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Debt and Other Financing Arrangements
 9 Months Ended
Sep. 26, 2020
Debt Disclosure [Abstract]  
Debt and Other Financing Arrangements [Text Block]
Note 7.    Debt and Other Financing Arrangements
Effective Interest Rate at September 26,September 26,December 31,
(Dollars in millions)202020202019
Floating Rate 2-Year Senior Notes, Due 8/7/2020 (euro-denominated)
$— $673 
2.15% 7-Year Senior Notes, Due 7/21/2022 (euro-denominated)
2.28 %582 561 
3.00% 7-Year Senior Notes, Due 4/15/2023
1.73 %1,000 1,000 
4.15% 10-Year Senior Notes, Due 2/1/2024
4.16 %1,000 1,000 
0.75% 8-Year Senior Notes, Due 9/12/2024 (euro-denominated)
0.94 %1,163 1,121 
0.125% 5.5-Year Senior Notes, Due 3/1/2025 (euro-denominated)
0.41 %930 897 
4.133% 5-Year Senior Notes, Due 3/25/2025
4.32 %1,100 — 
2.00% 10-Year Senior Notes, Due 4/15/2025 (euro-denominated)
2.10 %744 717 
3.65% 10-Year Senior Notes, Due 12/15/2025
3.77 %350 350 
1.40% 8.5-Year Senior Notes, Due 1/23/2026 (euro-denominated)
1.53 %814 785 
2.95% 10-Year Senior Notes, Due 9/19/2026
3.19 %1,200 1,200 
1.45% 10-Year Senior Notes, Due 3/16/2027 (euro-denominated)
1.66 %582 561 
1.75% 7-Year Senior Notes, Due 4/15/2027 (euro-denominated)
1.97 %698 — 
3.20% 10-Year Senior Notes, Due 8/15/2027
3.39 %750 750 
0.50% 8.5-Year Senior Notes, Due 3/1/2028 (euro-denominated)
0.78 %930 897 
1.375% 12-Year Senior Notes, Due 9/12/2028 (euro-denominated)
1.46 %698 673 
1.95% 12-Year Senior Notes, Due 7/24/2029 (euro-denominated)
2.08 %814 785 
2.60% 10-Year Senior Notes, Due 10/1/2029
2.74 %900 900 
4.497% 10-Year Senior Notes, Due 3/25/2030
5.31 %1,100 — 
0.875% 12-Year Senior Notes, Due 10/1/2031 (euro-denominated)
1.14 %1,047 1,009 
2.375% 12-Year Senior Notes, Due 4/15/2032 (euro-denominated)
2.55 %698 — 
2.875% 20-Year Senior Notes, Due 7/24/2037 (euro-denominated)
2.94 %814 785 
1.50% 20-Year Senior Notes, Due 10/1/2039 (euro-denominated)
1.73 %1,047 1,009 
5.30% 30-Year Senior Notes, Due 2/1/2044
5.37 %400 400 
4.10% 30-Year Senior Notes, Due 8/15/2047
4.23 %750 750 
1.875% 30-Year Senior Notes, Due 10/1/2049 (euro-denominated)
1.99 %1,163 1,121 
Other
8 16 
Total Borrowings at Par Value
21,282 17,960 
Fair Value Hedge Accounting Adjustments
30 (13)
Unamortized Discount, Net
(101)(94)
Unamortized Debt Issuance Costs
(118)(101)
Total Borrowings at Carrying Value
21,093 17,752 
Less: Short-term Obligations and Current Maturities
2 676 
Long-term Obligations
$21,091 $17,076 
The effective interest rates for the fixed-rate debt include the stated interest on the notes, the accretion of any discount or amortization of any premium, the amortization of any debt issuance costs and, if applicable, adjustments related to hedging.
See Note 10 for fair value information pertaining to the company’s long-term obligations.
In connection with the termination of the agreement to acquire QIAGEN (Note 2), the company terminated the bridge and term loan commitments which had been available to fund the acquisition. The company had a cash outlay of $51 million in 2020 associated with obtaining the bridge and term loan commitments included in other financing activities, net, in the accompanying statement of cash flows. In 2020, other expense, net includes $81 million of costs for the terminated QIAGEN acquisition, primarily for loan commitment fees and entering into hedging contracts.
