Xerox 2009 Annual Report Download - page 65

63Xerox 2009 Annual Report
Notes to the Consolidated
Financial Statements
Dollars in millions, except per-share data and unless otherwise indicated.
(1) As of December 31, 2009 and 2008, the associated net encumbered finance
receivables were $17 and $104, respectively. This secured loan agreement will
terminate in 2010. Refer to Note 19 – Subsequent Events for additional information.
(2) Fair value adjustments represent changes in the fair value of hedged debt obligations
attributable to movements in benchmark interest rates. Hedge accounting requires
hedged debt instruments to be reported at an amount equal to the sum of their
carrying value (principal value plus/minus premiums/discounts) and any fair value
adjustment.
(3) Represents weighted average effective interest rate which includes the effect of
discounts and premiums on issued debt.
Scheduled payments due on our principal long-term debt for the next
five years and thereafter are as follows:
2010 2011 2012 2013 2014 Thereafter Total
$988(1) $802 $1,101 $961 $819 $4,451 $9,122
(1) Quarterly total debt maturities for 2010 are $17, $702, $268 and $1 for the first,
second, third and fourth quarters, respectively.
The zero coupon note of $267 due 2023 is included in the above
maturity schedule based on the year of its first potential put date
of 2010.
Credit Facility
The Credit Facility is a $2.0 billion unsecured revolving credit facility
including a $300 letter of credit subfacility. At December 31, 2009
we had no outstanding borrowings or letters of credit.
The Credit Facility is available, without sublimit, to certain of our quali-
fying subsidiaries and includes provisions that would allow us to increase
the overall size of the Credit Facility up to an aggregate amount of
$2.5 billion. Our obligations under the Credit Facility are unsecured and
are not currently guaranteed by any of our subsidiaries. Any domestic
subsidiary that guarantees more than $100 of Xerox Corporation debt
must also guaranty our obligations under the Credit Facility as well. In
the event that any of our subsidiaries borrows under the Credit Facility,
its borrowings thereunder would be guaranteed by us.
In October 2009, in connection with the acquisition of ACS, we amended
the Credit Facility as follows:
•The definition of “principal debt” was changed such that prior to the
closing of the ACS acquisition, it was calculated net of cash proceeds
from the Senior Notes issued in connection with the pre-funding of
the ACS acquisition.
•A portion of the Credit Facility that had a maturity date of April
30, 2012 was extended to a maturity date of April 30, 2013,
consistent with the majority of the Credit Facility. Accordingly,
after the amendment, approximately $1.6 billion, or approximately
80% of the Credit Facility, has a maturity date of April 30, 2013.
The remaining portion of the Credit Facility continues to have a
maturity date of April 30, 2012.
•Extended the permitted leverage ratios to current levels noted below.
Borrowings under the Credit Facility bear interest at LIBOR plus an
all-in spread that varies between 2.5% and 4.5%, depending on our
credit rating at the time of borrowing. Based on our credit rating as of
December 31, 2009, the applicable all-in spread for the Credit Facility
would be 3.50%.
Long-term debt at December 31, 2009 and 2008 was as follows:
Weighted Average
Interest Rates at
December 31, 2009(3) 2009 2008
U.S. Operations
Xerox Corporation
Euro Senior Notes due 2009 —% $ — $ 317
Senior Notes due 2009 —% — 583
Floating Senior Notes due 2009 —% — 150
Senior Notes due 2010 7.13% 700 700
Notes due 2011 0.08% 1 1
Notes due 2011 7.01% 50 50
Senior Notes due 2011 6.59% 750 750
Credit Facility due 2012 —% — 246
Senior Notes due 2012 5.59% 1,100 1,100
Senior Notes due 2013 5.65% 400 400
Senior Notes due 2013 7.63% 550 550
Convertible Notes due 2014 9.00% 19 19
Senior Notes due 2014 8.25% 750 —
Senior Notes due 2015 4.25% 1,000 —
Notes due 2016 7.20% 250 250
Senior Notes due 2016 6.48% 700 700
Senior Notes due 2017 6.83% 500 500
Senior Notes due 2018 6.37% 1,000 1,000
Senior Notes due 2019 5.63% 650 —
Zero Coupon Notes due 2022 —% — 433
Zero Coupon Notes due 2023 5.41% 267 253
Senior Notes due 2039 6.75% 350 —
Subtotal $ 9,037 $ 8,002
Xerox Credit Corporation
Notes due 2013 6.42% 10 10
Notes due 2014 6.06% 50 50
Subtotal $ 60 $ 60
Other U.S. Operations
Borrowings secured by
finance receivables(1) 5.87% 2 56
Borrowings secured by other assets 11.35% 5 6
Subtotal $ 7 $ 62
Total U.S. Operations $ 9,104 $ 8,124
International Operations
Other debt due 2009–2010 2.89% $ 18 $ 16
Total International Operations $ 18 $ 16
Principal Debt Balance 9,122 8,140
Unamortized discount (11) (6)
Fair value adjustments(2) 153 189
Total Debt $ 9,264 $ 8,323
Less: current maturities (988) (1,549)
Total Long-term Debt $ 8,276 $ 6,774