Commercial Paper and Long-Term Debt

Commercial paper and senior unsecured long-term debt consisted of the following:



	March 31, 2014						December 31, 2013
(in millions, except percentages)	Par Value		Carrying Value		Fair Value		Par Value		Carrying Value		Fair Value
Commercial paper	$	1,124	$	1,124	$	1,124	$	1,115	$	1,115	$	1,115
4.750% notes due February 2014	—		—		—		172		173		173
5.000% notes due August 2014	389		395		396		389		397		400
Floating-rate notes due August 2014	250		250		250		250		250		250
4.875% notes due March 2015 (a)	416		429		433		416		431		436
0.850% notes due October 2015 (a)	625		624		628		625		624		628
5.375% notes due March 2016 (a)	601		637		654		601		641		657
1.875% notes due November 2016	400		398		409		400		398		408
5.360% notes due November 2016	95		95		106		95		95		107
6.000% notes due June 2017	441		476		502		441		479		506
1.400% notes due October 2017 (a)	625		613		623		625		613		617
6.000% notes due November 2017	156		167		178		156		168		178
6.000% notes due February 2018	1,100		1,115		1,266		1,100		1,116		1,271
1.625% notes due March 2019 (a)	500		491		486		500		489		481
3.875% notes due October 2020 (a)	450		441		476		450		435		474
4.700% notes due February 2021	400		415		441		400		416		436
3.375% notes due November 2021 (a)	500		480		507		500		472		494
2.875% notes due March 2022 (a)	1,100		1,001		1,069		1,100		981		1,046
0.000% notes due November 2022	15		10		11		15		9		10
2.750% notes due February 2023 (a)	625		577		588		625		563		572
2.875% notes due March 2023 (a)	750		745		711		750		729		698
5.800% notes due March 2036	850		845		989		850		845		935
6.500% notes due June 2037	500		495		628		500		495		593
6.625% notes due November 2037	650		646		837		650		645		786
6.875% notes due February 2038	1,100		1,085		1,447		1,100		1,084		1,370
5.700% notes due October 2040	300		298		350		300		298		329
5.950% notes due February 2041	350		348		419		350		348		397
4.625% notes due November 2041	600		593		603		600		593		567
4.375% notes due March 2042	502		486		488		502		486		459
3.950% notes due October 2042	625		611		566		625		611		530
4.250% notes due March 2043	750		740		714		750		740		673
Total commercial paper and long-term debt	$	16,789	$	16,630	$	17,899	$	16,952	$	16,739	$	17,596


(a)	Fixed-rate debt instruments hedged with interest rate swap contracts. See below for more information on the Company’s interest rate swaps.

The Company’s long-term debt obligations also included $135 million and $121 million of other financing obligations, of which $43 million and $34 million were current as of March 31, 2014 and December 31, 2013, respectively.

Commercial Paper and Bank Credit Facilities

Commercial paper consists of short-duration, senior unsecured debt privately placed on a discount basis through broker-dealers. As of March 31, 2014, the Company’s outstanding commercial paper had a weighted-average annual interest rate of 0.2%.

The Company has $3.0 billion five-year and $1.0 billion 364-day revolving bank credit facilities with 23 banks, which mature in November 2018 and November 2014, respectively. These facilities provide liquidity support for the Company’s $4.0 billion commercial paper program and are available for general corporate purposes. There were no amounts outstanding under these facilities as of March 31, 2014. The interest rates on borrowings are variable based on term and are calculated based on the London Interbank Offered Rate (LIBOR) plus a credit spread based on the Company’s senior unsecured credit ratings. As of March 31, 2014, the annual interest rates on the bank credit facilities, had they been drawn, would have ranged from 1.0% to 1.2%.

Debt Covenants

The Company’s bank credit facilities contain various covenants including requiring the Company to maintain a debt to debt-plus-equity ratio of not more than 50%. The Company was in compliance with its debt covenants as of March 31, 2014.

Interest Rate Swap Contracts

The Company uses interest rate swap contracts to convert a portion of its interest rate exposure from fixed rates to floating rates to more closely align interest expense with interest income received on its cash equivalent and variable rate investment balances. The floating rates are benchmarked to LIBOR. The swaps are designated as fair value hedges on the Company’s fixed-rate debt. Since the critical terms of the swaps match those of the debt being hedged, they are considered to be highly effective hedges and all changes in the fair values of the swaps are recorded as adjustments to the carrying value of the related debt with no net impact recorded on the Condensed Consolidated Statements of Operations. Both the hedge fair value changes and the offsetting debt adjustments are recorded in interest expense on the Condensed Consolidated Statements of Operations. As of March 31, 2014 and December 31, 2013, the Company had interest rate swap contracts with notional amounts of $6.2 billion. The fair values of these swap liabilities were $97 million and $163 million, as of March 31, 2014 and December 31, 2013, respectively, which were recorded in other liabilities on the Condensed Consolidated Balance Sheets.