Borrowings and Lines of Credit



(Dollars in millions)	June 30, 2013		December 31, 2012
Commercial paper	$	50	$	320
Other borrowings	146		183
Total short-term borrowings	$	196	$	503

At June 30, 2013, we had revolving credit agreements with various banks permitting aggregate borrowings of up to $4 billion pursuant to a $2 billion revolving credit agreement and a $2 billion multicurrency revolving credit agreement, both of which expire in November 2016. As of June 30, 2013, there were no borrowings under either of these revolving credit agreements. The undrawn portions of these revolving credit agreements are also available to serve as backup facilities for the issuance of commercial paper. As of June 30, 2013, our maximum commercial paper borrowing authority as set by our Board of Directors was $4 billion. We use our commercial paper borrowings for general corporate purposes, including the funding of potential acquisitions, debt refinancing, and repurchases of our common stock.

On May 7, 2013, we commenced cash tender offers for two series of outstanding notes issued by Goodrich and the 1.200% Senior Notes issued by UTC. These offers expired on June 4, 2013. Holders validly tendering their notes by May 21, 2013 received consideration determined by reference to a fixed spread over the yield to maturity of the applicable U.S. Treasury security with the same maturity as the note being tendered, plus an early tender payment of $50 per $1,000 principal amount of notes accepted for purchase. Holders validly tendering their notes after May 21, 2013 but prior to June 4, 2013 received consideration determined by reference to a fixed spread over the yield to maturity of the applicable U.S. Treasury security with the same maturity as the notes being tendered. A total of $874 million principal amount of all notes subject to the tender offers, and $36 million of the fair value adjustment related to the notes assumed in the Goodrich acquisition, were repaid, including approximately $103 million principal amount of the 2016 Goodrich 6.290% notes, approximately $98 million principal amount of the 2019 Goodrich 6.125% notes, and approximately $674 million principal amount of the 2015 UTC Senior Notes. An extinguishment loss of approximately $18 million was recognized within Interest expense, net in the accompanying Condensed Consolidated Statements of Comprehensive Income.

On June 24, 2013, we redeemed all remaining outstanding 1.200% Senior Notes due 2015, representing $327 million in aggregate principal, under our redemption notice issued on May 24, 2013. An extinguishment loss of approximately $6 million was recognized within Interest expense, net in the accompanying Condensed Consolidated Statements of Comprehensive Income.

On July 24, 2013, we called for redemption of all outstanding 6.125% notes due March 1, 2019 issued by Goodrich, representing approximately $202 million in aggregate principal, to be redeemed in August 2013. These Goodrich notes are being refinanced to achieve future interest savings.

As previously disclosed, on December 6, 2012, we announced that we had commenced cash tender offers for six series of outstanding notes issued by Goodrich. These offers expired on January 7, 2013. Approximately $637 million in aggregate principal amount of notes subject to the tender offers and $126 million of the fair value adjustment were repaid, with $635 million in aggregate principal amount being eligible for the early tender premium and approximately $2 million in aggregate principal amount being paid on January 8, 2013. An extinguishment loss of approximately $26 million was recognized within Interest expense, net during 2012.

Long-term debt consisted of the following:



(Dollars in millions)	June 30, 2013		December 31, 2012
LIBOR^§ plus 0.270% floating rate notes due 2013	$	1,000	$	1,000
LIBOR^§ plus 0.500% floating rate notes due 2015	500		500
1.200% notes due 2015*	—		1,000
4.875% notes due 2015*	1,200		1,200
6.290% notes due 2016^‡	188		291
5.375% notes due 2017*	1,000		1,000
1.800% notes due 2017*	1,500		1,500
6.800% notes due 2018^‡	99		99
6.125% notes due 2019^‡	202		300
6.125% notes due 2019*	1,250		1,250
8.875% notes due 2019	272		272
4.500% notes due 2020*	1,250		1,250
4.875% notes due 2020^‡	171		171
3.600% notes due 2021^‡	294		295
8.750% notes due 2021	250		250
3.100% notes due 2022*	2,300		2,300
1.550% junior subordinated notes due 2022^†	1,100		1,100
7.100% notes due 2027^‡	141		141
6.700% notes due 2028	400		400
7.500% notes due 2029*	550		550
5.400% notes due 2035*	600		600
6.050% notes due 2036*	600		600
6.800% notes due 2036^‡	134		134
7.000% notes due 2038^‡	159		159
6.125% notes due 2038*	1,000		1,000
5.700% notes due 2040*	1,000		1,000
4.500% notes due 2042*	3,500		3,500
Project financing obligations	73		100
Other (including capitalized leases and discounts)^‡	436		403
Total principal long-term debt	21,169		22,365
Other (fair market value adjustment)^‡	291		353
Total long-term debt	21,460		22,718
Less: current portion	1,085		1,121
Long-term debt, net of current portion	$	20,375	$	21,597

We may redeem the above notes, in whole or in part, at our option at any time at a redemption price in U.S. Dollars equal to the greater of 100% of the principal amount of the notes to be redeemed or the sum of the present values of the remaining scheduled payments of principal and interest on the notes to be redeemed, discounted to the redemption date on a semiannual basis at the adjusted treasury rate plus 10-50 basis points. The redemption price will also include interest accrued to the date of redemption on the principal balance of the notes being redeemed.

^†

The junior subordinated notes are redeemable at our option, in whole or in part, on a date not earlier than August 1, 2017. The redemption price will be the principal amount, plus accrued and unpaid interest, if any, up to but excluding the redemption date. We may extend or eliminate the optional redemption date as part of a remarketing of the junior subordinated notes which could occur between April 29, 2015 and July 15, 2015 or between July 23, 2015 and July 29, 2015.


‡	Includes notes and remaining fair market value adjustments that were assumed as a part of the Goodrich acquisition on July 26, 2012.


^§	The three-month LIBOR rate as of June 30, 2013 was approximately 0.3%.

We have an existing universal shelf registration statement filed with the Securities and Exchange Commission (SEC) for an indeterminate amount of equity and debt securities for future issuance, subject to our internal limitations on the amount of equity and debt to be issued under this shelf registration statement.