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| 1 | AGILENT TECHNOLOGIES INC |
In October 2007, the company issued an aggregate principal amount of $600 million in senior notes. The senior notes were issued at 99.60% of their principal amount. The notes will mature on November 1, 2017, and bear interest at a fixed rate of 6.50% per annum. The interest is payable semi-annually on May 1st and November 1st of each year and payments commenced on May 1, 2008. The senior notes are unsecured and rank equally in right of payment with all of Agilent’s other senior unsecured indebtedness. The company incurred issuance costs of $5 million in connection with the senior notes. These costs were capitalized in other assets on the condensed consolidated balance sheet and the costs are being amortized to interest expense over the term of the senior notes. On November 25, 2008, we terminated the two remaining interest rate swap contracts associated with our senior notes that represented the notional amount of $400 million. The asset value upon termination was approximately $43 million. The proceeds were recorded as operating cash flows and the gain is being deferred and amortized over the remaining life of the senior notes. |
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| 2 | Alpha Natural Resources, Inc. |
Long-term debt consisted of the following:
Old Alpha Credit Agreement On July 31, 2009, in conjunction with the Merger (see Note 18), Old Alpha terminated its existing senior secured credit facilities, which consisted of a $250,000 term loan facility, of which $233,125 was outstanding at July 31, 2009 (and due in 2012), and a $375,000 revolving credit facility. On July 31, 2009, the Company repaid the outstanding balance under the term loan and recorded a loss on early extinguishment of debt to write off the remaining balance of deferred loan costs in the amount of $5,641. New Alpha Credit Facility Prior to the Merger, Foundation had a credit facility (the “Foundation Credit Facility”) consisting of $500,000 secured revolving credit line and a $335,000 secured term loan. Repayment of outstanding indebtedness owed under the Foundation Credit Facility includes quarterly amortization of the term loan, which began in the third quarter of 2007, with both the term loan and revolving credit line maturing July 7, 2011. In connection with the Merger, the Foundation Credit Facility was amended to add the Company and substantially all of the subsidiaries of Old Alpha (the “New Subsidiaries”) as guarantors under the Foundation Credit Facility (the “New Alpha Credit Facility”). This amendment also provides for an increase in the interest rate to 3.25 percentage points over the London interbank offered rate (“LIBOR”) from 1.25 percentage points over LIBOR, subject, in the case of revolving loans, to adjustment based on leverage ratios. Following the Merger and upon the amendment becoming effective, limitations on annual capital expenditure amounts were eliminated and the amount of incremental credit facilities that may be incurred under the New Alpha Credit Facility were increased from $100,000 to $200,000, of which $150,000 was utilized to increase the revolving credit line to $650,000. As of September 30, 2009, the Company’s term loan due 2011 under the New Alpha Credit Facility had an outstanding balance of $293,125, with $33,500 classified as current portion of long-term debt. 2.375% Convertible Senior Notes Due June 2015 Old Alpha issued its 2.375% convertible senior notes due 2015 (the “Convertible Notes”) with an aggregate principal amount of $287,500 under an indenture dated as of April 7, 2008, as supplemented (the “Convertible Notes Indenture”). Following completion of the Merger, the Company assumed Old Alpha’s obligations in respect of the Convertible Notes by executing a supplemental indenture, dated as of July 31, 2009, among Old Alpha, as issuer, the Company, as successor issuer, and Union Bank of California (“UBOC”), as trustee. As of September 30, 2009, the aggregate principal amount of the Convertible Notes was $287,500. The Convertible Notes are the Company’s senior unsecured obligations and rank equally with all of the Company’s existing and future senior unsecured indebtedness. The Convertible Notes are effectively subordinated to all of the Company’s existing and future secured indebtedness and all existing and future liabilities of the Company’s subsidiaries, including trade payables. The Convertible Notes bear interest at a rate of 2.375% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, which began on October 15, 2008 and will mature on April 15, 2015, unless previously repurchased by the Company or converted. The Convertible Notes are convertible in certain circumstances and in specified periods at an initial conversion rate of 18.2962 shares of common stock per one thousand principal amount of Convertible Notes, subject to adjustment upon the occurrence of certain events set forth in the Indenture. Upon conversion of the Convertible Notes, holders will receive cash up to the principal amount of the notes to be converted, and any excess conversion value will be delivered in cash, shares of common stock or a combination thereof, at the Company's election. The Convertible Notes Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either UBOC or the holders of not less than 25% in aggregate principal amount of the Convertible Notes then outstanding may declare the principal of Convertible Notes and any accrued and unpaid interest thereon immediately due and payable. In the case of certain events of bankruptcy, insolvency or reorganization relating to the Company, the principal amount of the Convertible Notes together with any accrued and unpaid interest thereon will automatically become and be immediately due and payable. As a result of the Merger, the Convertible Notes became convertible at the option of the holders beginning on June 18, 2009, and remained convertible through the 30th day after the effective date of the Merger, which was July 31, 2009. There were no notes converted during the conversion period. The Convertible Notes were not convertible as of September 30, 2009 and therefore have been classified as long-term debt. On January 1, 2009, the Company adopted ASC 470-20, Debt with Conversion and other Options (“ASC 470-20”). ASC 470-20 applies to all convertible debt instruments that have a “net settlement feature,” which means that such convertible debt instruments, by their terms, may be settled either wholly or partially in cash upon conversion, and requires issuers of convertible debt instruments to separately account for the liability and equity components in a manner reflective of the issuers’ nonconvertible debt borrowing rate. ASC 470-20 was effective for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. Upon adoption of ASC 470-20, the Company retrospectively applied the change in accounting principle to prior accounting periods. Adoption of the standard resulted in the following balance sheet impacts at December 31, 2008: (1) a reduction of debt by $87,830 and an increase in paid in capital of $69,851, (2) an increase to deferred loan costs of $5,309, (3) a net reduction to deferred tax assets of $23,124 ($36,262 reduction in deferred tax assets, offset by a $13,138 change in the valuation allowance), and (4) a net increase in retained earnings of $164. In addition, the adoption of