CONOCOPHILLIPS | 2013 | FY | 3


Note 11—Debt     
      
Long-term debt at December 31 was:
  Millions of Dollars
  2013 2012
      
9.125% Debentures due 2021$ 150  150
8.20% Debentures due 2025  150  150
8.125% Notes due 2030  600  600
7.9% Debentures due 2047  100  100
7.8% Debentures due 2027  300  300
7.65% Debentures due 2023  88  88
7.625% Debentures due 2013  -  100
7.40% Notes due 2031  500  500
7.375% Debentures due 2029  92  92
7.25% Notes due 2031  500  500
7.20% Notes due 2031  575  575
7% Debentures due 2029  200  200
6.95% Notes due 2029  1,549  1,549
6.875% Debentures due 2026  67  67
6.65% Debentures due 2018  297  297
6.50% Notes due 2039  2,250  2,250
6.50% Notes due 2039  500  500
6.00% Notes due 2020  1,000  1,000
5.951% Notes due 2037  645  645
5.95% Notes due 2036  500  500
5.90% Notes due 2032  505  505
5.90% Notes due 2038  600  600
5.75% Notes due 2019  2,250  2,250
5.625% Notes due 2016  1,250  1,250
5.50% Notes due 2013  -  750
5.20% Notes due 2018  500  500
4.75% Notes due 2014  400  400
4.60% Notes due 2015  1,500  1,500
2.4% Notes due 2022  1,000  1,000
1.05% Notes due 2017  1,000  1,000
Commercial paper at 0.20% – 0.25% during 2013 and 0.15% – 0.33% during    
  2012  961  1,055
Industrial Development Bonds due 2013 through 2038 at 0.04% – 0.25% during    
  2013 and 0.04% – 0.35% during 2012  18  18
Marine Terminal Revenue Refunding Bonds due 2031 at 0.04% – 0.26% during    
  2013 and 0.04% – 0.35% during 2012  265  265
Other  24  24
Debt at face value  20,336  21,280
Capitalized leases  922  16
Net unamortized premiums and discounts  404  429
Total debt  21,662  21,725
Short-term debt  (589)  (955)
Long-term debt$ 21,073  20,770

Maturities of long-term borrowings, inclusive of net unamortized premiums and discounts, in 2014 through 2018 are: $589 million, $1,576 million, $2,202 million, $1,073 million and $873 million, respectively. At December 31, 2013, we classified $861 million of short-term debt as long-term debt, based on our ability and intent to refinance the obligation on a long-term basis under our revolving credit facility.

 

During 2013, the following debt instruments were repaid at maturity:

 

 

In February 2014, the $400 million 4.75% Notes due 2014 were repaid at maturity.

 

At December 31, 2013, we had a revolving credit facility totaling $7.5 billion expiring in August 2016. Our revolving credit facility may be used as direct bank borrowings, as support for issuances of letters of credit totaling up to $750 million, or as support for our commercial paper programs. The revolving credit facility is broadly syndicated among financial institutions and does not contain any material adverse change provisions or any covenants requiring maintenance of specified financial ratios or ratings. The facility agreement contains a cross-default provision relating to the failure to pay principal or interest on other debt obligations of $200 million or more by ConocoPhillips, or by any of its consolidated subsidiaries.

 

Credit facility borrowings may bear interest at a margin above rates offered by certain designated banks in the London interbank market or at a margin above the overnight federal funds rate or prime rates offered by certain designated banks in the United States. The agreements call for commitment fees on available, but unused, amounts. The agreements also contain early termination rights if our current directors or their approved successors cease to be a majority of the Board of Directors.

 

We have two commercial paper programs supported by our $7.5 billion revolving credit facility: the ConocoPhillips $6.35 billion program, primarily a funding source for short-term working capital needs, and the ConocoPhillips Qatar Funding Ltd. $1.15 billion program, which is used to fund commitments relating to QG3. Commercial paper maturities are generally limited to 90 days.

 

At both December 31, 2013 and 2012, we had no direct outstanding borrowings under the revolving credit facility, with no letters of credit as of December 31, 2013. In addition, under the ConocoPhillips Qatar Funding Ltd. commercial paper program, there was $961 million of commercial paper outstanding at December 31, 2013, compared with $1,055 million at December 31, 2012. Since we had $961 million of commercial paper outstanding and had issued no letters of credit, we had access to $6.5 billion in borrowing capacity under our revolving credit facility at December 31, 2013.

 

During the second quarter of 2013, a lease of a semi-submersible floating production system (FPS) commenced for the Gumusut development, located in Malaysia, in which we are a co-venturer. The FPS lease provides for an initial noncancelable term of 15 years, a subsequent 5-year cancelable term with no required lease payments, and an additional 5-year term with terms and conditions to be agreed at a later date. The lease has no ongoing purchase options or escalation clauses. Certain contingent rental payments may be incurred if actual commissioning costs exceed provisioned amounts. The lease does not impose any significant restrictions concerning dividends, debt or further leasing activities.

 

A capital lease asset and capital lease obligation were recognized for our proportionate interest in the FPS of $906 million, based on the present value of the future minimum lease payments using our pre-tax incremental borrowing rate of 3.58 percent for debt with similar terms. As of December 31, 2013, the value of the lease asset and associated obligation is $906 million with commissioning activities continuing. Following the startup of the FPS, the capital lease asset will be depreciated over a period consistent with the estimated proved reserves of Gumusut using the unit-of-production method with the associated depreciation included in the “Depreciation, depletion and amortization” line on our consolidated income statement.

 

At December 31, 2013, future minimum payments due under capital leases were:
   
 Millions
of Dollars
   
2014$ 127
2015  80
2016  80
2017  80
2018  80
Remaining years  769
Total  1,216
Less: portion representing imputed interest  (294)
Capital lease obligations$ 922

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