2018 Form 10-K Financial Statement

#000001892619000006 Filed on March 11, 2019

View on sec.gov

Income Statement

Concept 2018 2017 Q4 2017 Q3
Revenue $22.58B $5.323B $4.034B
YoY Change 27.89% 24.11% -7.94%
Cost Of Revenue $9.999B $2.498B $1.927B
YoY Change 21.89% 29.5% -3.46%
Gross Profit $12.58B $2.825B $2.107B
YoY Change 33.09% 19.7% -11.69%
Gross Profit Margin 55.72% 53.07% 52.23%
Selling, General & Admin $4.165B $1.104B $710.0M
YoY Change 18.73% 10.73% -11.03%
% of Gross Profit 33.11% 39.08% 33.7%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $5.120B $1.197B $910.0M
YoY Change 30.08% 24.95% -8.54%
% of Gross Profit 40.7% 42.37% 43.19%
Operating Expenses $22.87B $2.301B $3.547B
YoY Change 46.18% 17.7% -6.39%
Operating Profit $570.0M $524.0M $487.0M
YoY Change -71.63% 29.38% -17.88%
Interest Expense $2.177B -$481.0M $362.0M
YoY Change 47.0% 50.31% 10.7%
% of Operating Profit 381.93% -91.79% 74.33%
Other Income/Expense, Net -$2.133B $11.00M -$348.0M
YoY Change 45.2% -200.0% 1.16%
Pretax Income -$1.563B $54.00M $139.0M
YoY Change -389.44% -27.03% -44.18%
Income Tax $170.0M $37.00M $47.00M
% Of Pretax Income 68.52% 33.81%
Net Earnings -$1.733B $1.117B $92.00M
YoY Change -224.77% 2559.52% -39.47%
Net Earnings / Revenue -7.67% 20.98% 2.28%
Basic Earnings Per Share -$1.63 $1.26 $0.17
Diluted Earnings Per Share -$1.63 $1.26 $0.17
COMMON SHARES
Basic Shares Outstanding 1.066B shares 1.069B shares 541.5M shares
Diluted Shares Outstanding 1.066B shares 542.0M shares

Balance Sheet

Concept 2018 2017 Q4 2017 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $488.0M $551.0M $160.0M
YoY Change -11.43% 148.2% 14.29%
Cash & Equivalents $488.0M $551.0M $160.0M
Short-Term Investments
Other Short-Term Assets $598.0M $941.0M $639.0M
YoY Change -14.57% 72.03% 1.27%
Inventory $120.0M $128.0M $131.0M
Prepaid Expenses $294.0M $245.0M
Receivables $2.086B $2.557B $1.888B
Other Receivables $528.0M $734.0M $0.00
Total Short-Term Assets $3.820B $4.194B $2.694B
YoY Change -8.92% -18.75% -1.25%
LONG-TERM ASSETS
Property, Plant & Equipment $26.41B $26.85B $17.63B
YoY Change -1.65% 57.59% -1.15%
Goodwill $30.48B $19.64B
YoY Change 55.09% -5.43%
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $1.218B $1.286B $813.0M
YoY Change -7.52% 53.83% 17.83%
Total Long-Term Assets $66.44B $71.42B $47.84B
YoY Change -6.97% 70.63% 8.56%
TOTAL ASSETS
Total Short-Term Assets $3.820B $4.194B $2.694B
Total Long-Term Assets $66.44B $71.42B $47.84B
Total Assets $70.26B $75.61B $50.54B
YoY Change -7.08% 60.82% 7.99%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.933B $1.555B $939.0M
YoY Change 24.31% 31.89% -9.36%
Accrued Expenses $1.465B $1.287B $1.020B
YoY Change 13.83% 17.75% 13.71%
Deferred Revenue $892.0M
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $652.0M $443.0M $124.0M
YoY Change 47.18% -70.53% -91.92%
Total Short-Term Liabilities $5.531B $4.857B $3.266B
YoY Change 13.88% -9.2% -31.0%
LONG-TERM LIABILITIES
Long-Term Debt $35.41B $37.28B $24.85B
YoY Change -5.03% 105.02% 36.68%
Other Long-Term Liabilities $6.961B $2.389B $1.145B
YoY Change -8.01% 119.98% 3.53%
Total Long-Term Liabilities $42.37B $2.389B $1.145B
YoY Change -5.53% 119.98% 3.53%
TOTAL LIABILITIES
Total Short-Term Liabilities $5.531B $4.857B $3.266B
Total Long-Term Liabilities $42.37B $2.389B $1.145B
Total Liabilities $50.43B $7.246B $4.411B
YoY Change -3.25% 12.6% -24.46%
SHAREHOLDERS EQUITY
Retained Earnings $1.103B $34.00M
YoY Change -110400.0% -56.96%
Common Stock $1.069B $550.0M
YoY Change 95.43% 0.55%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $19.83B $23.49B $12.96B
YoY Change
Total Liabilities & Shareholders Equity $70.26B $75.61B $50.54B
YoY Change -7.08% 60.82% 7.99%

