XML 44 R21.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Financing arrangements | 12 Months Ended
--- | ---
Dec. 31, 2017
Debt Disclosure [Abstract] |
Financing arrangements | Financing arrangements The carrying values and the fixed contractual coupon rates of our borrowings were as follows (in millions):
| December 31,
| 2017 |  | 2016
Short-term loan | $ | — |  |  | $ | 605 |
2.125% notes due 2017 (2.125% 2017 Notes) | — |  |  | 1,250 |
Floating Rate Notes due 2017 | — |  |  | 600 |
1.25% notes due 2017 (1.25% 2017 Notes) | — |  |  | 850 |
5.85% notes due 2017 (5.85% 2017 Notes) | — |  |  | 1,100 |
6.15% notes due 2018 (6.15% 2018 Notes) | 500 |  |  | 500 |
4.375% €550 million notes due 2018 (4.375% 2018 euro Notes) | 653 |  |  | 577 |
5.70% notes due 2019 (5.70% 2019 Notes) | 1,000 |  |  | 1,000 |
1.90% notes due 2019 (1.90% 2019 Notes) | 700 |  |  | — |
Floating Rate Notes due 2019 | 550 |  |  | 250 |
2.20% notes due 2019 (2.20% 2019 Notes) | 1,400 |  |  | 1,400 |
2.125% €675 million notes due 2019 (2.125% 2019 euro Notes) | 810 |  |  | 710 |
4.50% notes due 2020 (4.50% 2020 Notes) | 300 |  |  | 300 |
2.125% notes due 2020 (2.125% 2020 Notes) | 750 |  |  | 750 |
Floating Rate Notes due 2020 | 300 |  |  | — |
2.20% notes due 2020 (2.20% 2020 Notes) | 700 |  |  | — |
3.45% notes due 2020 (3.45% 2020 Notes) | 900 |  |  | 900 |
4.10% notes due 2021 (4.10% 2021 Notes) | 1,000 |  |  | 1,000 |
1.85% notes due 2021 (1.85% 2021 Notes) | 750 |  |  | 750 |
3.875% notes due 2021 (3.875% 2021 Notes) | 1,750 |  |  | 1,750 |
1.25% €1,250 million notes due 2022 (1.25% 2022 euro Notes) | 1,501 |  |  | 1,315 |
2.70% notes due 2022 (2.70% 2022 Notes) | 500 |  |  | 500 |
2.65% notes due 2022 (2.65% 2022 Notes) | 1,500 |  |  | — |
3.625% notes due 2022 (3.625% 2022 Notes) | 750 |  |  | 750 |
0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds) | 719 |  |  | 687 |
2.25% notes due 2023 (2.25% 2023 Notes) | 750 |  |  | 750 |
3.625% notes due 2024 (3.625% 2024 Notes) | 1,400 |  |  | 1,400 |
3.125% notes due 2025 (3.125% 2025 Notes) | 1,000 |  |  | 1,000 |
2.00% €750 million notes due 2026 (2.00% 2026 euro Notes) | 901 |  |  | 789 |
2.60% notes due 2026 (2.60% 2026 Notes) | 1,250 |  |  | 1,250 |
5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes) | 642 |  |  | 586 |
3.20% notes due 2027 (3.20% 2027 Notes) | 1,000 |  |  | — |
4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes) | 946 |  |  | 864 |
6.375% notes due 2037 (6.375% 2037 Notes) | 552 |  |  | 552 |
6.90% notes due 2038 (6.90% 2038 Notes) | 291 |  |  | 291 |
6.40% notes due 2039 (6.40% 2039 Notes) | 466 |  |  | 466 |
5.75% notes due 2040 (5.75% 2040 Notes) | 412 |  |  | 412 |
4.95% notes due 2041 (4.95% 2041 Notes) | 600 |  |  | 600 |
5.15% notes due 2041 (5.15% 2041 Notes) | 974 |  |  | 974 |
5.65% notes due 2042 (5.65% 2042 Notes) | 487 |  |  | 487 |
5.375% notes due 2043 (5.375% 2043 Notes) | 261 |  |  | 261 |
4.40% notes due 2045 (4.40% 2045 Notes) | 2,250 |  |  | 2,250 |
4.563% notes due 2048 (4.563% 2048 Notes) | 1,415 |  |  | 1,415 |
4.663% notes due 2051 (4.663% 2051 Notes) | 3,541 |  |  | 3,541 |
Other notes due 2097 | 100 |  |  | 100 |
Unamortized bond discounts, premiums and issuance costs, net | (929 | ) |  | (936 | )
Total carrying value of debt | 35,342 |  |  | 34,596 |
Less current portion | (1,152 | ) |  | (4,403 | )
Total noncurrent debt | $ | 34,190 |  |  | $ | 30,193 |
There are no material differences between the effective interest rates and coupon rates of any of our borrowings, except for the 4.563% 2048 Notes and the 4.663% 2051 Notes, which have effective interest rates of 6.3% and 5.6%, respectively. Under the terms of all of our outstanding notes (including debt exchange issuances discussed below), except our Other notes due 2097, in the event of a change-in-control triggering event, we may be required to purchase all or a portion of these debt securities at a price equal to 101% of the principal amount of the notes plus accrued and unpaid interest. In addition, all of our outstanding notes, except for our floating-rate notes, 0.41% 2023 Swiss franc Bonds and Other notes due 2097, may be redeemed at any time at our option, in whole or in part, at the principal amount of the notes being redeemed plus accrued and unpaid interest and a make-whole amount, which is defined by the terms of the notes. Certain of the redeemable notes do not require the payment of a make-whole amount if redeemed during a specified period of time immediately prior to the maturity of the notes. Such time periods range from one to six months prior to maturity. Debt issuances We issued debt and debt securities in various offerings during the years ended December 31, 2017, 2016 and 2015 including:
• | In 2017, we issued $4.5 billion principal amount of notes, consisting of the Floating-Rate Notes due 2019, the 1.90% 2019 Notes, the Floating-Rate Notes due 2020, the 2.20% 2020 Notes, the 2.65% 2022 Notes and the 3.20% 2027 Notes.
