Borrowings and Lines of Credit

9 Months Ended

Sep. 30, 2019

Borrowings and Lines of Credit [Text Block]

Borrowings and Lines of Credit



(dollars in millions)	September 30, 2019		December 31, 2018
Commercial paper	$	984	$	1,257
Other borrowings	343		212
Total short-term borrowings	$	1,327	$	1,469

At September 30, 2019, we had credit agreements with various banks permitting aggregate borrowings of up to $10.35 billion, including: a $2.20 billion revolving credit agreement and a $2.15 billion multicurrency revolving credit agreement, both of which expire in August 2021; and a $2.0 billion revolving credit agreement and a $4.0 billion term credit agreement, both of which we entered into on March 15, 2019 and which will expire on March 15, 2021 or, if earlier, the date that is 180 days after the date on which each of the separations of Otis and Carrier have been consummated. As of September 30, 2019, there were no borrowings under any of these 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 September 30, 2019, our maximum commercial paper borrowing limit was $6.35 billion. Commercial paper borrowings at September 30, 2019 include approximately €750 million ($824 million) of euro-denominated commercial paper. We use our commercial paper borrowings for general corporate purposes, including the funding of potential acquisitions, pension contributions, debt refinancing, dividend payments and repurchases of our common stock. The need for commercial paper borrowings arises when the use of domestic cash for general corporate purposes exceeds the sum of domestic cash generation and foreign cash repatriated to the U.S.

Long-term debt consisted of the following:



(dollars in millions)	September 30, 2019		December 31, 2018
LIBOR plus 0.350% floating rate notes due 2019 ³	$	350	$	350
1.500% notes due 2019 ¹	650		650
1.950% notes due 2019 ⁴	—		300
EURIBOR plus 0.15% floating rate notes due 2019 (€750 million principal value) ²	824		858
5.250% notes due 2019 ⁴	—		300
8.875% notes due 2019	271		271
4.875% notes due 2020 ¹	171		171
4.500% notes due 2020 ¹	1,250		1,250
1.900% notes due 2020 ¹	1,000		1,000
EURIBOR plus 0.20% floating rate notes due 2020 (€750 million principal value) ²	824		858
8.750% notes due 2021	250		250
3.100% notes due 2021 ⁴	250		250
3.350% notes due 2021¹	1,000		1,000
LIBOR plus 0.650% floating rate notes due 2021 ^1,3	750		750
1.950% notes due 2021 ¹	750		750
1.125% notes due 2021 (€950 million principal value) ¹	1,044		1,088



2.300% notes due 2022 ¹	500			500
2.800% notes due 2022 ⁴	1,100			1,100
3.100% notes due 2022 ¹	2,300			2,300
1.250% notes due 2023 (€750 million principal value) ¹	824			858
3.650% notes due 2023 ¹	2,250			2,250
3.700% notes due 2023 ⁴	400			400
2.800% notes due 2024 ¹	800			800
3.200% notes due 2024 ⁴	950			950
1.150% notes due 2024 (€750 million principal value) ¹	824			858
3.950% notes due 2025 ¹	1,500			1,500
1.875% notes due 2026 (€500 million principal value) ¹	549			573
2.650% notes due 2026 ¹	1,150			1,150
3.125% notes due 2027 ¹	1,100			1,100
3.500% notes due 2027 ⁴	1,300			1,300
7.100% notes due 2027	141			141
6.700% notes due 2028	400			400
4.125% notes due 2028 ¹	3,000			3,000
7.500% notes due 2029 ¹	550			550
2.150% notes due 2030 (€500 million principal value) ¹	549			573
5.400% notes due 2035 ¹	600			600
6.050% notes due 2036 ¹	600			600
6.800% notes due 2036 ¹	134			134
7.000% notes due 2038	159			159
6.125% notes due 2038 ¹	1,000			1,000
4.450% notes due 2038 ¹	750			750
5.700% notes due 2040 ¹	1,000			1,000
4.500% notes due 2042 ¹	3,500			3,500
4.800% notes due 2043 ⁴	400			400
4.150% notes due 2045 ¹	850			850
3.750% notes due 2046 ¹	1,100			1,100
4.050% notes due 2047 ¹	600			600
4.350% notes due 2047 ⁴	1,000			1,000
4.625% notes due 2048 ¹	1,750			1,750
Project financing obligations ⁵	307			287
Other (including finance leases)	279			287
Total principal long-term debt	43,600			44,416
Other (fair market value adjustments, discounts and debt issuance costs)	(323		)	(348		)
Total long-term debt	43,277			44,068
Less: current portion	5,495			2,876
Long-term debt, net of current portion	$	37,782		$	41,192


1	We may redeem these notes at our option pursuant to their terms.


2	The three-month EURIBOR rate as of September 30, 2019 was approximately -0.418%. The notes may be redeemed at our option in whole, but not in part, at any time in the event of certain developments affecting U.S. taxation.


3	The three-month LIBOR rate as of September 30, 2019 was approximately 2.0851%.


4	Rockwell Collins debt which remained outstanding following the Rockwell Acquisition.


5	Project financing obligations are associated with the sale of rights to unbilled revenues related to the ongoing activity of an entity owned by Carrier.

We had no debt issuances during the nine months ended September 30, 2019 and had the following issuances of debt in 2018:



(dollars and Euro in millions)
Issuance Date	Description of Notes	Aggregate Principal Balance
August 16, 2018:	3.350% notes due 2021¹	$	1,000
	3.650% notes due 2023¹	2,250
	3.950% notes due 2025¹	1,500
	4.125% notes due 2028¹	3,000
	4.450% notes due 2038¹	750
	4.625% notes due 2048²	1,750
	LIBOR plus 0.65% floating rate notes due 2021¹	750

May 18, 2018:	1.150% notes due 2024³	€	750
	2.150% notes due 2030³	500
	EURIBOR plus 0.20% floating rate notes due 2020³	750


1	The net proceeds received from these debt issuances were used to partially finance the cash consideration portion of the purchase price for Rockwell Collins and fees, expenses and other amounts related to the acquisition of Rockwell Collins.


2	The net proceeds from these debt issuances were used to fund the repayment of commercial paper and for other general corporate purposes.


3	The net proceeds received from these debt issuances were used for general corporate purposes.

We had the following repayments of debt during the nine months ended September 30, 2019 and the year-ended December 31, 2018:



(dollars and Euro in millions)
Repayment Date	Description of Notes	Aggregate Principal Balance
July 15, 2019	1.950% notes¹	$	300
July 15, 2019	5.250% notes¹	$	300
December 14, 2018	Variable-rate term loan due 2020 (1 month LIBOR plus 1.25%)¹	$	482
May 4, 2018	1.778% junior subordinated notes	$	1,100
February 22, 2018	EURIBOR plus 0.80% floating rate notes	€	750
February 1, 2018	6.80% notes	$	99


1	The notes and term loan were acquired in connection with the Rockwell Collins acquisition and have been subsequently repaid.

The average maturity of our long-term debt at September 30, 2019 is approximately 10 years. The average interest expense rate on our total borrowings for the quarters and nine months ended September 30, 2019 and 2018 were as follows:



	Quarter Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Average interest expense rate	3.7	%	3.6	%	3.7	%	3.5	%

On September 27, 2019 we filed a universal shelf registration statement with the SEC for an indeterminate amount of debt and equity securities for future issuance, subject to our internal limitations on the amount of debt to be issued under the shelf registration statement.