Short-term Borrowings and Long-term Debt

12 Months Ended

Dec. 29, 2012

Debt Disclosure [Abstract]

Short-term Borrowings and Long-term Debt

Short-term Borrowings and Long-term Debt

	2012			2011
Short-term Borrowings
Current maturities of long-term debt	$	10		$	315
Current portion of fair value hedge accounting adjustment (See Note 12)	—			5
	$	10		$	320
Long-term Debt
Senior Unsecured Notes	$	2,750		$	3,012
Unsecured Revolving Credit Facility, expires March 2017	—			—
Capital lease obligations (See Note 11)	170			279
	2,920			3,291
Less current maturities of long-term debt	(10		)	(315		)
Long-term debt excluding long-term portion of hedge accounting adjustment	2,910			2,976
Long-term portion of fair value hedge accounting adjustment (See Note 12)	22			21
Long-term debt including hedge accounting adjustment	$	2,932		$	2,997

In 2012, the Company executed a five-year syndicated senior unsecured revolving credit facility (the “Credit Facility”) totaling $1.3 billion which replaced a syndicated revolving domestic credit facility in the amount of $1.15 billion and a syndicated revolving international credit facility of $350 million that were both set to expire in November 2012. The Credit Facility includes 24 participating banks with commitments ranging from $23 million to $115 million and expires on March 31, 2017.  Under the terms of the Credit Facility, we may borrow up to the maximum borrowing limit, less outstanding letters of credit or banker’s acceptances, where applicable.  At December 29, 2012, our unused Credit Facility totaled $1.2 billion net of outstanding letters of credit of $63 million.  There were no borrowings outstanding under the Credit Facility at December 29, 2012.  The interest rate for most borrowings under the Credit Facility ranges from 1.00% to 1.75% over the London Interbank Offered Rate (“LIBOR”).  The exact spread over LIBOR under the Credit Facility depends upon our performance against specified financial criteria.  Interest on any outstanding borrowings under the Credit Facility is payable at least quarterly.

The Credit Facility is unconditionally guaranteed by our principal domestic subsidiaries.  This agreement contains financial covenants relating to maintenance of leverage and fixed charge coverage ratios and also contains affirmative and negative covenants including, among other things, limitations on certain additional indebtedness and liens, and certain other transactions specified in the agreement.  Given the Company’s strong balance sheet and cash flows, we were able to comply with all debt covenant requirements at December 29, 2012 with a considerable amount of cushion. Additionally, the Credit Facility contains cross-default provisions whereby our failure to make any payment on our indebtedness in a principal amount in excess of $125 million, or the acceleration of the maturity of any such indebtedness, will constitute a default under such agreement.

The majority of our remaining long-term debt primarily comprises Senior Unsecured Notes with varying maturity dates from 2014 through 2037 and stated interest rates ranging from 2.38% to 6.88%.  The Senior Unsecured Notes represent senior, unsecured obligations and rank equally in right of payment with all of our existing and future unsecured unsubordinated indebtedness. Our Senior Unsecured Notes provide that the acceleration of the maturity of any of our indebtedness in a principal amount in excess of $50 million will constitute a default under the Senior Unsecured Notes if such acceleration is not annulled, or such indebtedness is not discharged, within 30 days after notice.

During the third quarter of 2012 we repaid $263 million of Senior Unsecured Notes upon their maturity primarily with existing cash on hand.

The following table summarizes all Senior Unsecured Notes issued that remain outstanding at December 29, 2012:

				Interest Rate
Issuance Date(a)	Maturity Date	Principal Amount (in millions)		Stated	Effective(b)
April 2006	April 2016	$	300	6.25%	6.03%
October 2007	March 2018	$	600	6.25%	6.38%
October 2007	November 2037	$	600	6.88%	7.29%
August 2009	September 2015	$	250	4.25%	4.44%
August 2009	September 2019	$	250	5.30%	5.59%
August 2010	November 2020	$	350	3.88%	4.01%
August 2011	November 2021	$	350	3.75%	3.88%
September 2011	September 2014	$	56	2.38%	2.89%

(a) Interest payments commenced approximately six months after issuance date and are payable semi-annually thereafter.

(b) Includes the effects of the amortization of any (1) premium or discount; (2) debt issuance costs; and (3) gain or loss upon settlement of related treasury locks and forward-starting interest rate swaps utilized to hedge the interest rate risk prior to the debt issuance.  Excludes the effect of any swaps that remain outstanding as described in Note 12.

The annual maturities of short-term borrowings and long-term debt as of December 29, 2012, excluding capital lease obligations of $170 million and fair value hedge accounting adjustments of $22 million, are as follows:

Year ended:
2013	$	—
2014	56
2015	250
2016	300
2017	—
Thereafter	2,150
Total	$	2,756

Interest expense on short-term borrowings and long-term debt was $169 million, $184 million and $195 million in 2012, 2011 and 2010, respectively.