Note 4 – Borrowings and Credit Agreements


	September 30,		December 31,
In millions	2018		2017
Short-term debt
Commercial paper	$	—	$	1,276

Long-term debt
3.25% senior exchange debentures due 2035		—		1
1.9% senior notes due 2018		—		2,250
2.25% senior notes due 2018		1,250		1,250
2.25% senior notes due 2019		850		850
2.8% senior notes due 2020		2,750		2,750
3.125% senior notes due 2020		2,000		—
Floating rate notes due 2020		1,000		—
2.125% senior notes due 2021		1,750		1,750
4.125% senior notes due 2021		550		550
3.35% senior notes due 2021		3,000		—
Floating rate notes due 2021		1,000		—
2.75% senior notes due 2022		1,250		1,250
3.5% senior notes due 2022		1,500		1,500
4.75% senior notes due 2022		399		399
4% senior notes due 2023		1,250		1,250
3.7% senior notes due 2023		6,000		—
3.375% senior notes due 2024		650		650
5% senior notes due 2024		299		299
3.875% senior notes due 2025		2,828		2,828
4.1% senior notes due 2025		5,000		—
2.875% senior notes due 2026		1,750		1,750
6.25% senior notes due 2027		372		372
4.3% senior notes due 2028		9,000		—
4.875% senior notes due 2035		652		652
4.78% senior notes due 2038		5,000		—
6.125% senior notes due 2039		447		447
5.75% senior notes due 2041		133		133
5.3% senior notes due 2043		750		750
5.125% senior notes due 2045		3,500		3,500
5.05% senior notes due 2048		8,000		—
Capital lease obligations		672		670
Other		18		43
Total debt principal		63,620		27,170
Debt premiums		25		28
Debt discounts and deferred financing costs		(759)		(196)
		62,886		27,002
Less:
Short-term debt (commercial paper)		—		(1,276)
Current portion of long-term debt		(2,139)		(3,545)
Long-term debt	$	60,747	$	22,181

The Company did not have any commercial paper outstanding as of September 30, 2018. In connection with its commercial paper program, the Company maintains a $1.75 billion 364-day unsecured back-up credit facility, which expires on May 16, 2019, a $1.25 billion, five-year unsecured back-up credit facility, which expires on July 1, 2020, a $1.0 billion, five-year unsecured back-up credit facility, which expires on May 18, 2022, and a $2.0 billion, five-year unsecured back-up credit facility, which expires on May 17, 2023. The credit facilities allow for borrowings at various rates that are dependent, in part, on the Company’s public debt ratings and require the Company to pay a weighted average quarterly facility fee of approximately 0.03%, regardless of usage. As of September 30, 2018 and December 31, 2017, there were no borrowings outstanding under the back-up credit facilities.

On March 9, 2018, the Company issued an aggregate of $40.0 billion of floating rate notes and unsecured senior notes, collectively the “Notes”, for total proceeds of approximately $39.4 billion, net of discounts and underwriting fees, comprised of the following:


In millions
3.125% senior notes due 2020	$	2,000
Floating rate notes due 2020		1,000
3.35% senior notes due 2021		3,000
Floating rate notes due 2021		1,000
3.7% senior notes due 2023		6,000
4.1% senior notes due 2025		5,000
4.3% senior notes due 2028		9,000
4.78% senior notes due 2038		5,000
5.05% senior notes due 2048		8,000
Total debt principal	$	40,000

The Notes pay interest semi-annually and contain redemption terms which allow or require the Company to redeem the Notes at a defined redemption price plus accrued and unpaid interest at the redemption date. The net proceeds of the Notes will be used to fund the proposed acquisition of Aetna.

If the proposed acquisition of Aetna has not been completed by September 3, 2019 (the “Outside Date”) or if, prior to such date, the merger agreement is terminated or the Company otherwise publicly announces that the merger will not be consummated, then the Company will be required to redeem all outstanding 2020 Floating Rate Notes, 2021 Floating Rate Notes, 2020 Notes, 2021 Notes, 2023 Notes, 2025 Notes, 2028 Notes and 2038 Notes at a redemption price equal to 101% of the aggregate principal amount of those notes plus accrued and unpaid interest. The 2048 Notes are not subject to this mandatory redemption provision.

On December 3, 2017, in connection with the proposed acquisition of Aetna, the Company entered into a $49.0 billion unsecured bridge loan facility commitment. The Company paid approximately $221 million in fees upon entering into the agreement. The fees were capitalized in other current assets and are being amortized as interest expense over the period the bridge loan facility commitment is outstanding. The bridge loan facility commitment was reduced to $44.0 billion on December 15, 2017 upon the Company entering into a $5.0 billion term loan agreement. As discussed above, on March 9, 2018, the Company issued unsecured senior notes with an aggregate principal of $40.0 billion. At this time, the bridge loan facility commitment was reduced to $4.0 billion and the Company paid approximately $8 million in fees to retain the bridge loan facility commitment through the date of the proposed acquisition of Aetna. These fees were capitalized in other current assets and are being amortized as interest expense over the period the bridge loan facility commitment is outstanding. The Company recorded $2 million and $171 million of amortization of the bridge loan facility commitment fees during the three and nine months ended September 30, 2018, respectively, which was recorded in “Interest expense, net” on the condensed consolidated statements of operations. On October 26, 2018, the Company entered into a $4.0 billion unsecured 364-day bridge term loan agreement to formalize the bridge loan facility discussed above.

The back-up credit facilities, unsecured senior notes, and term loan agreement contain customary restrictive financial and operating covenants. These covenants do not include a requirement for the acceleration of the Company’s debt maturities in the event of a downgrade in the Company’s credit rating. The Company does not believe the restrictions contained in these covenants materially affect its financial or operating flexibility. As of September 30, 2018, the Company is in compliance with all debt covenants.