INDEBTEDNESS

9 Months Ended

Sep. 30, 2020

The Company’s debt is recorded at its carrying amount, which represents the issuance amount plus or minus any issuance premium or discount, except for the 2012 Senior Notes, the 2017 Senior Notes due 2023, the 2017 Senior Notes due 2028 and the 2020 Senior Notes due 2025 which are recorded at the carrying amount adjusted for the fair value of an interest rate swap used to hedge the fair value of the note.

The following table summarizes total indebtedness:


September 30, 2020
Notes Payable:	Principal Amount		Fair Value of Interest Rate Swaps (1)		Unamortized (Discount) Premium		Unamortized Debt Issuance Costs		Carrying Value
4.50% 2012 Senior Notes, due 2022	$	500	$	16	$	(1)	$	(1)	$	514
4.875% 2013 Senior Notes, due 2024	500		—		(1)		(1)		498
5.25% 2014 Senior Notes (30-Year), due 2044	600		—		4		(5)		599
1.75% 2015 Senior Notes, due 2027	586		—		—		(2)		584
2.625% 2017 Senior Notes, due 2023	500		13		(1)		(2)		510
3.25% 2017 Senior Notes, due 2028	500		34		(4)		(3)		527
4.25% 2018 Senior Notes, due 2029	400		—		(2)		(3)		395
4.875% 2018 Senior Notes, due 2048	400		—		(7)		(4)		389
0.950% 2019 Senior Notes, due 2030	879		—		(3)		(6)		870
3.75% 2020 Senior Notes, due 2025	700		(1)		(1)		(5)		693
3.25% 2020 Senior Notes, due 2050	300		—		(4)		(3)		293
2.55% 2020 Senior Notes, due 2060	500		—		(4)		(5)		491

Total long-term debt	$	6,365	$	62	$	(24)	$	(40)	$	6,363


December 31, 2019
Notes Payable:	Principal Amount		Fair Value of Interest Rate Swaps (1)		Unamortized (Discount) Premium		Unamortized Debt Issuance Costs		Carrying Value

4.50% 2012 Senior Notes, due 2022	$	500	$	9	$	(1)	$	(1)	$	507
4.875% 2013 Senior Notes, due 2024	500		—		(1)		(2)		497
5.25% 2014 Senior Notes (30-Year), due 2044	600		—		4		(5)		599
1.75% 2015 Senior Notes, due 2027	561		—		—		(3)		558
2.75% 2017 Senior Notes, due 2021	500		11		(1)		(2)		508
2.625% 2017 Senior Notes, due 2023	500		7		(1)		(2)		504
3.25% 2017 Senior Notes, due 2028	500		—		(4)		(3)		493
3.25% 2018 Senior Notes, due 2021	300		—		—		(1)		299
4.25% 2018 Senior Notes, due 2029	400		—		(3)		(3)		394
4.875% 2018 Senior Notes, due 2048	400		—		(7)		(4)		389
0.950% 2019 Senior Notes, due 2030	842		—		(3)		(6)		833
Total long-term debt	$	5,603	$	27	$	(17)	$	(32)	$	5,581

(1) The fair value of interest rate swaps in the table above represents the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged debt.

Notes Payable

In the first nine months of 2020, the Company issued the 2020 Senior Notes (5-year), the 2020 Senior Notes (30-year) and the 2020 Senior Notes (40-year). The key terms of these debt issuances are set forth in the table above.

The Company may prepay certain amounts of its senior notes, in whole or in part, but may incur a Make-Whole Amount penalty.

In the second quarter of 2020, the Company fully repaid $300 million of the 2018 Senior Notes due 2021 along with a Make-Whole Amount of approximately $8 million. In the third quarter of 2020, the Company fully repaid $500 million of the 2017 Senior Notes due 2021 along with a Make-Whole Amount of approximately $16 million. Additionally, in the third quarter of 2020, the Company recognized into interest expense, net, $17 million of carrying value adjustments relating to the early termination of interest rate swaps designated as fair value hedges that were associated with the 2017 Senior Notes due 2021.

At September 30, 2020, the Company was in compliance with all covenants contained within all of the debt agreements. All the debt agreements contain cross default provisions which state that default under one of the aforementioned debt instruments could in turn permit lenders under other debt instruments to declare borrowings outstanding under those instruments to be immediately due and payable. As of September 30, 2020, there were no such cross defaults.

The repayment schedule for the Company’s borrowings is as follows:


Year Ending December 31,	2012 Senior Notes due 2022		2013 Senior Notes due 2024		2014 Senior Notes (30-Year) due 2044		2015 Senior Notes due 2027		2017 Senior Notes due 2023		2017 Senior Notes due 2028		2018 Senior Notes due 2029		2018 Senior Notes due 2048		2019 Senior Notes due 2030		2020 Senior Notes due 2025		2020 Senior Notes due 2050		2020 Senior Notes due 2060		Total
2020 (After September 30,)	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2021	—		—		—		—		—		—		—		—		—		—		—		—		—
2022	500		—		—		—		—		—		—		—		—		—		—		—		500
2023	—		—		—		—		500		—		—		—		—		—		—		—		500
2024	—		500		—		—		—		—		—		—		—		—		—		—		500
Thereafter	—		—		600		586		—		500		400		400		879		700		300		500		4,865
Total	$	500	$	500	$	600	$	586	$	500	$	500	$	400	$	400	$	879	$	700	$	300	$	500	$	6,365

Interest expense, net

The following table summarizes the components of interest as presented in the consolidated statements of operations:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Income	$	2	$	3	$	9	$	12
Expense on borrowings	(42)		(37)		(121)		(125)
UTPs and other tax related liabilities	(9)		(7)		(27)		(20)
Net periodic pension costs - interest component	(4)		(6)		(14)		(17)
Capitalized	—		1		—		1
Total	$	(53)	$	(46)	$	(153)	$	(149)

The following table shows the cash paid for interest:


	Nine Months Ended September 30,
	2020		2019
Interest paid	$	119	$	149

The fair value and carrying value of the Company’s debt as of September 30, 2020 and December 31, 2019 are as follows:


	September 30, 2020				December 31, 2019
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
4.50% 2012 Senior Notes, due 2022	$	514	$	535	$	507	$	531
4.875% 2013 Senior Notes, due 2024	498		565		497		551
5.25% 2014 Senior Notes (30-Year), due 2044	599		822		599		757
1.75% 2015 Senior Notes, due 2027	584		643		558		604
2.75% 2017 Senior Notes, due 2021	—		—		508		507
2.625% 2017 Senior Notes, due 2023	510		523		504		507
3.25% 2017 Senior Notes, due 2028	527		566		493		523
3.25% 2018 Senior Notes, due 2021	—		—		299		306
4.25% 2018 Senior Notes, due 2029	395		479		394		453
4.875% 2018 Senior Notes, due 2048	389		540		389		492
0.950% 2019 Senior Notes, due 2030	870		923		833		847
3.75% 2020 Senior Notes, due 2025	693		789		—		—
3.25% 2020 Senior Notes, due 2050	293		320		—		—
2.55% 2020 Senior Notes, due 2060	491		458		—		—
Total	$	6,363	$	7,163	$	5,581	$	6,078

The fair value of the Company’s long-term debt is estimated based on quoted market prices for similar instruments. Accordingly, the inputs used to estimate the fair value of the Company’s long-term debt are classified as Level 2 inputs within the fair value hierarchy.