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Baker Hughes Incorporated63
Baker Hughes Incorporated
Notes to Consolidated Financial Statements
Intangible assets are generally amortized on a straight-line basis with estimated useful lives ranging from 3 to
30 years. Amortization expense included in net income for the years ended December 31, 2013, 2012 and 2011
was $119 million, $140 million and $96 million, respectively. Estimated amortization expense for each of the
subsequent five fiscal years is expected to be as follows:
Year
Estimated
Amortization
Expense
2014 104
2015 97
2016 95
2017 92
2018 86
NOTE 8. INDEBTEDNESS
Total debt consisted of the following at December 31, net of unamortized discount and debt issuance cost:
2013 2012
6.0% Notes due June 2018 with an effective interest rate of 4.8% $ 260 $ 263
7.5% Senior Notes due November 2018 with an effective interest rate of 7.6% 745 744
3.2% Senior Notes due August 2021 with an effective interest rate of 3.3% 744 743
8.55% Debentures due June 2024 with an effective interest rate of 8.8% 148 148
6.875% Notes due January 2029 with an effective interest rate of 7.1% 394 393
5.125% Notes due September 2040 with an effective interest rate of 5.2% 1,480 1,480
Commercial paper with an effective interest rate of 0.2% 254 925
Other debt with an effective interest rate of 11.1% 356 220
Total debt 4,381 4,916
Less: short-term debt and current portion of long-term debt 499 1,079
Total long-term debt $ 3,882 $ 3,837
The estimated fair value of total debt at December 31, 2013 and 2012 was $4,857 million and $5,829 million,
respectively, which differs from the carrying amounts of $4,381 million and $4,916 million, respectively, included in
our consolidated balance sheets. The fair value was determined using quoted period end market prices.
At December 31, 2013 we had a $2.5 billion committed revolving credit facility maturing in September 2016. As
of December 31, 2013, we were in compliance with all of the facility's covenants. There were no direct borrowings
under the committed revolving credit facility during 2013. We also have a commercial paper program under which
we may issue up to $2.5 billion in commercial paper with maturities of no more than 270 days. The maximum
combined borrowing at any point in time under both the commercial paper program and the credit facility is $2.5
billion. At December 31, 2013, we had $254 million of commercial paper outstanding. Maturities of debt at
December 31, 2013 are as follows: 2014 - $499 million; 2015 - $21 million; 2016 - $17 million; 2017 - $11 million;
2018 - $1,018 million; and $2,815 million thereafter.
In 2011, we redeemed in full our 6.5% Senior Notes due in November 2013, which resulted in the payment of a
redemption premium of $63 million and in a pre-tax loss on the early extinguishment of this debt of $40 million,
which included the redemption premium and the write off of the remaining original debt issuance cost and debt
discount, partially offset by a gain of $25 million from the termination of two related interest rate swap agreements.