Halliburton 2013 Annual Report Download - page 39

23
Contractual obligations
The following table summarizes our significant contractual obligations and other long-term liabilities as of
December 31, 2013:
Payments Due
Millions of dollars
2014
2015
2016
2017
2018
Thereafter
Total
Long-term debt
$
—
$
—
$
600
$
45
$
800
$
6,389
$
7,834
Interest on debt (a)
362
365
376
385
398
6,422
8,308
Operating leases
282
215
156
83
56
154
946
Purchase obligations (b)
2,382
450
315
225
76
96
3,544
Other long-term liabilities (c)
39
3
3
3
2
4
54
Total
$
3,065
$
1,033
$
1,450
$
741
$
1,332
$
13,065
$
20,686
(a) Interest on debt includes 83 years of interest on $300 million of debentures at 7.6% interest that become due in 2096.
(b) Amount in 2014 primarily represents certain purchase orders for goods and services utilized in the ordinary course of
our business.
(c) Includes capital lease obligations and pension funding obligations. Amounts for pension funding obligations, which
include international plans and are based on assumptions that are subject to change, are only included for 2014 as we
are currently not able to reasonably estimate our contributions for years after 2014.
Other factors affecting liquidity
Financial position in current market. As of December 31, 2013, we had $2.4 billion of cash and equivalents, $373
million in fixed income investments, and a total of $3.0 billion of available committed bank credit under our revolving credit
facility. Reflecting the growth of our company, we executed an amendment to our revolving credit facility during 2013, which
increased the capacity from $2.0 billion to $3.0 billion and extended the maturity to 2018. Furthermore, we have no financial
covenants or material adverse change provisions in our bank agreements, and our debt maturities extend over a long period of
time. Although a portion of earnings from our foreign subsidiaries is reinvested outside the United States indefinitely, we do not
consider this to have a significant impact on our liquidity. We currently believe that capital expenditures, working capital
investments, and dividends, if any, in 2014 can be fully funded through cash from operations.
As a result, we believe we have a reasonable amount of liquidity and, if necessary, additional financing flexibility
given the current market environment to fund our potential contingent liabilities, if any. However, as discussed in Note 8 to the
consolidated financial statements, there are numerous future developments that may arise as a result of the Macondo well
incident that could have a material adverse effect on our liquidity.
Guarantee agreements. In the normal course of business, we have agreements with financial institutions under which
approximately $2.1 billion of letters of credit, bank guarantees, or surety bonds were outstanding as of December 31, 2013.
Some of the outstanding letters of credit have triggering events that would entitle a bank to require cash collateralization.
Credit ratings. Credit ratings for our long-term debt remain A2 with Moody’s Investors Service and A with Standard &
Poor’s. The credit ratings on our short-term debt remain P-1 with Moody’s Investors Service and A-1 with Standard & Poor’s.
Customer receivables. In line with industry practice, we bill our customers for our services in arrears and are,
therefore, subject to our customers delaying or failing to pay our invoices. In weak economic environments, we may experience
increased delays and failures to pay our invoices due to, among other reasons, a reduction in our customers’ cash flow from
operations and their access to the credit markets as well as unsettled political conditions. If our customers delay paying or fail to
pay us a significant amount of our outstanding receivables, it could have a material adverse effect on our liquidity, consolidated
results of operations, and consolidated financial condition. See “Business Environment and Results of Operations –
International operations – Venezuela” for further discussion related to Venezuela.