XML 24 R13.htm IDEA: XBRL DOCUMENT
v3.21.2

Contractual Obligations and Commitments | 9 Months Ended
--- | ---
Sep. 30, 2021
Debt Disclosure [Abstract] |
CONTRACTUAL OBLIGATIONS AND COMMITMENTS | NOTE E – CONTRACTUAL OBLIGATIONS AND COMMITMENTS Borrowings and Credit Arrangements We had total debt outstanding of $9.085 billion as of September 30, 2021 and $9.143 billion as of December 31, 2020, with current maturities of $261 million as of September 30, 2021 and $13 million as of December 31, 2020. The debt maturity schedule for our long-term debt obligations is presented below:
(in millions, except interest rates) |  | Issuance Date |  | Maturity Date |  | As of |  | Coupon Rate(1)
| September 30, 2021 |  | December 31, 2020 |
May 2022 Notes(3) |  | May 2015 |  | May 2022 |  | $ | — |  |  | $ | 250 |  |  | 3.375%
October 2023 Notes |  | August 2013 |  | October 2023 |  | 244 |  |  | 244 |  |  | 4.125%
March 2024 Notes |  | February 2019 |  | March 2024 |  | 850 |  |  | 850 |  |  | 3.450%
May 2025 Notes |  | May 2015 |  | May 2025 |  | 523 |  |  | 523 |  |  | 3.850%
June 2025 Notes |  | May 2020 |  | June 2025 |  | 500 |  |  | 500 |  |  | 1.900%
March 2026 Notes |  | February 2019 |  | March 2026 |  | 850 |  |  | 850 |  |  | 3.750%
December 2027 Notes |  | November 2019 |  | December 2027 |  | 1,043 |  |  | 1,105 |  |  | 0.625%
March 2028 Notes |  | February 2018 |  | March 2028 |  | 434 |  |  | 434 |  |  | 4.000%
March 2029 Notes |  | February 2019 |  | March 2029 |  | 850 |  |  | 850 |  |  | 4.000%
June 2030 Notes |  | May 2020 |  | June 2030 |  | 1,200 |  |  | 1,200 |  |  | 2.650%
November 2035 Notes(2) |  | November 2005 |  | November 2035 |  | 350 |  |  | 350 |  |  | 7.000%
March 2039 Notes |  | February 2019 |  | March 2039 |  | 750 |  |  | 750 |  |  | 4.550%
January 2040 Notes |  | December 2009 |  | January 2040 |  | 300 |  |  | 300 |  |  | 7.375%
March 2049 Notes |  | February 2019 |  | March 2049 |  | 1,000 |  |  | 1,000 |  |  | 4.700%
Unamortized Debt Issuance Discount and Deferred Financing Costs |  |  |  | 2022 - 2049 |  | (79) |  |  | (88) |  |  |
Unamortized Gain on Fair Value Hedges |  |  |  | 2023 |  | 4 |  |  | 5 |  |  |
Finance Lease Obligation |  |  |  | Various |  | 6 |  |  | 7 |  |  |
Long-term debt |  |  |  |  |  | $ | 8,824 |  |  | $ | 9,130 |  |  |
Note: The table above does not include unamortized amounts related to interest rate contracts designated as cash flow hedges. (1) Coupon rates are semi-annual, except for the euro-denominated December 2027 Notes, which bear an annual coupon. (2) Corporate credit rating improvements may result in a decrease in the adjusted interest rate on our November 2035 Notes to the extent that our lowest credit rating is above BBB- or Baa3. The interest rates on our November 2035 Notes will be permanently reinstated to the issuance rate if the lowest credit ratings assigned to these senior notes is either A- or A3 or higher. Effective November 15, 2021, the interest rate payable will decrease by 0.25 percent and begin accruing at a rate of 6.75 percent following recent upgrades to our credit ratings. (3) As of September 30, 2021 the outstanding balance is presented within Current Debt Obligations within our unaudited consolidated balance sheet. Revolving Credit Facility On May 10, 2021 we entered into a new $2.750 billion revolving credit facility (2021 Revolving Credit Facility) with a global syndicate of commercial banks and terminated our previous facility (2018 Revolving Credit Facility). The 2021 Revolving Credit Facility will mature on May 10, 2026, with one-year extension options, subject to certain conditions. This facility provides backing for our commercial paper program, and outstanding commercial paper directly reduces borrowing capacity under the 2021 Revolving Credit Facility. There were no amounts outstanding under the 2021 Revolving Credit Facility as of September 30, 2021 or under the 2018 Revolving Credit Facility as of December 31, 2020. Financial Covenant As of and through September 30, 2021, we were in compliance with the financial covenant required by the credit facilities described above:
|  | Covenant Requirement |  | Actual
|  | as of September 30, 2021 |  | as of September 30, 2021
Maximum permitted leverage ratio(1) |  | 4.00 times |  | 2.89 times
