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Borrowings and Lines of Credit | 3 Months Ended
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Mar. 31, 2019
Debt Disclosure [Abstract] |
Borrowings and Lines of Credit [Text Block] | Borrowings and Lines of Credit
(dollars in millions) | March 31, 2019 |  | December 31, 2018
Commercial paper | $ | 849 |  |  | $ | 1,257 |
Other borrowings | 262 |  |  | 212 |
Total short-term borrowings | $ | 1,111 |  |  | $ | 1,469 |
At March 31, 2019, we had credit agreements with various banks permitting aggregate borrowings of up to $10.35 billion, including: a $2.20 billion revolving credit agreement and a $2.15 billion multicurrency revolving credit agreement, both of which expire in August 2021; and a $2.0 billion revolving credit agreement and a $4.0 billion term credit agreement, both of which we entered into on March 15, 2019 and which will expire on March 15, 2021 or, if earlier, the date that is 180 days after the date on which each of the separations of Otis and Carrier have been consummated. On March 15, 2019, we terminated the $1.5 billion revolving credit agreement that we entered into on November 26, 2018. As of March 31, 2019, there were no borrowings under any of these agreements. As of March 31, 2019, the undrawn portions of the $2.20 billion revolving credit agreement and $2.15 billion multicurrency revolving credit agreement were available to serve as backup facilities for the issuance of commercial paper. As of March 31, 2019, our maximum commercial paper borrowing limit was $4.35 billion. In April 2019, we increased our commercial paper borrowing limit to $6.35 billion with the undrawn portion of the $2.0 billion revolving credit agreement serving as additional backup for the issuance of commercial paper. Commercial paper borrowings at March 31, 2019 include approximately €750 million ($849 million) of euro-denominated commercial paper. We use our commercial paper borrowings for general corporate purposes, including the funding of potential acquisitions, pension contributions, debt refinancing, dividend payments and repurchases of our common stock. The need for commercial paper borrowings arises when the use of domestic cash for general corporate purposes exceeds the sum of domestic cash generation and foreign cash repatriated to the U.S. Long-term debt consisted of the following:
(dollars in millions) | March 31, 2019 |  | December 31, 2018
LIBOR plus 0.350% floating rate notes due 2019 3 | $ | 350 |  |  | $ | 350 |
1.500% notes due 2019 1 | 650 |  |  | 650 |
1.950% notes due 2019 4 | 300 |  |  | 300 |
EURIBOR plus 0.15% floating rate notes due 2019 (€750 million principal value) 2 | 849 |  |  | 858 |
5.250% notes due 2019 4 | 300 |  |  | 300 |
8.875% notes due 2019 | 271 |  |  | 271 |
4.875% notes due 2020 1 | 171 |  |  | 171 |
4.500% notes due 2020 1 | 1,250 |  |  | 1,250 |
1.900% notes due 2020 1 | 1,000 |  |  | 1,000 |
EURIBOR plus 0.20% floating rate notes due 2020 (€750 million principal value) 2 | 849 |  |  | 858 |
8.750% notes due 2021 | 250 |  |  | 250 |
3.100% notes due 2021 4 | 250 |  |  | 250 |
3.350% notes due 2021 1 | 1,000 |  |  | 1,000 |
LIBOR plus 0.650% floating rate notes due 2021 1,3 | 750 |  |  | 750 |
1.950% notes due 2021 1 | 750 |  |  | 750 |
1.125% notes due 2021 (€950 million principal value) 1 | 1,075 |  |  | 1,088 |
2.300% notes due 2022 1 | 500 |  |  | 500 |
2.800% notes due 2022 4 | 1,100 |  |  | 1,100 |
3.100% notes due 2022 1 | 2,300 |  |  | 2,300 |
1.250% notes due 2023 (€750 million principal value) 1 | 849 |  |  | 858 |
3.650% notes due 2023 1 | 2,250 |  |  | 2,250 |
3.700% notes due 2023 4 | 400 |  |  | 400 |
2.800% notes due 2024 1 | 800 |  |  | 800 |
3.200% notes due 2024 4 | 950 |  |  | 950 |
1.150% notes due 2024 (€750 million principal value) 1 | 849 |  |  | 858 |
3.950% notes due 2025 1 | 1,500 |  |  | 1,500 |
1.875% notes due 2026 (€500 million principal value) 1 | 566 |  |  | 573 |
2.650% notes due 2026 1 | 1,150 |  |  | 1,150 |
3.125% notes due 2027 1 | 1,100 |  |  | 1,100 |
3.500% notes due 2027 4 | 1,300 |  |  | 1,300 |
7.100% notes due 2027 | 141 |  |  | 141 |
6.700% notes due 2028 | 400 |  |  | 400 |
4.125% notes due 2028 1 | 3,000 |  |  | 3,000 |
7.500% notes due 2029 1 | 550 |  |  | 550 |
2.150% notes due 2030 (€500 million principal value) 1 | 566 |  |  | 573 |
5.400% notes due 2035 1 | 600 |  |  | 600 |
