AT&T Wireless 2015 Annual Report Download - page 61

AT&T INC. | 59
NOTE 8. EQUITY METHOD INVESTMENTS
Investments in partnerships, joint ventures and less than
majority-owned subsidiaries in which we have significant
influence are accounted for under the equity method.
In the third quarter of 2015, we acquired DIRECTV (see
Note 5), which included various equity method investments.
The earnings from these investments, subsequent to the
acquisition date, are included in the 2015 activity in the
table below, as well as our consolidated statement of
income for 2015.
Our investments in equity affiliates at December 31, 2015
primarily include our interests in SKY Mexico, Game
Show Network, Otter Media Holdings, YP Holdings LLC
(YP Holdings), MLB Network and NW Sports Net.
SKY Mexico We hold a 41.0% interest in SKY Mexico,
which was acquired as part of DIRECTV. SKY Mexico is a
leading pay-TV provider in Mexico.
Game Show Network (GSN) We hold a 42.0% interest in
GSN, which was also a part of the acquisition of DIRECTV.
GSN is a television network dedicated to game-related
programming and Internet interactive game playing.
Otter Media Holdings We hold a 43.4% interest in Otter
Media Holdings, a venture between The Chernin Group and
AT&T that is focused on acquiring, investing in and launching
over-the-top subscription video services.
YP Holdings We hold a 47.0% interest in YP Holdings, an
online advertising company and directory publisher.
MLB Network We hold a 16.7% interest in MLB Network,
which offers broadcasts dedicated to Major League Baseball
and was acquired with DIRECTV.
NW Sports Net We hold a 29.0% interest in NW Sports
Net, a regional sports network acquired as part of DIRECTV.
The following table is a reconciliation of our investments
in equity affiliates as presented on our consolidated
balance sheets:
2015 2014
Beginning of year $ 250 $ 3,860
Additional investments 77 226
DIRECTV investments acquired 1,232 —
Equity in net income of affiliates 79 175
Dividends and distributions received (30) (148)
Sale of América Móvil shares — (3,817)
Other adjustments (2) (46)
End of year $1,606 $ 250
Undistributed earnings from equity affiliates were $162 and
$88 at December 31, 2015 and 2014.
NOTE 9. DEBT
Long-term debt of AT&T and its subsidiaries, including interest
rates and maturities, is summarized as follows at December 31:
2015 2014
Notes and debentures1
Interest Rates Maturities2
0.49% – 2.99% 2015 – 2022 $ 34,265 $ 22,127
3.00% – 4.99% 2015 – 2046 54,678 31,516
5.00% – 6.99% 2015 – 2095 31,140 23,260
7.00% – 9.50% 2015 – 2097 5,805 6,153
Other 15 —
Fair value of interest rate swaps
recorded in debt 109 125
126,012 83,181
Unamortized (discount) premium – net (842) (1,549)
Unamortized issuance costs (323) (233)
Total notes and debentures 124,847 81,399
Capitalized leases 884 430
Other 416 —
Total long-term debt, including
current maturities 126,147 81,829
Current maturities of long-term debt (7,632) (6,051)
Total long-term debt $118,515 $ 75,778
1 Includes credit agreement borrowings.
2 Maturities assume putable debt is redeemed by the holders at the next opportunity.
On July 24, 2015, we added $20,585 in long-term debt,
including capital leases, related to our acquisition of DIRECTV.
DIRECTV’s debt included both fixed and floating-rate coupons
with a weighted average rate of approximately 4.6% (ranging
from 1.75% to 9.50%) and had maturities ranging from 2015
to 2042. Included in our “Total notes and debentures” balance
in the table above was the face value of acquired debt from
DIRECTV of $17,050, which had a carrying amount of $17,787
at December 31, 2015.
Included in the table above at December 31, 2015, was
approximately $738, representing the remaining excess
of the fair value over the recorded value of debt in
connection with the acquisition of DIRECTV, all of which
was included in our “Unamortized (discount) premium – net.”
The excess is amortized over the remaining lives of the
underlying debt obligations.
We had outstanding Euro, British pound sterling, Canadian
dollar, Swiss franc and Brazilian real denominated debt of
approximately $26,221 and $24,568 at December 31, 2015
and 2014. The weighted-average interest rate of our entire
long-term debt portfolio, including the impact of derivatives,
decreased from 4.2% at December 31, 2014 to 4.0% at
December 31, 2015.
Other debt includes financing arrangements we have in
Mexico for the construction of wireless network facilities
that totaled $416, at December 31, 2015.