• | In 2016, we issued $6.7 billion principal amount of notes, consisting of the 1.85% 2021 Notes, 1.25% 2022 euro Notes, 0.41% 2023 Swiss franc Bonds, 2.25% 2023 Notes, 2.00% 2026 euro Notes, 2.60% 2026 Notes and $1.0 billion of the 4.40% 2045 Notes. We received a $79 million premium on the 4.40% 2045 Notes. In addition, we borrowed $605 million under a short-term floating rate loan.
• | In 2015, we issued $3.5 billion aggregate principal amount of notes, consisting of the 2.125% 2020 Notes, the 2.70% 2022 Notes, the 3.125% 2025 Notes and $1.25 billion of the 4.40% 2045 Notes.
As of December 31, 2017, we have a commercial paper program that allows us to issue up to $2.5 billion of unsecured commercial paper to fund our working capital needs. During the year ended December 31, 2017, we issued and repaid an aggregate of $12.3 billion commercial paper and had a maximum outstanding balance of $1.5 billion under our commercial paper program. During the years ended December 31, 2016 and 2015, we did not issue any commercial paper. No commercial paper was outstanding as of December 31, 2017 or 2016. Debt repayments In 2017, we repaid the $605 million short-term floating rate loan, the $1.25 billion aggregate principal amount of the 2.125% 2017 Notes, the $600 million aggregate principal amount of the Floating-Rate Notes due 2017, the $850 million aggregate principal amount of the 1.25% 2017 Notes and the $1.1 billion aggregate principal amount of the 5.85% 2017 Notes. In 2016, we repaid $3.7 billion of debt, including the remaining $1.975 billion of principal on a term loan credit facility, the $750 million aggregate principal amount of the 2.30% 2016 Notes and the $1.0 billion aggregate principal amount of the 2.50% 2016 Notes. In 2015, we repaid $2.4 billion of principal on a term loan credit facility. Debt exchange During 2016, we completed a private offering to exchange portions of certain outstanding senior notes due 2037 through 2043 (collectively, the Old Notes), listed below, for new senior notes, consisting of principal amounts of $1.4 billion of 4.563% 2048 Notes and $3.5 billion of 4.663% 2051 Notes (collectively, the New Notes). The following principal amounts of each series of Old Notes were validly tendered and subsequently canceled (in millions):
|  |  |  | Principal amount exchanged
6.375% 2037 Notes |  |  |  | $ | 348 |
6.90% 2038 Notes |  |  |  | 209 |
6.40% 2039 Notes |  |  |  | 534 |
5.75% 2040 Notes |  |  |  | 288 |
5.15% 2041 Notes |  |  |  | 1,276 |
5.65% 2042 Notes |  |  |  | 763 |
5.375% 2043 Notes |  |  |  | 739 |
The New Notes bear lower fixed-coupon rates while requiring higher principal repayments on extended maturity dates, compared with the Old Notes that were exchanged. There were no other significant changes to the terms between the Old Notes and the New Notes. The exchange was accounted for as a debt modification, and there were no cash payments to or cash receipts from the note holders as a result of the exchange. Existing deferred financing costs associated with the Old Notes, as well as discounts associated with the New Notes aggregating $801 million, are being accreted over the term of the New Notes and recorded as Interest expense, net, in the Consolidated Statements of Income. Transaction costs of $24 million incurred for the exchange were expensed immediately in Interest and other income, net, in the Consolidated Statement of Income. Interest rate swaps To achieve a desired mix of fixed-rate and floating-rate debt, we entered into interest rate swap contracts that effectively converted fixed-rate interest coupons for certain of our debt issuances to floating London Interbank Offered Rate (LIBOR)-based coupons over the lives of the respective notes. These interest rate swap contracts qualified and are designated as fair value hedges. The effective interest rates on notes for which we have entered into interest rate swap contracts and the related notional amounts of these contracts were as follows (dollar amounts in millions):
|  |  |  | December 31,
|  |  |  | 2017 |  | 2016
Notes |  | Effective interest rate |  | Notional amount
1.25% 2017 Notes |  | LIBOR + 0.4% |  | $ | — |  |  | $ | 850 |
