AT&T Wireless 2011 Annual Report Download - page 75

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AT&T Inc. 73
Long-Term Debt and Other Financial Instruments
The carrying amounts and estimated fair values of our long-
term debt, including current maturities and other financial
instruments, are summarized as follows:
December 31, 2011 December 31, 2010
Carrying Fair Carrying Fair
Amount Value Amount Value
Notes and debentures $64,514 $73,738 $64,256 $69,313
Commercial paper — — 1,625 1,625
Bank borrowings — — 27 27
Investment securities 2,092 2,092 2,185 2,185
The fair values of our notes and debentures were estimated
based on quoted market prices, where available. The carrying
value of debt with an original maturity of less than one year
approximates market value.
Investment Securities
Our investment securities consist of primarily available-for-
sale instruments, which include equities, fixed income bonds
and other securities. Substantially all the fair values of our
available-for-sale securities were estimated based on quoted
market prices. Investments in securities not traded on a
national securities exchange are valued using pricing models,
quoted prices of securities with similar characteristics or
discounted cash flows. Realized gains and losses on securities
are included in “Other income (expense) – net” in the
consolidated statements of income using the specific
identification method. Unrealized gains and losses, net of tax,
on available-for-sale securities are recorded in accumulated
OCI. Unrealized losses that are considered other than
temporary are recorded in “Other income (expense) – net”
with the corresponding reduction to the carrying basis of the
investment. Fixed income investments have maturities of $149
less than one year, $228 within one to three years, $103
within three to five years, and $82 for five or more years.
Our short-term investments, other short- and long-term
held-to-maturity investments (including money market
securities) and customer deposits are recorded at amortized
cost, and the respective carrying amounts approximate
fair values.
Our investment securities maturing within one year are
recorded in “Other current assets,” and instruments with
maturities of more than one year are recorded in “Other
Assets” on the consolidated balance sheets.
Following is the fair value leveling for available-for-sale securities and derivatives as of December 31, 2011, and December 31, 2010:
December 31, 2011
Level 1 Level 2 Level 3 Total
Available-for-Sale Securities
Domestic equities $947 $ — $ — $ 947
International equities 495 — — 495
Fixed income bonds — 562 — 562
Asset Derivatives1
Interest rate swaps — 521 — 521
Cross-currency swaps — 144 — 144
Foreign exchange contracts — 2 — 2
Liability Derivatives1
Cross-currency swaps — (820) — (820)
Interest rate locks — (173) — (173)
Foreign exchange contracts — (9) — (9)
December 31, 2010
Level 1 Level 2 Level 3 Total
Available-for-Sale Securities
Domestic equities $976 $ — $ — $ 976
International equities 513 — — 513
Fixed income bonds — 639 — 639
Asset Derivatives1
Interest rate swaps — 537 — 537
Cross-currency swaps — 327 — 327
Interest rate locks — 11 — 11
Foreign exchange contracts — 6 — 6
Liability Derivatives1
Cross-currency swaps — (675) — (675)
Interest rate locks — (187) — (187)
Foreign exchange contracts — (2) — (2)
1
Derivatives designated as hedging instruments are reflected as other assets, other liabilities and, for a portion of interest rate swaps, accounts receivable.