AT&T Wireless 2015 Annual Report Download - page 59

AT&T INC. | 57
We periodically assess our network assets for impairment,
and our analyses have indicated no impairment. During
2014, due to declining customer demand for our legacy
voice and data products and the migration of our networks
to next generation technologies, we decided to abandon in
place specific copper network assets classified as cable,
wiring and conduit. These abandoned assets had a gross
book value of approximately $7,141, with accumulated
depreciation of $5,021. In 2014, we recorded a $2,120
noncash charge for this abandonment, which is included
in “Abandonment of network assets” on our consolidated
statements of income.
Certain facilities and equipment used in operations are
leased under operating or capital leases. Rental expenses
under operating leases were $5,025 for 2015, $4,345 for
2014 and $3,683 for 2013. At December 31, 2015, the
future minimum rental payments under noncancelable
operating leases for the years 2016 through 2020 were
$3,775, $3,551, $3,257, $3,003 and $2,771, with $12,488
due thereafter. Certain real estate operating leases contain
renewal options that may be exercised. Capital leases are
not significant.
NOTE 7. GOODWILL AND OTHER INTANGIBLE ASSETS
As part of our organizational realignment discussed in
Note 4, the goodwill from the previous Wireless segment
was allocated to the Business Solutions and Consumer
Mobility segments and the goodwill from the previous
Wireline segment was allocated to the Business Solutions
and Entertainment Group segments. The allocations were
based on the relative fair value of the portions of the
previous Wireless and Wireline segments which were
moved into the new Business Solutions, Entertainment
Group and Consumer Mobility segments.
The following table sets forth the changes in the carrying
amounts of goodwill by segment, which is the same as
reporting unit for Business Solutions, Entertainment Group
and Consumer Mobility. The International segment has three
reporting units: Mexico Wireless, Brazil and PanAmericana.
Dispositions
Connecticut Wireline On October 24, 2014, we sold
our incumbent local exchange operations in Connecticut
for $2,018 and recorded a pre-tax gain of $76, which
is included in “Other income (expense) – net,” on our
consolidated statements of income. In conjunction with
the sale, we allocated $743 of goodwill from our former
Wireline reporting unit. Because the book value of the
goodwill did not have a corresponding tax basis, the
resulting net income impact of the sale was a loss of $360.
América Móvil In 2014, we sold our remaining stake in
América Móvil for approximately $5,885 and recorded a
pre-tax gain of $1,330, which is included in “Other income
(expense) – net,” on our consolidated statements of income.
In 2013, we sold a portion of our shares in América Móvil
for approximately $1,179. América Móvil was accounted for
as an equity method investment.
NOTE 6. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is summarized as follows at
December 31:
Lives (years) 2015 2014
Land — $ 1,638 $ 1,567
Buildings and improvements 2-44 33,784 32,204
Central office equipment1 3-10 93,643 89,857
Cable, wiring and conduit 15-50 75,784 72,766
Satellites 12-15 2,088 —
Other equipment 2-23 81,972 74,244
Software 3-5 11,347 8,604
Under construction — 5,971 3,053
306,227 282,295
Accumulated depreciation
and amortization 181,777 169,397
Property, plant and
equipment – net $124,450 $112,898
1 Includes certain network software.
Our depreciation expense was $19,289 in 2015, $17,773 in
2014 and $17,722 in 2013. Depreciation expense included
amortization of software totaling $1,660 in 2015, $1,504 in
2014 and $2,142 in 2013.
Business Entertainment Consumer
Wireless Wireline Solutions Group Mobility International Total
Balance as of December 31, 2013 $ 36,106 $ 33,167 $ — $ — $ — $ — $ 69,273
Goodwill acquired 367 — — — — — 367
Other (4) 56 — — — — 52
Balance as of December 31, 2014 36,469 33,223 — — — — 69,692
Goodwill acquired 6 — — 30,839 — 4,672 35,517
Foreign currency translation
adjustments — — — — — (638) (638)
Allocation of goodwill (36,471) (33,226) 45,351 7,834 16,512 — —
Other (4) 3 — — — (2) (3)
Balance as of December 31, 2015 $ — $ — $45,351 $38,673 $16,512 $4,032 $104,568