Borrowings (Tables)

9 Months Ended

Sep. 30, 2017

Borrowings:

Short-Term Debt

	At September 30,		At December 31,
(Dollars in millions)	2017		2016
Commercial paper	$	—	$	899
Short-term loans	407		375
Long-term debt — current maturities	3,892		6,239
Total	$	4,299	$	7,513

Long-Term Debt

		Balance		Balance
(Dollars in millions)	Maturities	9/30/2017		12/31/2016
U.S. dollar debt (average interest rate at September 30, 2017):*
2.7%	2017	$	2	$	5,104
3.0%	2018–2019	10,208		8,856
2.0%	2020–2021	7,416		4,941
2.4%	2022	3,492		1,901
3.4%	2023	1,529		1,500
3.6%	2024	2,000		2,000
7.0%	2025	600		600
3.5%	2026	1,350		1,350
4.7%	2027	969		469
6.5%	2028	313		313
5.9%	2032	600		600
8.0%	2038	83		83
5.6%	2039	745		745
4.0%	2042	1,107		1,107
7.0%	2045	27		27
4.7%	2046	650		650
7.1%	2096	316		316
		$	31,408	$	30,563
Other currencies (average interest rate at September 30, 2017, in parentheses):*
Euros (1.5%)	2019–2029	$	10,342	$	7,122
Pound sterling (2.7%)	2020–2022	1,409		1,296
Japanese yen (0.9%)	2017–2026	1,669		1,576
Canadian (2.2%)	2017	—		373
Other (7.4%)	2018–2020	694		215
		$	45,522	$	41,145
Less: net unamortized discount		833		839
Less: net unamortized debt issuance costs		99		82
Add: fair value adjustment**		627		669
		$	45,218	$	40,893
Less: current maturities		3,892		6,239
Total		$	41,327	$	34,655

*    Includes notes, debentures, bank loans, secured 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 and 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

Pre-swap annual contractual maturities of long-term debt outstanding at September 30, 2017, are as follows:

(Dollars in millions)	Total
2017 (for Q4)	$	468
2018	5,140
2019	7,034
2020	6,155
2021	5,155
2022 and beyond	21,569
Total	$	45,522

Interest on Debt

(Dollars in millions)
For the nine months ended September 30:	2017			2016
Cost of financing	$	496		$	432
Interest expense	485			523
Net investment derivative activity	(34		)	(51		)
Interest capitalized	(1		)	3
Total interest paid and accrued	$	947		$	907