the standard resulted in the following non-cash income statement impacts: (1) an increase in interest expense of $2,728 for the three months ended September 30, 2008 and a reduction in interest expense of $3,369 for the nine months ended September 30, 2008, which is comprised of the reestablishment of the deferred loan costs of $8,903 in the second quarter of 2008 that were previously written off, offset by amortization of the deferred loan costs of $212 and $424 for the three and nine months ended September 30, 2008, respectively, and the accretion of the convertible debt discount of $2,516 and $5,110 for the three and nine months ended September 30, 2008, respectively, (2) an increase in income tax expense of $296 and $13,006 for the three and nine months ended September 30, 2008, respectively, and (3) a decrease in net income of $2,432 and $9,637 for the three and nine months ended September 30, 2008, respectively. For the three and nine month periods ended September 30, 2009, the adoption of ASC 470-20 increased non-cash interest expense by $2,954 and $8,690, respectively, related to the accretion of the convertible debt discount and the amortization of the deferred loan costs. The deferred loan costs and discount are being amortized and accreted, respectively, over the seven-year term of the Convertible Notes, which are due in 2015, and provide for an effective interest rate of 8.64%. As of September 30, 2009, the carrying amounts of the debt and the equity components were $207,722 and $95,511, respectively, and the unamortized discount of the debt was $79,778. For the three and nine month periods ended September 30, 2009, the Company incurred expense of $1,707 and $5,121, respectively, on the contractual interest coupon. 7.25% Senior Notes Due August 1, 2014 Prior to the Merger, on July 31, 2004, a subsidiary of Foundation, Foundation PA Coal Company, LLC (“Foundation PA”) issued $300,000 aggregate principal amount of notes that mature on August 1, 2014 (the “2014 Notes”). The 2014 Notes were guaranteed on a senior unsecured basis by Foundation Coal Corporation (“FCC”), an indirect parent of Foundation PA, and certain of its subsidiaries. As a result of the Merger, Foundation PA and FCC became subsidiaries of New Alpha. On July 31, 2009, in connection with the Merger, the Company assumed the obligations of FCC in respect of the 2014 Notes and, along with the New Subsidiaries, became obligated as guarantors on the indenture governing the 2014 Notes. On August 1, 2009, in connection with the Merger, FCC merged with and into the Company. As of September 30, 2009, the outstanding balance of the 2014 Notes was $289,206, which is net of the debt discount of $9,079. Accounts Receivable Securitization On March 25, 2009, the Company and certain subsidiaries became a party to an $85,000 accounts receivable securitization facility with a third party financial institution (the “A/R Facility”) by forming ANR Receivables Funding, LLC (the “SPE”), a special-purpose, bankruptcy-remote subsidiary, wholly-owned indirectly by the Company. The sole purpose of the SPE is to purchase trade receivables generated by certain of the Company’s operating subsidiaries, without recourse (other than customary indemnification obligations for breaches of specific representations and warranties), and then transfer senior undivided interests in up to $85,000 of those accounts receivable to a financial institution for the issuance of letters of credit or for cash borrowings for the ultimate benefit of the Company. The SPE is consolidated into the Company’s financial statements, and therefore has no impact on the Company’s consolidated financial statements. The assets of the SPE, however, are not available to the creditors of the Company or any other subsidiary. The SPE pays facility fees, program fees and letter of credit fees (based on amounts of outstanding letters of credit), as defined in the definitive agreements for the A/R Facility. Available borrowing capacity is based on the amount of eligible accounts receivable as defined under the terms of the definitive agreements for the A/R Facility and varies over time. The receivables purchase agreement supporting the borrowings under the A/R Facility is subject to renewal annually and, unless terminated earlier, expires March 24, 2010. As of September 30, 2009, letters of credit in the amount $80,100 were outstanding under the A/R Facility and no cash borrowing transactions had taken place. As outstanding letters of credit exceeded borrowing capacity as of September 30, 2009, the Company was required to provide additional collateral in the form of $14,174 of restricted cash, which is included in prepaid expenses and other current assets, to secure outstanding letters of credit. Under the A/R Facility, the SPE is subject to certain affirmative, negative and financial covenants customary for financings of this type, including restrictions related to, among other things, liens, payments, merger or consolidation and amendments to the agreements underlying the receivables pool. Alpha Natural Resources, Inc. has agreed to guarantee the performance by its subsidiaries, other than the SPE, of their obligations under the A/R Facility. The Company does not guarantee repayment of the SPE’s debt under the A/R Facility. The financial institution, which is the administrator, may terminate the A/R Facility upon the occurrence of certain events that are customary for facilities of this type (with customary grace periods, if applicable), including, among other things, breaches of covenants, inaccuracies of representations and warranties, bankruptcy and insolvency events, changes in the rate of default or delinquency of the receivables above specified levels, a change of control and material judgments. A termination event would permit the administrator to terminate the program and enforce any and all rights and remedies, subject to cure provisions, where applicable. |
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| 3 | AMAZON COM INC | Note 3 — Long-Term Debt In February 2008, our Board of Directors authorized a debt repurchase program, pursuant to which in Q1 2009 we redeemed the remaining €240 million ($319 million based on the Euro to U.S. Dollar exchange rate on the date of redemption) in principal of our 6.875% Premium Adjustable Convertible Securities (“PEACS”). |
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| 4 | AMPHENOL CORP /DE/ |
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| 5 | BANK OF AMERICA CORP /DE/ |
The following table presents long-term debt at September 30, 2009 including long-term debt associated with the acquisition of Merrill Lynch.
The weighted-average interest rate for debt (excluding structured notes) issued by Merrill Lynch & Co., Inc. and subsidiaries was 3.69 percent as of September 30, 2009. Including the Merrill Lynch acquisition, the Corporation has aggregate annual maturities on its long-term debt obligations of $94.5 billion maturing within one year, $62.5 billion maturing in two years, $77.0 billion maturing in three years, $34.8 billion maturing in four years, $37.2 billion maturing in five years and $150.3 billion for all years thereafter. Certain structured notes acquired in connection with the acquisition of Merrill Lynch are accounted for under the fair value option. For more information on these structured notes, see Note 16 - Fair Value Disclosures.
