Humana 2013 Annual Report Download - page 125

Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
We file income tax returns in the United States and certain foreign jurisdictions. The U.S. Internal Revenue
Service, or IRS, has completed its examinations of our consolidated income tax returns for 2011 and prior years.
Our 2012 tax return is in the post-filing review period under the Compliance Assurance Process (CAP). Our 2013
tax return is under advance review by the IRS under CAP. With few exceptions, which are immaterial in the
aggregate, we no longer are subject to state, local and foreign tax examinations for years before 2010. As of
December 31, 2013, we are not aware of any material adjustments that may be proposed.
11. DEBT
The carrying value of long-term debt outstanding was as follows at December 31, 2013 and 2012:
2013 2012
(in millions)
Long-term debt:
Senior notes:
$500 million, 6.45% due June 1, 2016 ............... $ 517 $ 523
$500 million, 7.20% due June 15, 2018 .............. 505 506
$300 million, 6.30% due August 1, 2018 ............. 314 317
$600 million, 3.15% due December 1, 2022 ........... 598 598
$250 million, 8.15% due June 15, 2038 .............. 266 267
$400 million, 4.625% due December 1, 2042 .......... 400 400
Total long-term debt ......................... $2,600 $2,611
Senior Notes
In December 2012, we issued $600 million of 3.15% senior notes due December 1, 2022 and $400 million
of 4.625% senior notes due December 1, 2042. Our net proceeds, reduced for the discount and cost of the
offering, were $990 million. We used the proceeds from the offering primarily to finance the acquisition of
Metropolitan, including the retirement of Metropolitan’s indebtedness, and to pay related fees and expenses.
Our senior notes, which are unsecured, may be redeemed at our option at any time at 100% of the principal
amount plus accrued interest and a specified make-whole amount. The 7.20% and 8.15% senior notes are subject
to an interest rate adjustment if the debt ratings assigned to the notes are downgraded (or subsequently upgraded).
In addition, our 7.20%, 8.15%, 3.15%, and 4.625% senior notes contain a change of control provision that may
require us to purchase the notes under certain circumstances.
Prior to 2009, we were parties to interest-rate swap agreements that exchanged the fixed interest rate under
our senior notes for a variable interest rate based on LIBOR. As a result, the carrying value of the senior notes
was adjusted to reflect changes in value caused by an increase or decrease in interest rates. During 2008, we
terminated all of our swap agreements. The cumulative adjustment to the carrying value of our senior notes was
$103 million as of the termination date which is being amortized as a reduction to interest expense over the
remaining term of the senior notes. The unamortized carrying value adjustment was $54 million as of
December 31, 2013 and $64 million as of December 31, 2012.
Credit Agreement
In July 2013, we amended and restated our 5-year $1.0 billion unsecured revolving credit agreement to,
among other things, extend its maturity to July 2018 from November 2016. Under the amended and restated
credit agreement, at our option, we can borrow on either a competitive advance basis or a revolving credit basis.
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