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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
107
subject to state, local and foreign tax examinations for years before 2011. As of December 31, 2014, we are not aware
of any material adjustments that may be proposed.
12. DEBT
The carrying value of long-term debt outstanding was as follows at December 31, 2014 and 2013:
2014 2013
(in millions)
Long-term debt:
Senior notes:
$500 million, 6.45% due June 1, 2016 $ — $ 517
$500 million, 7.20% due June 15, 2018 504 505
$300 million, 6.30% due August 1, 2018 312 314
$400 million, 2.625% due October 1, 2019 400 —
$600 million, 3.15% due December 1, 2022 598 598
$600 million, 3.85% due October 1, 2024 599 —
$250 million, 8.15% due June 15, 2038 266 266
$400 million, 4.625% due December 1, 2042 400 400
$750 million, 4.95% due October 1, 2044 746 —
Total long-term debt $ 3,825 $ 2,600
Senior Notes
In September 2014, we issued $400 million of 2.625% senior notes due October 1, 2019, $600 million of 3.85%
senior notes due October 1, 2024 and $750 million of 4.95% senior notes due October 1, 2044. Our net proceeds,
reduced for the underwriters' discount and commission and offering expenses, were $1.73 billion. We used a portion
of the net proceeds to redeem the $500 million 6.45% senior unsecured notes as discussed below.
In October 2014, we redeemed the $500 million 6.45% senior unsecured notes due June 1, 2016, at 100% of the
principal amount plus applicable premium for early redemption and accrued and unpaid interest to the redemption date,
for cash totaling approximately $560 million. We recognized a loss on extinguishment of debt, included in interest
expense, of approximately $37 million for the redemption of these notes.
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
senior notes (other than the 6.30% 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.
In October 2014, the redemption of our 6.45% senior notes reduced the unamortized carrying value adjustment by $12
million. The unamortized carrying value adjustment was $32 million as of December 31, 2014 and $54 million as of
December 31, 2013.