AT&T Wireless 2007 Annual Report Download - page 68

Notes to Consolidated Financial Statements (continued)
Dollars in millions except per share amounts
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| 2007 AT&T Annual Report
Our other intangible assets are summarized as follows:
December 31, 2007 December 31, 2006
Gross Carrying Accumulated Gross Carrying Accumulated
Other Intangible Assets Amount Amortization Amount Amortization
Amortized intangible assets:
Customer lists and relationships:
AT&T Mobility $10,526 $4,549 $ 9,530 $1,948
BellSouth 9,205 2,205 9,230 —
ATTC 3,050 1,653 3,050 1,082
Other 429 298 395 253
Subtotal 23,210 8,705 22,205 3,283
Other 1,873 1,191 1,973 714
Total $25,083 $9,896 $24,178 $3,997
Indefinite life intangible assets not subject to amortization:
Licenses $37,985 $34,252
Trade name 5,230 5,307
Total $43,215 $39,559
Equity Method Investments Our investments in equity
affiliates include primarily international investments.
As of December 31, 2007, our investments in equity
affiliates included a 9.3% interest in Teléfonos de México,
S.A. de C.V. (Telmex), Mexico’s national telecommunications
company, and an 8.2% interest in América Móvil S.A. de C.V.
(América Móvil), primarily a wireless provider in Mexico,
with telecommunications investments in the United States
and Latin America. We are a member of a consortium
that holds all of the class AA shares of Telmex stock,
representing voting control of the company. Another
member of the consortium, Carso Global Telecom,
S.A. de C.V., has the right to appoint a majority of the
directors of Telmex. We also are a member of a consortium
that holds all of the class AA shares of América Móvil stock,
representing voting control of the company. Another
member of the consortium, Americas Telecom S.A. de C.V.,
has the right to appoint a majority of the directors of
América Móvil. On November 14, 2007, Telmex’s board
of directors approved a strategic initiative to divide the
company into two separate companies. The initiative
calls for Telmex to split off all of its Latin American
businesses and its Mexican yellow pages business to a
new holding company, Telmex Internacional. The spin-off
was approved by shareholders on December 21, 2007.
The proposed spin-off will be subject to compliance with
the regulatory requirements in Mexico and other jurisdictions.
NOTE 7. EQUITY METHOD INVESTMENTS
Investments in partnerships, joint ventures, and less-than-
majority-owned subsidiaries where we have significant
influence are accounted for under the equity method.
Until our acquisition of BellSouth in December 2006 (see
Note 2), we accounted for our 60% economic interest in
AT&T Mobility under the equity method since we shared
control equally with BellSouth, our 40% economic partner.
We had equal voting rights and representation on the board
of directors that controlled AT&T Mobility. As a result of the
BellSouth acquisition, AT&T Mobility became a wholly-owned
subsidiary of AT&T and is reported in our wireless segment
and our consolidated statements of income.
AT&T Mobility As of December 29, 2006, we report
AT&T Mobility as a wholly-owned subsidiary.
The following table presents summarized operating results
for AT&T Mobility prior to the December 29, 2006 BellSouth
acquisition:
2006 2005
Income Statements
Operating revenues $37,291 $34,433
Operating income 4,547 1,824
Net income 2,513 333
Amortized intangible assets are definite-life assets, and as such, we record amortization expense based on a method that most
appropriately reflects our expected cash flows from these assets with a weighted-average amortization period of 7.4 years
(7.3 years for customer lists and relationships and 9.6 years for other). Amortization expense for definite-life intangible assets
was $5,952, $1,033 and $271 for the years ended December 31, 2007, 2006 and 2005, respectively. Amortization expense is
estimated to be $4,430 in 2008, $3,540 in 2009, $2,740 in 2010, $1,820 in 2011 and $1,200 in 2012.
Licenses include FCC licenses of $37,948 that provide us with the exclusive right to utilize certain radio frequency spectrum to
provide wireless communications services. While FCC licenses are issued for a fixed time, renewals of FCC licenses have occurred
routinely and at nominal cost. Moreover, we have determined that there are currently no legal, regulatory, contractual, competitive,
economic or other factors that limit the useful lives of our FCC licenses and therefore, treat the FCC licenses as an indefinite-lived
intangible asset.