Borrowings

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Borrowings

Borrowings:

Short-Term Debt

(Dollars in millions)	At September 30, 2023		At December 31, 2022
Short-term loans	$	13	$	8
Long-term debt — current maturities	6,400		4,751
Total	$	6,414	$	4,760

The weighted-average interest rate for short-term loans was 1.8 percent and 7.6 percent at September 30, 2023 and December 31, 2022, respectively.

Long-Term Debt

Pre-Swap Borrowing

		Balance		Balance
(Dollars in millions)	Maturities	9/30/2023		12/31/2022
U.S. dollar debt (weighted-average interest rate at September 30, 2023):*
2.4%	2023	$	2	$	1,529
3.3%	2024	5,004		5,009
5.1%	2025	1,602		1,603
3.5%	2026	5,201		4,351
3.1%	2027	3,620		3,620
5.0%	2028	1,313		313
3.5%	2029	3,250		3,250
2.0%	2030	1,350		1,350
4.4%	2032	1,850		1,850
4.8%	2033	750		—
8.0%	2038	83		83
4.5%	2039	2,745		2,745
2.9%	2040	650		650
4.0%	2042	1,107		1,107
7.0%	2045	27		27
4.7%	2046	650		650
4.3%	2049	3,000		3,000
3.0%	2050	750		750
4.2%	2052	1,400		1,400
5.1%	2053	650		—
7.1%	2096	316		316
		$	35,321	$	33,605
Other currencies (weighted-average interest rate at September 30, 2023, in parentheses):*
Euro (1.8%)	2024–2043	$	18,512	$	17,087
Pound sterling (4.9%)	2038	915		—
Japanese yen (0.5%)	2024–2028	1,182		694
Other (15.1%)	2023–2026	310		361
		$	56,240	$	51,747
Finance lease obligations (4.3%)	2023–2030	303		239
		$	56,542	$	51,986
Less: net unamortized discount		846		835
Less: net unamortized debt issuance costs		157		138
Add: fair value adjustment**		(311)		(73)
		$	55,228	$	50,940
Less: current maturities		6,400		4,751
Total		$	48,828	$	46,189

*Includes notes, debentures, bank loans and secured borrowings.

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

The company’s indenture governing its debt securities and its various credit facilities each contain significant covenants which obligate the company to promptly pay principal and interest, limit the aggregate amount of secured indebtedness and sale and leaseback transactions to 10 percent of the company’s consolidated net tangible assets, and restrict the company’s ability to merge or consolidate unless certain conditions are met. The credit facilities also include a covenant on the company’s consolidated net interest expense ratio, which cannot be less than 2.20 to 1.0, as well as a cross default provision with respect to other defaulted indebtedness of at least $500 million.

The company is in compliance with its debt covenants and provides periodic certifications to its lenders. The failure to comply with its debt covenants could constitute an event of default with respect to the debt to which such provisions apply. If certain events of default were to occur, the principal and interest on the debt to which such event of default applied would become immediately due and payable.

In the first quarter of 2023, the company issued $0.7 billion of Japanese yen floating-rate syndicated bank loans with a maturity of 5 years; $4.6 billion of Euro fixed-rate notes in tranches with maturities ranging from 4 to 20 years and coupons ranging from 3.375 percent to 4 percent; $0.9 billion of Pound sterling fixed-rate notes with a maturity of 15 years and a coupon of 4.875 percent; and $3.25 billion of U.S. dollar fixed-rate notes in tranches with maturities ranging from 3 to 30 years and coupons ranging from 4.5 to 5.1 percent.

Pre-swap annual contractual obligations of long-term debt outstanding at September 30, 2023, were as follows:

(Dollars in millions)	Total
Remainder of 2023	$	75
2024	6,368
2025	4,912
2026	5,570
2027	5,772
Thereafter	33,845
Total	$	56,542

Interest on Debt

(Dollars in millions)
For the nine months ended September 30:	2023		2022
Cost of financing	$	255	$	264
Interest expense	1,202		903
Interest capitalized	7		4
Total interest paid and accrued	$	1,464	$	1,170

Lines of Credit

The company has a $2.5 billion Three-Year Credit Agreement and a $7.5 billion Five-Year Credit Agreement (the Credit Agreements) with maturity dates of June 20, 2026 and June 22, 2028, respectively. The Credit Agreements permit the company and its subsidiary borrowers to borrow up to $10 billion on a revolving basis. At September 30, 2023, there were no borrowings by the company, or its subsidiaries, under these credit facilities.