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v3.23.3

Financing arrangements | 9 Months Ended
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Sep. 30, 2023
Debt Disclosure [Abstract] |
Financing arrangements | Financing arrangements Our borrowings consisted of the following (in millions):
| September 30, 2023 |  | December 31, 2022
0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds) | $ | — |  |  | $ | 757 |
2.25% notes due 2023 (2.25% 2023 Notes) | — |  |  | 750 |
3.625% notes due 2024 (3.625% 2024 Notes) | 1,400 |  |  | 1,400 |
1.90% notes due 2025 (1.90% 2025 Notes) | 500 |  |  | 500 |
5.25% notes due 2025 (5.25% 2025 Notes) | 2,000 |  |  | — |
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) | 793 |  |  | 803 |
5.507% notes due 2026 (5.507% 2026 Notes) | 1,500 |  |  | — |
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) | 579 |  |  | 574 |
2.20% notes due 2027 (2.20% 2027 Notes) | 1,724 |  |  | 1,724 |
3.20% notes due 2027 (3.20% 2027 Notes) | 1,000 |  |  | 1,000 |
5.15% notes due 2028 (5.15% 2028 Notes) | 3,750 |  |  | — |
1.65% notes due 2028 (1.65% 2028 Notes) | 1,234 |  |  | 1,234 |
3.00% notes due 2029 (3.00% 2029 Notes) | 750 |  |  | 750 |
4.05% notes due 2029 (4.05% 2029 Notes) | 1,250 |  |  | 1,250 |
4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes) | 855 |  |  | 846 |
2.45% notes due 2030 (2.45% 2030 Notes) | 1,250 |  |  | 1,250 |
5.25% notes due 2030 (5.25% 2030 Notes) | 2,750 |  |  | — |
2.30% notes due 2031 (2.30% 2031 Notes) | 1,250 |  |  | 1,250 |
2.00% notes due 2032 (2.00% 2032 Notes) | 1,001 |  |  | 1,051 |
3.35% notes due 2032 (3.35% 2032 Notes) | 1,000 |  |  | 1,000 |
4.20% notes due 2033 (4.20% 2033 Notes) | 750 |  |  | 750 |
5.25% notes due 2033 (5.25% 2033 Notes) | 4,250 |  |  | — |
6.375% notes due 2037 (6.375% 2037 Notes) | 478 |  |  | 478 |
6.90% notes due 2038 (6.90% 2038 Notes) | 254 |  |  | 254 |
6.40% notes due 2039 (6.40% 2039 Notes) | 333 |  |  | 333 |
3.15% notes due 2040 (3.15% 2040 Notes) | 1,803 |  |  | 2,000 |
5.75% notes due 2040 (5.75% 2040 Notes) | 373 |  |  | 373 |
2.80% notes due 2041 (2.80% 2041 Notes) | 1,091 |  |  | 1,110 |
4.95% notes due 2041 (4.95% 2041 Notes) | 600 |  |  | 600 |
5.15% notes due 2041 (5.15% 2041 Notes) | 729 |  |  | 729 |
5.65% notes due 2042 (5.65% 2042 Notes) | 415 |  |  | 415 |
5.60% notes due 2043 (5.60% 2043 Notes) | 2,750 |  |  | — |
5.375% notes due 2043 (5.375% 2043 Notes) | 185 |  |  | 185 |
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 |
3.375% notes due 2050 (3.375% 2050 Notes) | 2,132 |  |  | 2,250 |
4.663% notes due 2051 (4.663% 2051 Notes) | 3,541 |  |  | 3,541 |
3.00% notes due 2052 (3.00% 2052 Notes) | 999 |  |  | 1,254 |
4.20% notes due 2052 (4.20% 2052 Notes) | 950 |  |  | 1,000 |
4.875% notes due 2053 (4.875% 2053 Notes) | 1,000 |  |  | 1,000 |
5.65% notes due 2053 (5.65% 2053 Notes) | 4,250 |  |  | — |
2.77% notes due 2053 (2.77% 2053 Notes) | 940 |  |  | 940 |
4.40% notes due 2062 (4.40% 2062 Notes) | 1,200 |  |  | 1,250 |
| September 30, 2023 |  | December 31, 2022
5.75% notes due 2063 (5.75% 2063 Notes) | 2,750 |  |  | — |
Other notes due 2097 | 100 |  |  | 100 |
Unamortized bond discounts, premiums and issuance costs, net | (1,423) |  |  | (1,246) |
Fair value adjustments | (494) |  |  | (437) |
Other | 11 |  |  | 12 |
Total carrying value of debt | 60,468 |  |  | 38,945 |
Less current portion | (1,428) |  |  | (1,591) |
Total long-term debt | $ | 59,040 |  |  | $ | 37,354 |
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, the 4.663% 2051 Notes and the 2.77% 2053 Notes, which have effective interest rates of 6.3%, 5.6% and 5.2%, respectively. Debt issuances and acquisition-related financing During the three months ended March 31, 2023, in connection with the acquisition of Horizon (see Note 3, Acquisitions and divestitures—Acquisition of Horizon Therapeutics plc), we issued the following series of notes (in millions):
| Principal Amount
5.25% 2025 Notes | $ | 2,000 |
5.507% 2026 Notes | 1,500 |
5.15% 2028 Notes | 3,750 |
5.25% 2030 Notes | 2,750 |
5.25% 2033 Notes | 4,250 |
5.60% 2043 Notes | 2,750 |
5.65% 2053 Notes | 4,250 |
5.75% 2063 Notes | 2,750 |
Total | $ | 24,000 |
