Debt

12 Months Ended

Dec. 31, 2020

10. DEBT

Commercial Paper

The company maintains a commercial paper program that serves as a source of short-term financing with capacity to issue unsecured commercial paper notes up to $2.0 billion. There were no commercial paper borrowings outstanding at December 31, 2020 and December 31, 2019, respectively. The outstanding balance of commercial paper borrowings is recorded in Other current liabilities in the consolidated statements of financial position.

Credit Facilities

In August 2018, the company entered into a five-year senior unsecured credit facility in an aggregate principal amount of $2.0 billion (the “2018 Credit Agreement”). In October 2019, the company amended the 2018 Credit Agreement to extend its maturity date by one year from August 2023 to August 2024. The revolving credit facility established under the 2018 Credit Agreement is intended to support the company’s commercial paper program and other general corporate purposes. At December 31, 2020, there was no balance outstanding under this facility. Commercial paper borrowings reduce the amount available for borrowing under the 2018 Credit Agreement.

In December 2016, a subsidiary of the company entered into a two-year credit facility, with two additional one-year option periods, in an aggregate principal amount of £120 million (the equivalent of approximately $163 million as of December 31, 2020) (the “2016 Credit Agreement”). The 2016 Credit Agreement is guaranteed by the company. The company exercised the second option to extend the maturity to December 2020. In the fourth quarter of 2020, the remaining credit facility balance of £50 million (the equivalent of approximately $68 million as of December 31, 2020) was paid in full and the credit facility was terminated. Borrowings outstanding under this facility in prior periods are recorded in Other current liabilities in the consolidated statements of financial position.

Our credit agreements contain generally customary terms and conditions, including covenants restricting the company’s ability to sell all or substantially all of its assets, merge or consolidate with another entity or undertake other fundamental changes and incur liens. The company also cannot permit the ratio of its debt to capitalization (as set forth in the credit agreements) to exceed 65 percent. At December 31, 2020, the company was in compliance with all covenants under its credit agreements.

Unsecured Senior Notes

In March 2020, the company issued $2.25 billion of unsecured senior notes for general corporate purposes, including debt repayment and working capital, as follows:

•$750 million of 4.40% senior notes due 2030 (the “2030 Notes”),

•$500 million of 5.15% senior notes due 2040 (the “2040 Notes”) and

•$1.0 billion of 5.25% senior notes due 2050 (the “2050 Notes”).

We refer to the 2030 Notes, the 2040 Notes and the 2050 Notes, together, as the “notes.” Interest on the notes is payable semi-annually in arrears. The notes are generally subject to redemption, in whole or in part, at the company’s discretion at any time, or from time to time, prior to maturity at a redemption price equal to the greater of 100% of the principal amount of the notes to be redeemed or an applicable “make-whole” amount, plus accrued and unpaid interest.

Long-term debt consists of the following:


$ in millions		December 31
		2020		2019
Fixed-rate notes and debentures, maturing in	Interest rate
2020	2.08%	$	—	$	1,000
2021	3.50%	700		700
2022	2.55%	1,500		1,500
2023	3.25%	1,050		1,050
2025	2.93%	1,500		1,500
2026	7.75% - 7.88%	527		527
2027	3.20%	750		750
2028	3.25%	2,000		2,000
2030	4.40%	750		—
2031	7.75%	466		466
2040	5.05% - 5.15%	800		300
2043	4.75%	950		950
2045	3.85%	600		600
2047	4.03%	2,250		2,250
2050	5.25%	1,000		—
Credit facilities	1.89%	—		78
Other	Various	235		272
Debt issuance costs		(75)		(64)
Total long-term debt		15,003		13,879
Less: current portion(1)		742		1,109
Long-term debt, net of current portion		$	14,261	$	12,770

(1) The current portion of long-term debt is recorded in Other current liabilities in the consolidated statements of financial position.

The estimated fair value of long-term debt was $18.2 billion and $15.1 billion as of December 31, 2020 and 2019, respectively. We calculated the fair value of long-term debt using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the company’s existing debt arrangements.

Indentures underlying long-term debt issued by the company or its subsidiaries contain various restrictions with respect to the issuer, including one or more restrictions relating to limitations on liens, sale-leaseback arrangements and funded debt of subsidiaries. The majority of these fixed rate notes and debentures are subject to redemption at the company’s discretion at any time prior to maturity in whole or in part at the principal amount plus any make-whole premium and accrued and unpaid interest. Interest on these fixed rate notes and debentures are payable semi-annually in arrears.

Total interest payments, net of interest received, were $572 million, $521 million and $456 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Maturities of long-term debt as of December 31, 2020, are as follows:


$ in millions
Year Ending December 31
2021	$	742
2022	1,505
2023	1,053
2024	3
2025	1,503
Thereafter	10,285
Total principal payments	15,091
Unamortized premium on long-term debt, net of discount	(13)
Debt issuance costs	(75)
Total long-term debt	$	15,003