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| 6 | BB&T CORP | NOTE 5. Long-Term Debt Long-term debt is summarized as follows:
In July 2009, BB&T Capital Trust VI (“BBTCT VI”) issued $575 million of Capital Securities, with a fixed interest rate of 9.60% through August 1, 2064 and a floating rate, if extended, through August 1, 2069. BBTCT VI, a statutory business trust created under the laws of the State of Delaware, was formed by BB&T for the sole purpose of issuing the Capital Securities and investing the proceeds thereof in Junior Subordinated Debentures issued by BB&T. BB&T has made guarantees which, taken collectively, fully, irrevocably, and unconditionally guarantee, on a subordinated basis, all of BBTCT VI’s obligations under the Trust and Capital Securities. BBTCT VI’s sole asset is the Junior Subordinated Debentures issued by BB&T which have an initial maturity on August 1, 2064 and a final maturity date on August 1, 2069. The Junior Subordinated Debentures are subject to early redemption (i) in whole, but not in part, at any time under certain prescribed limited circumstances or (ii) in whole, or in part, pursuant to the call provisions after August 1, 2014. The Capital Securities of BBTCT VI are subject to mandatory redemption in whole, or in part, upon repayment of the Junior Subordinated Debentures at maturity or their earlier redemption. |
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| 7 | BMC SOFTWARE INC | (4) Long-Term Debt Long-term debt consists of the following:
At September 30, 2009, we were in compliance with all debt covenants. |
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| 8 | BUCYRUS INTERNATIONAL INC | 7. Long-Term Debt and Financing Arrangements The Company’s credit facilities include a secured revolving credit facility of $357.5 million, an unsecured German revolving credit facility of €65.0 million, each of which mature on May 4, 2012, and a term loan facility of $400.0 million plus €75.0 million with a maturity date of May 4, 2014. The entire secured revolving credit facility may be used for letters of credit. At September 30, 2009 the Company had no borrowings under its secured or unsecured revolving credit facilities. At December 31, 2008, the Company classified the entire secured revolving credit facility balance of $55.2 million as current maturities of long-term debt and short-term obligations because it intended to repay the outstanding balance within 12 months.
At September 30, 2009, the amount potentially available for borrowing under the secured revolving credit facility was $285.3 million, after taking into account $72.2 million of issued letters of credit. The amount potentially available for borrowing under the unsecured German credit facility at September 30, 2009 was $54.3 million (€37.1 million), after taking into account $40.9 million (€27.9 million) of issued letters of credit. At September 30, 2009, the Company had borrowings of $499.5 million ($392.0 million plus €73.5 million) under its term loan facility. To manage a portion of its exposure to changes in LIBOR-based interest rates, the Company has entered into interest rate swap agreements that effectively fix the interest payments on $477.4 million ($375.0 million plus €70.0 million) of outstanding borrowings under its term loan facility at a weighted average interest rate of 3.4%, plus the applicable spread. The remaining $22.1 million of outstanding term loan borrowings at September 30, 2009 were at a weighted average interest rate of 1.9%, plus the applicable spread. |
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| 9 | CABOT OIL & GAS CORP |
4. LONG-TERM DEBT
The Company’s debt consisted of the following:
In April 2009, the Company entered into a new revolving credit facility and terminated its prior
credit facility. The credit facility provides for an available credit line of $500 million and
contains an accordion feature allowing the Company to increase the available credit line to $600
million, if any one or more of the existing banks or new banks agree to provide such increased
commitment amount. The term of the facility expires in April 2012.
In conjunction with entering into the new credit facility, the Company incurred $10.4 million of
debt issuance costs which were capitalized and will be amortized over the term of the credit
facility. Additionally, $1.5 million in unamortized costs associated with the prior credit
facility will be amortized over the term of the new credit facility in accordance with ASC 470-50,
“Debt-Modifications and Extinguishments.”
The credit facility is unsecured. The available credit line is subject to adjustment from time to
time on the basis of (1) the projected present value (as determined by the banks based on the
Company’s reserve reports and engineering reports) of estimated future net cash flows from certain
proved oil and gas reserves and certain other assets of the Company (the “Borrowing Base”) and (2)
the outstanding principal balance of the Company’s senior notes. Under the credit facility, the
Borrowing Base is initially set at $1.35 billion, to be periodically redetermined as described
above. While the Company does not expect a reduction in the available credit line, in the event
that it is adjusted below the outstanding level of borrowings in connection with scheduled
redetermination or due to a termination of hedge positions, the Company has a period of six months
to reduce its outstanding debt in equal monthly installments to the adjusted credit line available.
Interest rates under the credit facility are based on Euro-Dollars (LIBOR) or Base Rate (Prime)
indications, plus a margin. These associated margins increase if the total indebtedness under the
credit facility and the Company’s senior notes is greater than 25%, greater than 50%, greater than
75% or greater than 90% of the Borrowing Base, as shown below:
The credit facility provides for a commitment fee on the unused available balance at annual rates
of 0.50%.
The credit facility contains various customary restrictions, which include the following:
(a) Maintenance of a minimum annual coverage ratio of operating cash flow to interest expense for
the trailing four quarters of 2.8 to 1.0.
(b) Maintenance of an asset coverage ratio of the present value of proved reserves plus working
capital to debt of 1.5 to 1.0.
(c) Maintenance of a current ratio, as defined in the agreement, of 1.0 to 1.0.
(d) Prohibition on the merger or sale of all, or substantially all, of the Company’s or any
subsidiary’s assets to a third party, except under certain limited conditions.
In addition, the credit facility includes a customary condition to the Company’s borrowings under
the facility that there has not occurred a material adverse change with respect to the Company.
At September 30, 2009, the Company had $128 million of borrowings outstanding under its revolving
credit facility at a weighted-average interest rate of 3.7%.
The Company believes it is in compliance in all material respects with its debt covenants.
