NOTE 11 - BORROWINGS AND CONTRACTUAL COMMITMENTS

Short-term borrowings

Other short-term borrowings as of December 31 was as follows:



	2012				2011
(Dollars in millions)	Balance		Interest Rate		Balance		Interest Rate
FHLB advances		$1,500	0.34	%		$7,000	0.14	%
Master notes	1,512		0.30		1,710		0.40
Dealer collateral	282		0.17		265		various
Other	9		2.70		8		2.70
Total other short-term borrowings		$3,303				$8,983

The average balances of other short-term borrowings for the years ended December 31, 2012 and 2011 were $7.0 billion and $3.5 billion, respectively, while the maximum amounts outstanding at any month-end during the years ended December 31, 2012 and 2011 were $10.7 billion and $9.0 billion, respectively. As of December 31, 2012, the Company had collateral pledged to the Federal Reserve discount window to support $23.8 billion of available, unused borrowing capacity.

Long-term debt

Long-term debt as of December 31 was as follows:



(Dollars in millions)	2012		2011		Interest Rates	Maturities
Parent Company Only
Senior, fixed rate ¹		$2,270		$2,719	1.00% - 6.00%	2014 - 2028
Senior, variable rate	152		1,527		0.46 - 4.00	2013 - 2019
Subordinated, fixed rate	200		200		6.00	2026
Junior subordinated, fixed rate	—		1,197		6.10 - 7.88	2036 - 2068
Junior subordinated, variable rate	627		651		0.96 - 1.34	2027 - 2028
Total Parent Company debt (excluding intercompany of $160 as of December 31, 2012 and 2011)	3,249		6,294

Subsidiaries
Senior, fixed rate ²	426		350		0.50 - 9.65	2013 - 2048
Senior, variable rate ³	3,846		2,504		0.41 - 7.50	2013 - 2037
Subordinated, fixed rate ⁴	1,336		1,260		5.00 - 7.25	2015 - 2020
Subordinated, variable rate	500		500		0.60 - 0.66	2015
Total subsidiaries debt	6,108		4,614
Total long-term debt		$9,357		$10,908

¹Includes $0 and $448 million of debt recorded at fair value at December 31, 2012 and 2011, respectively.

²Includes leases and other obligations that do not have a stated interest rate.

³Includes $286 million and $289 million of debt recorded at fair value at December 31, 2012 and 2011, respectively.

⁴Debt recorded at fair value.

The Company held no foreign denominated debt at December 31, 2012; however, the Company had $460 million of foreign denominated debt at December 31, 2011. The Company held no government-guaranteed debt issued under the FDIC's Temporary Liquidity Guarantee Program at December 31, 2012; however, the Company held $576 million under the FDIC's Temporary Liquidity Guarantee Program at December 31, 2011. Maturities of long-term debt are: 2013 – $295 million; 2014 – $19 million; 2015 – $835 million; 2016 – $1.2 billion; 2017 – $4.7 billion; and thereafter – $2.3 billion.

Restrictive provisions of several long-term debt agreements prevent the Company from creating liens on, disposing of, or issuing (except to related parties) voting stock of subsidiaries. Further, there are restrictions on mergers, consolidations, certain leases, sales or transfers of assets, minimum shareholders’ equity, and maximum borrowings by the Company. As of December 31, 2012, the Company was in compliance with all covenants and provisions of long-term debt agreements. As currently defined by federal bank regulators, long-term debt of $627 million and $1.9 billion qualified as Tier 1 capital as of December 31, 2012 and 2011, respectively, and long-term debt of $1.5 billion and $1.6 billion qualified as Tier 2 capital as of December 31, 2012 and 2011, respectively. As of December 31, 2012, the Company had collateral pledged to the FHLB of Atlanta to support $16.0 billion of available borrowing capacity with $3.0 billion of long-term debt and $1.5 billion of short-term debt outstanding at December 31, 2012.

The Company does not consolidate certain wholly-owned trusts which had been formed for the sole purpose of issuing trust preferred securities. The proceeds from the trust preferred securities issuances were invested in junior subordinated debentures of the Parent Company. The obligations of these debentures constitute a full and unconditional guarantee by the Parent Company of the trust preferred securities.

During 2012, $1.4 billion of floating rate senior notes and $589 million of floating rate senior foreign denominated notes matured. Additionally, during 2012, the Company extinguished a $1.0 billion long-term FHLB advance and $1.2 billion of floating rate senior notes related to the Coke transaction. Fixed rate junior subordinated notes of $1.2 billion, due in 2036 and 2068, were repurchased during the year ended December 31, 2012. Net losses related to debt extinguishment during the year ended December 31, 2012 were $16 million. During 2012, the Company entered into new long-term FHLB advances of $4.0 billion.

Contractual Commitments

In the normal course of business, the Company enters into certain contractual arrangements. Such arrangements include obligations to make future payments on lease arrangements, contractual commitments for capital expenditures, and service contracts. As of December 31, 2012, the Company had the following unconditional obligations:




(Dollars in millions)	1 year or less		1-3 years		3-5 years		After 5 years		Total
Operating lease obligations		$214		$387		$331		$377		$1,309
Capital lease obligations ¹	1		3		3		4		11
Purchase obligations ²	96		469		222		—		787
Total		$311		$859		$556		$381		$2,107

¹ Amounts do not include accrued interest.

²Includes contracts with a minimum annual payment of $5 million or more.