Coca Cola 2014 Annual Report Download - page 105

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During 2013, the Company retired $1,250 million of debt upon maturity. The Company also extinguished $2,154 million of long-term
debt prior to maturity, incurring associated extinguishment charges of $50 million. The general terms of the notes that were
extinguished were:
• $225 million total principal amount of notes due August 15, 2013, at a fixed interest rate of 5.0 percent;
• $675 million total principal amount of notes due March 3, 2014, at a fixed interest rate of 7.375 percent;
• $900 million total principal amount of notes due March 15, 2014, at a fixed interest rate of 3.625 percent; and
• $354 million total principal amount of notes due March 1, 2015, at a fixed interest rate of 4.25 percent.
During 2012, the Company retired $1,250 million of long-term notes upon maturity and issued $2,750 million of long-term debt.
The general terms of the notes issued are as follows:
• $1,000 million total principal amount of notes due March 14, 2014, at a variable interest rate equal to the three-month LIBOR
minus 0.05 percent;
• $1,000 million total principal amount of notes due March 13, 2015, at a fixed interest rate of 0.75 percent; and
• $750 million total principal amount of notes due March 14, 2018, at a fixed interest rate of 1.65 percent.
The Company’s long-term debt consisted of the following (in millions, except average rate data):
December 31, 2014 December 31, 2013
Amount
Average
Rate1Amount
Average
Rate1
U.S. dollar notes due 2015–2093 $ 17,433 1.8% $ 17,427 1.8%
U.S. dollar debentures due 2017–2098 2,157 3.9 2,191 3.9
U.S. dollar zero coupon notes due 20202143 8.4 138 8.4
Euro notes due 2022 and 202632,468 3.7 — —
Other, due through 20984380
4.0
370 4.0
Fair value adjustment534 N/A 52 N/A
Total6,7 $ 22,615 2.2% $ 20,178 2.2%
Less current portion 3,552 1,024
Long-term debt $ 19,063 $ 19,154
1
These rates represent the weighted-average effective interest rate on the balances outstanding as of year end, as adjusted for the effects of interest rate
swap agreements, cross currency swap agreements and fair value adjustments, if applicable. Refer to Note 5 for a more detailed discussion on interest rate
management.
2 This amount is shown net of unamortized discounts of $28 million and $33 million as of December 31, 2014 and 2013, respectively.
3 This amount includes adjustments recorded due to changes in foreign currency exchange rates.
4 As of December 31, 2014, the amount shown includes $199 million of debt instruments that are due through 2031.
5 Refer to Note 5 for additional information about our fair value hedging strategy.
6
As of December 31, 2014 and 2013, the fair value of our long-term debt, including the current portion, was $23,411 million and $20,352 million,
respectively. The fair value of our long-term debt is estimated based on quoted prices for those or similar instruments.
7 The above notes and debentures include various restrictions, none of which is presently significant to our Company.
The carrying value of the Company’s long-term debt included fair value adjustments related to the debt assumed from Coca-Cola
Enterprises Inc. (“CCE”) of $464 million and $514 million as of December 31, 2014 and 2013, respectively. These fair value
adjustments are being amortized over the number of years remaining until the underlying debt matures. As of December 31, 2014,
the weighted-average maturity of the assumed debt to which these fair value adjustments relate was approximately 20 years. The
amortization of these fair value adjustments will be a reduction of interest expense in future periods, which will typically result in our
interest expense being less than the actual interest paid to service the debt. Total interest paid was $498 million, $498 million and
$574 million in 2014, 2013 and 2012, respectively.