We have subtracted accumulated amortization of $473 million and $508 million and valuation allowances of $18 million and $66 million at year-end 1998 and 1997, respectively, in determining the above amounts.

 

 

We have included any related discount or premium in the carrying amount of long-term debt.

On October 2, 1997, we entered into a $5.25 billion bank credit agreement comprised of a $2 billion senior, unsecured Term Loan Facility and a $3.25 billion senior, unsecured Revolving Credit Facility (collectively referred to as the "Facilities") which mature on October 2, 2002. Our principal U.S. Subsidiaries have guaranteed the Facilities. Amounts borrowed under the Term Loan Facility that we repay may not be reborrowed.

We used $4.5 billion of the initial $4.55 billion borrowed under the Facilities to make a Spin-off related payment to PepsiCo. We used the remaining $50 million of the proceeds to provide cash collateral securing certain obligations previously secured by PepsiCo, to pay fees and expenses related to the Spin-off and establishment of the Facilities and for general corporate purposes. Interest on amounts borrowed is payable at least quarterly at rates which are variable, based principally on the London Interbank Offered Rate ("LIBOR") plus a variable margin factor as defined in the credit agreement. At December 26, 1998, the weighted average interest rate on our variable rate debt was 6.2%, which includes the effects of associated interest rate swaps and collars. See Note 11 for a discussion of our use of interest rate swaps, our management of inherent credit risk and fair value information related to debt and interest rate swaps.

At December 26, 1998, we had unused borrowings available under the Revolving Credit Facility of $1.3 billion, net of outstanding letters of credit of $173 million. Once we have repaid the Term Loan in full, mandatory prepayments may be required of the Revolving Credit Facility which would reduce the amount available. Absent this circumstance, under the terms of the Revolving Credit Facility, we may borrow up to $3.25 billion less outstanding letters of credit until maturity. We pay a facility fee on the Revolving Credit Facility. The variable margin factor and facility fee rate is determined based on the more favorable of our leverage ratio or third-party senior debt ratings as defined in the agreement. Facility fees accrued at December 26, 1998 were $1.7 million.