Q » Topics » Asset Retirement Obligations

This excerpt taken from the Q 10-K filed Feb 13, 2009.

Asset Retirement Obligations

        As of December 31, 2008, our asset retirement obligations balance was primarily related to estimated future costs of removing circuit equipment from leased properties and estimated future costs of properly disposing of asbestos and other hazardous materials upon remodeling or demolishing buildings. Asset retirement obligations are included in other long-term liabilities on our consolidated

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QWEST COMMUNICATIONS INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Years Ended December 31, 2008, 2007 and 2006

Note 6: Property, Plant and Equipment (Continued)


balance sheets. The following table provides asset retirement obligation activity for the years ended December 31, 2008, 2007 and 2006:

 
  December 31,  
 
  2008   2007   2006  
 
  (Dollars in millions)
 

Asset retirement obligations:

                   
 

Balance as of January 1

  $ 58   $ 85   $ 73  
   

Accretion expense

    6     11     9  
   

Liabilities incurred

        4      
   

Liabilities settled and other

    1     (42 )   3  
               

Balance as of December 31

  $ 65   $ 58   $ 85  
               

        During 2007, we revised our estimates of the timing and amounts of our original estimate of undiscounted cash flows related to certain future asset retirement obligations. These revisions resulted in a reduction of $39 million to our asset retirement obligations and an offsetting reduction to gross property, plant and equipment.

This excerpt taken from the Q 8-K filed Apr 4, 2008.

Asset Retirement Obligations

In December 2005, we adopted FIN 47, which requires us to recognize asset retirement obligations that are conditional on a future event, such as the obligation to safely dispose of asbestos when a building is demolished or renovated under certain circumstances. Upon adoption of FIN 47, we determined that we have conditional asset retirement obligations to properly dispose of, or encapsulate, asbestos in several of our buildings, to close fuel storage tanks and to dispose of other potentially hazardous materials. In 2005, we recorded a charge of $22 million (liability of $26 million net of an asset of $4 million) for the cumulative effect of this change in accounting principle.

As of December 31, 2007, our asset retirement obligations balance was primarily related to estimated future costs of removing circuit equipment from leased properties and estimated future costs of properly disposing of asbestos and other hazardous materials upon remodeling or demolishing buildings. Asset retirement obligations are included in other long-term liabilities on our consolidated balance sheets. The following table provides asset retirement obligation activity for the years ended December 31, 2007, 2006 and 2005:

 

     December 31,  
     2007     2006    2005  
     (Dollars in millions)  

Asset retirement obligations:

       

Balance as of January 1

   $ 85     $ 73    $ 55  

Accretion expense

     11       9      7  

Liabilities incurred, including adoption of FIN 47

     4       —        26  

Liabilities settled and other

     (42 )     3      (15 )
                       

Balance as of December 31

   $ 58     $ 85    $ 73  
                       

During 2007, we revised our estimates of the timing and amounts of our original estimate of undiscounted cash flows related to certain future asset retirement obligations. These revisions resulted in a reduction of $39 million to our asset retirement obligations and an offsetting reduction to gross property, plant and equipment.

This excerpt taken from the Q 10-K filed Feb 12, 2008.

Asset Retirement Obligations

In December 2005, we adopted FIN 47, which requires us to recognize asset retirement obligations that are conditional on a future event, such as the obligation to safely dispose of asbestos when a building is demolished or renovated under certain circumstances. Upon adoption of FIN 47, we determined that we have conditional asset retirement obligations to properly dispose of, or encapsulate, asbestos in several of our buildings, to close fuel storage tanks and to dispose of other potentially hazardous materials. In 2005, we recorded a charge of $22 million (liability of $26 million net of an asset of $4 million) for the cumulative effect of this change in accounting principle.

As of December 31, 2007, our asset retirement obligations balance was primarily related to estimated future costs of removing circuit equipment from leased properties and estimated future costs of properly disposing of asbestos and other hazardous materials upon remodeling or demolishing buildings. Asset retirement obligations are included in other long-term liabilities on our consolidated balance sheets. The following table provides asset retirement obligation activity for the years ended December 31, 2007, 2006 and 2005:

 

     December 31,
     2007    2006    2005
     (Dollars in millions)

Asset retirement obligations:

        

Balance as of January 1

   $85    $73    $55

Accretion expense

   11    9    7

Liabilities incurred, including adoption of FIN 47

   4       26

Liabilities settled and other

   (42)    3    (15)
              

Balance as of December 31

   $58    $85    $73
              

 

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QWEST COMMUNICATIONS INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the Years Ended December 31, 2007, 2006 and 2005

 

During 2007, we revised our estimates of the timing and amounts of our original estimate of undiscounted cash flows related to certain future asset retirement obligations. These revisions resulted in a reduction of $39 million to our asset retirement obligations and an offsetting reduction to gross property, plant and equipment.

This excerpt taken from the Q 10-K filed Feb 8, 2007.

