Quarterly report pursuant to Section 13 or 15(d)

DEBT

v3.22.1
DEBT
 3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
DEBT
NOTE 10. DEBT
Loans Payable and Commercial Paper
Loans payable, commercial paper and the related weighted-average interest rates were as follows:
In millions March 31,
2022		 December 31,
2021
Loans payable (1)
$ 243  $ 208 
Commercial paper 311 
(2)
 313 
(3)
(1) Loans payable consist primarily of notes payable to various domestic and international financial institutions. 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 0.33 percent at March 31, 2022. This included $111 million of borrowings under the Europe program that were at a negative weighted-average interest rate of 0.22 percent and $200 million of borrowings under the U.S. program at a weighted-average interest rate of 0.63 percent.
(3) The weighted-average interest rate, inclusive of all brokerage fees, was negative 0.01 percent at December 31, 2021. This included $113 million of borrowings under the Europe program that were at a negative weighted-average interest rate of 0.39 percent and $200 million of borrowings under the U.S. program at a weighted-average interest rate of 0.21 percent.
We can issue up to $3.5 billion of unsecured, short-term promissory notes (commercial paper) pursuant to the 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 acquisitions and general corporate purposes.
Revolving Credit Facilities
We have access to committed credit facilities totaling $3.5 billion, including the $1.5 billion 364-day facility that expires August 17, 2022 and our $2.0 billion five-year facility that expires on August 18, 2026. We intend to maintain credit facilities at the current or higher aggregate amounts by renewing or replacing these facilities at or before expiration. These revolving credit facilities are maintained primarily to provide backup liquidity for our commercial paper borrowings and general corporate purposes. There were no outstanding borrowings under these facilities at March 31, 2022 and December 31, 2021.
At March 31, 2022, the $311 million of outstanding commercial paper effectively reduced the $3.5 billion of revolving credit capacity to $3.2 billion.
At March 31, 2022, we also had an additional $253 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,
2022		 December 31,
2021
Long-term debt    
Senior notes, due 2023 3.65% $ 500  $ 500 
Senior notes, due 2025(1)
0.75% 500  500 
Debentures, due 2027 6.75% 58  58 
Debentures, due 2028 7.125% 250  250 
Senior notes, due 2030(1)
1.50% 850  850 
Senior notes, due 2043 4.875% 500  500 
Senior notes, due 2050 2.60% 650  650 
Debentures, due 2098(2)
5.65% 165  165 
Other debt 126  110 
Unamortized discount and deferred issuance costs (66) (68)
Fair value adjustments due to hedge on indebtedness (49) 34 
Finance leases 87  89 
Total long-term debt 3,571  3,638 
Less: Current maturities of long-term debt 69  59 
Long-term debt $ 3,502  $ 3,579 
(1) In 2021, we entered into a series of interest rate swaps to effectively convert from a fixed rate to floating rate. See "Interest Rate Risk" below for additional information.
(2) The effective interest rate is 7.48 percent.
Principal payments required on long-term debt during the next five years are as follows:
In millions 2022 2023 2024 2025 2026
Principal payments $ 62  $ 548  $ 32  $ 507  $ 24 
Interest Rate Risk
Beginning in the second half of 2021, we entered into a series of interest rate swaps to effectively convert our $500 million senior notes, due in 2025, from a fixed rate of 0.75 percent to a floating rate equal to the three-month LIBOR plus a spread, and we also entered into a series of interest rate swaps to effectively convert $765 million of our $850 million senior notes, due in 2030, from a fixed rate of 1.50 percent to a floating rate equal to the three-month LIBOR plus a spread. The loss on the interest rate swaps was $72 million and the offsetting gain on borrowings was $80 million for the three months ended March 31, 2022.
We have interest rate lock agreements to reduce the variability of the cash flows of the interest payments on a total of $500 million of fixed rate debt forecast to be issued in 2023 to replace our senior notes at maturity. The following table summarizes the gains, net of tax, recognized in other comprehensive income:
In millions Three months ended
Type of Swap March 31,
2022		 April 4,
2021
Interest rate locks $ 39  $ 61 
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,
2022		 December 31,
2021
Fair value of total debt (1)
$ 4,060  $ 4,461 
Carrying value of total debt 4,125  4,159 
(1) The fair value of debt is derived from Level 2 input measures.
Shelf Registration
As a well-known seasoned issuer, we filed an automatic shelf registration of an undetermined amount of debt and equity with the SEC on February 8, 2022. 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.