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| 10 | CITRIX SYSTEMS INC |
8. LONG-TERM DEBT Effective on August 9, 2005, the Company entered into a revolving credit facility (the “Credit Facility”) with a group of financial institutions (the “Lenders”). Effective September 27, 2006, the Company entered into an amendment and restatement of its Credit Facility (the “Amendment”). The Amendment decreased the overall range of interest rates the Company must pay on amounts outstanding on the Credit Facility and lowered the facility fee. In addition, the Amendment extended the term of the Credit Facility. The Credit Facility, as amended, allows the Company to increase the revolving credit commitment up to a maximum aggregate revolving credit commitment of $175.0 million. The Credit Facility, as amended, currently provides for a revolving line of credit that will expire on September 27, 2011 in the aggregate amount of $100.0 million, subject to continued covenant compliance. A portion of the revolving line of credit (i) in the aggregate amount of $25.0 million may be available for issuances of letters of credit and (ii) in the aggregate amount of $15.0 million may be available for swing line loans. The Credit Facility, as amended, currently bears interest at LIBOR plus 0.32% and adjusts in the range of 0.32% to 0.80% above LIBOR based on the level of the Company’s total debt and its adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) as defined in the agreement. In addition, the Company is required to pay a quarterly facility fee ranging from 0.08% to 0.20% based on the aggregate amount available under the Credit Facility, as amended, and the level of the Company’s total debt and its adjusted EBITDA. Borrowings under the Credit Facility, as amended, are guaranteed by the Company and certain of the Company’s U.S. and foreign subsidiaries, which guarantees are secured by a pledge of shares of certain foreign subsidiaries. As of September 30, 2009, there were no amounts outstanding under the Credit Facility, as amended. The Credit Facility, as amended, contains customary default provisions, and the Company must comply with various financial and non-financial covenants. The financial covenants consist of a minimum interest coverage ratio and a maximum consolidated leverage ratio. The primary non-financial covenants contain certain limits on the Company’s ability to pay dividends, conduct certain mergers or acquisitions, make certain investments and loans, incur future indebtedness or liens, alter the Company’s capital structure or sell stock or assets. As of September 30, 2009, the Company was in compliance with all covenants of the Credit Facility. |
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| 11 | COCA COLA CO |
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| 12 | COMCAST CORP | Note 5: Long-Term Debt Borrowings In June 2009, we issued $700 million principal amount of 5.70% notes due 2019 and $800 million principal amount of 6.55% notes due 2039. During the nine months ended September 30, 2009, we issued $300 million face amount of commercial paper, net of repayments. The net proceeds of these issuances, together with cash on hand, were used for the purchase of notes included in the cash tender offer, as described below, as well as for the repayment of outstanding borrowings under our revolving credit facility, the repayment of debt at its maturity as well as working capital and general corporate purposes. Redemptions and Repayments In June 2009, we repaid at maturity $750 million principal amount of our 6.875% notes due 2009. In July 2009, we repaid at maturity $1.2 billion principal amount of our floating rate notes due 2009. In July 2009, we completed a cash tender to purchase $1.3 billion aggregate principal amount of certain of our outstanding notes consisting of approximately $621 million principal amount of our 8.375% notes due 2013, $367 million principal amount of our 7.125% notes due 2013 and $312 million principal amount of our 7.875% senior debentures due 2013. During the three months ended September 30, 2009, we recognized approximately $180 million of interest expense primarily associated with the premiums incurred in the tender offer. During the nine months ended September 30, 2009, we repaid all $1.0 billion of amounts outstanding under our revolving credit facility due 2013. |
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| 13 | CONAGRA FOODS INC /DE/ |
16. LONG-TERM DEBT
As of May 31, 2009 and August 24, 2008, $9.2 million and $300.0 million, respectively, of senior
debt due August 2027 was included in current installments of long-term debt due to the existence of
a put option that was exercisable by the holders of this senior debt from June 1, 2009 to July 1,
2009. As part of our debt refinancing in the fourth quarter of fiscal 2009, we repaid $290.8
million of this senior debt. We reclassified the amount not put by the holders to senior long-term
debt in the first quarter of fiscal 2010, when the put option expired.
We consolidate the financial statements of Lamb Weston BSW. During the second quarter of fiscal
2009, Lamb Weston BSW entered into a term loan agreement with a bank under which it borrowed $20.0
million of senior debt at an annual interest rate of 4.34% due September 2018. During the third
quarter of fiscal 2009, Lamb Weston BSW restructured and repaid this debt and entered into a term
loan agreement with a bank under which it borrowed $40.0 million of variable (30-day LIBOR+1.85%)
interest rate debt due in June 2018.
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| 14 | CONSOLIDATED EDISON INC | Note C—Long-Term Debt Reference is made to Note C to the financial statements in Item 8 of the Form 10-K and Note C to the financial statements in Part I, Item 1 of the First and Second Quarter Forms 10-Q. |
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| 15 | CSX CORP | Debt Total activity related to long-term debt as of September 2009 was as follows:
For fair value information related to the Company’s long-term debt, see Note 12, Fair Value Measurements. Revolving Credit Facility CSX has a $1.25 billion unsecured revolving credit facility with a syndicate of banks. The facility allows borrowings at floating rates based on the London interbank offered rate ("LIBOR"), plus a spread depending upon ratings assigned by Moody's Investors Service and Standard & Poor's Ratings Group to CSX's senior, unsecured, long-term indebtedness for borrowed money. The facility requires CSX to maintain a ratio of total debt to total capitalization below a prescribed limit. The facility does not require CSX to post collateral under any circumstances. As of September 2009, this facility was not drawn on, and CSX was in compliance with all covenant requirements under the facility. This facility expires in 2012. Receivables Securitization Facility On September 28, 2009, following the end of the fiscal quarter, the Company entered into a $250 million receivables securitization facility. The purpose of this facility is to provide an alternative to commercial paper and a low cost source of short-term liquidity. This facility has a 364-day term. As of the date of this filing, CSX has not drawn on this facility. Under the terms of this facility, CSX Transportation and CSX Intermodal transfer eligible third-party receivables to CSX Trade Receivables, a bankruptcy-remote special purpose subsidiary. A separate subsidiary of CSX will service the receivables. Upon transfer, the receivables become assets of CSX Trade Receivables and are not available to the creditors of CSX or any of its other subsidiaries. The cash received in exchange for these receivables when CSX Trade Receivables monetizes them by selling them to third party lenders will be recorded as debt on CSX’s consolidated financial statements. |
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| 16 | DAVITA INC |
Long-term debt was comprised of the following:
Scheduled maturities of long-term debt at September 30, 2009 are as follows:
During the first nine months of 2009, the Company made mandatory principal payments totaling $39,375 on the term loan A. Effective January 1, 2009, the Company was required to provide enhanced disclosures about the Company’s derivative and hedging activities. The Company is required to provide additional disclosures about (a) how and why the Company uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for, and (c) how derivative instruments and related hedged items affect the Company’s financial position, financial performance, and cash flows. These requirements did not have a material impact on the Company’s consolidated financial statements. The Company has elected to provide comparative disclosures for the prior period presented. The Company has entered into several interest rate swap agreements as a means of hedging its exposure to and volatility from variable-based interest rate changes as part of its overall risk management strategy. These agreements are not held for trading or speculative purposes, and have the economic effect of converting portions of our variable rate debt to a fixed rate. These agreements are designated as cash flow hedges, and as a result, hedge-effective gains or losses resulting from changes in the fair values of these swaps are reported in other comprehensive income until such time as each specific swap tranche is realized, at which time the amounts are reclassified into net income. Net amounts paid or received for each specific swap tranche that have settled have been reflected as adjustments to debt expense. These agreements do not contain credit-risk contingent features.
