Issue link: http://catalog.e-digitaleditions.com/i/275023
33 Dollar amounts in millions except per share amounts or as otherwise specified In 2010 we received a subpoena from the DOJ related to sales, marketing and regulatory matters related to the Stryker PainPump. We have received requests for certain documents in connection with this investigation. The investigation is ongoing and we are fully cooperating with the DOJ regarding this matter. Purchase Commitments and Operating Leases We have purchase commitments for materials, supplies, services and property, plant and equipment as part of the normal course of business. In addition, we lease various manufacturing, warehousing and distribution facilities, administrative and sales offices as well as equipment under operating leases. Future commitments under these obligations and minimum lease commitments under these leases are: 2014 2015 2016 2017 2018 Thereafter Purchase obligations $ 479 $ 136 $ 11 $ 6 $ 33 $ 3 Minimum lease payments 51 53 33 26 21 38 Rent expense totaled $100, $98 and $96 in 2013, 2012 and 2011, respectively. NOTE 8 - DEBT AND CREDIT FACILITIES Our debt is summarized as follows: December 31 2013 2012 Senior unsecured notes: Rate Due 3.00% January 15, 2015 $ 500 $ 500 4.38% January 15, 2020 498 497 2.00% September 30, 2016 749 749 1.30% April 1, 2018 598 — 4.10% April 1, 2043 394 — Other 25 16 Total debt 2,764 1,762 Less current maturities (25) (16) Total Long-term Debt $ 2,739 $ 1,746 In March 2013 we completed a public offering of $600 in 1.30% Notes due April 1, 2018, net of an offering discount of $3 (2018 Notes), and $400 in 4.10% Notes due April 1, 2043, net of an offering discount of $6 (2043 Notes and, together with the 2018 Notes, the Notes). Interest on the Notes is payable on April 1 and October 1 of each year, commencing on October 1, 2013. Unless previously redeemed, the 2018 Notes will mature on April 1, 2018 and the 2043 Notes will mature on April 1, 2043. We intend to use the net proceeds from the Notes for working capital and other general corporate purposes, including acquisitions, stock repurchases and other business opportunities. In August 2012 we refinanced our credit facility with a new $1,000 Unsecured Revolving Credit Facility due August 2017 (2012 Facility). The 2012 Facility replaced the previously outstanding $1,000 Unsecured Credit Facility due in August 2013. The 2012 Facility includes an increase option permitting us to increase the size of the facility up to an additional $500, a $500 multicurrency sublimit (with no sublimit for euro borrowings) and a $100 letter of credit sublimit. The 2012 Facility has an annual facility fee ranging from 5 to 22.5 basis points and bears interest at LIBOR, as defined in the 2012 Facility agreement, plus an applicable margin ranging from 57.5 to 127.5 basis points, both of which are dependent on our credit ratings. The 2012 Facility requires us to comply with certain financial and other covenants. We were in compliance with all covenants at December 31, 2013. In September 2011 we sold $750 of unsecured notes due September 2016 (the 2016 Notes). The 2016 Notes bear interest at 2.00% per year and, unless previously redeemed, will mature on September 30, 2016. We received net proceeds of $749, net of an offering discount of $1. On July 15, 2011 we entered into a commercial paper program (the Program) under which we may issue, on a private placement basis, unsecured commercial paper notes (the Notes) up to a maximum aggregate amount outstanding at any time of $500. We may issue the Notes under the Program from time to time. The net proceeds from the sale of the Notes will be used for general corporate purposes. The Program contains customary representations, warranties, covenants and indemnification provisions. The maturities of the Notes will vary but may not exceed 397 days, and the Notes must be in a minimum denomination of $0.25. The Notes will be sold at a discount from par or, alternatively, will be sold at par and bear interest at either a fixed or floating rate that will vary based upon market conditions at the time of the issuance of the Notes. The interest on a floating rate Note may be (a) the CD rate, (b) the commercial paper rate, (c) the federal funds rate, (d) the LIBOR rate, (e) the prime rate, (f) the treasury rate or (g) such other base rate as may be specified at the time of issuance. The Notes will not be redeemable prior to maturity or be subject to voluntary prepayment. As of December 31, 2013, no Notes had been issued under the Program. In addition, we have lines of credit, issued by various financial institutions, available to fund our day-to-day operating needs. At December 31, 2013, we had $1,052 of borrowing capacity available under all of our existing credit facilities. The weighted-average interest rate, excluding required fees, for all borrowings was 2.9% at December 31, 2013. At December 31, 2013, total unamortized debt issuance costs incurred in connection with our unsecured notes were $16. The fair value of debt (including current maturities) at December 31, 2013 and December 31, 2012 was $2,790 and $1,866, respectively, based on the quoted interest rates for similar types and amounts of borrowing agreements. Interest expense, including required fees incurred on outstanding debt and credit facilities, which is included in other income (expense), totaled $83, $63, and $56 in 2013, 2012 and 2011, respectively. Cash interest paid on debt, including required fees, was $88, $55, and $39 in 2013, 2012 and 2011, respectively.