Quarterly report pursuant to Section 13 or 15(d)

DEBT AND FINANCING ARRANGEMENTS

v3.22.2.2
DEBT AND FINANCING ARRANGEMENTS
 9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
DEBT AND FINANCING ARRANGEMENTS DEBT AND FINANCING ARRANGEMENTS The carrying value of our outstanding debt obligations as of September 30, 2022 and December 31, 2021 consists of the following (in millions):
Principal
Amount		 Carrying Value
Maturity 2022 2021
Fixed-rate senior notes:
2.450% senior notes
 1,000  2022 1,000  1,010 
2.350% senior notes
 —  2022 —  600 
2.500% senior notes
 1,000  2023 999  998 
2.800% senior notes
 500  2024 499  498 
2.200% senior notes
 400  2024 399  399 
3.900% senior notes
 1,000  2025 997  996 
2.400% senior notes
 500  2026 499  498 
3.050% senior notes
 1,000  2027 995  994 
3.400% senior notes
 750  2029 746  746 
2.500% senior notes
 400  2029 397  397 
4.450% senior notes
 750  2030 744  744 
6.200% senior notes
 1,500  2038 1,484  1,484 
5.200% senior notes
 500  2040 494  494 
4.875% senior notes
 500  2040 491  491 
3.625% senior notes
 375  2042 369  368 
3.400% senior notes
 500  2046 492  492 
3.750% senior notes
 1,150  2047 1,137  1,137 
4.250% senior notes
 750  2049 743  743 
3.400% senior notes
 700  2049 688  688 
5.300% senior notes
 1,250  2050 1,231  1,231 
Floating-rate senior notes:
Floating-rate senior notes —  2022 —  400 
Floating-rate senior notes 500  2023 500  500 
Floating-rate senior notes 1,039  2049-2067 1,027  1,027 
Debentures:
7.620% debentures
 276  2030 280  280 
Pound Sterling notes:
5.500% notes
 74  2031 73  89 
5.125% notes
 504  2050 479  583 
Euro senior notes:
0.375% senior notes
 684  2023 683  791 
1.625% senior notes
 684  2025 682  791 
1.000% senior notes
 488  2028 486  564 
1.500% senior notes
 488  2032 486  564 
Canadian senior notes:
2.125% senior notes
 547  2024 547  585 
Finance lease obligations 379  2022-2046 379  408 
Facility notes and bonds 320  2029-2045 320  320 
Other debt 4  2022-2025 4  5 
Total debt $ 20,512  20,350  21,915 
Less: current maturities (2,581) (2,131)
Long-term debt $ 17,769  $ 19,784 
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. As of September 30, 2022, we had no outstanding balances under our commercial paper programs.
Debt Classification
We have classified certain floating-rate senior notes that are redeemable at the option of the note holder as long-term liabilities in our consolidated balance sheets, due to our intent and ability to refinance the debt if the put option is exercised.
Debt Repayments
During the second quarter, our 2.350% senior notes with a principal balance of $600 million and our floating rate senior notes with a principal balance of $400 million matured and were repaid in full.
On October 3, 2022, our 2.450% senior notes with a principal balance of $1.0 billion matured and were repaid in full.
Reference Rate Reform
Our floating-rate senior notes with maturities ranging from 2049 through 2067 bear interest at rates that reference the London Interbank Offer Rate ("LIBOR") for U.S. Dollars. As part of a broader program of reference rate reform, it is expected that U.S. Dollar LIBOR rates will cease to be published after June 2023. We are currently working to transition these notes to an alternative reference rate, and we anticipate that the Secured Overnight Financing Rate ("SOFR") will be adopted in accordance with recommendations of the Alternative Reference Rates Committee.
Sources of Credit
We maintain two credit agreements with a consortium of banks. The first of these agreements provides revolving credit facilities of $1.0 billion, and expires on December 6, 2022. Amounts outstanding under this agreement bear interest at a periodic fixed rate equal to the term SOFR rate, plus 0.10% per annum and an applicable margin based on our then-current credit rating. The applicable margin from the credit pricing grid as of September 30, 2022 was 0.875%. Alternatively, a fluctuating rate of interest equal to the highest of (1) the rate of interest last quoted by The Wall Street Journal as the prime rate in the United States; (2) the Federal Funds effective rate plus 0.50%; or (3) the Adjusted Term SOFR Rate for a one-month interest period plus 1.00%, may be used at our discretion. We expect to renew this credit agreement in the fourth quarter of 2022 on substantially similar terms.
The second agreement provides revolving credit facilities of $2.0 billion, and expires on December 7, 2026. Amounts outstanding under this facility bear interest at a periodic fixed rate equal to the term SOFR rate plus 0.10% per annum and an applicable margin based on our then-current credit rating. The applicable margin from the credit pricing grid as of September 30, 2022 was 0.875%. Alternatively, a fluctuating rate of interest equal to the highest of (1) the rate of interest last quoted by The Wall Street Journal as the prime rate in the United States; (2) the Federal Funds effective rate plus 0.50%; or (3) the Adjusted Term SOFR Rate for a one-month interest period plus 1.00%, plus an applicable margin, may be used at our discretion.
If the credit ratings established by Standard & Poor's and Moody's differ, the higher rating will be used, except in cases where the lower rating is two or more levels lower. In these circumstances, the rating one step below the higher rating will be used. We are also able to request advances under these facilities based on competitive bids for the applicable interest rate. There were no amounts outstanding under these facilities as of September 30, 2022.
Debt Covenants
Our existing debt instruments and credit facilities subject us to certain financial covenants. As of September 30, 2022, 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, 2022, 10% of net tangible assets was equivalent to $4.6 billion and we had 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 us for long-term debt with similar terms and maturities, the fair value of long-term debt, including current maturities, was approximately $18.9 and $25.1 billion as of September 30, 2022 and December 31, 2021, 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.