AT&T Wireless 2008 Annual Report Download - page 65

AT&T Annual Report 2008
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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, 2008 and 2007, 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-
2009 2010 2011 2012 2013 after
Debt
repayments $9,504 $3,767 $7,536 $4,896 $5,825 $36,916
Weighted-
average
interest rate 4.3% 5.2% 7.1% 6.6% 5.6% 6.5%
Financing Activities
Debt During 2008, debt repayments totaled $4,010 and
consisted of:
 • $3,915relatedtodebtrepaymentswithaweighted-
average interest rate of 3.98%.
 • $66relatedtorepaymentsofEdgeWirelesstermloan.
 • $29relatedtoscheduledprincipalpaymentsonother
debt and repayments of other borrowings.
During 2008, we received net proceeds of $12,416 from
the issuance of $12,475 in long-term debt. Debt proceeds
were used for general corporate purposes and parts of the
proceeds were used for repurchases of our common stock.
Long-term debt issuances consisted of:
 • $2,500of5.5%globalnotesduein2018.
 • $2,000offloatingratenotesdue2010inaprivate
offering, which can be redeemed by the holder early
(which is classified as debt maturing in one year).
 • €1,250of6.125%globalnotesdue2015(equivalent
to approximately $1,975 when issued).
 • $1,500of4.95%globalnotesduein2013.
 • $1,250of6.4%globalnotesdue2038.
 • $1,000of5.6%globalnotesdue2018.
 • $750of6.3%globalnotesduein2038.
 • $1,500of6.7%globalnotesduein2013.
Debt maturing within one year consists of the following
at December 31:
2008 2007
Commercial paper $ 4,575 $1,859
Current maturities of long-term debt 9,503 4,939
Bank borrowings1 41 62
Total $14,119 $6,860
1 Primarily represents borrowings, the availability of which is contingent on the level of
cash held by some of our foreign subsidiaries.
The weighted-average interest rate on commercial paper
debt at December31, 2008 and 2007 was 1.1% and 4.2%,
respectively.
The following table is a reconciliation of our investments
in equity affiliates as presented on our consolidated
balance sheets:
2008 2007
Beginning of year $2,270 $1,995
Additional investments — 8
Equity in net income of affiliates 819 692
Dividends received (164) (395)
Currency translation adjustments (574) (18)
Other adjustments (19) (12)
End of year $2,332 $2,270
Undistributed earnings from equity affiliates were $2,989
and $2,335 at December31, 2008 and 2007. The currency
translation adjustment for 2008 and 2007 primarily reflects
the effect of exchange rate fluctuations on our investments
in Telmex, Telmex Internacional and América Móvil.
The fair value of our investment in Telmex, based on the
equivalent value of Telmex L shares at December 31, 2008,
was $1,884. The fair value of our investment in América Móvil,
based on the equivalent value of América Móvil L shares
at December 31, 2008, was $4,447. The fair value of our
investment in Telmex Internacional, based on the equivalent
value of Telmex Internacional L shares at December 31, 2008,
was $1,022.
NOTE 8. DEBT
Long-term debt of AT&T and its subsidiaries, including interest
rates and maturities, is summarized as follows at December31:
2008 2007
Notes and debentures
Interest Rates Maturities
2.95% – 5.99% 2008 – 2054 $28,796 $23,324
6.00% – 7.99% 2008 – 2097 31,794 29,282
8.00% – 9.10% 2008 – 2031 7,107 7,114
Other 138 136
Fair value of interest rate swaps
recorded in debt 527 88
68,362 59,944
Unamortized premium, net of discount 1,846 2,049
Total notes and debentures 70,208 61,993
Capitalized leases 167 201
Total long-term debt, including
current maturities 70,375 62,194
Current maturities of long-term debt (9,503) (4,939)
Total long-term debt $60,872 $57,255
We have debt instruments that may require us to repurchase
the debt or which may alter the interest rate associated with
that debt. We have $1,000 of Puttable Reset Securities (PURS)
at 5.0% 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.