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Long-Term Debt and Short-Term Borrowings | 12 Months Ended
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Dec. 31, 2017
Long-Term Debt and Short-Term Borrowings |
Long-Term Debt and Short-Term Borrowings | NOTE 11. Long-Term Debt and Short-Term Borrowings The following debt tables reflect effective interest rates, which include the impact of interest rate swaps, as of December 31, 2017. If the debt was issued on a combined basis, the debt has been separated to show the impact of the fixed versus floating effective interest rates. Carrying value includes the impact of debt issuance costs and fair value hedging activity. Long-term debt and short-term borrowings as of December 31 consisted of the following: Long-Term Debt
|  | Currency/ |  | Effective |  | Final |  |  |  |  |  |  |
(Millions) |  | Fixed vs. |  | Interest |  | Maturity |  | Carrying Value |
Description / 2017 Principal Amount |  | Floating |  | Rate |  | Date |  | 2017 |  | 2016 |
Medium-term note (repaid in 2017) |  | USD Fixed |  | — | % | — |  | $ | — |  | $ | 649 |
Medium-term note (500 million Euros) |  | Euro Floating |  | — | % | 2018 |  |  | 600 |  |  | 523 |
Medium-term note ($450 million) |  | USD Floating |  | 1.50 | % | 2018 |  |  | 448 |  |  | 448 |
Medium-term note ($600 million) |  | USD Floating |  | 1.63 | % | 2019 |  |  | 596 |  |  | 598 |
Medium-term note ($25 million) |  | USD Fixed |  | 1.74 | % | 2019 |  |  | 25 |  |  | 25 |
Medium-term note (650 million Euros) |  | Euro Floating |  | — | % | 2020 |  |  | 779 |  |  | 680 |
Medium-term note ($300 million) |  | USD Floating |  | 1.58 | % | 2020 |  |  | 296 |  |  | 297 |
Medium-term note ($200 million) |  | USD Floating |  | 1.49 | % | 2020 |  |  | 198 |  |  | 199 |
Eurobond (300 million Euros) |  | Euro Floating |  | — | % | 2021 |  |  | 378 |  |  | 336 |
Eurobond (300 million Euros) |  | Euro Fixed |  | 1.97 | % | 2021 |  |  | 358 |  |  | 312 |
Medium-term note ($600 million) |  | USD Fixed |  | 1.63 | % | 2021 |  |  | 598 |  |  | 598 |
Medium-term note (500 million Euros) |  | Euro Fixed |  | 0.45 | % | 2022 |  |  | 597 |  |  | 520 |
Medium-term note ($600 million) |  | USD Fixed |  | 2.17 | % | 2022 |  |  | 595 |  |  | 593 |
Medium-term note (600 million Euros) |  | Euro Fixed |  | 1.14 | % | 2023 |  |  | 712 |  |  | 619 |
Medium-term note ($650 million) |  | USD Fixed |  | 2.26 | % | 2023 |  |  | 647 |  |  | — |
Medium-term note ($550 million) |  | USD Fixed |  | 3.04 | % | 2025 |  |  | 546 |  |  | 546 |
Medium-term note (750 million Euros) |  | Euro Fixed |  | 1.71 | % | 2026 |  |  | 885 |  |  | 770 |
Medium-term note ($650 million) |  | USD Fixed |  | 2.25 | % | 2026 |  |  | 641 |  |  | 640 |
Medium-term note ($850 million) |  | USD Fixed |  | 2.95 | % | 2027 |  |  | 839 |  |  | — |
30-year debenture ($220 million) |  | USD Fixed |  | 6.01 | % | 2028 |  |  | 227 |  |  | 342 |
Medium-term note (500 million Euros) |  | Euro Fixed |  | 1.90 | % | 2030 |  |  | 589 |  |  | 512 |
Medium-term note (500 million Euros) |  | Euro Fixed |  | 1.54 | % | 2031 |  |  | 595 |  |  | 518 |
30-year bond ($555 million) |  | USD Fixed |  | 5.73 | % | 2037 |  |  | 550 |  |  | 743 |
Floating rate note ($96 million) |  | USD Floating |  | 1.29 | % | 2041 |  |  | 95 |  |  | 96 |
Medium-term note ($325 million) |  | USD Fixed |  | 4.05 | % | 2044 |  |  | 313 |  |  | 313 |
Floating rate note ($55 million) |  | USD Floating |  | 1.21 | % | 2044 |  |  | 54 |  |  | 54 |
Medium-term note ($500 million) |  | USD Fixed |  | 3.13 | % | 2046 |  |  | 473 |  |  | 473 |
Medium-term note ($500 million) |  | USD Fixed |  | 3.68 | % | 2047 |  |  | 491 |  |  | — |
Other borrowings |  | Various |  | 1.26 | % | 2018-2040 |  |  | 73 |  |  | 74 |
Total long-term debt |  |  |  |  |  |  |  | $ | 13,198 |  | $ | 11,478 |
Less: current portion of long-term debt |  |  |  |  |  |  |  |  | 1,102 |  |  | 800 |
Long-term debt (excluding current portion) |  |  |  |  |  |  |  | $ | 12,096 |  | $ | 10,678 |
Post-Swap Borrowing (Long-Term Debt, Including Current Portion)
|  | 2017 |  | 2016 |
|  | Carrying |  | Effective |  | Carrying |  | Effective |
(Millions) |  | Value |  | Interest Rate |  | Value |  | Interest Rate |
Fixed-rate debt |  | $ | 9,681 |  | 2.45 | % | $ | 8,372 |  | 2.42 | %
Floating-rate debt |  |  | 3,517 |  | 0.76 | % |  | 3,106 |  | 0.48 | %
Total long-term debt, including current portion |  | $ | 13,198 |  |  |  | $ | 11,478 |  |  |
Short-Term Borrowings and Current Portion of Long-Term Debt
|  | Effective |  | Carrying Value |
(Millions) |  | Interest Rate |  | 2017 |  | 2016 |
Current portion of long-term debt |  | 0.67 | % | $ | 1,102 |  | $ | 800 |
U.S. dollar commercial paper |  | 1.50 | % |  | 745 |  |  | — |
Other borrowings |  | 5.35 | % |  | 6 |  |  | 172 |
Total short-term borrowings and current portion of long-term debt |  |  |  | $ | 1,853 |  | $ | 972 |
Other short-term borrowings primarily consisted of bank borrowings by international subsidiaries. In 2016, these were primarily related to Japan and Korea. Future Maturities of Long-term Debt Maturities of long-term debt in the table below are net of the unaccreted debt issue costs such that total maturities equal the carrying value of long-term debt as of December 31, 2017. The maturities of long-term debt for the periods subsequent to December 31, 2017 are as follows (in millions):
