AT&T Wireless 2015 Annual Report Download - page 54

Notes to Consolidated Financial Statements (continued)
Dollars in millions except per share amounts
52 | AT&T INC.
We also evaluate segment performance based on segment
operating income before depreciation and amortization,
which we refer to as EBITDA and/or EBITDA margin. We
believe EBITDA to be a relevant and useful measurement
to our investors as it is part of our internal management
reporting and planning processes and it is an important
metric that management uses to evaluate segment
operating performance. EBITDA does not give effect to
cash used for debt service requirements and thus does
not reflect available funds for distributions, reinvestment
or other discretionary uses.
The Business Solutions segment provides services to
business, governmental and wholesale customers and
individual subscribers who purchase wireless services
through employer-sponsored plans. We provide advanced
IP-based services including Virtual Private Networks (VPN),
NOTE 3. OTHER COMPREHENSIVE INCOME
Changes in the balances of each component included in accumulated OCI are presented below. All amounts are net of tax
and exclude noncontrolling interest.
Following our 2015 acquisitions of DIRECTV and wireless businesses in Mexico, we have additional foreign operations that are
exposed to fluctuations in the exchange rates used to convert operations, assets and liabilities into U.S. dollars. Since the
dates of acquisition, when compared to the U.S. dollar, the Brazilian real exchange rate has depreciated 15.2%, the Argentinian
peso exchange rate has depreciated 29.1% and Mexican peso exchange rate has depreciated 13.1%. For the year ended
December 31, 2014, the amounts reclassified from accumulated OCI include amounts realized upon the sale of our
investment in América Móvil, S.A. de C.V. (América Móvil) (see Note 5).
At December 31, 2015, 2014 and 2013 and for the years ended
Foreign Net Unrealized Net Unrealized Defined Accumulated
Currency Gains (Losses) on Gains (Losses) Benefit Other
Translation Available-for- on Cash Flow Postretirement Comprehensive
Adjustment Sale Securities Hedges Plans Income
Balance as of December 31, 2012 $ (284) $ 271 $(110) $ 5,358 $ 5,235
Other comprehensive income (loss)
before reclassifications (138) 258 525 2,765 3,410
Amounts reclassified from accumulated OCI 551 (79)2 303 (771)4 (765)
Net other comprehensive income (loss) (83) 179 555 1,994 2,645
Balance as of December 31, 2013 (367) 450 445 7,352 7,880
Other comprehensive income (loss)
before reclassifications (75) 65 260 428 678
Amounts reclassified from accumulated OCI 4161 (16)2 363 (933)4 (497)
Net other comprehensive income (loss) 341 49 296 (505) 181
Balance as of December 31, 2014 (26) 499 741 6,847 8,061
Other comprehensive income (loss)
before reclassifications (1,172) — (763) 45 (1,890)
Amounts reclassified from accumulated OCI —1 (15)2 383 (860)4 (837)
Net other comprehensive income (loss) (1,172) (15) (725) (815) (2,727)
Balance as of December 31, 2015 $(1,198) $484 $ 16 $6,032 $5,334
1 Translation (gain) loss reclassifications are included in Other income (expense) – net in the consolidated statements of income.
2 (Gains) losses are included in Other income (expense) – net in the consolidated statements of income.
3 (Gains) losses are included in interest expense in the consolidated statements of income. See Note 10 for additional information.
4 The amortization of prior service credits associated with postretirement benefits, net of amounts capitalized as part of construction labor, are included in Cost of services
and sales and Selling, general and administrative in the consolidated statements of income (see Note 12). Actuarial loss reclassifications related to our equity method
investees are included in Other income (expense) – net in the consolidated statements of income.
NOTE 4. SEGMENT INFORMATION
Our segments are strategic business units that offer
products and services to different customer segments over
various technology platforms and/or in different geographies
that are managed accordingly. Due to recent organizational
changes and our July 24, 2015 acquisition of DIRECTV,
effective for the quarter ended September 30, 2015, we
revised our operating segments to align with our new
management structure and organizational responsibilities.
We analyze our operating segments based on segment
contribution, which consists of operating income, excluding
acquisition-related costs and other significant items
(as discussed below), and equity in net income of affiliates
for investments managed within each operating segment.
We have four reportable segments: (1) Business Solutions,
(2) Entertainment Group, (3) Consumer Mobility and
(4) International.