| DEBT AND BORROWING ARRANGEMENTS |
DEBT AND BORROWING ARRANGEMENTS Short-Term Borrowings
Loans and notes payable consist primarily of commercial paper issued in the United States. As of December 31, 2019 and 2018, we had $10,007 million and $13,063 million, respectively, in outstanding commercial paper borrowings. Our weighted-average interest rates for commercial paper outstanding were approximately 2.0 percent and 2.6 percent per year as of December 31, 2019 and 2018, respectively. As of December 31, 2019 and 2018, the Company also had $987 million and $772 million, respectively, in lines of credit, short-term credit facilities and other short-term borrowings that were primarily related to our international operations.
In addition, we had $11,911 million in unused lines of credit and other short-term credit facilities as of December 31, 2019, of which $8,940 million was in backup lines of credit for general corporate purposes. These backup lines of credit expire at various times from 2020 through 2024. There were no borrowings under these corporate backup lines of credit during 2019. These credit facilities are subject to normal banking terms and conditions. Some of the financial arrangements require compensating balances, none of which is presently significant to our Company.
Long-Term Debt
During 2019, the Company issued euro- and U.S. dollar-denominated debt of €3,500 million and $2,000 million, respectively. The carrying value of this debt as of December 31, 2019 was $5,891 million. The general terms of the notes issued are as follows:
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€750 million total principal amount of notes due March 8, 2021, at a variable interest rate equal to the three month Euro Interbank Offered Rate ("EURIBOR") plus 0.20 percent;
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€1,000 million total principal amount of notes due September 22, 2022, at a fixed interest rate of 0.125 percent;
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€1,000 million total principal amount of notes due September 22, 2026, at a fixed interest rate of 0.75 percent;
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€750 million total principal amount of notes due March 8, 2031, at a fixed interest rate of 1.25 percent;
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$1,000 million total principal amount of notes due September 6, 2024, at a fixed interest rate of 1.75 percent; and
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$1,000 million total principal amount of notes due September 6, 2029, at a fixed interest rate of 2.125 percent.
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During 2019, the Company retired upon maturity euro- and U.S. dollar-denominated notes. The general terms of the notes retired are as follows:
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€1,500 million total principal amount of notes due March 8, 2019, at a variable interest rate equal to the three month EURIBOR plus 0.25 percent;
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€2,000 million total principal amount of notes due September 9, 2019, at a variable interest rate equal to the three month EURIBOR plus 0.23 percent; and
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$1,000 million total principal amount of notes due May 30, 2019, at a fixed interest rate of 1.375 percent.
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During 2018, the Company retired upon maturity U.S. dollar-denominated notes and debentures. The general terms of the notes and debentures retired are as follows:
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$26 million total principal amount of debentures due January 29, 2018, at a fixed interest rate of 9.66 percent;
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$750 million total principal amount of notes due March 14, 2018, at a fixed interest rate of 1.65 percent;
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$1,250 million total principal amount of notes due April 1, 2018, at a fixed interest rate of 1.15 percent; and
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$1,250 million total principal amount of notes due November 1, 2018, at a fixed interest rate of 1.65 percent.
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The Company also extinguished a portion of the long-term debt that was assumed in connection with our acquisition of Coca‑Cola Enterprises Inc.'s former North America business ("Old CCE"). The extinguished debentures had a total principal amount of $94 million that was due to mature on May 15, 2098, at a fixed interest rate of 7.00 percent. Related to this extinguishment, the Company recorded a net gain of $27 million in the line item interest expense in our consolidated statement of income during the year ended December 31, 2018.
During 2017, the Company issued U.S. dollar- and euro-denominated debt of $1,000 million and €2,500 million, respectively. The carrying value of this debt as of December 31, 2017 was $3,974 million. The general terms of the notes issued are as follows:
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$500 million total principal amount of notes due May 25, 2022, at a fixed interest rate of 2.20 percent;
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$500 million total principal amount of notes due May 25, 2027, at a fixed interest rate of 2.90 percent;
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€1,500 million total principal amount of notes due March 8, 2019, at a variable interest rate equal to the three month EURIBOR plus 0.25 percent;
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€500 million total principal amount of notes due March 9, 2021, at a fixed interest rate of 0.00 percent; and
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€500 million total principal amount of notes due March 8, 2024, at a fixed interest rate of 0.50 percent.
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During 2017, the Company retired upon maturity euro-, U.S. dollar-, and Swiss franc-denominated notes. The general terms of the notes retired are as follows:
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€2,000 million total principal amount of notes due March 9, 2017, at a variable interest rate equal to the three month EURIBOR plus 0.15 percent;
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$206 million total principal amount of notes due August 1, 2017, at a fixed interest rate of 7.125 percent;
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$750 million total principal amount of notes due October 27, 2017, at a fixed interest rate of 0.875 percent; and
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$225 million total principal amount of notes due November 16, 2017, at a variable interest rate equal to the three month London Interbank Offered Rate ("LIBOR") plus 0.05 percent; and
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SFr200 million total principal amount of notes due October 2, 2017, at a fixed interest rate of 0.00 percent.
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In 2017, the Company also extinguished a portion of the long-term debt that was assumed in connection with our acquisition of Old CCE. The extinguished notes had a carrying value of $417 million, which included fair value adjustments recorded as part of purchase accounting. The general terms of the notes extinguished were as follows:
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$95.6 million total principal amount of notes due August 15, 2019, at a fixed interest rate of 4.50 percent;
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$38.6 million total principal amount of notes due February 1, 2022, at a fixed interest rate of 8.50 percent;
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$11.7 million total principal amount of notes due September 15, 2022, at a fixed interest rate of 8.00 percent;
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$36.5 million total principal amount of notes due September 15, 2023, at a fixed interest rate of 6.75 percent;
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$9.9 million total principal amount of notes due October 1, 2026, at a fixed interest rate of 7.00 percent;
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$53.8 million total principal amount of notes due November 15, 2026, at a fixed interest rate of 6.95 percent;
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$41.3 million total principal amount of notes due September 15, 2028, at a fixed interest rate of 6.75 percent;
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$32.0 million total principal amount of notes due October 15, 2036, at a fixed interest rate of 6.70 percent;
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$3.4 million total principal amount of notes due March 18, 2037, at a fixed interest rate of 5.71 percent;
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$24.3 million total principal amount of notes due January 15, 2038, at a fixed interest rate of 6.75 percent; and
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$4.7 million total principal amount of notes due May 15, 2098, at a fixed interest rate of 7.00 percent.
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The Company recorded a net charge of $38 million related to the early extinguishment of long-term debt in the line item interest expense in our consolidated statement of income during the year ended December 31, 2017.
The Company's long-term debt consisted of the following (in millions except average rate data):
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December 31, 2019 |
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December 31, 2018 |
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Amount |
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Average
Rate 1
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Amount |
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Average
Rate1
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U.S. dollar notes due 2020–2093 |
$ |
14,621 |
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2.4 |
% |
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$ |
13,619 |
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2.6 |
% |
U.S. dollar debentures due 2022–2098 |
1,366 |
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4.9 |
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1,390 |
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5.2 |
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U.S. dollar zero coupon notes due 20202
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168 |
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8.4 |
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163 |
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8.4 |
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Australian dollar notes due 2020–2024 |
677 |
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2.4 |
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723 |
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2.2 |
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Euro notes due 2021–2036 |
12,807 |
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0.5 |
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12,994 |
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0.6 |
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Swiss franc notes due 2022–2028 |
1,129 |
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3.7 |
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1,128 |
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3.6 |
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Other, due through 20983
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548 |
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6.2 |
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300 |
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4.0 |
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Fair value adjustments4
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453 |
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N/A |
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62 |
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N/A |
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Total5,6
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31,769 |
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1.9 |
% |
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30,379 |
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1.9 |
% |
Less: Current portion |
4,253 |
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5,003 |
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Long-term debt |
$ |
27,516 |
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$ |
25,376 |
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1 |
Rates represent the weighted-average effective interest rate on the balances outstanding as of year end, as adjusted for the effects of interest rate swap agreements, cross-currency swap agreements and fair value adjustments, if applicable. Refer to Note 6 for a more detailed discussion on interest rate management.
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2 |
Amount is shown net of unamortized discounts of $3 million and $8 million as of December 31, 2019 and 2018, respectively.
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3 |
As of December 31, 2019, the amount shown includes $409 million of debt instruments and finance leases that are due through 2031.
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4 |
Amount represents changes in fair value due to changes in benchmark interest rates. Refer to Note 6 for additional information about our fair value hedging strategy.
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5 |
As of December 31, 2019 and 2018, the fair value of our long-term debt, including the current portion, was $32,725 million and $30,456 million, respectively.
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6 |
The above notes and debentures include various restrictions, none of which is presently significant to our Company. |
The carrying value of the Company's long-term debt included fair value adjustments related to the debt assumed from Old CCE in 2010 of $186 million and $212 million as of December 31, 2019 and 2018, respectively. These fair value adjustments are being amortized over the number of years remaining until the underlying debt matures. As of December 31, 2019, the weighted-average maturity of the assumed debt to which these fair value adjustments relate was approximately 19 years. The amortization of these fair value adjustments will be a reduction of interest expense in future periods, which will typically result in our interest expense being less than the actual interest paid to service the debt. Total interest paid was $921 million, $903 million and $803 million in 2019, 2018 and 2017, respectively.
Maturities of long-term debt for the five years succeeding December 31, 2019 are as follows (in millions):
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Maturities of
Long-Term Debt
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2020 |
$ |
4,253 |
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2021 |
3,767 |
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2022 |
3,788 |
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2023 |
4,097 |
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2024 |
1,974 |
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