Borrowings (Tables)

9 Months Ended

Sep. 30, 2018

Borrowings

Short-Term Debt

	At September 30,		At December 31,
(Dollars in millions)	2018		2017
Commercial paper	$	3,986	$	1,496
Short-term loans	173		276
Long-term debt — current maturities	6,773		5,214
Total	$	10,932	$	6,987

Long-Term Debt

		Balance		Balance
(Dollars in millions)	Maturities	9/30/2018		12/31/2017
U.S. dollar debt (weighted-average interest rate at September 30, 2018):*
7.6%	2018	$	1,634	$	4,640
2.9%	2019	5,474		5,540
2.2%	2020	3,347		3,416
2.5%	2021	5,001		4,129
2.4%	2022	3,533		3,481
3.3%	2023	2,395		1,547
3.6%	2024	2,013		2,000
7.0%	2025	600		600
3.5%	2026	1,350		1,350
4.7%	2027	969		969
6.5%	2028	313		313
3.7%	2030	32		—
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
		$	30,192	$	31,515
Other currencies (average interest rate at September 30, 2018, in parentheses):*
Euros (1.5%)	2019–2029	$	10,162	$	10,502
Pound sterling (2.7%)	2020–2022	1,369		1,420
Japanese yen (0.3%)	2022–2026	1,281		1,291
Other (6.6%)	2019–2022	446		717
		$	43,450	$	45,445
Less: net unamortized discount		808		826
Less: net unamortized debt issuance costs		79		93
Add: fair value adjustment**		198		526
		$	42,762	$	45,052
Less: current maturities		6,773		5,214
Total		$	35,989	$	39,837

*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 obligations of long-term debt outstanding

Pre-swap annual contractual obligations of long-term debt outstanding at September 30, 2018, are as follows:

(Dollars in millions)	Total
2018 (for Q4)	$	1,724
2019	7,034
2020	6,286
2021	6,139
2022	4,320
2023 and beyond	17,946
Total	$	43,450

Interest on Debt

(Dollars in millions)
For the nine months ended September 30:	2018		2017
Cost of financing	$	568	$	496
Interest expense	530		451
Interest capitalized	3		(1		)
Total interest paid and accrued	$	1,101	$	947