Quarterly report pursuant to Section 13 or 15(d)

DEBT

v3.19.1
DEBT
 3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]  
DEBT NOTE 9. DEBT
Loans Payable and Commercial Paper
Loans payable, commercial paper and the related weighted-average interest rates were as follows:
In millions
 
March 31, 2019
 
December 31,
2018
Loans payable (1)
 
$
70

 
$
54

Commercial paper (2)
 
709

 
780

____________________________________
(1) Loans payable consist primarily of notes payable to various domestic and international financial institutions and it is not practicable to aggregate these notes and calculate a quarterly weighted-average interest rate.
(2) The weighted-average interest rate, inclusive of all brokerage fees, was 2.60 percent and 2.59 percent at March 31, 2019 and December 31, 2018, respectively.
We can issue up to $3.5 billion of unsecured, short-term promissory notes ("commercial paper") pursuant to our board authorized commercial paper programs. The programs facilitate the private placement of unsecured short-term debt through third party brokers. We intend to use the net proceeds from the commercial paper borrowings for general corporate purposes.
Revolving Credit Facilities
We have access to committed credit facilities that total $3.5 billion, including a $1.5 billion 364-day facility that expires August 21, 2019 and a $2.0 billion five-year facility that expires on August 22, 2023. We intend to maintain credit facilities of a similar aggregate amount by renewing or replacing these facilities before expiration. These revolving credit facilities are maintained primarily to provide backup liquidity for our commercial paper borrowings and for general corporate purposes.
At March 31, 2019, the $709 million of outstanding commercial paper effectively reduced the $3.5 billion of revolving credit capacity to $2.8 billion and $187 million available for borrowings under our international and other domestic credit facilities.
Long-term Debt
A summary of long-term debt was as follows:
 
In millions
 
Interest Rate
 
March 31,
2019
 
December 31,
2018
Long-term debt
 
 
 
 

 
 

Senior notes, due 2023
 
3.65%
 
$
500

 
$
500

Debentures, due 2027
 
6.75%
 
58

 
58

Debentures, due 2028
 
7.125%
 
250

 
250

Senior notes, due 2043
 
4.875%
 
500

 
500

Debentures, due 2098(1)
 
5.65%
 
165

 
165

Other debt
 
 
 
69

 
64

Unamortized discount
 
 
 
(51
)
 
(52
)
Fair value adjustments due to hedge on indebtedness
 
 
 
30

 
25

Finance leases
 
 
 
121

 
132

Total long-term debt
 
 
 
1,642

 
1,642

Less: Current maturities of long-term debt
 
 
 
37

 
45

Long-term debt
 
 
 
$
1,605

 
$
1,597


____________________________________
(1) The effective interest rate on this debt is 7.48%.
Principal payments required on long-term debt during the next five years are as follows:
In millions
 
2019
 
2020
 
2021
 
2022
 
2023
Principal payments
 
$
33

 
$
18

 
$
41

 
$
9

 
$
506


Fair Value of Debt
Based on borrowing rates currently available to us for bank loans with similar terms and average maturities, considering our risk premium, the fair values and carrying values of total debt, including current maturities, were as follows:
 
In millions
 
March 31,
2019
 
December 31,
2018
Fair value of total debt (1)
 
$
2,688

 
$
2,679

Carrying values of total debt
 
2,421

 
2,476

_________________________________________________
(1) The fair value of debt is derived from Level 2 inputs.
Shelf Registration
As a well-known seasoned issuer, we filed an automatic shelf registration for an undetermined amount of debt and equity securities with the SEC on February 13, 2019. Under this shelf registration we may offer, from time to time, debt securities, common stock, preferred and preference stock, depositary shares, warrants, stock purchase contracts and stock purchase units.