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DEBT AND FINANCING ARRANGEMENTS | 9 Months Ended
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Sep. 30, 2017
Debt Disclosure [Abstract] |
DEBT AND FINANCING ARRANGEMENTS | DEBT AND FINANCING ARRANGEMENTS The carrying value of our outstanding debt as of September 30, 2017 and December 31, 2016 consists of the following (in millions):
| Principal Amount |  |  |  | Carrying Value
|  | Maturity |  | 2017 |  | 2016
Commercial paper | $ | 4,120 |  |  | 2017-2018 |  | $ | 4,120 |  |  | $ | 3,250 |
Fixed-rate senior notes: |  |  |  |  |  |  |
1.125% senior notes | 375 |  |  | 2017 |  | 375 |  |  | 374 |
5.50% senior notes | 750 |  |  | 2018 |  | 755 |  |  | 769 |
5.125% senior notes | 1,000 |  |  | 2019 |  | 1,027 |  |  | 1,043 |
3.125% senior notes | 1,500 |  |  | 2021 |  | 1,567 |  |  | 1,584 |
2.40% senior notes | 500 |  |  | 2026 |  | 497 |  |  | 497 |
2.45% senior notes | 1,000 |  |  | 2022 |  | 989 |  |  | 986 |
2.35% senior notes | 600 |  |  | 2022 |  | 596 |  |  | — |
6.20% senior notes | 1,500 |  |  | 2038 |  | 1,482 |  |  | 1,481 |
4.875% senior notes | 500 |  |  | 2040 |  | 489 |  |  | 489 |
3.625% senior notes | 375 |  |  | 2042 |  | 368 |  |  | 367 |
3.40% senior notes | 500 |  |  | 2046 |  | 491 |  |  | 491 |
Floating rate senior notes | 400 |  |  | 2022 |  | 398 |  |  | — |
8.375% Debentures: |  |  |  |  |  |  |
8.375% debentures | 424 |  |  | 2020 |  | 453 |  |  | 461 |
8.375% debentures | 276 |  |  | 2030 |  | 282 |  |  | 282 |
Pound Sterling notes: |  |  |  |  |  |  |
5.50% notes | 89 |  |  | 2031 |  | 84 |  |  | 76 |
5.125% notes | 609 |  |  | 2050 |  | 582 |  |  | 535 |
Euro senior notes: |  |  |  |  |  |  |
1.625% notes | 827 |  |  | 2025 |  | 822 |  |  | 732 |
1.00% notes | 591 |  |  | 2028 |  | 587 |  |  | 523 |
Floating rate senior notes | 591 |  |  | 2020 |  | 589 |  |  | 525 |
Canadian senior notes: |  |  |  |  |  |  |
2.125% notes | 603 |  |  | 2024 |  | 600 |  |  | — |
Floating rate senior notes | 979 |  |  | 2049-2067 |  | 969 |  |  | 824 |
Capital lease obligations | 450 |  |  | 2017-3005 |  | 450 |  |  | 447 |
Facility notes and bonds | 320 |  |  | 2029-2045 |  | 320 |  |  | 319 |
Other debt | 18 |  |  | 2017-2022 |  | 18 |  |  | 20 |
Total debt | $ | 18,897 |  |  |  |  | 18,910 |  |  | 16,075 |
Less: Current maturities |  |  |  |  | (4,555 | ) |  | (3,681 | )
Long-term debt |  |  |  |  | $ | 14,355 |  |  | $ | 12,394 |
Debt Classification We have classified our 5.50% senior notes due January 2018 with a principal balance of $750 million as a long-term liability, based on our intent and ability to refinance the debt as of September 30, 2017. We have also classified certain floating rate senior notes that are putable by the note holders as a long-term liability, due to our intent and ability to refinance the debt if the put option is exercised by the note holders. Debt Issuances In March, we issued floating rate senior notes in principal amount of $147 million. These notes bear interest at three-month LIBOR less 30 basis points and mature in 2067. These notes are callable at various times after 30 years at a stated percentage of par value, and putable by the note holders at various times after one year at a stated percentage of par value. On May 16, 2017 we issued U.S. senior rate notes. These senior notes consist of two separate series, as follows:
• | Two series of notes, in the principle amounts of $600 and $400 million, were issued. These notes bear interest at a 2.35% fixed rate and at a three-month LIBOR plus 38 basis points, respectively, and mature May 2022. Interest on the fixed rate senior notes will be paid semi-annually, beginning November 2017. Interest on the floating rate senior notes will be paid quarterly beginning August 2017. The 2.35% notes are callable at our option at a redemption price equal to the greater of 100% of the principal amount, or the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date on a semi-annual basis at the discount rate of the treasury rate plus 10 basis points and accrued interest. The floating rate senior notes are not callable.