Cashflow Statement

Concept 2018 2017 Q4 2017 Q3
OPERATING ACTIVITIES
Net Income -$1.733B $1.117B $92.00M
YoY Change -224.77% 2559.52% -39.47%
Depreciation, Depletion And Amortization $5.120B $1.197B $910.0M
YoY Change 30.08% 24.95% -8.54%
Cash From Operating Activities $7.032B $1.178B $958.0M
YoY Change 81.33% 7.48% 5.16%
INVESTING ACTIVITIES
Capital Expenditures -$3.175B -$743.0M -$753.0M
YoY Change 2.22% -23.48% 0.94%
Acquisitions $0.00
YoY Change -100.0%
Other Investing Activities $61.00M -$7.278B -$3.000M
YoY Change 1120.0% 66063.64% -123.08%
Cash From Investing Activities -$3.078B -$8.021B -$756.0M
YoY Change -65.3% 716.8% 3.14%
FINANCING ACTIVITIES
Cash Dividend Paid $2.312B
YoY Change 59.12%
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net $1.936B
YoY Change -1.38%
Cash From Financing Activities -$4.023B 1.268B -395.0M
YoY Change -175.11% -4062.5% 72.49%
NET CHANGE
Cash From Operating Activities $7.032B 1.178B 958.0M
Cash From Investing Activities -$3.078B -8.021B -756.0M
Cash From Financing Activities -$4.023B 1.268B -395.0M
Net Change In Cash -$69.00M -5.575B -193.0M
YoY Change -119.01% -6898.78% 278.43%
FREE CASH FLOW
Cash From Operating Activities $7.032B $1.178B $958.0M
Capital Expenditures -$3.175B -$743.0M -$753.0M
Free Cash Flow $10.21B $1.921B $1.711B
YoY Change 46.15% -7.06% 3.26%

