Xerox 2011 Annual Report Download - page 83

81Xerox 2011 Annual Report
Scheduled principal payments due on our long-term debt for the next five
years and thereafter are as follows:
2012(1) 2013 2014 2015 2016 Thereafter Total
$1,445 $425 $1,078 $1,252 $951 $3,199 $8,350
(1) Quarterly total debt maturities for 2012 are $12, $1,114, $310 and $9 for the first,
second, third and fourth quarters, respectively. 2012 maturities also includes our
puttable 5.71% Zero Coupon Notes due 2023, In February 2012, we completed an
exchange of the 5.71% Zero Coupon Notes due 2023 for approximately $363 of our
4.50% Senior Notes due 2021. Refer to Note 21 – Subsequent Events for additional
information regarding this debt exchange.
Commercial Paper
In 2010, we initiated a commercial paper (“CP”) program in the U.S.
Aggregate CP and Credit Facility borrowings may not exceed $2.0 billion
outstanding at any time. Under the company’s current private placement
CP program, we may issue CP up to a maximum amount of $2.0 billion
outstanding at any time. The maturities of the CP Notes will vary, but
may not exceed 390 days from the date of issue. The CP Notes are sold
at a discount from par or, alternatively, sold at par and bear interest at
market rates. At December 31, 2011, we had $100 par value CP Notes
outstanding.
Credit Facility
In 2011, we refinanced our $2.0 billion unsecured revolving Credit Facility
that was executed in 2007 (the “2007 Credit Facility”). The new $2.0 billion
Credit Facility is a five-year commitment maturing in 2016 with a group
of lenders. A majority of the lenders that participated in the 2007 Credit
Facility are participating in the new Credit Facility. The new Credit Facility
contains a $300 letter of credit sub-facility, and also includes an accordion
feature that would allow us to increase (from time to time, with willing
lenders) the overall size of the facility up to an aggregate amount not to
exceed $2.75 billion. We have the right to request a one-year extension on
each of the first and second anniversary dates.
We deferred $7 of debt issuance costs in connection with this refinancing,
which includes approximately $2 of unamortized deferred debt issue costs
associated with those lenders from the 2007 Credit Facility that elected to
participate in the new Credit Facility. The write-off of debt issuance costs
associated with those lenders that did not elect to participate in the new
Credit Facility was not material.
The Credit Facility provides a backstop to our $2.0 billion commercial
paper program. Proceeds from any borrowings under the Credit
Facility can be used to provide working capital for the Company and its
subsidiaries and for general corporate purposes.
At December 31, 2011 we had no outstanding borrowings or letters of
credit under the Credit Facility.
The weighted-average interest rate for commercial paper at December
31, 2011, including issuance costs, was 0.71 percent and had maturities
ranging from three to 48 days.
We classify our debt based on the contractual maturity dates of the
underlying debt instruments or as of the earliest put date available to
the debt holders. We defer costs associated with debt issuance over the
applicable term, or to the first put date in the case of convertible debt or
debt with a put feature. These costs are amortized as interest expense in
our Consolidated Statements of Income.
Long-term debt was as follows:
December 31,
Weighted Average
Interest Rates at
December 31, 2011(2) 2011 2010
Xerox Corporation
Notes due 2011 —% $ — $ 1
Senior Notes due 2011 —% — 750
Senior Notes due 2012 5.59% 1,100 1,100
Senior Notes due 2013 5.65% 400 400
Convertible Notes due 2014 9.00% 19 19
Senior Notes due 2014 8.25% 750 750
Floating Rate Notes due 2014 1.28% 300 —
Senior Notes due 2015 4.29% 1,000 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
Notes due 2018 0.57% 1 —
Senior Notes due 2018 6.37% 1,000 1,000
Senior Notes due 2019 5.66% 650 650
Senior Notes due 2021 4.59% 700 —
Zero Coupon Notes due 2023 5.71% 301 283
Senior Notes due 2039 6.78% 350 350
Subtotal – Xerox Corporation $ 8,021 $ 7,753
Subsidiary Companies
Senior Notes due 2015 4.25% 250 250
Borrowings secured by other assets 5.59% 76 75
Other 2.14% 3 2
Subtotal – Subsidiary Companies $ 329 $ 327
Principal Debt Balance 8,350 8,080
Unamortized discount (7) (1)
Fair value adjustments(1) 190 228
Less: current maturities (1,445) (1,070)
Total Long-Term Debt
$ 7,088 $ 7,237
(1) 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.
(2) Represents weighted average effective interest rate which includes the effect of
discounts and premiums on issued debt.
Notes to the Consolidated
Financial Statements
(in millions, except per-share data and where otherwise noted)