LONG-TERM DEBT

Lines of Credit

The company has available uncommitted short term credit lines in the form of money market facilities with several banks. The amount and conditions for borrowing under these credit lines depend on the availability and terms prevailing in the marketplace. No fees or compensating balances are required for these credit facilities.

Credit Facility

In September 2012, the company entered into a 364-day revolving credit facility in an aggregate principal amount of $500 million (the "2012 Credit Agreement") replacing the company's 364-day revolving credit facility entered into in September 2011 (the "2011 Credit Agreement"). The terms and conditions of the 2012 Credit Agreement are substantially the same as the terms and conditions in the 2011 Credit Agreement, which restrict the company’s ability to sell all or substantially all of its assets, merge or consolidate with another entity or undertake other fundamental changes and incur liens. The company also cannot permit the ratio of its consolidated debt to capitalization (as set forth in the Credit Agreement) to exceed 65 percent. The company is in compliance with all covenants under the Credit Agreement. There were no borrowings under the credit facility for the year ended December 31, 2012, and no balance outstanding under the credit facility at December 31, 2012.

In September 2011, the Company entered into two senior unsecured credit facilities (the Credit Agreements) in an aggregate principal amount of $2 billion. The first Credit Agreement amended the company’s $2 billion five-year credit facility dated August 10, 2007, by reducing the aggregate principal amount available under the facility by $500 million to $1.5 billion and extending the maturity date to September 2016. The second Credit Agreement is a 364-day revolving credit facility in an aggregate principal amount of $500 million which ended in September 2012. The credit facilities permit the company to request additional lending commitments of up to $500 million from the lenders under the agreement or through other eligible lenders under certain circumstances. Borrowings under the credit facilities bear interest at various rates, including LIBOR (or an alternate base rate), plus an incremental margin based on the company’s credit ratings and credit default swap spread. The credit facilities also require a commitment fee based on the daily aggregate unused amount of commitments and the company’s credit ratings, and contain a financial covenant relating to a maximum debt to capitalization ratio, and certain restrictions on additional asset liens. There were no borrowings under the credit facilities in the years ended December 31, 2012, and 2011, and no balances outstanding under the credit facilities at December 31, 2012 and 2011. As of December 31, 2012, the company was in compliance with all covenants under these Credit Agreements.

Debt Tender Offer

In November 2010, the company made a tender offer for $1.9 billion of debt securities issued by its subsidiary, Northrop Grumman Systems Corporation, maturing in 2016 to 2036 with interest rates ranging from 6.98 percent to 7.875 percent. Approximately $682 million in aggregate principal amount was purchased for a total price of $919 million (including accrued and unpaid interest on the securities). The company recorded a pre-tax charge of $229 million principally related to the premiums paid on the debt tendered.

Long-term debt consists of the following:



$ in millions			December 31
$ in millions			2012		2011
Fixed-rate notes and debentures, maturing in	Interest rate
2014	3.70	%		$ 350		$ 350
2015	1.85	%	500		500
2016	7.75	%	107		107
2018	6.75	%	200		200
2019	5.05	%	500		500
2021	3.50	%	700		700
2026	7.81	%	527		527
2031	7.75	%	466		466
2040	5.05	%	300		300
Capital leases	Various		32		37
Other	Various		253		253
Total long-term debt			3,935		3,940
Less current portion			5		5
Long-term debt, net of current portion				$3,930		$3,935

Indentures underlying long-term debt issued by the company or its subsidiaries contain various restrictions with respect to the issuer, including one or more restrictions relating to limitations on liens, sale-leaseback arrangements, and funded debt of subsidiaries. The majority of these fixed rate notes and debentures are subject to redemption at the company’s discretion at any time prior to maturity in whole or in part at the principal amount plus any make-whole premium and accrued and unpaid interest. Interest on these fixed rate notes and debentures are payable semi-annually in arrears.

Maturities of long-term debt as of December 31, 2012, are as follows:



$ in millions
Year Ending December 31
2013		$ 5
2014	353
2015	502
2016	110
2017	3
Thereafter	2,951
Total principal payments	3,924
Unamortized premium on long-term debt, net of discount	11
Total long-term debt		$3,935

The premium on long-term debt primarily represents non-cash fair market value adjustments resulting from acquisitions, which are amortized over the life of the related debt.