Borrowings (Tables)

6 Months Ended

Jun. 30, 2017

Borrowings:

Short-Term Debt

	At June 30,		At December 31,
(Dollars in millions)	2017		2016
Commercial paper	$	—	$	899
Short-term loans	227		375
Long-term debt — current maturities	7,834		6,239
Total	$	8,061	$	7,513

Long-Term Debt

		Balance		Balance
(Dollars in millions)	Maturities	6/30/2017		12/31/2016
U.S. dollar debt (average interest rate at June 30, 2017):*
4.70%	2017	$	4,018	$	5,104
3.25%	2018-2019	8,934		8,856
1.93%	2020-2021	6,221		4,941
2.40%	2022	2,903		1,901
3.37%	2023	1,502		1,500
3.63%	2024	2,000		2,000
7.00%	2025	600		600
3.45%	2026	1,350		1,350
4.71%	2027	969		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
4.70%	2046	650		650
7.13%	2096	316		316
		$	32,339	$	30,563
Other currencies (average interest rate at June 30, 2017, in parentheses):*
Euros (1.5%)	2019-2029	$	9,984	$	7,122
Pound sterling (2.7%)	2020-2022	1,364		1,296
Japanese yen (1.1%)	2017-2026	1,233		1,576
Canadian (2.2%)	2017	—		373
Other (8.5%)	2017-2020	788		215
		$	45,708	$	41,145
Less: net unamortized discount		837		839
Less: net unamortized debt issuance costs		92		82
Add: fair value adjustment**		668		669
		$	45,446	$	40,893
Less: current maturities		7,834		6,239
Total		$	37,612	$	34,655

* Includes notes, debentures, bank loans, securitized borrowings and capital lease obligations.

**   The portion of the company’s fixed-rate debt obligations that is hedged is reflected in the Consolidated Statement 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.

There are no debt securities issued and outstanding by IBM International Group Capital LLC, which is an indirect, 100 percent owned finance subsidiary of International Business Machines Corporation, the parent. Any debt securities issued by IBM International Group Capital LLC, would be fully and unconditionally guaranteed by the parent.

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

(Dollars in millions)	Total
2017 (for Q3 - Q4)	$	4,493
2018	5,169
2019	5,574
2020	6,059
2021	4,012
2022 and beyond	20,401
Total	$	45,708

Interest on Debt

(Dollars in millions)
For the six months ended June 30:	2017			2016
Cost of financing	$	330		$	284
Interest expense	309			341
Net investment derivative activity	(27		)	(26		)
Interest capitalized	1			1
Total interest paid and accrued	$	613		$	600