Interpreting Equity Method Investment Footnotes
AT&T reports the following footnote to its 20 12 I 0-K report ($ millions).
a. At what amount is the equity investment in affiliates reported on AT&T's balance sheet?
b. Did affiliates pay dividends in 2012? How do you know?
c. How much income did AT& T report in 20 12 re lating to this investment in affiliates?
d. Interpret the AT&T statement that “und istributed earnings from equity affiliates were $6,375 and $5,760 at December 31, 20 12 and 20 1 I.”
e. How does use of the equity method impact AT &T’s ROE and its RNOA components (net operating asset turnover and net operating profit margin)?
f AT&T accounts for its investment in affiliates under the equity method. Why?
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