2.20% 2019 Notes |  | LIBOR + 0.6% |  | 1,400 |  |  | 1,400 |
3.45% 2020 Notes |  | LIBOR + 1.1% |  | 900 |  |  | 900 |
4.10% 2021 Notes |  | LIBOR + 1.7% |  | 1,000 |  |  | 1,000 |
3.875% 2021 Notes |  | LIBOR + 2.0% |  | 1,750 |  |  | 1,750 |
3.625% 2022 Notes |  | LIBOR + 1.6% |  | 750 |  |  | 750 |
3.625% 2024 Notes |  | LIBOR + 1.4% |  | 1,400 |  |  | — |
3.125% 2025 Notes |  | LIBOR + 0.9% |  | 1,000 |  |  | — |
2.600% 2026 Notes |  | LIBOR + 0.3% |  | 1,250 |  |  | — |
Total notional amounts |  |  |  | $ | 9,450 |  |  | $ | 6,650 |
Cross-currency swaps In order to hedge our exposure to foreign currency exchange rate risk associated with certain of our long-term notes denominated in foreign currencies, we entered into cross-currency swap contracts. The terms of these contracts effectively convert the interest payments and principal repayment on our 2.125% 2019 euro Notes, 1.25% 2022 euro Notes, 0.41% 2023 Swiss franc Bonds, 2.00% 2026 euro Notes, 5.50% 2026 pound sterling Notes and 4.00% 2029 pound sterling Notes from euros, pounds sterling and Swiss francs to U.S. dollars. These cross-currency swap contracts have been designated as cash flow hedges. For information regarding the terms of these contracts, see Note 17, Derivative instruments. Shelf registration statements and other facilities In 2014, we entered into a $2.5 billion syndicated, unsecured, revolving credit agreement which is available for general corporate purposes or as a liquidity backstop to our commercial paper program. The commitments under the revolving credit agreement may be increased by up to $500 million with the agreement of the banks. Each bank which is a party to the agreement has an initial commitment term of five years. We extended this term by one year during 2016 and may extend the term for an additional year with the agreement of the banks. Annual commitment fees for this agreement are 0.09% of the unused portion of the facility based on our current credit rating. Generally, we would be charged interest at LIBOR plus 1% for any amounts borrowed under this facility. As of December 31, 2017 and 2016, no amounts were outstanding under this facility. In 2017, we filed a shelf registration statement with the SEC that allows us to issue unspecified amounts of debt securities; common stock; preferred stock; warrants to purchase debt securities, common stock, preferred stock or depositary shares; rights to purchase common stock or preferred stock; securities purchase contracts; securities purchase units; and depositary shares. Under this shelf registration statement, all of the securities available for issuance may be offered from time to time with terms to be determined at the time of issuance. This shelf registration statement expires in February 2020. Certain of our financing arrangements contain non-financial covenants. In addition, our revolving credit agreement includes a financial covenant with respect to the level of our borrowings in relation to our equity, as defined. We were in compliance with all applicable covenants under these arrangements as of December 31, 2017. Contractual maturities of debt obligations The aggregate contractual maturities of all borrowings due subsequent to December 31, 2017, are as follows (in millions):
Maturity date |  | Amount
2018 |  | $ | 1,153 |
2019 |  | 4,460 |
2020 |  | 2,950 |
2021 |  | 3,500 |
2022 |  | 4,251 |
Thereafter |  | 19,957 |
Total |  | $ | 36,271 |
Interest costs Interest costs are expensed as incurred, except to the extent such interest is related to construction in progress, in which case interest is capitalized. Interest expense, net, for the years ended December 31, 2017, 2016 and 2015, was $1.3 billion, $1.3 billion and $1.1 billion, respectively. Interest costs capitalized for the years ended December 31, 2017, 2016 and 2015, were not material. Interest paid, including the ongoing impact and settlements of interest rate and cross-currency swap contracts, during the years ended December 31, 2017, 2016 and 2015, was $1.3 billion, $1.2 billion and $1.0 billion, respectively.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration