Quarterly report pursuant to Section 13 or 15(d)

Borrowings

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Borrowings
9 Months Ended
Oct. 01, 2011
Borrowings [Abstract]  
Borrowings [Text Block]

Note 21: Borrowings

 

Short-Term Debt

 

We have an ongoing authorization from our Board of Directors to borrow up to $3.0 billion, including through the issuance of commercial paper. Maximum borrowings under our commercial paper program during the first nine months of 2011 were $1.4 billion, although no commercial paper remained outstanding as of October 1, 2011.

 

Long-Term Debt

 

Senior Notes

 

In the third quarter of 2011, we issued $5.0 billion aggregate principal amount of senior unsecured notes (the notes). The outstanding balance for the notes included in long-term debt was as follows.

(In Millions)         October 1, 2011
1.95% Senior Notes due October 1, 2016       $ 1,498
3.30% Senior Notes due October 1, 2021         1,995
4.80% Senior Notes due October 1, 2041         1,489
Total       $ 4,982

The notes bear a fixed rate of interest payable semiannually on April 1 and October 1 of each year, beginning on April 1, 2012. We may redeem the notes, in whole or in part, at any time at our option at specified redemption prices. The notes rank equally in right of payment with all of our other existing and future senior unsecured indebtedness and will effectively rank junior to all liabilities of our subsidiaries.

 

The notes were issued primarily to repurchase shares of our common stock pursuant to our common stock repurchase program, and for general corporate purposes.

 

Convertible Debentures

 

In 2009, we issued $2.0 billion of junior subordinated convertible debentures (the 2009 debentures) due in 2039. In 2005, we issued $1.6 billion of junior subordinated convertible debentures (the 2005 debentures) due in 2035. The conversion rates for the 2009 and 2005 debentures adjust for certain events outlined in the indenture governing the debentures, such as quarterly dividend distributions in excess of $0.14 per share and $0.10 per share, for the 2009 and 2005 debentures, respectively. As of October 1, 2011, the conversion rate for the 2009 debentures was 44.55 shares of common stock per $1,000 principal amount of debentures, representing an effective conversion price of approximately $22.45 per share of common stock (as of December 25, 2010, the conversion rate was 44.09 shares of common stock per $1,000 principal amount of debentures, representing an effective conversion price of approximately $22.68 per share of common stock). As of October 1, 2011, the conversion rate for the 2005 debentures was 32.94 shares of common stock per $1,000 principal amount of debentures, representing an effective conversion price of approximately $30.36 per share of common stock (as of December 25, 2010, the conversion rate was 32.52 shares of common stock per $1,000 principal amount of debentures, representing an effective conversion price of approximately $30.75 per share of common stock).