Motorola 2008 Annual Report Download - page 107

(1) At December 31, 2008, the balance primarily represents the unamortized gain associated with the termination
of all interest rate swaps designated as fair value hedges. For detailed discussion please see Note 5, “Risk
Management.” At December 31, 2007, the balance represents the fair value of the interest rate swaps.
Other Short-Term Debt
December 31 2008 2007
Notes to banks $89 $134
Add: current portion of long-term debt 3198
Notes payable and current portion of long-term debt $92 $332
Weighted average interest rates on short-term borrowings throughout the year
Commercial paper
(1)
— 5.3%
Other short-term debt 4.2% 4.6%
(1) At December 31, 2008, the Company did not have any commercial paper outstanding.
In December 2008, the Company completed the open market purchase of $42 million of the $400 million
aggregate principal amount outstanding of its 7.50% Debentures due 2025 (the “2025 Debentures”). The
$42 million principal amount of 2025 Debentures was purchased for an aggregate purchase price of approximately
$28 million, including accrued interest as of the redemption date. During the year ended December 31, 2008, the
Company recognized a gain of approximately $14 million related to this open market purchase in Other within
Other income (expense) in the consolidated statements of operations.
In October 2008, the Company repaid, at maturity, the entire $84 million aggregate principal amount
outstanding of its 5.80% Notes due October 15, 2008. In March 2008, the Company repaid at maturity, the entire
$114 million aggregate principal amount outstanding of its 6.50% Notes due March 1, 2008.
In November 2007, the Company repaid, at maturity, the entire $1.2 billion aggregate principal amount
outstanding of its 4.608% Notes due November 16, 2007. In November 2007, the Company issued an aggregate
face principal amount of: (i) $400 million of 5.375% Senior Notes due November 15, 2012, (ii) $400 million of
6.00% Senior Notes due November 15, 2017, and (iii) $600 million of 6.625% Senior Notes due November 15,
2037. In January 2007, the Company repaid, at maturity, the entire $118 million aggregate principal amount
outstanding of its 7.6% Notes due January 1, 2007.
Aggregate requirements for long-term debt maturities during the next five years are as follows: 2009—
$3 million; 2010—$536 million; 2011—$609 million; 2012—$410 million; and 2013—$11 million.
In December 2006, the Company entered into a five-year domestic syndicated revolving credit facility (“5-Year
Credit Facility”) for $2.0 billion. At December 31, 2008 and 2007, the Company had no outstanding borrowings
under the 5-Year Credit Facility. At December 31, 2008, the commitment fee assessed against the daily average
amounts unused was 10.0 basis points. Important terms of the 5-Year Credit Facility include a covenant relating to
the ratio of total debt to adjusted EBITDA. The Company was in compliance with the terms of the 5-Year Credit
Facility at December 31, 2008.
Events over the past several months, including recent failures and near failures of a number of large financial
service companies, have made the capital markets increasingly volatile. The Company also has access to
uncommitted non-U.S. credit facilities (“uncommitted facilities”), but in light of the state of the financial services
industry and the Company’s current financial condition, the Company does not believe it is prudent to assume the
same level of funding will be available under those facilities going forward as has been available historically.
The Company’s current corporate credit ratings are “BBB⫺” with a negative outlook by Fitch Ratings
(“Fitch”), “Baa3” with a negative outlook by Moody’s Investors Service (“Moody’s”), and “BB+” with a stable
outlook by Standard & Poor’s (“S&P”).
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