Notes to Consolidated Financial Statements

NOTE 6

INVESTMENTS IN UNCONSOLIDATED BUSINESSES

Our investments in unconsolidated businesses are comprised of the following:

(dollars in millions)

At December 31,

Ownership

 

2007
Investment

 

Ownership

 

2006
Investment

 

Equity Investees

Vodafone Omnitel

23.1

%

$

2,313

 

23.1

%

$

3,624

 

CANTV

 

 

 

28.5

 

 

230

 

Other

Various

 

 

744

 

Various

 

 

744

 

Total equity investees

 

 

 

3,057

 

 

 

 

4,598

 

 

Cost Investees

Various

 

 

315

 

Various

 

 

270

 

Total investments

in unconsolidated businesses

 

 

$

3,372

 

 

 

$

4,868

 

Dividends and repatriations of foreign earnings received from these investees amounted to $2,571 million in 2007, $42 million in 2006 and $2,335 million in 2005.

Equity Investees

Vodafone Omnitel

Vodafone Omnitel is the second largest wireless communications company in Italy. At December 31, 2007 and 2006, our investment in Vodafone Omnitel included goodwill of $1,154 million and $1,044 million, respectively.

In December 2007, Verizon received a net distribution from Vodafone Omnitel of approximately $2.1 billion and we anticipate that we may receive an additional distribution from Vodafone Omnitel within the next twelve months. As a result, we recorded $610 million of foreign and domestic taxes and expenses specifically relating to our share of Vodafone Omnitel’s distributable earnings. During 2005, we repatriated approximately $2.2 billion of Vodafone Omnitel’s earnings through the repurchase of issued and outstanding shares of its equity. Vodafone Omnitel’s owners, Verizon and Vodafone Group Plc (Vodafone), participated on a pro rata basis; consequently, Verizon’s ownership interest after the share repurchase remained at 23.1%.

CANTV

Verizon sold its interest in CANTV in 2007 (see Note 2).

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, 2007 and 2006, Verizon had equity investments in these partnerships of $637 million and $659 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 Investees

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 as described in Note 4. Our cost investments include a variety of domestic and international investments primarily involved in providing communication services.