6.050% notes due 2036 1 | 600 |  |  | 600 |
6.800% notes due 2036 1 | 134 |  |  | 134 |
7.000% notes due 2038 | 159 |  |  | 159 |
6.125% notes due 2038 1 | 1,000 |  |  | 1,000 |
4.450% notes due 2038 1 | 750 |  |  | 750 |
5.700% notes due 2040 1 | 1,000 |  |  | 1,000 |
4.500% notes due 2042 1 | 3,500 |  |  | 3,500 |
4.800% notes due 2043 4 | 400 |  |  | 400 |
4.150% notes due 2045 1 | 850 |  |  | 850 |
3.750% notes due 2046 1 | 1,100 |  |  | 1,100 |
4.050% notes due 2047 1 | 600 |  |  | 600 |
4.350% notes due 2047 4 | 1,000 |  |  | 1,000 |
4.625% notes due 2048 1 | 1,750 |  |  | 1,750 |
Project financing obligations 5 | 338 |  |  | 287 |
Other (including finance leases) | 302 |  |  | 287 |
Total principal long-term debt | 44,419 |  |  | 44,416 |
Other (fair market value adjustments, discounts and debt issuance costs) | (344 | ) |  | (348 | )
Total long-term debt | 44,075 |  |  | 44,068 |
Less: current portion | 3,071 |  |  | 2,876 |
Long-term debt, net of current portion | $ | 41,004 |  |  | $ | 41,192 |
1 | We may redeem these notes at our option pursuant to their terms.
2 | The three-month EURIBOR rate as of March 31, 2019 was approximately -0.311%. The notes may be redeemed at our option in whole, but not in part, at any time in the event of certain developments affecting U.S. taxation.
3 | The three-month LIBOR rate as of March 31, 2019 was approximately 2.599%.
4 | Rockwell Collins debt which remained outstanding following the Merger.
5 | Project financing obligations are associated with the sale of rights to unbilled revenues related to the ongoing activity of an entity owned by Carrier.
We had no debt issuances during the quarter ended March 31, 2019 and had the following issuances of debt in 2018:
(dollars and Euro in millions) |  |  |
Issuance Date | Description of Notes | Aggregate Principal Balance
August 16, 2018: | 3.350% notes due 2021 1 | $ | 1,000 |
| 3.650% notes due 2023 1 | 2,250 |
| 3.950% notes due 2025 1 | 1,500 |
| 4.125% notes due 2028 1 | 3,000 |
| 4.450% notes due 2038 1 | 750 |
| 4.625% notes due 2048 2 | 1,750 |
| LIBOR plus 0.65% floating rate notes due 2021 1 | 750 |
May 18, 2018: | 1.150% notes due 2024 3 | € | 750 |
| 2.150% notes due 2030 3 | 500 |
| EURIBOR plus 0.20% floating rate notes due 2020 3 | 750 |
1 | The net proceeds received from these debt issuances were used to partially finance the cash consideration portion of the purchase price for Rockwell Collins and fees, expenses and other amounts related to the acquisition of Rockwell Collins.
2 | The net proceeds from these debt issuances were used to fund the repayment of commercial paper and for other general corporate purposes.
3 | The net proceeds received from these debt issuances were used for general corporate purposes.
We had no debt payments during the quarter ended March 31, 2019 and had the following repayments of debt in 2018:
(dollars and Euro in millions) |  |
Repayment Date | Description of Notes | Aggregate Principal Balance
December 14, 2018 | Variable-rate term loan due 2020 (1 month LIBOR plus 1.25%)1 | $ | 482 |
May 4, 2018 | 1.778% junior subordinated notes | $ | 1,100 |
February 22, 2018 | EURIBOR plus 0.80% floating rate notes | € | 750 |
February 1, 2018 | 6.80% notes | $ | 99 |
1 | This term loan was assumed in connection with the Rockwell Collins acquisition and subsequently repaid.
The average maturity of our long-term debt at March 31, 2019 is approximately 11 years. The average interest expense rate on our total borrowings for the quarters ended March 31, 2019 and 2018 were as follows:
| Quarter Ended March 31,
| 2019 |  | 2018
Average interest expense rate | 3.6 | % |  | 3.4 | %
We have an existing universal shelf registration statement filed with the SEC, which expires on April 29, 2019. Our ability to use or renew our shelf registration statement may be limited as a result of the separation transactions; accordingly and as noted above, we entered into a new $2.0 billion revolving credit agreement and a $4.0 billion term credit agreement on March 15, 2019 to be used for general corporate purposes, including the repayment, repurchase or redemption of existing debt, and to serve as backup facilities to support additional issuances of commercial paper. We expect to renew our shelf registration statement following the separation transactions.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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