Walgreens 2014 Annual Report Download - page 86

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The following details each tranche of notes issued on September 13, 2012:
Notes Issued
(In millions) Maturity Date Interest Rate Interest Payment Dates
$ 550 March 13, 2014 Variable; three-month U.S. Dollar
LIBOR, reset quarterly, plus 50 basis
points
March 13, June 13, September 13
and December 13; commencing on
December 13, 2012
750 March 13, 2015 Fixed 1.000% March 13 and September 13;
commencing on March 13, 2013
1,000 September 15, 2017 Fixed 1.800% March 15 and September 15;
commencing on March 15, 2013
1,200 September 15, 2022 Fixed 3.100% March 15 and September 15;
commencing on March 15, 2013
500 September 15, 2042 Fixed 4.400% March 15 and September 15;
commencing on March 15, 2013
$4,000
The Company paid in full its $550 million obligation that matured in March 2014. The Company may redeem the
fixed rate notes at its option, at any time in whole, or from time to time in part, at a redemption price equal to the
greater of: (1) 100% of the principal amount of the notes being redeemed; and (2) the sum of the present values
of the remaining scheduled payments of principal and interest thereon (not including any portion of such
payments of interest accrued as of the date of redemption), discounted to the date of redemption on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined), plus 12
basis points for the notes due 2015, 20 basis points for the notes due 2017, 22 basis points for the notes due 2022
and 25 basis points for the notes due 2042. If a change of control triggering event occurs, the Company will be
required, unless it has exercised its right to redeem the notes, to offer to purchase the notes at a purchase price
equal to 101% of their principal amount, plus accrued and unpaid interest, if any, on the notes repurchased to the
date of repurchase. The notes are unsecured senior debt obligations and rank equally with all other unsecured and
unsubordinated indebtedness of the Company. Total issuance costs relating to the notes, including underwriting
discounts and fees, were $26 million. The fair value of the notes as of August 31, 2014 and 2013 was $3.4 billion
and $3.9 billion, respectively. Fair value for these notes was determined based upon quoted market prices.
On January 13, 2009, the Company issued notes totaling $1.0 billion bearing an interest rate of 5.250% paid
semiannually in arrears on January 15 and July 15 of each year, beginning on July 15, 2009. The notes will
mature on January 15, 2019. The Company may redeem the notes, at any time in whole or from time to time in
part, at its option at a redemption price equal to the greater of: (1) 100% of the principal amount of the notes to
be redeemed; or (2) the sum of the present values of the remaining scheduled payments of principal and interest,
discounted to the date of redemption on a semiannual basis at the Treasury Rate, plus 45 basis points, plus
accrued interest on the notes to be redeemed to, but excluding, the date of redemption. If a change of control
triggering event occurs, unless the Company has exercised its option to redeem the notes, it will be required to
offer to repurchase the notes at a purchase price equal to 101% of the principal amount of the notes plus accrued
and unpaid interest to the date of redemption. The notes are unsecured senior debt obligations and rank equally
with all other unsecured senior indebtedness of the Company. The notes are not convertible or
exchangeable. Total issuance costs relating to this offering were $8 million, primarily underwriting fees. The fair
value of the notes as of August 31, 2014 and 2013, was $1.1 billion and $1.1 billion, respectively. Fair value for
these notes was determined based upon quoted market prices.
We have periodically borrowed under our commercial paper program during the current fiscal year, and may
continue to borrow in future periods. We had average daily short-term borrowings of $4 million of commercial
paper outstanding at a weighted average interest rate of 0.23% for the fiscal year ended August 31, 2014. We had
no commercial paper outstanding at August 31, 2014. In connection with the commercial paper program, the
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