Notes Payable and Long-term Debt
Notes payable and long-term debt consisted of the following at December 31:
|
| | | | | | | |
(In millions, except percentages) | 2013 |
| | 2012 |
|
$251 notes due 2018, 6.75% | $ | 251 |
| | $ | 251 |
|
$340 notes due 2018, 6.40% | 339 |
| | 338 |
|
$500 notes due 2020, 4.40% | 497 |
| | 497 |
|
$1,000 notes due 2020, 3.125% | 992 |
| | 991 |
|
$1,100 notes due 2022, 2.50% | 1,092 |
| | 1,092 |
|
$382 notes due 2027, 7.20% | 369 |
| | 368 |
|
$185 notes due 2028, 7.00% | 184 |
| | 184 |
|
$600 notes due 2040, 4.875% | 591 |
| | 591 |
|
$425 notes due 2041, 4.70% | 419 |
| | 419 |
|
Total debt issued and outstanding | $ | 4,734 |
| | $ | 4,731 |
|
The notes are redeemable by us at any time at redemption prices based on U.S. Treasury rates. The carrying value of long-term debt was recorded at amortized cost. The estimated fair value of long-term debt was the following at December 31:
|
| | | | | | | |
(In millions) | 2013 |
| | 2012 |
|
Fair value of long-term debt | $ | 5,036 |
| | $ | 5,483 |
|
The fair value of long-term debt was determined on quoted prices in inactive markets, which falls within Level 2 of the fair value measurement hierarchy for 2013 and 2012.
In the fourth quarter of 2012, we received proceeds of $1,092 million for the issuance of $1.1 billion fixed rate long-term debt and exercised our call rights to repurchase, at prices based on fixed spreads to the U.S. Treasuries, $970 million of our long-term debt due 2014 and 2015 at a loss of $29 million pretax, $19 million after-tax, which is included in other (income) expense, net.
The adjustments to the principal amounts of long-term debt were as follows at December 31:
|
| | | | | | | |
(In millions) | 2013 |
| | 2012 |
|
Principal | $ | 4,783 |
| | $ | 4,783 |
|
Unamortized issue discounts | (38 | ) | | (40 | ) |
Unamortized interest rate lock costs | (11 | ) | | (12 | ) |
Total | $ | 4,734 |
| | $ | 4,731 |
|
The aggregate amounts of principal payments due on long-term debt for the next five years are:
|
| | | |
(In millions) | |
2014 | $ | — |
|
2015 | — |
|
2016 | — |
|
2017 | — |
|
2018 | 591 |
|
In December 2011, we entered into a $1.4 billion revolving credit facility maturing in 2016, replacing the previous $500 million and $1.0 billion credit facilities, both scheduled to mature in November 2012.
Under the $1.4 billion credit facility, we can borrow, issue letters of credit and backstop commercial paper. Borrowings under this facility bear interest at various rate options, including LIBOR plus a margin based on our credit ratings. Based on our credit ratings at December 31, 2013, borrowings would generally bear interest at LIBOR plus 90 basis points. The credit facility is comprised of commitments from approximately 25 separate highly rated lenders, each committing no more than 10% of the facility. As of December 31, 2013 and December 31, 2012, there were no borrowings outstanding under this credit facility. However, we had $2 million of outstanding letters of credit at December 31, 2013 and December 31, 2012, which effectively reduced our borrowing capacity under this credit facility by those same amounts.
Under the $1.4 billion credit facility we must comply with certain covenants, including a ratio of total debt to total capitalization of no more than 60%. We were in compliance with the credit facility covenants during 2013 and 2012. Our ratio of total debt to total capitalization, as those terms are defined in the credit facility, was 30.0% at December 31, 2013. We are providing this ratio as this metric is used by our lenders to monitor our leverage and is also a threshold that limits our ability to utilize this facility.
Total cash paid for interest on notes payable and long-term debt was $210 million, $198 million and $167 million in 2013, 2012 and 2011, respectively
