Baker Hughes 2015 Annual Report Download - page 79

Baker Hughes Incorporated
Notes to Consolidated Financial Statements
70
NOTE 12. INDEBTEDNESS
Total debt consisted of the following at December 31, net of unamortized discount and debt issuance cost:
2015 2014
6.0% Notes due June 2018 $ 255 $ 258
7.5% Senior Notes due November 2018 747 746
3.2% Senior Notes due August 2021 746 745
8.55% Debentures due June 2024 149 148
6.875% Notes due January 2029 394 394
5.125% Notes due September 2040 1,482 1,481
Other debt 268 361
Total debt 4,041 4,133
Less: short-term debt and current portion of long-term debt 151 220
Total long-term debt $ 3,890 $ 3,913
The estimated fair value of total debt at December 31, 2015 and 2014 was $4,321 million and $4,663 million,
respectively, which differs from the carrying amounts of $4,041 million and $4,133 million, respectively, included in
our consolidated balance sheets. The fair value was determined using quoted period end market prices.
At December 31, 2015, 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, 2015, we were in compliance with all of the credit facility's covenants, and there were no direct
borrowings under the credit facility during 2015. 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,
2015, we had no borrowings outstanding under the commercial paper program. Maturities of debt at December 31,
2015 are as follows: 2016 - $151 million; 2017 - $24 million; 2018 - $1,024 million; 2019 - $22 million; 2020 - $12
million; and $2,808 million thereafter.
The weighted average interest rate on short-term borrowings outstanding at December 31, 2015 and 2014 were
12.0% and 10.0%, respectively.
NOTE 13. 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. During 2015, as a result of the
workforce reductions stemming from our restructuring activities, we remeasured certain pension and other
postretirement benefit obligations, which resulted in reductions in our projected benefit obligations of $28 million,
and curtailment gains of $18 million.