Debt

At December 31, 2014 and 2013, our long-term debt and interest rates on that debt were as follows (dollars in millions):



	December 31, 2014				December 31, 2013
	Amount		Interest Rate		Amount		Interest Rate
Revolving Credit Facility, due October 2018	$	—	—	%	$	—	—	%
Five-Year Term Loan, due October 2018	65.0		1.54		650.0		1.54
Seven-Year Term Loan, due October 2020	643.5		1.79		650.0		1.79
6.50% Senior Notes due March 2018	150.0		6.50		150.0		6.50
3.90% Senior Notes, net of discounts of $0.3 million and $0.3 million as of December 31, 2014 and 2013, respectively, due June 2022	399.7		3.90		399.7		3.90
4.50% Senior Notes, net of discount of $1.7 million and $1.9 million as of December 31, 2014 and 2013, respectively, due November 2023	698.3		4.50		698.1		4.50
3.65% Senior Notes, net of discount of $1.1 million as of December 31, 2014, due September 2024	398.9		3.65		—		—
Total	2,355.4		3.56		2,547.8		3.08
Less current portion	6.5		1.79		39.0		1.59
Total long-term debt	$	2,348.9	3.56	%	$	2,508.8	3.10	%

As of December 31, 2014, the details of our borrowings are as follows:


•	Senior Unsecured Credit Agreement. On October 18, 2013, we replaced our senior credit facility that was scheduled to terminate in October 2016, with a new $1.65 billion senior unsecured credit facility. Loans bear interest at LIBOR plus a margin that is determined based upon our credit ratings. The financing consisted of:

◦

Revolving Credit Facility: A $350.0 million unsecured revolving credit facility with variable interest (LIBOR plus a margin) due October 2018. During 2014, we did not borrow under the Revolving Credit Facility. At December 31, 2014, we had $24.9 million of outstanding letters of credit that were considered outstanding on the revolving credit facility, resulting in $325.1 million of unused borrowing capacity. The outstanding letters of credit were primarily for workers compensation. We are required to pay commitment fees on the unused portions of the credit facility.


◦	Five-Year Term Loan: A $650.0 million unsecured term loan with variable interest (LIBOR plus 1.375%), payable quarterly, due October 2018. The balance outstanding at December 31, 2014 was $65.0 million.


◦	Seven-Year Term Loan: A $650.0 million unsecured term loan with variable interest (LIBOR plus 1.625%), payable quarterly, due October 2020. The balance outstanding at December 31, 2014 was $643.5 million.


•	6.50% Senior Notes. On March 25, 2008, we issued $150.0 million of 6.50% senior notes due March 15, 2018, through a registered public offering.


•	3.90% Senior Notes. On June 26, 2012, we issued $400.0 million of 3.90% senior notes due June 15, 2022, through a registered public offering.


•	4.50% Senior Notes. On October 22, 2013, we issued $700.0 million of 4.50% senior notes due November 1, 2023, through a registered public offering.


•	3.65% Senior Notes. On September 5, 2014, we issued $400.0 million of 3.65% fixed-rate senior notes due September 15, 2024, through a registered public offering. In connection with the $400.0 million debt issuance, we paid $3.4 million of deferred financing costs, which we are amortizing to interest expense using the effective interest method over the term of the debt.

The instruments governing our indebtedness contain financial and other covenants that limit the ability of PCA and its subsidiaries to enter into sale and leaseback transactions, incur liens, incur indebtedness at the subsidiary level, enter into certain transactions with affiliates, merge or consolidate with any other person or sell or otherwise dispose of all or substantially all of our assets. Our credit facility also requires us to comply with certain financial covenants, including maintaining a minimum interest coverage ratio and a maximum leverage ratio. A failure to comply with these restrictions could lead to an event of default, which could result in an acceleration of any outstanding indebtedness and/or prohibit us from drawing on the revolving credit facility. Such an acceleration may also constitute an event of default under the senior notes indenture. At December 31, 2014, we were in compliance with these covenants.

At December 31, 2014, we have $1,646.9 million of fixed-rate senior notes and $708.5 million of variable-rate term loans outstanding. At December 31, 2014, the fair value of our fixed-rate debt was estimated to be $1,707.5 million. The difference between the book value and fair value is due to the difference between the period-end market interest rate and the stated rate of our fixed-rate debt. We estimated the fair value of our fixed-rate debt using quoted market prices (Level 2 inputs), discussed further in Note 2, Summary of Significant Accounting Policies. The fair value of our variable-rate term debt approximates the carrying amount as our cost of borrowing is variable and approximates current market rates.

Repayments, Interest, and Other

In 2014, we used the proceeds of our $400.0 million of 3.65% fixed-rate senior notes offering and other cash from operations to repay $591.5 million of debt outstanding under the Five-Year and Seven-Year Term Loans.

On December 23, 2013, we repaid in full the $109.0 million that was outstanding under, and terminated, the receivables credit facility that was scheduled to terminate on October 11, 2014.

In October 2013, we used debt and cash on hand to finance the acquisition of Boise, repay $953.6 million of indebtedness, which included $829.8 million of acquired Boise debt, and for general corporate purposes.

On July 26, 2012, we used the proceeds of our $400.0 million of 3.90% senior notes offering issued June 26, 2012, and cash on hand to redeem our 5.75% notes for $432.5 million, which included a redemption premium of $21.3 million and $11.2 million of accrued and unpaid interest.

As of December 31, 2014, annual principal maturities for debt, excluding unamortized debt discount, are: $6.5 million each year for 2015, 2016, and 2017; $221.5 million for 2018; $6.5 million for 2019; and $2.1 billion for 2020 and thereafter.

At both December 31, 2014 and 2013, the reference interest rate (LIBOR) of our variable rate debt for both our Five-Year Term Loan, due October 2018, and Seven-Year Term Loan, due October 2020, was 0.17%. The applicable margin of our variable rate debt at both December 31, 2014 and 2013, for our Five-Year Term Loan, due October 2018, and Seven-Year Term Loan, due October 2020, was 1.375% and 1.625%, respectively.

Interest payments and redemption premium payments paid in connection with the Company’s debt obligations for the years ended December 31, 2014, 2013, and 2012, were $77.0 million, $105.7 million (including a $54.8 million redemption premium related to the acquired Boise Inc. debt), and $66.3 million (including a $21.3 million redemption premium), respectively.

Included in interest expense, net, are amortization of financing costs and amortization of treasury lock settlements. Amortization of treasury lock settlements was a $5.7 million net loss for both the years ended December 31, 2014 and 2013, and a $3.0 million net loss for the year ended December 31, 2012. Amortization of financing costs for the years ended December 31, 2014, 2013, and 2012, was $3.3 million (including $1.5 million of deferred financing costs), $10.3 million (including $8.2 million for acquisition-related financing fees), and $1.1 million, respectively.