Kroger 2013 Annual Report Download - page 123

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A-50
NO T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S , CO N T I N U E D
6 . D E B T O B L I G A T I O N S
Long-term debt consists of:
2013 2012
0.80% to 8.00% Senior notes due through 2043 ..................... $ 9,083 $ 6,587
5.00% to 12.75% Mortgages due in varying amounts through 2034 ...... 64 60
0.27% to 0.45% Commercial paper due through February 2014 ......... 1,250 1,645
Other ...................................................... 383 184
Total debt ................................................... 10,780 8,476
Less current portion .......................................... (1,616) (2,700)
Total long-term debt........................................... $ 9,164 $ 5,776
In 2013, the Company issued $600 of senior notes due in fiscal year 2023 bearing an interest rate of
3.85%, $400 of senior notes due in fiscal year 2043 bearing an interest rate of 5.15%, $500 of senior notes due
in fiscal year 2016 bearing an interest rate of 3-month London Inter-Bank Offering Rate plus 53 basis points,
$300 of senior notes due in fiscal year 2016 bearing an interest rate of 1.20%, $500 of senior notes due in fiscal
year 2019 bearing an interest rate of 2.30%, $700 of senior notes due in fiscal year 2021 bearing an interest
rate of 3.30% and $500 in senior notes due in fiscal year 2024 bearing an interest rate of 4.00%. In 2013, the
Company repaid $400 of senior notes bearing an interest rate of 5.00% and $600 of senior notes bearing an
interest rate of 7.50% upon their maturity.
In 2012, the Company issued $500 of senior notes due in fiscal year 2022 bearing an interest rate of
3.40% and $350 of senior notes due in fiscal year 2042 bearing an interest rate of 5.00%. In 2012, the Company
repaid upon their maturity $491 of senior notes bearing an interest rate of 6.75%, $346 of senior notes bearing
an interest rate of 6.20% and $500 of senior notes bearing an interest rate of 5.50%.
On January 25, 2012, the Company amended and extended its $2,000 unsecured revolving credit facility.
The Company entered into the amended credit facility to amend and extend the Company’s existing credit
facility which would have terminated on May 15, 2014. The amended credit facility provides for a $2,000
unsecured revolving credit facility (the “Credit Agreement”), with a termination date of January 25, 2017,
unless extended as permitted under the Credit Agreement. The Company has the ability to increase the size
of the Credit Agreement by up to an additional $500, subject to certain conditions.
Borrowings under the Credit Agreement bear interest at the Company’s option, at either (i) LIBOR plus
a market rate spread, based on the Company’s Leverage Ratio or (ii) the base rate, defined as the highest
of (a) the Bank of America prime rate, (b) the Federal Funds rate plus 0.5%, and (c) one-month LIBOR plus
1.0%, plus a market rate spread based on the Company’s Leverage Ratio. The Company will also pay a
Commitment Fee based on the Leverage Ratio and Letter of Credit fees equal to a market rate spread based
on the Company’s Leverage Ratio. The Credit Agreement contains covenants, which, among other things,
require the maintenance of a Leverage Ratio of not greater than 3.50:1.00 and a Fixed Charge Coverage Ratio
of not less than 1.70:1.00. In the first quarter of 2012, the covenants were amended to exclude up to $1,000 in
expense related to the Company’s commitment to fund the UFCW consolidated pension plan. The Company
may repay the Credit Agreement in whole or in part at any time without premium or penalty. The Credit
Agreement is not guaranteed by the Company’s subsidiaries.
In addition to the Credit Agreement, the Company maintained two uncommitted money market lines
totaling $75 in the aggregate. The money market lines allow the Company to borrow from banks at mutually
agreed upon rates, usually at rates below the rates offered under the credit agreement. As of February 1,
2014, the Company had $1,250 of borrowings of commercial paper, with a weighted average interest rate of
0.27%, and no borrowings under its Credit Agreement and money market lines. As of February 2, 2013, the
Company had $1,645 of borrowings of commercial paper, with a weighted average interest rate of 0.45%, and
no borrowings under its Credit Agreement and money market lines.