AT&T Wireless 2015 Annual Report Download - page 78

Notes to Consolidated Financial Statements (continued)
Dollars in millions except per share amounts
76 | AT&T INC.
NOTE 14. STOCKHOLDERS’ EQUITY
Stock Repurchase Program From time to time, we
repurchase shares of common stock for distribution through
our employee benefit plans or in connection with certain
acquisitions. In July 2012, our Board of Directors authorized
the repurchase of 300 million shares and we completed that
program in May 2013. In March 2013, our Board of Directors
approved a second authorization to repurchase 300 million
shares, under which we repurchased shares during 2014.
In March 2014, our Board of Directors approved a third
authorization to repurchase up to 300 million shares of
our common stock. For the year ended December 31, 2015,
we had repurchased approximately 8 million shares for
distribution through our employee benefit plans totaling
$269 under these authorizations. For the year ended
December 31, 2014, we had repurchased approximately
48 million shares totaling $1,617 under these authorizations.
To implement these authorizations, we used open market
repurchase programs, relying on Rule 10b5-1 of the
Securities Exchange Act of 1934 where feasible.
Authorized Shares There are 14 billion authorized
common shares of AT&T stock and 10 million authorized
preferred shares of AT&T stock. As of December 31, 2015
and 2014, no preferred shares were outstanding.
Dividend Declarations In December 2015, the Company
declared an increase in its quarterly dividend to $0.48 per
share of common stock. In December 2014, the Company
declared an increase in its quarterly dividend to $0.47 per
share of common stock.
Treasury Stock As part of the acquisition of DIRECTV, we
issued 954,407,524 shares to DIRECTV shareholders, which
reduced our treasury stock balance by $34,328.
Preferred Equity Interest The preferred equity interest
discussed in Note 12 is not transferable by the trust except
through its put and call features, and therefore has been
eliminated in consolidation. After a period of five years
from the contribution or, if earlier, the date upon which
the pension plan trust is fully funded as determined under
GAAP, AT&T has a right to purchase from the pension plan
trust some or all of the preferred equity interest at the
greater of their fair market value or minimum liquidation
value plus any unpaid cumulative dividends. In addition,
AT&T will have the right to purchase the preferred
equity interest in the event AT&T’s ownership of Mobility
is less than 50% or there is a transaction that results in the
transfer of 50% or more of the pension plan trust’s assets to
an entity not under common control with AT&T (collectively,
a change of control). The pension plan trust has the right
to require AT&T to purchase the preferred equity interest at
the greater of their fair market value or minimum liquidation
We account for our share-based payment arrangements
based on the fair value of the awards on their respective
grant date, which may affect our ability to fully realize the
value shown on our consolidated balance sheets of deferred
tax assets associated with compensation expense. We record
a valuation allowance when our future taxable income is not
expected to be sufficient to recover the asset. Accordingly,
there can be no assurance that the current stock price of
our common shares will rise to levels sufficient to realize
the entire tax benefit currently reflected on our consolidated
balance sheets. However, to the extent we generate excess
tax benefits (i.e., that additional tax benefits in excess of
the deferred taxes associated with compensation expense
previously recognized) the potential future impact on income
would be reduced.
The compensation cost recognized for those plans was
included in operating expenses in our consolidated
statements of income, as reflected in the table below.
The total income tax benefit recognized in the
consolidated statements of income for share-based
payment arrangements was $172 for 2015, compared
to $122 for 2014 and $175 for 2013.
2015 2014 2013
Performance stock units $299 $226 $381
Restricted stock and stock units 147 93 80
Other nonvested stock units 5 (1) (3)
Total $451 $318 $458
A summary of the status of our nonvested stock units as
of December 31, 2015, and changes during the year then
ended is presented as follows (shares in millions):
Weighted-Average
Nonvested Stock Units Shares Grant-Date Fair Value
Nonvested at January 1, 2015 26 $ 33.52
Granted 14 33.98
Issued in DIRECTV acquisition 11 34.29
Vested (13) 33.86
Forfeited (2) 34.07
Nonvested at December 31, 2015 36 $33.78
As of December 31, 2015, there was $563 of total
unrecognized compensation cost related to nonvested
share-based payment arrangements granted. That cost is
expected to be recognized over a weighted-average period
of 2.15 years. The total fair value of shares vested during
the year was $450 for 2015, compared to $327 for 2014
and $336 for 2013.
It is our policy to satisfy share option exercises using our
treasury stock. Cash received from stock option exercises
was $46 for 2015, $43 for 2014 and $135 for 2013.