Problem 1Liability Disclosure

Loans Payable, Long-Term Debt and Other Commitments

Loans payable at December31, 2013 included $2.1 billion of notes due in 2014,$1.6 billionof commercial paper,$402 millionof short-term foreign borrowings and$370 millionof long-dated notes that are subject to repayment at the option of the holder. Loans payable at December31, 2012 included $1.8 billion of notes due in 2013,$1.7 billionof commercial paper,$454 millionof short-term foreign borrowings and$328 millionof long-dated notes that are subject to repayment at the option of the holders. The weighted-average interest rate of the commercial paper borrowings was0.09%and0.15%at December31, 2013 and 2012, respectively.

Long-term debt at December31 consisted of:

(in $millions)

2013

2012

2.80% notes due 2023

$

1,749

$

6.50% notes due 2033

1,306

1,310

5.00% notes due 2019

1,293

1,294

4.15% notes due 2043

1,246

3.875% notes due 2021

1,148

1,147

6.55% notes due 2037

1,143

1,146

6.00% notes due 2017

1,095

1,112

4.00% notes due 2015

1,029

1,049

4.75% notes due 2015

1,023

1,044

2.40% notes due 2022

1,000

1,000

Floating-rate borrowing due 2018

1,000

1.10% notes due 2018

998

998

0.70% notes due 2016

997

1.30% notes due 2018

975

2.25% notes due 2016

866

874

5.85% notes due 2039

749

749

Floating-rate borrowing due 2016

500

6.40% debentures due 2028

499

499

5.75% notes due 2036

498

498

5.95% debentures due 2028

498

498

3.60% notes due 2042

492

492

6.30% debentures due 2026

249

248

5.375% euro-denominated notes due 2014

2,058

Other

186

238

$

20,539

$

16,254

In May 2013, the Company completed an underwritten public offering of$6.5 billionsenior unsecured notes consisting of$1.0 billionaggregate principal amount of0.70%notes due in 2016,$500 millionaggregate principal amount of floating rate notes due in 2016,$1.0 billionaggregate principal amount of1.30%notes due in 2018,$1.0 billionaggregate principal amount of floating rate notes due in 2018,$1.75 billionaggregate principal amount of2.80%notes due in 2023 and$1.25 billionaggregate principal amount of4.15%notes due in 2043. Interest on the notes is payable semi-annually. A substantial portion of the net proceeds from the notes were used to repurchase the Company's common stock pursuant to an accelerated share repurchase agreement in May 2013.

Certain of the Company's borrowings require that Merck comply with financial covenants including a requirement that the Total Debt to Capitalization Ratio (as defined in the applicable agreements) not exceed60%. At December31, 2013, the Company was in compliance with these covenants.

The aggregate maturities of long-term debt for each of the next five years are as follows: 2014,$2.1 billion; 2015,$2.1 billion; 2016,$2.4 billion; 2017,$1.1 billion; 2018,$3.0 billion.

In May 2012, the Company entered into a$4.0 billion, five-year credit facility maturing in May 2017. The facility provides backup liquidity for the Company's commercial paper borrowing facility and is to be used for general corporate purposes. The Company has not drawn funding from this line of credit.

1.1Why did Merck pay the 5.375% Euro-denominated notes in 2013, even though they were not due until 2014?