Debt (Tables)

9 Months Ended

Sep. 26, 2014

Components of Debt and Reconciliation to Carrying Amount of Long-Term Debt

The components of debt and a reconciliation to the carrying amount of long-term debt is presented in the table below.


	September 26, 2014			December 31, 2013
	(in millions)
L-3 Communications:
Borrowings under Amended and Restated Revolving Credit Facility⁽¹⁾	$	—		$	—
3.95% Senior Notes due 2016		500			500
1.50% Senior Notes due 2017		350			—
5.20% Senior Notes due 2019		1,000			1,000
4.75% Senior Notes due 2020		800			800
4.95% Senior Notes due 2021		650			650
3.95% Senior Notes due 2024		650			—

Subtotal		3,950			2,950

L-3 Holdings:
3% Convertible Contingent Debt Securities due 2035 (CODES)		—			689

Principal amount of long-term debt		3,950			3,639
Unamortized discounts		(12	)		(9	)

Carrying amount of long-term debt	$	3,938		$	3,630

⁽¹⁾

During the year-to-date period ended September 26, 2014, L-3 Communications’ aggregate borrowings and repayments under the Amended and Restated Revolving Credit Facility were $1,367 million. At September 26, 2014, L-3 Communications had the availability of all of its $1 billion Amended and Restated Revolving Credit Facility, which expires on February 3, 2017.

Information Regarding Outstanding Series of Senior Subordinated Note

The terms of each series of Senior Notes are presented in the table below.


Note	Date of Issuance		Amount Issued		Bond Discount⁽¹⁾		Net Cash Proceeds⁽²⁾		Effective Interest Rate			Redemption at Treasury Rate⁽³⁾⁽⁴⁾
			(in millions)
1.50% Senior Notes due May 28, 2017 (2017 Notes)		May 28, 2014	$	350	$	1	$	347		1.55	%		10 bps
3.95% Senior Notes due May 28, 2024 (2024 Notes)		May 28, 2014	$	650	$	3	$	641		4.02	%		20 bps

⁽¹⁾	Bond discounts are recorded as a reduction to the principal amount of the notes and are amortized as interest expense over the term of the notes.

⁽²⁾	The net cash proceeds of $988 million (after deduction of the bond discount, underwriting expenses and commissions and other related expenses) were used primarily to fund the CODES Retirement as discussed below. The remaining net proceeds are available for general corporate purposes.

⁽³⁾

The 2017 Senior Notes may be redeemed at any time prior to their maturity and the 2024 Notes may be redeemed at any time prior to February 28, 2024 (three months prior to their maturity) at the option of L-3 Communications, in whole or in part, at a redemption price equal to the greater of (1) 100% of the principal amount, or (2) the present value of the remaining principal and interest payments discounted to the date of redemption, on a semi-annual basis, at the Treasury Rate (as defined in the Indentures governing the Senior Notes), plus the spread indicated in the table above. In addition, if the 2024 Senior Notes are redeemed at any time on or after February 28, 2024, the redemption price would be equal to 100% of the principal amount.

⁽⁴⁾

Upon the occurrence of a change in control (as defined in the Indentures governing the Senior Notes), each holder of the notes will have the right to require L-3 Communications to repurchase all or any part of such holder’s notes at a price in cash equal to 101% of the aggregate principal amount plus accrued and unpaid interest, if any, but not including, the date of purchase.