Baker Hughes 2014 Annual Report Download - page 95

Baker Hughes Incorporated
Notes to Consolidated Financial Statements
70
NOTE 11. INDEBTEDNESS
Total debt consisted of the following at December 31, net of unamortized discount and debt issuance cost:
2014 2013
6.0% Notes due June 2018 $ 258 $ 260
7.5% Senior Notes due November 2018 746 745
3.2% Senior Notes due August 2021 745 744
8.55% Debentures due June 2024 148 148
6.875% Notes due January 2029 394 394
5.125% Notes due September 2040 1,481 1,480
Commercial paper — 254
Other debt 361 356
Total debt 4,133 4,381
Less: short-term debt and current portion of long-term debt 220 499
Total long-term debt $ 3,913 $ 3,882
The estimated fair value of total debt at December 31, 2014 and 2013 was $4,663 million and $4,857 million,
respectively, which differs from the carrying amounts of $4,133 million and $4,381 million, respectively, included in
our consolidated balance sheets. The fair value was determined using quoted period end market prices.
At December 31, 2014, we have a committed revolving credit facility (“credit facility”) with commercial banks
and a related commercial paper program under which the maximum combined borrowing at any time under both the
credit facility and the commercial paper program is $2.5 billion. The credit facility matures in September 2016. As
of December 31, 2014, we were in compliance with all of the credit facility's covenants, and there were no direct
borrowings under the credit facility during 2014. Under the commercial paper program, we may issue from time to
time up to $2.5 billion in commercial paper with maturities of no more than 270 days. The amount available to
borrow under the credit facility is reduced by the amount of any commercial paper outstanding. At December 31,
2014, we had no borrowings outstanding under the commercial paper program. Maturities of debt at December 31,
2014 are as follows: 2015 - $220 million; 2016 - $27 million; 2017 - $20 million; 2018 - $1,026 million; 2019 - $22
million; and $2,818 million thereafter.
The weighted average interest rate on short-term borrowings outstanding at December 31, 2014 and 2013 were
10.0% and 4.3%, respectively.
NOTE 12. EMPLOYEE BENEFIT PLANS
DEFINED BENEFIT PLANS
We have both funded and unfunded noncontributory defined benefit pension plans (“Pension Benefits”)
covering certain employees primarily in the U.S., the U.K., Germany and Canada. Under the provisions of the U.S.
qualified pension plan (the “U.S. Pension Plan”), a hypothetical cash balance account is established for each
participant. Such accounts receive quarterly credits based on a percentage according to the employee’s age on the
last day of the quarter applied to quarterly eligible compensation and interest credits based on the balance in the
account on the last day of the quarter. The U.K. and Canada plans are frozen for the majority of the participants;
therefore, we do not accrue benefits for those participants. The Germany pension plan is an unfunded plan where
benefits are based on creditable years of service, creditable pay and accrual rates. We also provide certain
postretirement health care benefits (“Other Postretirement Benefits”), through an unfunded plan, to a closed group
of U.S. employees who retire and have met certain age and service requirements.