Pizza Hut 2014 Annual Report Download - page 148

13MAR201517272138
PART II
ITEM 8 Financial Statements and Supplementary Data
Short-term Borrowings and Long-term Debt
2014 2013
Short-term Borrowings
Current maturities of long-term debt $ 264 $ 71
Current portion of fair value hedge accounting adjustment 3 —
$ 267 $ 71
Long-term Debt
Senior Unsecured Notes $ 2,746 $ 2,803
Unsecured Revolving Credit Facility, expires March 2017 416 —
Capital lease obligations (See Note 11) 175 172
3,337 2,975
Less current maturities of long-term debt (264) (71)
Long-term debt excluding long-term portion of hedge accounting adjustment 3,073 2,904
Long-term portion of fair value hedge accounting adjustment 4 14
Long-term debt including hedge accounting adjustment $ 3,077 $ 2,918
Our primary bank credit agreement comprises a $1.3 billion among other things, limitations on certain additional indebtedness and
syndicated senior unsecured revolving credit facility (the ‘‘Credit liens, and certain other transactions specified in the agreement. Given
Facility’’) which matures in March 2017. The Credit Facility includes the Company’s strong balance sheet and cash flows, we were able to
24 participating banks with commitments ranging from $23 million to comply with all debt covenant requirements at December 27, 2014
$115 million. Under the terms of the Credit Facility, we may borrow up with a considerable amount of cushion. Additionally, the Credit Facility
to the maximum borrowing limit, less outstanding letters of credit or contains cross-default provisions whereby our failure to make any
banker’s acceptances, where applicable. At December 27, 2014, our payment on our indebtedness in a principal amount in excess of
unused Credit Facility totaled $824 million net of outstanding letters of $125 million, or the acceleration of the maturity of any such
credit of $60 million. There were borrowings of $416 million and indebtedness, will constitute a default under such agreement.
$0 million outstanding under the Credit Facility at December 27, 2014 The majority of our remaining long-term debt primarily comprises
and December 28, 2013, respectively. The interest rate for most Senior Unsecured Notes with varying maturity dates from 2015
borrowings under the Credit Facility ranges from 1.00% to 1.75% over through 2043 and stated interest rates ranging from 3.75% to 6.88%.
the London Interbank Offered Rate (‘‘LIBOR’’). The exact spread over The Senior Unsecured Notes represent senior, unsecured obligations
LIBOR under the Credit Facility depends upon our performance and rank equally in right of payment with all of our existing and future
against specified financial criteria. Interest on any outstanding unsecured unsubordinated indebtedness. Our Senior Unsecured
borrowings under the Credit Facility is payable at least quarterly. Notes provide that the acceleration of the maturity of any of our
The Credit Facility is unconditionally guaranteed by our principal indebtedness in a principal amount in excess of $50 million will
domestic subsidiaries. This agreement contains financial covenants constitute a default under the Senior Unsecured Notes unless such
relating to maintenance of leverage and fixed charge coverage ratios indebtedness is discharged, or the acceleration of the maturity of that
and also contains affirmative and negative covenants including, indebtedness is annulled, within 30 days after notice.
The following table summarizes all Senior Unsecured Notes issued that remain outstanding at December 27, 2014:
Interest Rate
Principal Amount
Issuance Date(a) Maturity Date (in millions) Stated Effective(b)
April 2006 April 2016 $ 300 6.25% 6.03%
October 2007 March 2018 $ 325 6.25% 6.36%
October 2007 November 2037 $ 325 6.88% 7.45%
August 2009 September 2015 $ 250 4.25% 4.44%
August 2009 September 2019 $ 250 5.30% 5.59%
August 2010 November 2020 $ 350 3.88% 4.01%
August 2011 November 2021 $ 350 3.75% 3.88%
October 2013 November 2023 $ 325 3.88% 4.01%
October 2013 November 2043 $ 275 5.35% 5.42%
(a) Interest payments commenced approximately six months after issuance date and are payable semi-annually thereafter.
(b) Includes the effects of the amortization of any (1) premium or discount; (2) debt issuance costs; and (3) gain or loss upon settlement of related treasury locks and
forward-starting interest rate swaps utilized to hedge the interest rate risk prior to the debt issuance. Excludes the effect of any swaps that remain outstanding.
54 YUM! BRANDS, INC. - 2014 Form 10-K
NOTE 10
Form 10-K