As of September 30, 2009, the Company maintained a total of eight interest rate swap agreements with amortizing notional amounts totaling $482,600. These agreements had the economic effect of modifying the LIBOR-based variable interest rate on an equivalent amount of the Company’s debt to fixed rates ranging from 3.88% to 4.70%, resulting in an overall weighted average effective interest rate of 5.70% on the hedged portion of the Company’s Senior Secured Credit Facilities, including the term loan B margin of 1.50%. The swap agreements expire in 2010 and require quarterly interest payments. The Company estimates that approximately $12,300 of existing unrealized pre-tax losses in other comprehensive income at September 30, 2009 will be reclassified into income over the next twelve months. The following table summarizes our derivative instruments as of September 30, 2009 and December 31, 2008:
The following table summarizes the effects of our interest rate swap agreements for the nine months ended September 30, 2009 and 2008:
Total comprehensive income for the three and nine months ended September 30, 2009 was $128,465 and $360,677, respectively, including an increase to other comprehensive income for amounts reclassified into income, net of unrealized valuation losses on interest rate swaps of $1,667 and $5,866, net of tax, respectively, and an increase to other comprehensive income for unrealized valuation gains on investments, net of amounts reclassified into income of $527 and $635, net of tax, respectively. Total comprehensive income for the three and nine months ended September 30, 2008 was $107,943 and $309,239 including adjustments to other comprehensive income for valuation gains (losses) on interest rate swaps, net of amounts reclassified into income of $636 and $(1,729), net of tax, respectively, and adjustments to other comprehensive income for unrealized losses on investments, net of amounts reclassified into income of ($431) and ($606), net of tax, respectively. As of September 30, 2009, the interest rates were economically fixed on approximately 25% of the Company’s variable rate debt and approximately 61% of its total debt. As a result of the swap agreements, the overall effective weighted average interest rate on the Senior Secured Credit Facilities was 2.81%, based upon the current margins in effect of 1.50%, as of September 30, 2009. The Company’s overall average effective interest rate during the third quarter of 2009 was 4.79% and as of September 30, 2009 was 4.76%. As of September 30, 2009, the Company has undrawn revolving credit facilities totaling $250,000 of which approximately $48,000 was committed for outstanding letters of credit. In addition, the Company currently has undrawn revolving credit facilities totaling $3,000 associated with several of its joint ventures. These revolving credit facilities are typically guaranteed by DaVita Inc. or one of its wholly-owned operating subsidiaries based upon its proportionate ownership percentage. |
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| 17 | DIAMOND OFFSHORE DRILLING INC |
9. Long-Term Debt
Long-term debt consists of the following:
At September 30, 2009, there was $6.0 million aggregate principal amount at maturity, or
$4.1 million accreted, or carrying, value, of our Zero Coupon Debentures outstanding.
On October 8, 2009, we issued $500.0 million aggregate principal amount of senior unsecured
notes. See Note 13.
5.875% Senior Notes
On May 4, 2009, we issued $500.0 million aggregate principal amount of our 5.875% Senior Notes
due May 1, 2019, or 5.875% Senior Notes, for general corporate purposes. The 5.875% Senior Notes
were issued at an offering price of 99.851% of the principal and resulted in net proceeds to us of
approximately $495.3 million.
The notes bear interest at 5.875% per year, payable semiannually in arrears on May 1 and
November 1 of each year, beginning November 1, 2009, and mature on May 1, 2019. The 5.875% Senior
Notes are unsecured and unsubordinated obligations of Diamond Offshore Drilling, Inc., or DODI, and
rank equal in right of payment to existing and future unsecured and unsubordinated indebtedness of
DODI. We have the right to redeem all or a portion of these notes for cash at any time or from
time to time, on at least 15 days but not more than 60 days prior written notice, at the redemption
price specified in the governing indenture plus accrued and unpaid interest to the date of
redemption.
As reflected in the table below, the holders of our outstanding Zero Coupon Debentures have
the right to require us to purchase all or a portion of their outstanding debentures on June 6,
2010. The aggregate maturities of long-term debt for each of the five years subsequent to
September 30, 2009 are as follows:
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| 18 | Discover Financial Services |
Long-term borrowings consist of borrowings and capital leases having original maturities of one year or more. The following table provides a summary of the outstanding amounts and general terms of the Company’s long-term borrowings (dollars in thousands):
The Company has entered into an unsecured credit agreement that is effective through May 2012. The agreement provides for a revolving credit commitment of up to $2.4 billion (of which the Company may borrow up to 30% and Discover Bank may borrow up to 100% of the total commitment). As of August 31, 2009, the Company had no outstanding balances due under the facility. The credit agreement provides for a commitment fee on the unused portion of the facility, which can range from 0.07% to 0.175% depending on the index debt ratings. Loans outstanding under the credit facility bear interest at a margin above the Federal Funds rate, LIBOR, the EURIBOR or the Euro Reference rate. The terms of the credit agreement include various affirmative and negative covenants, including financial covenants related to the maintenance of certain capitalization and tangible net worth levels, and certain double leverage, delinquency and Tier 1 capital to managed loans ratios. The credit agreement also includes customary events of default with corresponding grace periods, including, without limitation, payment defaults, cross-defaults to other agreements evidencing indebtedness for borrowed money and bankruptcy-related defaults. The commitment may be terminated upon an event of default.
