Quest Diagnostics 2015 Annual Report Download - page 107

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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(in millions unless otherwise indicated)
F- 32
Maturities of Long-Term Debt
As of December 31, 2015, long-term debt matures as follows:
Year Ending December 31,
2016 $ 159
2017 6
2018 4
2019 302
2020 801
Thereafter 2,375
Total maturities of long-term debt 3,647
Unamortized discount (16)
Debt issuance costs (25)
Fair value basis adjustments attributable to hedged debt 45
Total long-term debt 3,651
Less: Current portion of long-term debt 159
Total long-term debt, net of current portion $ 3,492
14. FINANCIAL INSTRUMENTS
Interest Rate Derivatives – Cash Flow Hedges
From time to time, the Company has entered into various interest rate lock agreements and forward starting interest
rate swap agreements to hedge part of the Company's interest rate exposure associated with the variability in future cash flows
attributable to changes in interest rates.
During the fourth quarter of 2013 and first quarter of 2014, the Company entered into various forward starting interest
rate swap agreements for an aggregate notional amount of $150 million which were accounted for as cash flow hedges. In
connection with the issuance of the 2015 Senior Notes, all of these agreements were settled and the Company paid $17 million.
These losses are deferred in stockholders’ equity, net of income taxes, as a component of accumulated other comprehensive
loss, and amortized as an adjustment to interest expense, net over the term of the Senior Notes due 2025.
In March 2015, the Company entered into interest rate lock agreements with several financial institutions for a total
notional amount of $350 million which were accounted for as cash flow hedges. These agreements were entered into to hedge a
portion of the Company’s interest rate exposure associated with variability in future cash flows attributable to changes in the
five-year, ten-year and thirty-year treasury rates related to the planned issuance of the 2015 Senior Notes. In connection with
the issuance of the 2015 Senior Notes, these agreements were settled and the Company received $3 million. These gains are
deferred in stockholders’ equity, net of income taxes, as a component of accumulated other comprehensive loss, and amortized
as an adjustment to interest expense, net over the term of the respective senior notes.
The total net loss, net of taxes, recognized in accumulated other comprehensive loss, related to the Company's cash
flow hedges as of December 31, 2015 and 2014 was $12 million and $15 million, respectively. The loss recognized on the
Company's cash flow hedges for the years ended December 31, 2015, 2014 and 2013, as a result of ineffectiveness, was not
material. The net amount of deferred losses on cash flow hedges that is expected to be reclassified from accumulated other
comprehensive loss into earnings within the next twelve months is $3 million.
QUEST DIAGNOSTICS 2015 ANNUAL REPORT ON FORM 10-K