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25.00
CY2018Q4 us-gaap Preferred Stock Par Or Stated Value Per Share
PreferredStockParOrStatedValuePerShare
25.00
CY2017Q4 us-gaap Preferred Stock Shares Authorized
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2000000 shares
CY2018Q4 us-gaap Preferred Stock Shares Authorized
PreferredStockSharesAuthorized
2000000 shares
CY2017Q4 us-gaap Preferred Stock Shares Issued
PreferredStockSharesIssued
7000 shares
CY2018Q4 us-gaap Preferred Stock Shares Issued
PreferredStockSharesIssued
7000 shares
CY2017Q4 us-gaap Preferred Stock Shares Outstanding
PreferredStockSharesOutstanding
7000 shares
CY2018Q4 us-gaap Preferred Stock Shares Outstanding
PreferredStockSharesOutstanding
7000 shares
CY2017Q4 us-gaap Preferred Stock Value
PreferredStockValue
0 USD
CY2018Q4 us-gaap Preferred Stock Value
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0 USD
CY2017Q4 us-gaap Prepaid Expense Current
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294000000 USD
CY2018Q4 us-gaap Prepaid Expense Current
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307000000 USD
CY2016 us-gaap Proceeds From Issuance Of Long Term Debt
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2161000000 USD
CY2017 us-gaap Proceeds From Issuance Of Long Term Debt
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8398000000 USD
CY2018 us-gaap Proceeds From Issuance Of Long Term Debt
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130000000 USD
CY2016 us-gaap Proceeds From Payments For Other Financing Activities
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-10000000 USD
CY2017 us-gaap Proceeds From Payments For Other Financing Activities
ProceedsFromPaymentsForOtherFinancingActivities
-17000000 USD
CY2018 us-gaap Proceeds From Payments For Other Financing Activities
ProceedsFromPaymentsForOtherFinancingActivities
-50000000 USD
CY2016 us-gaap Proceeds From Rents Received
ProceedsFromRentsReceived
734000000 USD
CY2017 us-gaap Proceeds From Rents Received
ProceedsFromRentsReceived
766000000 USD
CY2018 us-gaap Proceeds From Rents Received
ProceedsFromRentsReceived
882000000 USD
CY2016 us-gaap Proceeds From Repayments Of Lines Of Credit
ProceedsFromRepaymentsOfLinesOfCredit
-40000000 USD
CY2017 us-gaap Proceeds From Repayments Of Lines Of Credit
ProceedsFromRepaymentsOfLinesOfCredit
35000000 USD
CY2018 us-gaap Proceeds From Repayments Of Lines Of Credit
ProceedsFromRepaymentsOfLinesOfCredit
145000000 USD
CY2016 us-gaap Proceeds From Sale Of Productive Assets
ProceedsFromSaleOfProductiveAssets
30000000 USD
CY2017 us-gaap Proceeds From Sale Of Productive Assets
ProceedsFromSaleOfProductiveAssets
1529000000 USD
CY2018 us-gaap Proceeds From Sale Of Productive Assets
ProceedsFromSaleOfProductiveAssets
158000000 USD
CY2017Q4 us-gaap Property Plant And Equipment Gross
PropertyPlantAndEquipmentGross
51204000000 USD
CY2018Q4 us-gaap Property Plant And Equipment Gross
PropertyPlantAndEquipmentGross
53267000000 USD
CY2017Q4 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
26852000000 USD
CY2018Q4 us-gaap Property Plant And Equipment Net
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26408000000 USD
CY2016 us-gaap Provision For Doubtful Accounts
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192000000 USD
CY2017 us-gaap Provision For Doubtful Accounts
ProvisionForDoubtfulAccounts
176000000 USD
CY2018 us-gaap Provision For Doubtful Accounts
ProvisionForDoubtfulAccounts
153000000 USD
CY2018Q4 us-gaap Purchase Commitment Remaining Minimum Amount Committed
PurchaseCommitmentRemainingMinimumAmountCommitted
921000000 USD
CY2018Q4 us-gaap Purchase Obligation Due After Fifth Year
PurchaseObligationDueAfterFifthYear
186000000 USD
CY2018Q4 us-gaap Purchase Obligation Due In Fourth And Fifth Year
PurchaseObligationDueInFourthAndFifthYear
88000000 USD
CY2018Q4 us-gaap Purchase Obligation Due In Next Twelve Months
PurchaseObligationDueInNextTwelveMonths
322000000 USD
CY2018Q4 us-gaap Purchase Obligation Due In Second And Third Year
PurchaseObligationDueInSecondAndThirdYear
325000000 USD
CY2017 us-gaap Reclassification From Aoci Current Period Net Of Tax Attributable To Parent
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-138000000 USD
CY2018 us-gaap Reclassification From Aoci Current Period Net Of Tax Attributable To Parent
ReclassificationFromAociCurrentPeriodNetOfTaxAttributableToParent
-143000000 USD
CY2016 us-gaap Repayments Of Long Term Capital Lease Obligations
RepaymentsOfLongTermCapitalLeaseObligations
58000000 USD
CY2017 us-gaap Repayments Of Long Term Capital Lease Obligations
RepaymentsOfLongTermCapitalLeaseObligations
48000000 USD
CY2018 us-gaap Repayments Of Long Term Capital Lease Obligations
RepaymentsOfLongTermCapitalLeaseObligations
48000000 USD
CY2016 us-gaap Repayments Of Long Term Debt
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2462000000 USD
CY2017 us-gaap Repayments Of Long Term Debt
RepaymentsOfLongTermDebt
1963000000 USD
CY2018 us-gaap Repayments Of Long Term Debt
RepaymentsOfLongTermDebt
1936000000 USD
CY2016Q4 us-gaap Restricted Cash Current
RestrictedCashCurrent
0 USD
CY2017Q4 us-gaap Restricted Cash Current
RestrictedCashCurrent
5000000 USD
CY2018Q4 us-gaap Restricted Cash Current
RestrictedCashCurrent
4000000 USD
CY2016Q4 us-gaap Restricted Cash Noncurrent
RestrictedCashNoncurrent
2000000 USD
CY2017Q4 us-gaap Restricted Cash Noncurrent
RestrictedCashNoncurrent
31000000 USD
CY2018Q4 us-gaap Restricted Cash Noncurrent
RestrictedCashNoncurrent
26000000 USD
CY2017Q4 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
1103000000 USD
CY2018Q4 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
-1643000000 USD
CY2018 us-gaap Revenue From Contract With Customer Including Assessed Tax
RevenueFromContractWithCustomerIncludingAssessedTax
21905000000 USD
CY2018Q4 us-gaap Revenue Remaining Performance Obligation
RevenueRemainingPerformanceObligation
6900000000 USD
CY2018Q4 us-gaap Revenue Remaining Performance Obligation Expected Timing Of Satisfaction Period1
RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod1
P3Y
CY2018Q4 us-gaap Revenue Remaining Performance Obligation Percentage
RevenueRemainingPerformanceObligationPercentage
0.83
CY2016 us-gaap Revenues
Revenues
17470000000 USD
CY2017Q1 us-gaap Revenues
Revenues
4209000000 USD
CY2017Q2 us-gaap Revenues
Revenues
4090000000 USD
CY2017Q3 us-gaap Revenues
Revenues
4034000000 USD
CY2017Q4 us-gaap Revenues
Revenues
5323000000 USD
CY2017 us-gaap Revenues
Revenues
17656000000 USD
CY2018Q1 us-gaap Revenues
Revenues
5945000000 USD
CY2018Q2 us-gaap Revenues
Revenues
5902000000 USD
CY2018Q3 us-gaap Revenues
Revenues
5818000000 USD
CY2018Q4 us-gaap Revenues
Revenues
5778000000 USD
CY2018 us-gaap Revenues
Revenues
23443000000 USD
CY2016 us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
3447000000 USD
CY2017 us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
3508000000 USD
CY2018 us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
4165000000 USD
CY2016 us-gaap Share Based Compensation
ShareBasedCompensation
80000000 USD
CY2017 us-gaap Share Based Compensation
ShareBasedCompensation
111000000 USD
CY2018 us-gaap Share Based Compensation
ShareBasedCompensation
186000000 USD
CY2018Q4 us-gaap Significant Change In Unrecognized Tax Benefits Is Reasonably Possible Amount Of Unrecorded Benefit
SignificantChangeInUnrecognizedTaxBenefitsIsReasonablyPossibleAmountOfUnrecordedBenefit
12000000 USD
CY2016Q4 us-gaap Stockholders Equity
StockholdersEquity
13399000000 USD
CY2017Q4 us-gaap Stockholders Equity
StockholdersEquity
23491000000 USD
CY2018Q4 us-gaap Stockholders Equity
StockholdersEquity
19828000000 USD
CY2017Q4 us-gaap Taxes Payable Current
TaxesPayableCurrent
370000000 USD
CY2018Q4 us-gaap Taxes Payable Current
TaxesPayableCurrent
337000000 USD
CY2016Q4 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
16000000 USD
CY2017Q4 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
40000000 USD
CY2018Q4 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
1587000000 USD
CY2017 us-gaap Unrecognized Tax Benefits Decreases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsDecreasesResultingFromPriorPeriodTaxPositions
0 USD
CY2018 us-gaap Unrecognized Tax Benefits Decreases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsDecreasesResultingFromPriorPeriodTaxPositions
3000000 USD
CY2017 us-gaap Unrecognized Tax Benefits Decreases Resulting From Settlements With Taxing Authorities
UnrecognizedTaxBenefitsDecreasesResultingFromSettlementsWithTaxingAuthorities
0 USD
CY2018 us-gaap Unrecognized Tax Benefits Decreases Resulting From Settlements With Taxing Authorities
UnrecognizedTaxBenefitsDecreasesResultingFromSettlementsWithTaxingAuthorities
1000000 USD
CY2017 us-gaap Unrecognized Tax Benefits Increases Resulting From Acquisition
UnrecognizedTaxBenefitsIncreasesResultingFromAcquisition
18000000 USD
CY2018 us-gaap Unrecognized Tax Benefits Increases Resulting From Acquisition
UnrecognizedTaxBenefitsIncreasesResultingFromAcquisition
0 USD
CY2017 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions
1000000 USD
CY2018 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions
4000000 USD
CY2017 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromPriorPeriodTaxPositions
3000000 USD
CY2018 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromPriorPeriodTaxPositions
211000000 USD
CY2017Q4 us-gaap Unrecognized Tax Benefits Interest On Income Taxes Accrued
UnrecognizedTaxBenefitsInterestOnIncomeTaxesAccrued
56000000 USD
CY2018Q4 us-gaap Unrecognized Tax Benefits Interest On Income Taxes Accrued
UnrecognizedTaxBenefitsInterestOnIncomeTaxesAccrued
17000000 USD
CY2017 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
UnrecognizedTaxBenefitsReductionsResultingFromLapseOfApplicableStatuteOfLimitations
0 USD
CY2018 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
UnrecognizedTaxBenefitsReductionsResultingFromLapseOfApplicableStatuteOfLimitations
2000000 USD
CY2017Q4 us-gaap Unrecognized Tax Benefits That Would Impact Effective Tax Rate
UnrecognizedTaxBenefitsThatWouldImpactEffectiveTaxRate
66000000 USD
CY2018Q4 us-gaap Unrecognized Tax Benefits That Would Impact Effective Tax Rate
UnrecognizedTaxBenefitsThatWouldImpactEffectiveTaxRate
256000000 USD
CY2018 us-gaap Valuation Allowance Deferred Tax Asset Change In Amount
ValuationAllowanceDeferredTaxAssetChangeInAmount
10000000 USD
CY2016 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
540679000 shares
CY2017 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
628693000 shares
CY2018 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
1065866000 shares
CY2016 us-gaap Weighted Average Number Of Shares Issued Basic
WeightedAverageNumberOfSharesIssuedBasic
545946000 shares
