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This excerpt taken from the T 10-K filed Feb 26, 2007. Other Equity Method Investments Our investments in equity affiliates include primarily international investments. As of December 31, 2006, our investments in equity affiliates included an 8.9% interest in Teléfonos de México, S.A. de C.V. (Telmex), Mexico’s national telecommunications company, and an 8.0% 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.
59 Notes to Consolidated Financial Statements, continued Dollars in millions except per share amounts
The following table is a reconciliation of our investments in equity affiliates as presented on our Consolidated Balance Sheets:
Undistributed earnings from equity affiliates were $2,038 and $1,615 at December 31, 2006 and 2005. The currency translation adjustment for 2006 and 2005 primarily reflects the effect of exchange rate fluctuations on our investments in Telmex and América Móvil. “Other adjustments” for 2006 consisted primarily of $375 representing the consolidation of the Cellular Communications of Puerto Rico, YPC and other domestic wireless investments as wholly-owned subsidiaries of AT&T as a result of the BellSouth acquisition and $75 representing purchase accounting revaluation of equity investments in ATTC.
Dispositions for 2005 primarily reflect the dissolution of a wireless partnership. “Other adjustments” for 2005 include equity investment balances at December 31, 2005, acquired as part of our acquisition of ATTC totaling $135, which includes our 49% economic interest in Alestra S. de R.L. de C.V., a telecommunications company in Mexico.
The fair value of our investment in Telmex, based on the equivalent value of Telmex L shares at December 31, 2006, was $2,543. The fair value of our investment in América Móvil, based on the equivalent value of América Móvil L shares at December 31, 2006, was $6,488.
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