| DEBT AND BORROWING ARRANGEMENTS |
DEBT AND BORROWING ARRANGEMENTS
Short-Term Borrowings
Loans and notes payable consist primarily of commercial paper issued in the United States. As of December 31, 2013 and 2012, we had $16,853 million and $16,204 million, respectively, in outstanding commercial paper borrowings. Our weighted-average interest rates for commercial paper outstanding were approximately 0.2 percent and 0.3 percent per year as of December 31, 2013 and 2012, respectively.
In addition, we had $7,413 million in lines of credit and other short-term credit facilities as of December 31, 2013. The Company's total lines of credit included $48 million that was outstanding and primarily related to our international operations.
Included in the credit facilities discussed above, the Company had $6,410 million in lines of credit for general corporate purposes. These backup lines of credit expire at various times from 2014 through 2018. There were no borrowings under these backup lines of credit during 2013. These credit facilities are subject to normal banking terms and conditions. Some of the financial arrangements require compensating balances, none of which is presently significant to our Company.
Long-Term Debt
During 2013, the Company issued $7,500 million of long-term debt. The general terms of the notes issued are as follows:
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$500 million total principal amount of notes due March 5, 2015, at a variable interest rate equal to the three-month London Interbank Offered Rate ("LIBOR") minus 0.02 percent;
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$500 million total principal amount of notes due November 1, 2016, at a variable interest rate equal to the three-month LIBOR plus 0.10 percent;
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$500 million total principal amount of notes due November 1, 2016, at a fixed interest rate of 0.75 percent;
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$1,250 million total principal amount of notes due April 1, 2018, at a fixed interest rate of 1.15 percent;
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$1,250 million total principal amount of notes due November 1, 2018, at a fixed interest rate of 1.65 percent;
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$1,250 million total principal amount of notes due November 1, 2020, at a fixed interest rate of 2.45 percent;
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$750 million total principal amount of notes due April 1, 2023, at a fixed interest rate of 2.50 percent; and
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$1,500 million total principal amount of notes due November 1, 2023, at a fixed interest rate of 3.20 percent.
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During 2013, the Company retired $1,250 million of debt upon maturity. The Company also extinguished $2,154 million of long-term debt prior to maturity, incurring associated extinguishment charges of $50 million. The general terms of the notes that were extinguished were:
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$225 million total principal amount of notes due August 15, 2013, at a fixed interest rate of 5.0 percent;
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$675 million total principal amount of notes due March 3, 2014, at a fixed interest rate of 7.375 percent;
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$900 million total principal amount of notes due March 15, 2014, at a fixed interest rate of 3.625 percent; and
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$354 million total principal amount of notes due March 1, 2015, at a fixed interest rate of 4.25 percent.
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During 2012, the Company retired $1,250 million of long-term notes upon maturity and issued $2,750 million of long-term debt. The general terms of the notes issued are as follows:
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$1,000 million total principal amount of notes due March 14, 2014, at a variable interest rate equal to the three-month LIBOR minus 0.05 percent;
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$1,000 million total principal amount of notes due March 13, 2015, at a fixed interest rate of 0.75 percent; and
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$750 million total principal amount of notes due March 14, 2018, at a fixed interest rate of 1.65 percent.
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During 2011, the Company issued $2,979 million of long-term debt. We used $979 million of this debt and paid a premium of $208 million to exchange $1,022 million of existing long-term debt that was assumed in connection with our acquisition of CCE's former North America business. The remaining cash from the issuance was used to reduce the Company's outstanding commercial paper balance and exchange a certain amount of short-term debt.
The general terms of the notes issued during 2011 are as follows:
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$1,655 million total principal amount of notes due September 1, 2016, at a fixed interest rate of 1.8 percent; and
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$1,324 million total principal amount of notes due September 1, 2021, at a fixed interest rate of 3.3 percent.
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During 2011, the Company extinguished $20 million of long-term debt prior to maturity. In addition, the Company repurchased long-term debt during 2011, which included $99 million in unamortized fair value adjustments related to purchase accounting for a prior year transaction and was settled throughout the year as follows:
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$674 million, which represented the carrying value of all of our outstanding British pound sterling notes, was repurchased; and
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$61 million in carrying value of long-term debt was repurchased.
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The Company recorded a net charge of $9 million in the line item interest expense in our consolidated statement of income during the year ended December 31, 2011. This net charge was due to the exchange, repurchase and/or extinguishment of long-term debt described above.
The Company's long-term debt consisted of the following (in millions, except average rate data):
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December 31, 2013 |
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December 31, 2012 |
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Amount |
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Average
Rate 1
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Amount |
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Average
Rate1
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U.S. dollar notes due 2014–2093 |
$ |
17,427 |
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1.8 |
% |
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$ |
13,407 |
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1.7 |
% |
U.S. dollar debentures due 2017–2098 |
2,191 |
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3.9 |
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2,207 |
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3.7 |
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U.S. dollar zero coupon notes due 20202
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138 |
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8.4 |
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135 |
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8.4 |
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Other, due through 20983
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370 |
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4.0 |
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291 |
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4.4 |
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Fair value adjustment4
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52 |
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N/A |
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273 |
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N/A |
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Total5,6
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$ |
20,178 |
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2.2 |
% |
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$ |
16,313 |
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2.1 |
% |
Less current portion |
1,024 |
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1,577 |
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Long-term debt |
$ |
19,154 |
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$ |
14,736 |
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1 |
These rates represent the weighted-average effective interest rate on the balances outstanding as of year end, as adjusted for the effects of interest rate swap agreements as well as fair value adjustments, if applicable. Refer to Note 5 for a more detailed discussion on interest rate management.
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2 |
This amount is shown net of unamortized discounts of $33 million and $36 million as of December 31, 2013 and 2012, respectively.
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3 |
As of December 31, 2013, the amount shown includes $167 million of debt instruments that are due through 2022.
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4 |
Refer to Note 5 for additional information about our fair value hedging strategy.
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5 |
As of December 31, 2013 and 2012, the fair value of our long-term debt, including the current portion, was $20,352 million and $17,157 million, respectively. The fair value of our long-term debt is estimated based on quoted prices for those or similar instruments.
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6 |
The above notes and debentures include various restrictions, none of which is presently significant to our Company. |
The carrying value of the Company's long-term debt included fair value adjustments related to the debt assumed from CCE of $514 million and $617 million as of December 31, 2013 and 2012, respectively. These fair value adjustments are being amortized over the number of years remaining until the underlying debt matures. As of December 31, 2013, the weighted-average maturity of the assumed debt to which these fair value adjustments relate was approximately 19 years. The amortization of these fair value adjustments will be a reduction of interest expense in future periods, which will typically result in our interest expense being less than the actual interest paid to service the debt. Total interest paid was $498 million, $574 million and $573 million in 2013, 2012 and 2011, respectively.
Maturities of long-term debt for the five years succeeding December 31, 2013, are as follows (in millions):
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Maturities of
Long-Term Debt
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2014 |
$ |
1,024 |
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2015 |
2,573 |
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2016 |
2,681 |
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2017 |
1,394 |
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2018 |
3,298 |
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