In the event of a change-in-control triggering event, as defined by the terms of the notes, we may be required to purchase all or a portion of these notes at a price equal to 101% of the principal amount of the notes plus accrued and unpaid interest. In addition, these notes 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 are defined by the terms of the notes. Except with respect to the 5.25% 2025 Notes, the notes may be redeemed without payment of make-whole amounts if redemption occurs during a specified period of time immediately prior to the maturing of the notes. Such time periods range from two months to six months prior to maturity, except for the 5.507% 2026 Notes, which may be redeemed without payment of the make-whole amount if redemption occurs after two years prior to maturity. In December 2022, in connection with the acquisition of Horizon, we entered into a bridge credit agreement, which provided for borrowings with an aggregate principal amount of $24.5 billion as of December 31, 2022. Subsequent to our March 2023 debt issuance described above, we terminated the bridge credit agreement. Accordingly, during the three months ended March 31, 2023, we recognized $98 million of financing cost associated with the bridge credit agreement, primarily in Other income (expense), net, in the Condensed Consolidated Statements of Income. Also in connection with the acquisition of Horizon, we entered into a $4.0 billion term loan credit agreement in December 2022. No amounts under this agreement were outstanding as of September 30, 2023 and December 31, 2022. In October 2023, in connection with the completion of the acquisition of Horizon, we borrowed $4.0 billion under the term loan credit agreement with an interest rate of three-month SOFR plus 1.225%, of which $2.0 billion is due in April 2025 and $2.0 billion is due in October 2026. Debt extinguishment During the nine months ended September 30, 2023, we repurchased portions of the 2.00% 2032 Notes, 3.15% 2040 Notes, 2.80% 2041 Notes, 3.375% 2050 Notes, 3.00% 2052 Notes, 4.20% 2052 Notes and 4.40% 2062 Notes for an aggregate cost of $550 million, which resulted in the recognition of a $182 million gain on extinguishment of debt recorded in Other income (expense), net, in the Condensed Consolidated Statements of Income. Debt repayments During the nine months ended September 30, 2023, we repaid $750 million aggregate principal amount of the 2.25% 2023 Notes as well as the CHF700 million aggregate principal amount ($704 million upon settlement of the related cross-currency swap) of the 0.41% 2023 Swiss franc Bonds. Shelf registration statement and other facilities In February 2023, 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 2026. During the three months ended March 31, 2023, we amended and restated our syndicated, unsecured, revolving credit agreement, under which we may borrow up to $4.0 billion (increased from $2.5 billion prior to the amendment) for general corporate purposes, including as a liquidity backstop for our commercial paper program. The commitments under the revolving credit agreement may be increased by up to $1.25 billion with the agreement of the banks (increased from $750 million prior to the amendment). Each bank that is a party to the agreement has an initial commitment term of five years. This term may be extended for up to two additional one-year periods 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 for any amounts borrowed under this facility, based on our current credit rating, at (i) SOFR plus 1.01% or (ii) the highest of (A) the administrative agent bank base commercial lending rate, (B) the overnight federal funds rate plus 0.50% or (C) one-month SOFR plus 1.1%. As of September 30, 2023 and December 31, 2022, no amounts were outstanding under this facility.

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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/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 470 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//470/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (i) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1E -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I + Details
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