Annual report pursuant to Section 13 and 15(d)

DEBT

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DEBT
 12 Months Ended
Dec. 31, 2013
Debt Disclosure [Abstract]  
DEBT
NOTE 10. DEBT
Loans Payable
Loans payable at December 31, 2013 and 2012 were $17 million and $16 million, respectively, and consisted primarily of notes payable to financial institutions. The weighted-average interest rate for notes payable, bank overdrafts and current maturities of long-term debt at December 31, 2013, 2012 and 2011, was as follows:
 
December 31,
 
2013
 
2012
 
2011
Weighted average interest rate
2.59
 
3.21
 
4.19

Interest
For the years ended December 31, 2013, 2012 and 2011, total interest incurred was $48 million, $39 million and $48 million, respectively, and interest capitalized was $7 million, $7 million and $4 million, respectively.
Revolving Credit Facility
On November 9, 2012, we entered into a five-year revolving credit agreement with a syndicate of lenders. The credit agreement provides us with a $1.75 billion senior unsecured revolving credit facility, the proceeds of which are to be used for working capital or other general corporate purposes.
The credit facility matures on November 9, 2017. Amounts payable under our revolving credit facility will rank pro rata with all of our unsecured, unsubordinated indebtedness. Up to $200 million under our credit facility is available for swingline loans denominated in U.S. dollars. Advances under the facility bear interest at (i) a base rate or (ii) a rate equal to the LIBOR Rate plus an applicable margin based on the credit ratings of our outstanding senior unsecured long-term debt. Based on our current long-term debt ratings, the applicable margin on LIBOR rate loans was 0.875 percent per annum as of December 31, 2013. Advances under the facility may be prepaid without premium or penalty, subject to customary breakage costs.
The credit agreement includes various covenants, including, among others, maintaining a leverage ratio of no more than 3.25 to 1.0. As of December 31, 2013, we were in compliance with the covenants.
There were no outstanding borrowings under this facility at December 31, 2013. A reconciliation of the maximum capacity of our revolver to the amount available under the facility was as follows:
In millions
Revolving
Credit Capacity
at December 31, 2013
Maximum credit capacity of the revolving credit facility
$
1,750

Less: Letters of credit against revolving credit facility
23

Amount available for borrowing under the revolving credit facility
$
1,727


As of December 31, 2013, we also had $310 million available for borrowings under our international and other domestic credit facilities. Commitments against the other domestic and international short-term facilities were $17 million as of December 31, 2013 and $16 million at the end of 2012.
Long-term Debt
 
December 31,
In millions
2013
 
2012
Long-term debt
 
 
 
Export financing loan, 4.5%, due 2013
$
—

 
$
23

Senior notes, 3.65%, due 2023
500

 
—

Debentures, 6.75%, due 2027
58

 
58

Debentures, 7.125%, due 2028
250

 
250

Senior notes, 4.875%, due 2043
500

 
—

Debentures, 5.65%, due 2098 (effective interest rate 7.48%)
165

 
165

Credit facilities related to consolidated joint ventures
92

 
88

Other
65

 
69

 
1,630

 
653

Unamortized discount
(48
)
 
(35
)
Fair value adjustments due to hedge on indebtedness
49

 
88

Capital leases
92

 
53

Total long-term debt
1,723

 
759

Less: Current maturities of long-term debt
(51
)
 
(61
)
Long-term debt
$
1,672

 
$
698


Principal payments required on long-term debt during the next five years are as follows:
 
Required Principal Payments
In millions
2014
 
2015
 
2016
 
2017
 
2018
Payment
$
51

 
$
55

 
$
82

 
$
8

 
$
17


As a well-known seasoned issuer, we filed an automatic shelf registration for an undetermined amount of debt and equity securities with the Securities and Exchange Commission on September 16, 2013. Under this shelf registration we may offer, from time to time, debt securities, common stock, preferred and preference stock, depositary shares, warrants, stock purchase contracts and stock purchase units.
In September 2013, we issued $1 billion aggregate principal amount of senior notes consisting of $500 million aggregate principal amount of 3.65% senior unsecured notes due in 2023 and $500 million aggregate principal amount of 4.875% senior unsecured notes due in 2043. We received net proceeds of $979 million. The senior notes pay interest semi-annually on April 1 and October 1, commencing on April 1, 2014. The indenture governing the senior notes contains covenants that, among other matters, limit (i) our ability to consolidate or merge into, or sell, assign, convey, lease, transfer or otherwise dispose of all or substantially all of our and our subsidiaries' assets to another person, (ii) our and certain of our subsidiaries' ability to create or assume liens and (iii) our and certain of our subsidiaries' ability to engage in sale and leaseback transactions.
Interest on the 6.75% debentures is payable on February 15 and August 15 each year.
Interest on the $250 million 7.125% debentures and $165 million 5.65% debentures is payable on March 1 and September 1 of each year. The debentures are unsecured and are not subject to any sinking fund requirements. We can redeem the 7.125% debentures and the 5.65% debentures at any time prior to maturity at the greater of par plus accrued interest or an amount designed to ensure that the debenture holders are not penalized by the early redemption.
During 2010, two of our wholly-owned Brazilian subsidiaries entered into a loan agreement for a loan in local currency in an amount equivalent to US $50 million, at drawdown, at a fixed rate of 4.5% to finance its exports over the next three years. The principal of the loan had a two-year grace period and began amortizing in 2012 and was completed in 2013.
Our debt agreements contain several restrictive covenants. The most restrictive of these covenants applies to our revolving credit facility which will upon default, among other things, limit our ability to incur additional debt or issue preferred stock, enter into sale-leaseback transactions, sell or create liens on our assets, make investments and merge or consolidate with any other person. In addition, we are subject to a maximum debt-to-EBITDA ratio financial covenant. As of December 31, 2013, we were in compliance with all of the covenants under our borrowing agreements.