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PART II
ITEM8.Notes to Consolidated Financial Statements
Description
Balance as of December31, 2013
Gross Amounts Not Oset in the Consolidated
Balance Sheets, but Have Legal Rights to Oset
Gross
Amounts of
Recognized
Liabilities
Gross
Amounts
Oset in the
Consolidated
Balance
Sheets
Net Presented
in the
Consolidated
Balance Sheets
Financial
Instruments
Cash
Collateral
Pledged
Non-Cash
Collateral
Pledged
Net
Liabilities
Derivatives $ 4 $ 0 $ 4 $ (2)(3) $ 0 $ 0 $ 2
Securities lending agreements 1,374 0 1,374 0 0 (1,357) 17
Total $ 1,378 $ 0 $ 1,378 $ (2) $ 0 $ (1,357) $19
(3) The balances at December 31, 2012 and December 31, 2013 were related to derivative assets which are allowed to be net settled against
derivativeliabilitiesinaccordancewithourmasternettingagreements.
Debt
Short-Term Debt
Wehaveadebtnancingprogramofupto$3.0billionthroughtheissuanceofcommercialpaper.Netproceedsfromthis
programareusedforgeneralcorporatepurposes.AtDecember31,2012andDecember31,2013,wehad$2.5billionand
$2.0billionofoutstandingcommercialpaperrecordedasshort-termdebtwithweighted-averageinterestratesof0.2%and
0.1%.Inconjunctionwiththisprogram,wehavea$3.0billionrevolvingcreditfacilityexpiringinJuly2016.Theinterestratefor
thecreditfacilityisdeterminedbasedonaformulausingcertainmarketrates.AtDecember31,2012andDecember31,2013,
wewereincompliancewiththenancialcovenantinthecreditfacility,andnoamountswereoutstandingunderthecreditfacility
atDecember31,2012andDecember31,2013.Theestimatedfairvalueoftheshort-termdebtapproximateditscarryingvalueat
December31,2012andDecember31,2013.
Ourshort-termdebtbalancealsoincludestheshort-termportionofcertainlong-termdebt,asdescribedinthesectionbelow.
Long-Term Debt
InMay2011,weissued$3.0billionofunsecuredseniornotesinthreetranches(collectively,theNotes)andinAugust2013,we
enteredintoacapitalleaseobligation.Thedetailsofthesenancingarrangementsaredescribedinthetablebelow(inmillions):
Outstanding
Balance As of
December31, 2012
Outstanding
Balance As of
December31, 2013
Short-TermPortionofLong-TermDebt
1.25%NotesdueonMay19,2014 $ 0 $1,000
CapitalLeaseObligation 0 9
Total $ 0 $1,009
Long-TermDebt
1.25%NotesdueonMay19,2014 $1,000 $ 0
2.125%NotesdueonMay19,2016 1,000 1,000
3.625%NotesdueonMay19,2021 1,000 1,000
UnamortizeddiscountfortheNotesabove (12) (10)
Subtotal 2,988 1,990
CapitalLeaseObligation 0246
Total $2,988 $2,236
Theeectiveinterestyieldsofthe2014,2016,and2021Noteswere1.258%,2.241%,and3.734%,respectively.Interestonthe
Notesispayablesemi-annuallyinarrearsonMay19andNovember19ofeachyear.WemayredeemtheNotesatanytimein
wholeorfromtimetotimeinpartatspeciedredemptionprices.WearenotsubjecttoanynancialcovenantsundertheNotes.
WeusedthenetproceedsfromtheissuanceoftheNotesforgeneralcorporatepurposes.Thetotalestimatedfairvalueofthe
Noteswasapproximately$3.2billionand$3.1billionatDecember31,2012andDecember31,2013.ThefairvalueoftheNotes
wasdeterminedbasedonobservablemarketpricesofidenticalinstrumentsinlessactivemarketsandiscategorizedaccordingly
asLevel2inthefairvaluehierarchy.
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