On May 18, 2017 we issued Canadian senior notes. These senior notes consist of a single series as follows:
• | Notes in the principal amount of C$750 million ($547 million), which bear interest at a 2.125% fixed interest rate and mature May 2024. Interest on the notes is payable semi-annually beginning November 2017. The notes are callable at our option, in whole or in part at the Government of Canada yield plus 21.5 basis points, and on or after the par call date, at par value.
Commercial Paper We are authorized to borrow up to $10.0 billion under a U.S. commercial paper program and €5.0 billion (in a variety of currencies) under a European commercial paper program. We had the following amounts outstanding under these programs as of September 30, 2017: $2.775 billion with an average interest rate of 1.07% and €1.139 billion ($1.345 billion) with an average interest rate of -0.41%. As of September 30, 2017, we have classified the entire commercial paper balance as a current liability on our consolidated balance sheet. Sources of Credit We maintain two credit agreements with a consortium of banks. One of these agreements provides revolving credit facilities of $1.5 billion, and expires on March 23, 2018. Generally, amounts outstanding under this facility bear interest at a periodic fixed rate equal to LIBOR for the applicable interest period and currency denomination, plus an applicable margin. Alternatively, a fluctuating rate of interest equal to the highest of (1) JPMorgan Chase Bank’s publicly announced prime rate; (2) the Federal Funds effective rate plus 0.50%; and (3) LIBOR for a one month interest period plus 1.00%, plus an applicable margin, may be used at our discretion. In each case, the applicable margin for advances bearing interest based on LIBOR is a percentage determined by quotations from Markit Group Ltd. for our 1-year credit default swap spread, subject to a minimum rate of 0.10% and a maximum rate of 0.75%. The applicable margin for advances bearing interest based on the prime rate is 1.00% below the applicable margin for LIBOR advances (but not lower than 0.00%). We are also able to request advances under this facility based on competitive bids for the applicable interest rate. There were no amounts outstanding under this facility as of September 30, 2017. The second agreement provides revolving credit facilities of $3.0 billion, and expires on March 24, 2022. Generally, amounts outstanding under this facility bear interest at a periodic fixed rate equal to LIBOR for the applicable interest period and currency denomination, plus an applicable margin. Alternatively, a fluctuating rate of interest equal to the highest of (1) JPMorgan Chase Bank’s publicly announced prime rate; (2) the Federal Funds effective rate plus 0.50%; and (3) LIBOR for a one month interest period plus 1.00%, plus an applicable margin, may be used at our discretion. In each case, the applicable margin for advances bearing interest based on LIBOR is a percentage determined by quotations from Markit Group Ltd. for our 1-year credit default swap spread, interpolated for a period from the date of determination of such credit default swap spread in connection with a new interest period until the latest maturity date of this facility then in effect (but not less than a period of one year). The minimum applicable margin rate is 0.10% and the maximum applicable margin rate is 0.75% per annum. The applicable margin for advances bearing interest based on the prime rate is 1.00% below the applicable margin for LIBOR advances (but not less than 0.00%). We are also able to request advances under this facility based on competitive bids. There were no amounts outstanding under this facility as of September 30, 2017. Debt Covenants Our existing debt instruments and credit facilities subject us to certain financial covenants. As of September 30, 2017 and for all prior periods presented, we have satisfied these financial covenants. These covenants limit the amount of secured indebtedness that we may incur, and limit the amount of attributable debt in sale-leaseback transactions, to 10% of net tangible assets. As of September 30, 2017, 10% of net tangible assets was equivalent to $2.345 billion; however, we have no covered sale-leaseback transactions or secured indebtedness outstanding. We do not expect these covenants to have a material impact on our financial condition or liquidity. Fair Value of Debt Based on the borrowing rates currently available to the Company for long-term debt with similar terms and maturities, the fair value of long-term debt, including current maturities, was approximately $19.746 and $17.134 billion as of September 30, 2017 and December 31, 2016, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of all of our debt instruments.

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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 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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