AT&T Uverse 2007 Annual Report Download - page 69

2007 AT&T Annual Report
| 67
and had maturities ranging from 2007 to 2097. Included in
our “Total notes and debentures” balance in the table above
was the face value of acquired debt from BellSouth and
AT&T Mobility of $25,234, which had a carrying amount of
$26,968 at December 31, 2006.
Included in the table above at December 31, 2006, was
$1,734 representing the remaining excess of the fair value
over the recorded value of debt in connection with the
acquisition of BellSouth and AT&T Mobility. The excess is
amortized over the remaining lives of the underlying debt
obligations.
We have debt instruments that may require us to repur-
chase the debt or which may alter the interest rate associated
with that debt. We have $1,000 of Puttable Reset Securities
(PURS) at 4.2% maturing in 2021 with an annual put option
by the holder. If the holders of our PURS do not require us
to repurchase the securities, the interest rate will be reset
based on current market conditions. Since these securities
can be put to us annually, the balance is included in current
maturities of long-term debt in our balance sheet.
Beginning in May 2009, our $500 zero-coupon puttable
note may be presented for redemption by the holder at
specified dates, but not more frequently than annually,
excluding 2011. If the note is held to maturity in 2022, the
redemption amount will be $1,030.
As of December 31, 2007 and 2006, we were in compliance
with all covenants and conditions of instruments governing
our debt. Substantially all of our outstanding long-term debt
is unsecured. Excluding capitalized leases and the effect of
interest rate swaps, the aggregate principal amounts of
long-term debt and the corresponding weighted-average
interest rate scheduled for repayment are as follows:
There-
2008 2009 2010 2011 2012 after
Debt
repayments $4,926 $5,965 $3,766 $7,534 $4,894 $32,771
Weighted-
average
interest rate 5.5% 4.9% 6.2% 7.1% 6.6% 6.4%
Financing Activities
Debt During 2007, debt repayments totaled $10,183 and
consisted of:
• $3,871 related to debt repayments with a weighted-
average interest rate of 6.1%, which included the early
redemption of debt related to a put exercise on $1,000
of our 4.2% PURS and called debt of $500 with an
interest rate of 7.0%.
• $3,411 related to repayments of commercial paper and
other short-term bank borrowings.
• $1,735 related to the early redemption of Dobson debt
acquired with a par value of $1,599 and a weighted-
average interest rate of 9.1%.
• $904 related to the early repayment of a Dobson
long-term credit facility.
• $218 related to the early redemption of a convertible
note held by Dobson.
• $44 related to scheduled principal payments on other
debt and repayments of other borrowings.
The following table is a reconciliation of our investments
in equity affiliates as presented on our consolidated balance
sheets:
2007 2006
Beginning of year $1,995 $2,031
Additional investments 8 5
Equity in net income of affiliates 692 535
Dividends received (395) (97)
Currency translation adjustments (18) (22)
Other adjustments (12) (457)
End of year $2,270 $1,995
Undistributed earnings from equity affiliates were $2,335
and $2,038 at December 31, 2007 and 2006, respectively.
The currency translation adjustment for 2007 and 2006
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 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.
The fair value of our investment in Telmex, based on the
equivalent value of Telmex L shares at December 31, 2007,
was $3,315. The fair value of our investment in América Móvil,
based on the equivalent value of América Móvil L shares at
December 31, 2007, was $8,808.
NOTE 8. DEBT
Long-term debt of AT&T and its subsidiaries, including interest
rates and maturities, is summarized as follows at December 31:
2007 2006
Notes and debentures
Interest Rates Maturities
4.03% – 5.98% 2007 – 2054 $23,324 $18,571
6.00% – 7.88% 2007 – 2097 29,282 24,685
8.00% – 9.10% 2007 – 2031 7,114 8,626
Other 136 141
Fair value of interest rate swaps 88 (80)
59,944 51,943
Unamortized premium, net of discount 2,049 2,323
Total notes and debentures 61,993 54,266
Capitalized leases 201 211
Total long-term debt, including
current maturities 62,194 54,477
Current maturities of long-term debt (4,939) (4,414)
Total long-term debt $57,255 $50,063
On December 29, 2006, we included on our balance sheet
$28,321 in long-term debt and capital leases related to our
acquisition of BellSouth (see Note 2). The debt of AT&T
Mobility was included in that amount since it is now a
subsidiary of AT&T. BellSouth’s and AT&T Mobility’s long-term
debt included both fixed and floating interest rates with a
weighted-average rate of 6.7% (ranging from 4.2% to 8.8%)