Progressive 2015 Annual Report Download - page 29

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4. DEBT
Debt at December 31 consisted of:
2015 2014
(millions)
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
3.75% Senior Notes due 2021 (issued: $500.0, August 2011) $ 498.1 $ 528.7 $ 497.8 $ 535.6
6 5/8% Senior Notes due 2029 (issued: $300.0, March 1999) 295.7 376.0 295.5 400.6
6.25% Senior Notes due 2032 (issued: $400.0, November 2002) 395.0 490.6 394.8 527.9
4.35% Senior Notes due 2044 (issued: $350.0, April 2014) 346.4 352.8 346.3 378.9
3.70% Senior Notes due 2045 (issued: $400.0, January 2015) 395.0 362.0 0 0
6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 (issued:
$1,000.0, June 2007; outstanding: $614.4 and $632.8) 612.8 612.8 630.3 684.5
Other debt instruments 164.9 164.9 0 0
Total $2,707.9 $2,887.8 $2,164.7 $2,527.5
The other debt instruments reported in the table above represent ARX indebtedness and consist of:
Type of debt instrument
Number of
Instruments
Carrying
Value Stated Maturity Date(s)
Term loans 2 $ 87.1 December 2018 and 2019
Junior subordinated notes12 41.2 June 2036 and 2037
Senior notes 4 24.0 Various2
Surplus note 1 12.6 November 2021
Total $164.9
1ARX issued junior subordinated floating rate notes to trusts established by ARX in connection with issuances of trust preferred securities by the
trust (discussed below).
2The senior notes mature in May 2033, April 2034, December 2034, and June 2035.
Aggregate required principal payments on debt outstanding at December 31, 2015, are as follows:
(millions)
Year Payments
2016 $ 27.2
2017 27.2
2018 27.2
2019 13.4
2020 3.0
Thereafter 2,631.3
Total $2,729.3
The Progressive Corporation Debt
Excluding the other debt instruments, all of the outstanding debt was issued by The Progressive Corporation, the ultimate
holding company. The holding company debt includes amounts that were borrowed and contributed to the capital of its
insurance subsidiaries or used, or made available for use, for other business purposes. Fair values for these debt
instruments are obtained from external sources. There are no restrictive financial covenants or credit rating triggers on The
Progressive Corporation debt.
Interest on all debt issued by The Progressive Corporation is payable semiannually at the stated rates. However, the 6.70%
Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 (the “6.70% Debentures”) will only bear interest at this
fixed annual rate through June 14, 2017. Thereafter, the 6.70% Debentures will bear interest at an annual rate equal to the
three-month London Interbank Offered Rate (LIBOR) plus 2.0175%, and interest will be payable quarterly until the 6.70%
Debentures are redeemed or retired.
Except for the 6.70% Debentures, all remaining principal on the Senior Notes is due at the maturity stated in the tables
above. The Senior Notes are redeemable, in whole or in part, at any time; however, the redemption price will equal the
App.-A-28