Credit Facilities
The company has a revolving credit facility, as amended, (the Facility) with a bank group that provides for up to $2.5 billion of unsecured multi-currency revolving credit. The Facility expires in July 2022. The revolving credit agreement calls for interest at either a LIBOR-based rate, a EURIBOR-based rate (for funds drawn in euro) or a rate based on the prime lending rate of the agent bank, at the company’s option. The agreement contains affirmative, negative and financial covenants, and events of default customary for facilities of this type. The covenants in the Facility include a Consolidated Leverage Ratio (net debt-to-Consolidated EBITDA) and a Consolidated Interest Coverage Ratio (Consolidated EBITDA to Consolidated Interest Expense), as such terms are defined in the Facility. Specifically, the company has agreed that, so long as any lender has any commitment under the Facility, any letter of credit is outstanding under the Facility, or any loan or other obligation is outstanding under the Facility, it will maintain a maximum Consolidated Leverage Ratio of 5.0:1.0, with such ratio stepping down to 4.0 to 1.0 for the two consecutive fiscal quarters starting on the last day of the first fiscal quarter of 2022 and then stepping down to 3.5 to 1.0 for each fiscal quarter ending thereafter. The company has also agreed that so long as any lender has any commitment under the Facility or any letter of credit is outstanding under the Facility, or any loan or other obligation is outstanding under the Facility, it will maintain a minimum Consolidated Interest Coverage Ratio of 3.0:1.0 as of the last day of any fiscal quarter. As of September 26, 2020, no borrowings were outstanding under the Facility, although available capacity was reduced by approximately $66 million as a result of outstanding letters of credit.
Commercial Paper Programs
The company has commercial paper programs pursuant to which it may issue and sell unsecured, short-term promissory notes (CP Notes). Under the U.S. program, a) maturities may not exceed 397 days from the date of issue and b) the CP Notes are issued on a private placement basis under customary terms in the commercial paper market and are not redeemable prior to maturity nor subject to voluntary prepayment. Under the euro program, maturities may not exceed 183 days and may be denominated in euro, U.S. dollars, Japanese yen, British pounds sterling, Swiss franc, Canadian dollars or other currencies. Under both programs, the CP Notes are issued at a discount from par (or premium to par, in the case of negative interest rates), or, alternatively, are sold at par and bear varying interest rates on a fixed or floating basis. As of September 26, 2020, there were no outstanding borrowings under these programs.
Senior Notes
Interest is payable annually on the euro-denominated senior notes and semi-annually on all other senior notes. Each of the notes may be redeemed at a redemption price of 100% of the principal amount plus a specified make-whole premium and accrued interest. The company is subject to certain affirmative and negative covenants under the indentures governing the senior notes, the most restrictive of which limits the ability of the company to pledge principal properties as security under borrowing arrangements.
Interest Rate Swap Arrangements and related Cross-currency Interest Rate Swap Arrangements
The company has entered into LIBOR-based interest rate swap arrangements with various banks. The aggregate amounts of the swaps are equal to the principal amount of the notes and the payment dates of the swaps coincide with the interest payment dates of the note. The swap contracts provide for the company to pay a variable interest rate and receive a fixed rate. The variable interest rates reset monthly. The swaps have been accounted for as fair value hedges of the notes. See Note 10 for additional information on the interest rate swap arrangements and related cross-currency interest rate swap arrangements. The following table summarizes the outstanding interest rate swap arrangements on the company's senior notes at September 26, 2020:
Aggregate Notional AmountPay Rate as of
(Dollars in millions)Pay RateSeptember 26,
2020		Receive Rate
3.00% Senior Notes due 2023 (a)1,000 
1-month LIBOR + 1.7640%
1.9164 %3.00 %
(a) The payments on $900 million notional value of these interest rate swaps are offset in part by cross-currency interest rate swaps which effectively reduced the pay rate as of September 26, 2020 from 1.92% to a weighted average of 1.13%.
The company has entered into $900 million notional value of cross-currency interest rate swaps, which effectively convert a portion of the semi-annual payments related to the variable rate, U.S. dollar denominated, LIBOR-based interest rate swaps to payments on variable rate, euro denominated, EURIBOR-based cross-currency interest rate swaps.