Borrowings: (Tables)

9 Months Ended

Sep. 30, 2014

Borrowings

Short-Term Debt

	At September 30,		At December 31,
(Dollars in millions)	2014		2013
Commercial paper	$	6,474	$	2,458
Short-term loans		329		551
Long-term debt—current maturities		6,073		3,854
Total	$	12,876	$	6,862

Long-Term Debt

Long-Term Debt
Pre-Swap Borrowing
				Balance		Balance
(Dollars in millions)		Maturities	9/30/2014		12/31/2013
U.S. dollar notes and debentures (average interest rate at September 30, 2014):
0.58%	2014–2015		$	5,423	$	6,456
2.75%	2016–2017			9,531		8,465
3.34%	2018–2021			8,056		6,206
1.88%		2022		1,000		1,000
3.38%		2023		1,500		1,500
3.63%		2024		2,000		–
7.00%		2025		600		600
6.22%		2027		469		469
6.50%		2028		313		313
5.88%		2032		600		600
8.00%		2038		83		83
5.60%		2039		745		745
4.00%		2042		1,107		1,107
7.00%		2045		27		27
7.13%		2096		316		316
			$	31,770	$	27,887
Other currencies (average interest rate at September 30, 2014, in parentheses):				\
Euros (2.0%)	2015–2025			4,438		5,894
Pound sterling (2.75%)	2017–2020			1,224		1,254
Japanese yen (0.5%)	2017			801		1,057
Swiss francs (3.8%)	2015–2020			169		181
Canadian (2.2%)		2017		447		471
Other (9.79%)	2015–2018			256		291
			$	39,106	$	37,036
Less: net unamortized discount				857		872
Add: fair value adjustment*				646		546
			$	38,894	$	36,710
Less: current maturities				6,073		3,854
Total			$	32,821	$	32,856

Note: The 2014-2015 maturities at 12/31/2013 includes $17 million of debt securities issued by IBM International Group Capital, LLC, which is an indirect, 100percent owned finance subsidiary of the company which matured in the first half of 2014. Debt securities issued by IBM International Group Capital LLC are fully and unconditionally guaranteed by the company.

* The portion of the company’s fixed-rate debt obligations that is hedged is reflected in the ConsolidatedStatement of Financial Position as an amount equal to the sum of the debt’s carrying value plus a fair value adjustment representing changes in the fair value of the hedged debt obligations attributable to movements in benchmark interest rates.

Pre-swap annual contractual maturities of long-term debt outstanding

(Dollars in millions)	Total
2014 (for Q4)	$	1,409
2015		4,717
2016		5,175
2017		5,328
2018		2,617
2019 and beyond		19,860
Total	$	39,106

Interest on Debt

(Dollars in millions)
For the nine months ended September 30:	2014		2013
Cost of financing	$	407	$	444
Interest expense		366		292
Net investment derivative activity		1		(3)
Interest capitalized		3		19
Total interest paid and accrued	$	777	$	752