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| 19 | DISH Network CORP |
7. Long-Term Debt
7 7/8% Senior Notes due 2019
On August 17, 2009, we issued $1.0 billion aggregate principal amount of our ten-year, 7 7/8%
Senior Notes due September 1, 2019 at an issue price of 97.467%. Interest accrues at an annual
rate of 7 7/8% and is payable semi-annually in cash, in arrears on March 1 and September 1 of each
year, commencing on March 1, 2010.
On October 5, 2009, we issued $400 million aggregate principal amount of additional 7 7/8% Senior
Notes due 2019 at an issue price of 101.750% plus accrued interest from August 17, 2009. These
notes were issued as additional notes under the indenture, dated as of August 17, 2009 (the
“Indenture”), pursuant to which we issued the $1.0 billion discussed above. These notes and the
notes previously issued under the Indenture will be treated as a single class of debt securities
under the Indenture.
The 7 7/8% Senior Notes are redeemable, in whole or in part, at any time at a redemption price equal
to 100% of the principal amount plus a “make-whole” premium, as defined in the related Indenture,
together with accrued and unpaid interest. Prior to September 1, 2012, we may also redeem up to
35% of each of the 7 7/8% Senior Notes at specified premiums with the net cash proceeds from certain
equity offerings or capital contributions.
The 7 7/8% Senior Notes are:
The Indenture related to the 7 7/8% Senior Notes contains restrictive covenants that, among other
things, impose limitations on the ability of DDBS and its restricted subsidiaries to:
In the event of a change of control, as defined in the related indenture, we would be required to
make an offer to repurchase all or any part of a holder’s 7 7/8% Senior Notes at a purchase price
equal to 101% of the aggregate principal amount thereof, together with accrued and unpaid interest
thereon, to the date of repurchase.
Fair Value of our Long-Term Debt
The following table summarizes the carrying value and fair values of our debt facilities as of
September 30, 2009 and December 31, 2008:
Capital Lease Obligations
Ciel II, a Canadian DBS satellite, was launched in December 2008 and commenced commercial operation
at the 129 degree orbital location in February 2009. We have leased 100% of the capacity on the
satellite for an initial term of ten years. Prior to the launch, we pre-paid $131 million to SES
Americom in connection with the lease agreement and we capitalized $16 million of interest related
to this satellite. We have accounted for this agreement as a capital lease asset by recording $277
million as the estimated fair value of the satellite and recording a capital lease obligation in
the amount of $130 million.
As of September 30, 2009 and December 31, 2008, we had $500 million and $223 million, respectively,
capitalized for satellites acquired under capital leases included in “Property and equipment, net”
with related accumulated depreciation of $56 million and $26 million, respectively. This increase
during the nine months ended September 30, 2009 related to the Ciel II satellite is discussed
above.
In our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), we
recognized depreciation expense on satellites acquired under capital lease agreements as follows:
Future minimum lease payments under our capital lease obligations, together with the present value
of the net minimum lease payments as of September 30, 2009, are as follows (in thousands):
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| 20 | DOW CHEMICAL CO /DE/ | NOTE L – NOTES PAYABLE, LONG-TERM DEBT AND AVAILABLE CREDIT FACILITIES
On March 9, 2009 the Company borrowed $3 billion under its Five Year Competitive Advance and Revolving Credit Facility Agreement, dated April 24, 2006; $1.6 billion of the funds were repaid on May 15, 2009 and $0.5 billion of the funds were repaid on June 30, 2009. The funds are due in April 2011 and bear interest at a variable LIBOR-plus rate. The Company is using the funds to finance day-to-day operations, to repay indebtedness maturing in the ordinary course of business and for other general corporate purposes. At September 30, 2009, the Company had an unused and committed balance of $2.1 billion under the Agreement. Debt financing for the acquisition of Rohm and Haas was provided by a $9,226 million draw on a Term Loan Agreement (“Term Loan”) on April 1, 2009. The Term Loan matures on April 1, 2010, provided however, that the original maturity date may be extended for an additional year at the option of the Company, for a maximum outstanding balance of $8.0 billion. The actual interest rate of the Term Loan and the resulting fees that the Company will ultimately pay for the Term Loan can vary significantly and are dependent on the current short-term interest rates in effect, the mode of borrowing (Base Rate or Eurodollar), the Company’s actual current long-term debt rating by Moody’s and Standard & Poor’s, the outstanding amount of the Term Loan at the end of each fiscal quarter, and the progress toward key targets such as the issuance of equity financing, among other factors. Prepaid up-front debt issuance costs of $304 million were paid. Amortization of the prepaid costs was accelerated concurrent with payments; $24 million remained to be amortized at September 30, 2009. The Term Loan requires the Company to maintain a total leverage ratio, measured as total debt to EBITDA on a four quarters Trailing Consolidated EBITDA basis, above specific thresholds as defined in the Term Loan Agreement. The Term Loan was repaid through a combination of proceeds obtained through asset sales, the issuance of debt securities and/or the issuance of equity securities. At September 30, 2009, $8,226 million had been paid on the Term Loan, leaving a balance of $1.0 billion. On October 1, 2009, the remaining $1.0 billion balance of the Term Loan was fully repaid from proceeds of the sale of Morton, (see Note E). On May 7, 2009, the Company issued $6 billion of debt securities in a public offering. The offering included $1.75 billion aggregate principal amount of 7.6 percent notes due 2014; $3.25 billion aggregate principal amount of 8.55 percent notes due 2019; and $1 billion aggregate principal amount of 9.4 percent notes due 2039. Aggregate principal amount of $1.35 billion of the 8.55 percent notes due 2019 were offered by accounts and funds managed by Paulson & Co. and trusts created by members of the Haas family. These investors received notes from the Company in payment for 1.3 million shares of the Company’s Perpetual Preferred Stock, Series B, at par plus accrued dividends (see Note P for further information). The Company used the net proceeds received from this offering for refinancing, renewals, replacements and refunding of outstanding indebtedness, including repayment of a portion of the Term Loan. On August 4, 2009, the Company issued $2.75 billion of debt securities in a public offering. The offering included $1.25 billion aggregate principal amount of 4.85 percent notes due 2012; $1.25 billion aggregate principal amount of 5.90 percent notes due 2015; and $0.25 billion aggregate principal amount of floating rate notes due 2011. The Company used the net proceeds received from this offering for refinancing, renewals, replacements and refunding of outstanding indebtedness, including repayment of a portion of the Term Loan. On October 1, 2009, the remaining $1.0 billion balance of the Term Loan was fully repaid from proceeds of the sale of Morton (see Note E). The fair value of debt assumed from Rohm and Haas on April 1, 2009 of $2,576 million is reflected in the long-term debt table above. On August 21, 2009, the Company executed a buy-back of 175 million Euro of private placement debt acquired from Rohm and Haas and recognized a $56 million pretax loss on this early extinguishment, included in “Sundry income (expense) – net.” On September 28, 2009, Calvin Capital LLC, a wholly owned subsidiary of the Company, repaid a $674 million note payable which was issued in September 2008. The Company’s outstanding debt of $23.7 billion has been issued under indentures which contain, among other provisions, covenants with which the Company must comply while the underlying notes are outstanding. Such covenants include obligations to not allow liens on principal U.S. manufacturing facilities, enter into sale and lease-back transactions with respect to principal U.S. manufacturing facilities, or merge or consolidate with any other corporation or sell or convey all or substantially all of the Company’s assets. The outstanding debt also contains customary default provisions. Failure of the Company to comply with any of these covenants could result in a default under the applicable indenture which would allow the note holders to accelerate the due date of the outstanding principal and accrued interest on the subject notes. The Company’s primary credit agreements contain covenant and default provisions in addition to the covenants set forth above with respect to the Company’s debt. Significant other covenants and default provisions include:
Failure of the Company to comply with any of the covenants or default provisions could result in a default under the applicable credit agreement which would allow the lenders to not fund future loan requests and to accelerate the due date of the outstanding principal and accrued interest on any outstanding loans. At September 30, 2009, management believes the Company was in compliance with all of the covenants and default provisions referred to above. |
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| 21 | DTE ENERGY CO |
NOTE 7 — LONG-TERM DEBT
Debt Issuances
In 2009, the Company has issued or remarketed the following long-term debt:
(in Millions)
Debt Retirements and Redemptions
In 2009, the following debt has been retired, through optional redemption or payment at maturity:
(in Millions)
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| 22 | EATON CORP |
LONG-TERM DEBT
In March 2009, Eaton issued $550 of long-term debt through the sale of $250 of 5.95% Notes due 2014
and $300 of 6.95% Notes due 2019. The cash proceeds from the sale of the Notes were used to repay
outstanding commercial paper.
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| 23 | EQT Corp |
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| 24 | Fidelity National Information Services, Inc. |
(5) Long-Term Debt
Long-term debt as of September 30, 2009 and December 31, 2008 consisted of the following (in
millions):
The fair value of the Company’s long-term debt at September 30, 2009 is estimated to be
approximately $64.3 million lower than the carrying value (based on values of trades of our debt
made in close proximity to quarter-end). These estimates are subjective in nature and involve
uncertainties and significant judgment in the interpretation of current market data. Therefore, the
values presented are not necessarily indicative of amounts the Company could realize or settle
currently.
Principal maturities of long-term debt at September 30, 2009 are as follows (in millions):
Through the eFunds Corporation (“eFunds”) acquisition on September 12, 2007, we assumed $100.0
million in long-term notes payable previously issued by eFunds (the “eFunds Notes”). On February
26, 2008, we redeemed the eFunds Notes for a total of $109.3 million, which included a make-whole
premium of $9.3 million.
See also Note 8 for changes in long-term debt subsequent to September 30, 2009.
As of September 30, 2009, we have entered into the following interest rate swap transactions
converting a portion of the interest rate exposure on our Term and Revolving Loans from variable to
fixed (in millions):
We have designated these interest rate swaps as cash flow hedges. A portion of the amount
included in accumulated other comprehensive earnings is reclassified into interest expense as a
yield adjustment as interest payments are made on the Term and Revolving Loans. In accordance with
the authoritative guidance for fair value measurements, the inputs used to determine the estimated
fair value of our interest rate swaps are Level 2-type measurements. We considered our own credit
risk when determining the fair value of our interest rate swaps.
See also Note 8 for interest rate swap activity subsequent to September 30, 2009.
A summary of the fair value of the Company’s derivative instruments is as follows (in
millions):
A summary of the effect of derivative instruments on the Company’s Condensed Consolidated
Statements of Earnings and recognized in Other Comprehensive Earnings (“OCE”) are as follows (in
millions):
Our existing cash flow hedges are highly effective and there is no current impact on earnings
due to hedge ineffectiveness. It is our practice to execute such instruments with credit-worthy
banks at the time of execution and not to enter into derivative financial instruments for
speculative purposes. As of September 30, 2009, we believe that our interest rate swap
counterparties will be able to fulfill their obligations under our agreements and we believe we
will have debt outstanding through the various expiration dates of the swaps such that the future
hedge cash flows remain probable of occurring.
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| 25 | FLIR SYSTEMS INC | Note 13. Long-Term Debt Long-term debt consists of the following (in thousands):
On February 5, 2009, the Company commenced an exchange offer for any and all of its outstanding convertible notes. Holders who elected to exchange their notes in this offer and whose notes were accepted for exchange by the Company received 90.1224 shares of the Company’s common stock and a cash payment of $20 per $1,000 principal amount of notes. The offer expired on March 9, 2009. Notes with an aggregate principal amount of $99.9 million were exchanged pursuant to the exchange offer and were converted into 9.0 million shares of the Company’s common stock. The Company recognized a gain of $2.2 million from the extinguishment of the notes; the gain and the $2.0 million expense associated with the cash inducement are reported in other expense (income), net. In addition, in July 2009, convertible notes with an aggregate principal amount of $30.1 million were converted into 2.7 million shares of the Company’s common stock. The Company recognized a gain of $0.3 million from the extinguishment of the notes, which is reported in other expense (income), net. |
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| 26 | FLUOR CORP |
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| 27 | FOREST LABORATORIES INC | 10. Long-Term Debt: On December 7, 2007, the Company established a $500 million revolving credit facility for the purpose of providing additional financial liquidity for the financing of business development and corporate strategic initiatives. The facility can be increased up to $750 million based upon agreement with the participating lenders and expires on December 7, 2012. As of November 6, 2009, the Company has not drawn any funds from the available credit. The utilization of the revolving credit facility is subject to the adherence to certain financial covenants such as leverage and interest coverage ratios. |
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| 28 | FORTUNE BRANDS INC |
In June 2009, we issued long-term debt securities of $500 million under our shelf registration statement filed with the Securities and Exchange Commission. The 6 3/8% Notes will mature in June 2014. Proceeds were used to pay down balances on our revolving credit facility. Net proceeds of $496.7 million are less price discounts of $0.3 million and underwriting fees of $3.0 million. In January 2009, we borrowed on our $400 million three-year term loan that matures in October 2011, to repay a €300 million note (approximately $394 million) that was due January 30, 2009. The interest rate under this term loan is variable based on U.S. LIBOR at the time of the borrowing and the Company’s long-term credit rating.