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | After |  |  |  |
2018 |  | 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2022 |  | Total |
$ | 1,102 |  | $ | 692 |  | $ | 1,368 |  | $ | 1,333 |  | $ | 1,191 |  | $ | 7,512 |  | $ | 13,198 |
Long-term debt payments due in 2018, 2019, and 2020 include floating rate notes totaling $54 million (classified as current portion of long-term debt), $71 million (included in other borrowings in the long-term debt table), and $95 million (included within the long-term debt table), respectively, as a result of put provisions associated with these debt instruments. Credit Facilities In March 2016, 3M amended and restated its existing $2.25 billion five-year revolving credit facility expiring in August 2019 to a $3.75 billion five-year revolving credit facility expiring in March 2021. This credit agreement includes a provision under which 3M may request an increase of up to $1.25 billion (at lender’s discretion), bringing the total facility up to $5.0 billion. This revolving credit facility was undrawn at December 31, 2017. Under the $3.75 billion credit agreement, the Company is required to maintain its EBITDA to Interest Ratio as of the end of each fiscal quarter at not less than 3.0 to 1. This is calculated (as defined in the agreement) as the ratio of consolidated total EBITDA for the four consecutive quarters then ended to total interest expense on all funded debt for the same period. At December 31, 2017, this ratio was approximately 29 to 1. Debt covenants do not restrict the payment of dividends. Other Credit Facilities Apart from the committed revolving facility, an additional $288 million in stand-alone letters of credit and bank guarantees were also issued and outstanding at December 31, 2017. These instruments are utilized in connection with normal business activities. Long-Term Debt Issuances The principal amounts, interest rates and maturity dates of individual long-term debt issuances can be found in the long-term debt table found at the beginning of this note. In October 2017, 3M issued $650 million aggregate principal amount of 5.5-year fixed rate medium-term notes due 2023 with a coupon rate of 2.25%, $850 million aggregate principal amount of 10-year fixed rate medium-term notes due 2027 with a coupon rate of 2.875%, and $500 million aggregate principal amount of 30-year fixed rate medium-term notes due 2047 with a coupon rate of 3.625%. In May 2016, 3M issued 1 billion Euros aggregate principal amount of medium-term notes. In September 2016, 3M issued $1.75 billion aggregate principal amount of medium-term notes. In May 2015, 3M issued 1.750 billion Euros aggregate principal amount of medium-term notes. In August 2015, 3M issued $1.500 billion aggregate principal amount of medium-term notes. Upon debt issuance, the Company entered into two interest rate swaps as fair value hedges of a portion of the fixed interest rate medium-term note obligation. The first converted a $450 million three-year fixed rate note, and the second converted $300 million of a five-year fixed rate note included in this issuance to an interest rate based on a floating three-month LIBOR index. Long-Term Debt Maturities and Extinguishments In June 2017, 3M repaid $650 million aggregate principal amount of fixed rate medium-term notes that matured. In October 2017, 3M, via cash tender offers, repurchased $305 million aggregate principal amount of its outstanding notes. This included $110 million of its $330 million principal amount of 6.375% notes due 2028 and $195 million of its $750 million principal amount of 5.70% notes due 2037. The Company recorded an early debt extinguishment charge of approximately $96 million in the fourth quarter of 2017 within interest expense, the cash outflow for which is recorded within other financing activities on the statement of cash flows. This charge reflected the differential between the carrying value and the amount paid to acquire the tendered notes and related expenses. In September 2016, 3M repaid $1 billion aggregate principal amount of medium-term notes. Floating Rate Notes At various times, 3M has issued floating rate notes containing put provisions. 3M would be required to repurchase these securities at various prices ranging from 99 percent to 100 percent of par value according to the reduction schedules for each security. In December 2004, 3M issued a forty-year $60 million floating rate note, with a rate based on a floating LIBOR index. Under the terms of this floating rate note due in 2044, holders have an annual put feature at 100 percent of par value from 2014 and every anniversary thereafter until final maturity. Under the terms of the floating rate notes due in 2027, 2040 and 2041, holders have put options that commence ten years from the date of issuance and each third anniversary thereafter until final maturity at prices ranging from 99 percent to 100 percent of par value. For the periods presented, 3M was required to repurchase an immaterial amount of principal on the aforementioned floating rate notes.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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