stimating Cost of Debt Capital

The December $31,2018,$ partial financial statements taken from the annual report for AT&T Inc. follow.

Consolidated Statements of Income

Dollars in millions except per share amounts

$2018$

$2017$

Operating revenues

Service

$$152,345$

$$145,597$

Equipment

$18,411$

$14,949$

Total operating revenues

$170,756$

$160,546$

Operating expenses

Equipment

$19,786$

$18,709$

Broadcast, programming and operations

$26,727$

$21,159$

Other cost of services $($exclusive of depreciation and amortization show separately below$)$

$32,906$

$37,942$

Selling, general and administrative

$36,765$

$35,465$

Abandonment of network assets

$46$

$2,914$

Depreciation and amortization

$28,430$

$24,387$

Total operating expenses

$144,660$

$140,576$

Operating income

$26,096$

$19,970$

Other income $($expense$)$:

Interest expense

$(7,957)$

$(6,300)$

Equity in net income of affiliates

$(48)$

$(128)$

Other income $($expense$)-$ net

$6,782$

$1,597$

Total other income $($expense$)$

$(1,223)$

$(4,831)$

Income before income taxes

$24,873$

$15,139$

Income tax expense

$4,920$

$(14,708)$

Net income

$$19,953$

$ $29,847$

Consolidated Balance Sheets $--$ Liabilities and Equity Sections

Dollars in millions except per share amounts, December $31$

$2018$

$2017$

Current liabilities

Debt maturing within one year

$$10,255$

$$38,374$

Accounts payable and accrued liabilities

$43,184$

$34,470$

Advanced billed and customer deposits

$5,948$

$4,213$

Accrued taxes

$1,179$

$1,262$

Dividends payable

$3,854$

$3,070$

Total current liabilities

$64,420$

$81,389$

Long$-$term debt

$166,250$

$125,972$

Deferred credits and other noncurrent liabilities:

Deferred income taxes

$57,859$

$43,207$

Post employment benefit obligation

$19,218$

$31,775$

Other noncurrent liabilities

$30,233$

$19,747$

Total deferred credits and other noncurrent liabilities

$107,310$

$94,729$