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| 29 | GANNETT CO INC /DE/ |
NOTE 6 – Long-term debt
The long-term debt of the Company is summarized below:
In connection with each of its three revolving credit agreements and its term loan agreement,
the Company agreed to provide guarantees from its domestic wholly-owned subsidiaries in the event
that the Company’s credit ratings from either Moody’s or S&P fell below investment grade. In the
first quarter of 2009, the Company’s credit rating was downgraded below investment grade by both
S&P and Moody’s. Accordingly, the guarantees were triggered and the existing notes and other
unsecured debt of the Company became structurally subordinated to the revolving credit agreements
and the term loan.
On September 25, 2009, the Company further amended the terms of its three revolving credit
agreements and its term loan agreement to provide for the issuance of up to $500 million of
additional long-term debt carrying the same guarantees put in place for the revolving credit
agreements and term loan. In addition, the Company also amended one of the credit agreements to
permit it to obtain up to $100 million of letters of credit from the lenders, which would count
toward their commitments.
On August 21, 2009, Moody’s confirmed the Company’s Ba1 corporate family rating and its Ba2
senior unsecured note rating which had been placed under review for a possible downgrade in April.
In addition, Moody’s rated the Company’s bank debt, which includes its revolving credit agreements
and term loan, Baa3. The Baa3 rating also applies to any long-term debt which has the same
subsidiary guarantees as the bank debt. The Company’s debt is rated BB by Standard and Poor’s.
During the first quarter of 2009, the Company repurchased $68.8 million in principal amount of
the floating rate notes in privately negotiated transactions. In connection with these
transactions, the Company recorded a gain of approximately $1.1 million which is classified in
“Other non-operating items” in the Statement of Income for the first quarter. This gain is net of
$0.6 million reclassified from accumulated other comprehensive loss for related interest swap
agreements in the first quarter.
On May 5, 2009, the Company completed a private exchange offer relating to its 5.75% fixed
rate notes due June 2011 and its 6.375% fixed rate notes due April 2012. The Company exchanged
approximately $67 million in principal amount of new 10% senior notes due 2015 for approximately
$67 million principal amount of the 2011 notes, and approximately $193 million in principal amount
of new 10% senior notes due 2016 for approximately $193 million principal amount of the 2012 notes.
The new 2015 notes and the new 2016 notes (together, the Notes) are senior unsecured
obligations and are guaranteed by those Company subsidiaries providing guarantees under the
revolving credit agreements and the term loan agreement. The Notes and the subsidiary guarantees
have not been and will not be registered under the Securities Act of 1933, as amended (the
Securities Act), or any state securities laws and may not be offered or sold in the United States
absent registration or an applicable exemption from registration requirements.
In connection with the exchange transactions and in accordance with the modifications and
extinguishments requirements of ASC Topic 470, “Debt,” the Company recorded a gain of approximately
$42.7 million which is classified in “Other non-operating items” in the Statement of Income for the
second quarter. This gain resulted from recording the Notes at fair value as of the time of the
exchange and extinguishing the old notes at their historical book values. Fair value of the Notes
was based on their trading prices on and shortly after the exchange date. The
discount created by
recording the Notes at fair value instead of face value is being amortized over the term of the
loans to interest expense.
As more fully described below in “NOTE 16 – Subsequent Event,” the Company completed a $500
million private placement offering on October 2, 2009.
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| 30 | GOLDMAN SACHS GROUP INC |
As of September 2009 and November 2008,
long-term
borrowings were $204.30 billion and $185.68 billion,
respectively, comprised of $14.58 billion and
$17.46 billion, respectively, included in “Other
secured financings” in the condensed consolidated
statements of financial condition and $189.72 billion and
$168.22 billion, respectively, of unsecured
long-term
borrowings. See Note 3 for information regarding other
secured financings.
The firm’s unsecured
long-term
borrowings extend through 2043 and consist principally of senior
borrowings.
Unsecured
long-term
borrowings are set forth below:
Unsecured
long-term
borrowings by maturity date are set forth below (in millions):
The firm enters into derivative contracts to effectively convert
a substantial portion of its unsecured
long-term
borrowings which are not accounted for at fair value into
floating rate obligations. Accordingly, excluding the cumulative
impact of changes in the firm’s credit spreads, the
carrying value of unsecured
long-term
borrowings approximated fair value as of September 2009 and
November 2008. For unsecured
long-term
borrowings for which the firm did not elect the fair value
option, the cumulative impact due to the widening of the
firm’s own credit spreads would be a reduction in the
carrying value of total unsecured
long-term
borrowings of approximately 1% and 9% as of September 2009
and November 2008, respectively.
The effective weighted average interest rates for unsecured
long-term
borrowings are set forth below:
Subordinated
Borrowings
Unsecured
long-term
borrowings included subordinated borrowings with outstanding
principal amounts of $19.16 billion and $19.26 billion
as of September 2009 and November 2008, respectively,
as set forth below.
Junior Subordinated Debt Issued to Trusts in Connection with
Fixed-to-Floating
and Floating Rate Normal Automatic Preferred Enhanced Capital
Securities. In 2007, Group Inc. issued a
total of $2.25 billion of remarketable junior subordinated
debt to Goldman Sachs Capital II and Goldman Sachs Capital III
(APEX Trusts), Delaware statutory trusts that, in turn, issued
$2.25 billion of guaranteed perpetual Normal Automatic
Preferred Enhanced Capital Securities (APEX) to third parties
and a de minimis amount of common securities to Group Inc.
Group Inc. also entered into contracts with the APEX Trusts
to sell $2.25 billion of perpetual
non-cumulative
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