(1)Ratio of total debt to consolidated EBITDA, as defined by the credit agreements, as amended. The 2021 Revolving Credit Facility includes the following financial covenant requirement for all of our credit arrangements (i) maintain the maximum permitted leverage ratio of 4.00 times for the third quarter of 2021, with a step-down to 3.75 times for the fourth quarter of 2021 and through the remaining term. The agreement provides for higher leverage ratios for the period following a qualified acquisition, at our election, for which consideration exceeds $1.000 billion. In the event of such an acquisition, for the four succeeding quarters immediately following, including the quarter in which the acquisition occurs, the maximum permitted leverage ratio is 4.75 times. The maximum permitted ratio steps down for the fifth, sixth and seventh succeeding quarters to 4.50 times, 4.25 times and 4.00 times, respectively. Thereafter, a maximum leverage ratio of 3.75 times is required through the remaining term of the 2021 Revolving Credit Facility. We have not elected to increase the maximum permitted leverage ratio for the recently completed acquisition of Lumenis due to the funding of the acquisition using cash on hand. The financial covenant requirement provides for an exclusion from the calculation of consolidated EBITDA, as defined by the agreement, through maturity, of any non-cash charges and up to $500 million in restructuring charges and restructuring-related expenses related to our current or future restructuring plans. As of September 30, 2021, we had $428 million of the restructuring charge exclusion remaining. In addition, any cash litigation payments (net of any cash litigation receipts), as defined by the agreements, are excluded from the calculation of consolidated EBITDA, as defined by the agreements, provided that the sum of any excluded net cash litigation payments do not exceed $1.455 billion in the aggregate. As of September 30, 2021, we had $1.243 billion of the litigation exclusion remaining. Any inability to maintain compliance with this covenant could require us to seek to renegotiate the terms of our credit arrangements or seek waivers from compliance with this covenant, both of which could result in additional borrowing costs. Further, there can be no assurance that our lenders would agree to such new terms or grant such waivers on terms acceptable to us. In this case, all 2021 Revolving Credit Facility commitments would terminate, and any amounts borrowed under the facility would become immediately due and payable. Furthermore, any termination of our 2021 Revolving Credit Facility may negatively impact the credit ratings assigned to our commercial paper program, which may impact our ability to refinance any then outstanding commercial paper as it becomes due and payable. Commercial Paper Our commercial paper program is backed by the 2021 Revolving Credit Facility, as discussed above, and outstanding commercial paper directly reduces borrowing capacity under the 2021 Revolving Credit Facility. We did not have any commercial paper outstanding as of September 30, 2021 or December 31, 2020. Senior Notes We had senior notes outstanding of $9.143 billion as of September 30, 2021 and $9.205 billion as of December 31, 2020. Our senior notes were issued in public offerings, are redeemable prior to maturity and are not subject to sinking fund requirements. Our senior notes are unsecured, unsubordinated obligations and rank on parity with each other. These notes are effectively junior to liabilities of our subsidiaries (see Other Arrangements below). Other Arrangements We have accounts receivable factoring programs in certain European countries and with commercial banks in China and Japan which include promissory notes discounting programs. We account for our factoring programs as sales under FASB ASC Topic 860, Transfers and Servicing. We have no retained interest in the transferred receivables, other than collection and administration, and once sold, the accounts receivable are no longer available to satisfy creditors in the event of bankruptcy. Amounts de-recognized for accounts and notes receivable, which are excluded from Trade accounts receivable, net in our accompanying unaudited consolidated balance sheets, are aggregated by contract denominated currency below (in millions):
Factoring Arrangements | As of September 30, 2021 |  | As of December 31, 2020
Amount De-recognized |  | Weighted Average Interest Rate |  | Amount De-recognized |  | Weighted Average Interest Rate
Euro denominated | $ | 152 |  |  | 2.1 | % |  | $ | 148 |  |  | 1.9 | %
Yen denominated | 203 |  |  | 0.5 | % |  | 240 |  |  | 0.6 | %
Renminbi denominated | — |  |  | 3.1 | % |  | — |  |  | 3.5 | %
Other Contractual Obligations and Commitments We had outstanding letters of credit of $135 million as of September 30, 2021 and $124 million as of December 31, 2020, which consisted primarily of bank guarantees and collateral for workers' compensation insurance arrangements. As of September 30, 2021 and December 31, 2020, none of the beneficiaries had drawn upon the letters of credit or guarantees, and accordingly, we have not recognized a related liability for our outstanding letters of credit in our accompanying unaudited consolidated balance sheets as of September 30, 2021 and December 31, 2020. Refer to Note F – Contractual Obligations and Commitments to our audited financial statements contained in Item 8 of our most recent Annual Report on Form 10-K for additional information on our borrowings and credit agreements.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration