3M 2004 Annual Report Download - page 86

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60
NOTE 9. Long-Term Debt and Short-Term Borrowings
Long-term debt and short-term borrowings as of December 31 consisted of the following (with interest rates as of
December 31, 2004):
Currency/ Effective
Long-Term Debt Fixed vs. Interest Maturity
(Millions) Floating Rate* Date
2004 2003
Convertible note USD Fixed 0.50% 2032 $ 556 $ 553
Medium-term notes USD Floating 2.38% 2005 400 750
Dealer remarketable securities USD Fixed 5.67% 2010 350 350
6.375% note USD Fixed 6.38% 2028 328 328
ESOP debt guarantee USD Fixed 5.62% 2005-2009 202 238
Floating rate note USD Floating 2.17% 2041 100 100
Floating rate note USD Floating 2.12% 2044 62 –
Other borrowings Various 2.30% After 2009 134 152
$2,132 $2,471
1,405 736
Total long-term debt
Less: current portion of long-term debt
Long-term debt $ 727 $1,735
Short-Term Borrowings and
Current Portion of Long-Term Debt Effective
(Millions) Interest Rate* 2004 2003
Current portion of long-term debt 2.53% $1,405 $ 736
U.S. dollar commercial paper 2.23% 671 288
Non-U.S. dollar commercial paper – – 156
Other borrowings 5.95% 18 22
Total short-term borrowings and
current portion of long-term debt $2,094 $1,202
Weighted-Average Effective Interest Rate*
Total Excluding ESOP debt
At December 31 2004 2003 2004 2003
Short-term 2.46%
2.74% 2.40% 2.65%
Long-term 3.82%
2.20% 3.30% 1.74%
* Debt tables reflect the effects of interest rate swaps at December 31; weighted-average effective interest rate table reflects the
combined effects of interest rate and currency swaps at December 31.
Maturities of long-term debt for the five years subsequent to December 31, 2004 are as follows (in millions):
2005 2006 2007 2008 2009 Thereafter Total
$1,405 $39 $40 $42 $44 $562 $2,132
Long-term debt payments due in 2005 include $350 million of dealer remarketable securities (final maturity 2010),
$62 million of medium-term notes (final maturity 2044), and $556 million of convertible notes (final maturity 2032).
These securities are classified as current portion of long-term debt as the result of put provisions associated with
these debt instruments. In addition, payments due in 2005 include $400 million in medium-term notes and
$37 million related to the ESOP.
The ESOP debt is serviced by dividends on stock held by the ESOP and by Company contributions. These
contributions are not reported as interest expense, but are reported as an employee benefit expense in the
Consolidated Statement of Income. Other borrowings includes debt held by 3M’s international companies and
floating rate notes in the United States, with the long-term portion of this debt primarily comprised of U.S. dollar
floating rate debt. At December 31, 2004, available short-term lines of credit globally totaled about $618 million, of
which $88 million was utilized. The Company also has uncommitted lines of credit outside the United States
totaling $637 million. Debt covenants do not restrict the payment of dividends.