Asset Retirement Obligations

In December 2005, we adopted FIN 47, which requires us to recognize asset retirement obligations that are conditional on a future event, such as the obligation to safely dispose of asbestos when a building is demolished or renovated under certain circumstances. Upon adoption of FIN 47, we determined that we have conditional asset retirement obligations to properly dispose of, or encapsulate, asbestos in several of our buildings, to close fuel storage tanks and to dispose of other potentially hazardous materials. In 2005, we recorded a charge of $22 million (liability of $26 million net of an asset of $4 million) for the cumulative effect of change in accounting principle.

Asset retirement obligations are included in other long-term liabilities on our consolidated balance sheets. The following table reconciles our asset retirement obligations for the years ended December 31, 2006, 2005 and 2004:

 

     December 31,  
     2006    2005     2004  
     (Dollars in millions)  

Asset retirement obligations as of January 1

   $ 73    $ 55     $ 49  

Accretion expense

     9      7       7  

Liabilities incurred, including adoption of FIN 47

     —        26       —    

Liabilities settled and other

     3      (15 )     (1 )
                       

Asset retirement obligations as of December 31

   $ 85    $ 73     $ 55  
                       

As of December 31, 2006, our asset retirement obligations balance was primarily related to costs of removing circuit equipment from expired leased properties and costs of properly disposing of asbestos and other hazardous materials upon remodeling or demolishing buildings. During 2005, we sold our wireless towers and, in connection with that sale, the related asset retirement obligations were transferred to the buyer.

 

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QWEST COMMUNICATIONS INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the Years Ended December 31, 2006, 2005 and 2004

 

This excerpt taken from the Q 10-K filed Feb 16, 2006.

Asset Retirement Obligations

 

As discussed in Note 2—Summary of Significant Accounting Policies, we adopted SFAS No. 143 on January 1, 2003, and we adopted FIN 47 on December 31, 2005. At December 31, 2005, our asset retirement obligations primarily related to the costs of removing circuit equipment from leased properties when leases expire, and the costs of properly disposing of asbestos and other hazardous materials when we remodel or demolish buildings we own. Asset retirement obligations are included in other long-term liabilities on our consolidated balance sheets. During 2005, we sold or disposed of our wireless towers and, in connection with that sale, the related asset retirement obligations were transferred to the buyer. See Note 6—Assets Held for Sale Including Discontinued Operations for additional information. The following is a reconciliation of our asset retirement obligations for the periods indicated:

 

     2005

    2004

    2003

     (Dollars in millions)

Asset retirement obligations, January 1

   $ 55     $ 49     $ 43

Accretion expense

     7       7       6

Liabilities incurred, including adoption of FIN 47

     26       —         —  

Liabilities settled and other

     (15 )     (1 )     —  
    


 


 

Asset retirement obligations, December 31

   $ 73     $ 55     $ 49
    


 


 

 

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QWEST COMMUNICATIONS INTERNATIONAL INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

For the Years Ended December 31, 2005, 2004 and 2003

 

This excerpt taken from the Q 8-K filed Mar 31, 2005.

Asset Retirement Obligations

        As discussed in Note 2—Summary of Significant Accounting Policies, we adopted SFAS No. 143 on January 1, 2003.

        Our asset retirement obligations primarily relate to the costs of removing circuit equipment and wireless towers from leased properties when leases expire. The balance of our asset retirement obligations at December 31, 2004 and 2003 was $55 million and $49 million, respectively, and is included in other long-term liabilities on our balance sheets. During 2004, we accreted $7 million of additional expense and settled $1 million of accrued obligations. During 2003, we accreted $6 million of additional expense related to these asset retirement obligations. Verizon will assume a portion of this obligation when they purchase substantially all of our wireless network. See Note 6—Assets Held for Sale Including Discontinued Operations for additional information.

F-16



        If the provisions of SFAS No. 143 had been adopted prior to the period ended December 31, 2002, net loss for 2002 would have increased by approximately $50 million and loss per share would have increased by $0.03.

This excerpt taken from the Q 10-K filed Feb 18, 2005.

Asset Retirement Obligations

        As discussed in Note 2—Summary of Significant Accounting Policies, we adopted SFAS No. 143 on January 1, 2003.

        Our asset retirement obligations primarily relate to the costs of removing circuit equipment and wireless towers from leased properties when leases expire. The balance of our asset retirement obligations at December 31, 2004 and 2003 was $55 million and $49 million, respectively, and is included in other long-term liabilities on our balance sheets. During 2004, we accreted $7 million of additional expense and settled $1 million of accrued obligations. During 2003, we accreted $6 million of additional expense related to these asset retirement obligations. Verizon will assume a portion of this obligation when they purchase substantially all of our wireless network. See Note 6—Assets Held for Sale Including Discontinued Operations for additional information.

        If the provisions of SFAS No. 143 had been adopted prior to the period ended December 31, 2002, net loss for 2002 would have increased by approximately $50 million and loss per share would have increased by $0.03.

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