Verizon Wireless 2008 Annual Report Download - page 55

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Notes to Consolidated Financial Statements continued
NOTE 7
INVESTMENTS IN UNCONSOLIDATED BUSINESSES
Our investments in unconsolidated businesses are comprised of the
following:
(dollars in millions)
At December 31, Ownership
2008
Investment Ownership
2007
Investment
Equity Investees
Vodafone Omnitel 23.1% $ 2,182 23.1% $ 2,313
Other Various 877 Various 744
Total equity investees 3,059 3,057
Cost Investees Various 334 Various 315
Total investments
in unconsolidated
businesses $ 3,393 $ 3,372
Dividends and repatriations of foreign earnings received from these
investees amounted to $779 million in 2008, $2,571 million in 2007 and
$42 million in 2006.
Equity Method Investments
Vodafone Omnitel
Vodafone Omnitel is the second largest wireless communications
company in Italy. At December 31, 2008 and 2007, our investment in
Vodafone Omnitel included goodwill of $1,105 million and $1,154
million, respectively. During 2008 and 2007, Verizon received a net dis-
tribution from Vodafone Omnitel of approximately $670 million and
$2,100 million, respectively. As a result, in 2007 we recorded $610 million
of foreign and domestic taxes and expenses specifically relating to our
share of Vodafone Omnitel’s distributable earnings.
Other Equity Investees
Verizon has limited partnership investments in entities that invest in
affordable housing projects, for which Verizon provides funding as a
limited partner and receives tax deductions and tax credits based on
its partnership interests. At December 31, 2008 and 2007, Verizon had
equity investments in these partnerships of $761 million and $637
million, respectively. Verizon currently adjusts the carrying value of
these investments for any losses incurred by the limited partnerships
through earnings.
The remaining investments include wireless partnerships in the U.S. and
other smaller domestic and international investments.
Cost Method Investments
Some of our cost investments are carried at their current market value.
Other cost investments are carried at their original cost, except in cases
where we have determined that a decline in the estimated market value
of an investment is other-than-temporary.
NOTE 8
MINORITY INTEREST
Minority interests in equity of subsidiaries were as follows:
(dollars in millions)
At December 31, 2008 2007
Minority interests in consolidated subsidiaries:
Wireless joint venture $ 36,683 $ 31,782
Cellular partnerships and other 516 506
$ 37,199 $ 32,288
Wireless Joint Venture
The wireless joint venture was formed in April 2000 in connection with
the combination of the U.S. wireless operations and interests of Verizon
and Vodafone. The wireless joint venture operates as Verizon Wireless.
Verizon owns a controlling 55% interest in Verizon Wireless and Vodafone
owns the remaining 45%.
Under the terms of an investment agreement, Vodafone had the right
to require Verizon Wireless to purchase up to an aggregate of $20 billion
worth of Vodafone’s interest in Verizon Wireless at designated times (put
windows) at its then fair market value, not to exceed $10 billion in any
one put window. The last of these put windows opened on June 10 and
closed on August 9 in 2007. Vodafone did not exercise its right during
this period and no longer has any right to require the purchase of any of
its interest in Verizon Wireless.
Cellular Partnerships and Other
In August 2002, Verizon Wireless and Price Communications Corp. (Price)
combined Price’s wireless business with a portion of Verizon Wireless.
The resulting limited partnership, Verizon Wireless of the East LP (VZ
East), is controlled and managed by Verizon Wireless. In exchange for
its contributed assets, Price received a limited partnership interest in
VZ East which was exchangeable into the common stock of Verizon
Wireless if an initial public offering of that stock occurred, or into the
common stock of Verizon on the fourth anniversary of the asset contri-
bution date. On August 15, 2006, Verizon delivered 29.5 million shares of
newly-issued Verizon common stock to Price valued at $1,007 million in
exchange for Price’s limited partnership interest in VZ East.
Noncontrolling Interests in Consolidated Financial Statements
See Note 1 for a discussion of the pending implementation of SFAS
No. 160.