CY2017 us-gaap Weighted Average Number Of Shares Issued Basic
WeightedAverageNumberOfSharesIssuedBasic
635576000 shares
CY2018 us-gaap Weighted Average Number Of Shares Issued Basic
WeightedAverageNumberOfSharesIssuedBasic
1078409000 shares
CY2016 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
539549000 shares
CY2017 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
627808000 shares
CY2018 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
1065866000 shares
CY2016 us-gaap Weighted Average Number Of Shares Restricted Stock
WeightedAverageNumberOfSharesRestrictedStock
6397000 shares
CY2017 us-gaap Weighted Average Number Of Shares Restricted Stock
WeightedAverageNumberOfSharesRestrictedStock
7768000 shares
CY2018 us-gaap Weighted Average Number Of Shares Restricted Stock
WeightedAverageNumberOfSharesRestrictedStock
12543000 shares
CY2018 us-gaap Prior Period Reclassification Adjustment Description
PriorPeriodReclassificationAdjustmentDescription
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-indent:36px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">We reclassified certain prior period amounts to conform to the current period presentation, including the categorization of our revenue and our segment reporting for </font><font style="font-family:Arial;font-size:10pt;">2018</font><font style="font-family:Arial;font-size:10pt;">, </font><font style="font-family:Arial;font-size:10pt;">2017</font><font style="font-family:Arial;font-size:10pt;"> and </font><font style="font-family:Arial;font-size:10pt;">2016</font><font style="font-family:Arial;font-size:10pt;">. See </font><font style="font-family:Arial;font-size:10pt;">Note 15&#8212;Segment Information</font><font style="font-family:Arial;font-size:10pt;"> for additional information. These changes had no impact on total operating revenue, total operating expenses or net (loss) income for any period.</font></div></div>
CY2018 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-indent:36px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;text-indent:36px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:36px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions we make when accounting for specific items and matters, including, but not limited to, revenue recognition, revenue reserves, network access costs, network access cost dispute reserves, investments, long-term contracts, customer retention patterns, allowance for doubtful accounts, depreciation, amortization, asset valuations, internal labor capitalization rates, recoverability of assets (including deferred tax assets), impairment assessments, pension, post-retirement and other post-employment benefits, taxes, certain liabilities and other provisions and contingencies, are reasonable, based on information available at the time they are made. These estimates, judgments and assumptions can materially affect the reported amounts of assets, liabilities and components of stockholders' equity as of the dates of the consolidated balance sheets, as well as the reported amounts of revenue, expenses and components of cash flows during the periods presented in our other consolidated financial statements. We also make estimates in our assessments of potential losses in relation to threatened or pending tax and legal matters. See </font><font style="font-family:Arial;font-size:10pt;">Note 14&#8212;Income Taxes</font><font style="font-family:Arial;font-size:10pt;"> and </font><font style="font-family:Arial;font-size:10pt;">Note 17&#8212;Commitments, Contingencies and Other Items</font><font style="font-family:Arial;font-size:10pt;"> for additional information.</font></div><div style="line-height:120%;text-indent:36px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:36px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">For matters not related to income taxes, if a loss is considered probable and the amount can be reasonably estimated, we recognize an expense for the estimated loss. If we have the potential to recover a portion of the estimated loss from a third party, we make a separate assessment of recoverability and reduce the estimated loss if recovery is also deemed probable.</font></div><div style="line-height:120%;text-indent:36px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:36px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">For matters related to income taxes, if we determine that the impact of an uncertain tax position is more likely than not to be sustained upon audit by the relevant taxing authority, then we recognize a benefit for the largest amount that is more likely than not to be sustained. </font><font style="font-family:Arial;font-size:10pt;">No</font><font style="font-family:Arial;font-size:10pt;"> portion of an uncertain tax position will be recognized if the position has less than a </font><font style="font-family:Arial;font-size:10pt;">50%</font><font style="font-family:Arial;font-size:10pt;"> likelihood of being sustained. Interest is recognized on the amount of unrecognized benefit from uncertain tax positions.</font></div><div style="line-height:120%;text-indent:36px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:36px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">For all of these and other matters, actual results could differ materially from our estimates.</font></div></div>

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