Debt and Financing Activities

Long-term debt consisted of the following:



	March 31,
(In millions)	2018		2017
U.S. Dollar notes ^{(1) (2)}
1.40% Notes due March 15, 2018	$	—	$	500
7.50% Notes due February 15, 2019	—		350
2.28% Notes due March 15, 2019	1,100		1,100
4.75% Notes due March 1, 2021	323		599
2.70% Notes due December 15, 2022	400		400
2.85% Notes due March 15, 2023	400		400
3.80% Notes due March 15, 2024	1,100		1,100
7.65% Debentures due March 1, 2027	167		175
3.95% Notes due February 16, 2028	600		—
6.00% Notes due March 1, 2041	282		493
4.88% Notes due March 15, 2044	411		800
Foreign currency notes ^{(1) (3)}
4.50% Euro Bonds due April 26, 2017	—		533
Floating Rate Euro Notes due February 12, 2020 ⁽⁴⁾	337		—
0.63% Euro Notes due August 17, 2021	695		638
1.50% Euro Notes due November 17, 2025	691		635
1.63% Euro Notes due October 30, 2026	669		—
3.13% Sterling Notes due February 17, 2029	630		564

Lease and other obligations	75		75
Total debt	7,880		8,362
Less: Current portion	1,129		1,057
Total long-term debt	$	6,751	$	7,305


(1)	These notes are unsecured and unsubordinated obligations of the Company.


(2)	Interest on these notes is payable semiannually.


(3)	Interest on these foreign bonds and notes is payable annually, except the 2020 Floating Rate Euro Notes.


(4)	Interest on these notes is payable quarterly.

Long-Term Debt

Our long-term debt includes both U.S. dollar and foreign currency-denominated borrowings. At March 31, 2018 and March 31, 2017, $7,880 million and $8,362 million of total debt were outstanding, of which $1,129 million and $1,057 million were included under the caption “Current portion of long-term debt” within our consolidated balance sheets.

Fiscal 2018

On February 12, 2018, we completed a public offering of Euro-denominated floating rate notes due February 12, 2020 (the “2020 Floating Rate Euro Notes”) in an aggregate principal amount of €250 million and 1.63% Euro-denominated notes due October 30, 2026 (the “2026 Euro Notes”) in an aggregate principal amount of €500 million. On February 16, 2018, we completed a public offering of 3.95% notes due February 16, 2028 (the “2028 USD Notes”) in an aggregate principal amount of $600 million. The 2020 Floating Rate Euro Notes bear an interest at a rate equal to the three-month Euro Interbank Offered Rate plus 0.15%. Interest on the 2020 Floating Rate Euro Notes is payable on February 12, May 12, August 12 and November 12 of each year, commencing on May 12, 2018. Interest on the 2026 Euro Notes is payable on October 30 of each year, commencing on October 30, 2018. Interest on the 2028 USD Notes is payable on February 16 and August 16 of each year, commencing on August 16, 2018. We utilized the net proceeds from these notes of $1.5 billion, net of discounts and offering expenses, to finance the purchase of certain outstanding notes and for working capital and general corporate purposes.

Fiscal 2017

On February 17, 2017, we completed a public offering of 0.63% Euro-denominated notes due August 17, 2021 (the “2021 Euro Notes”) in an aggregate principal amount of €600 million, 1.50% Euro-denominated notes due November 17, 2025 (the “2025 Euro Notes”) in an aggregate principal amount of €600 million and 3.13% British pound sterling-denominated notes due February 17, 2029 (the “2029 Sterling Notes”) in an aggregate principal amount of £450 million. Interest on the 2021 Euro Notes is payable on August 17^th of each year. Interest on the 2025 Euro Notes is payable on November 17^th of each year. Interest on the 2029 Sterling Notes is payable on February 17^th of each year. We utilized the net proceeds from these notes of $1.8 billion, net of discounts and offering expenses for general corporate purposes including the repayments of long-term debt.

Each note, which constitutes a “Series”, is an unsecured and unsubordinated obligation of the Company and ranks equally with all of the Company’s existing and, from time-to-time, future unsecured and unsubordinated indebtedness outstanding. Each Series is governed by materially similar indentures and officers’ certificates. Upon required notice to holders of notes with fixed interest rates, we may redeem those notes at any time prior to maturity, in whole or in part, for cash at redemption prices that may include a make-whole premium plus accrued and unpaid interest, as specified in the indenture and officers’ certificate relating to that Series. The 2020 Floating Rate Euro Notes are not redeemable at our option. In the event of the occurrence of both (1) a change of control of the Company and (2) a downgrade of a Series below an investment grade rating by each of Fitch Ratings, Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services within a specified period, an offer must be made to purchase that Series from the holders at a price equal to 101% of the then outstanding principal amount of that Series, plus accrued and unpaid interest to, but not including, the date of repurchase. The indenture and the related officers’ certificate for each Series, subject to the exceptions and in compliance with the conditions as applicable, specify that we may not consolidate, merge or sell all or substantially all of our assets, incur liens, or enter into sale-leaseback transactions exceeding specific terms, without lenders’ consent. The indentures also contain customary events of default provisions.

Tender Offers and Early Repayments

On February 7, 2018, we commenced cash tender offers for a portion of our existing outstanding (i) 7.50% Notes due 2019, (ii) 4.75% Notes due 2021, (iii) 7.65% Debentures due 2027, (iv) 6.00% Notes due 2041 and (v) 4.88% Notes due 2044 (collectively referred to herein as the “Tender Offer Notes”). In connection with the tender offers and an additional repurchase, we paid an aggregate consideration of $1.05 billion to redeem $936 million principal amount of the notes at a redemption price equal to 100% of the principal amount and premiums of $99 million, plus accrued and unpaid interest of $20 million. The redemption of the Tender Offer Notes was accounted for as a debt extinguishment. As a result of the redemption, we incurred a pre-tax loss on debt extinguishment of $109 million ($70 million after-tax), which included premiums of $99 million and the write-off of unamortized debt issuance costs of $10 million.

On March 26, 2018, we paid an aggregate consideration of $317 million to redeem $302 million principal amount of the 7.500% Notes due 2019 at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest of $2 million, and the applicable redemption premium of $13 million pursuant to the terms of the indentures. As a result of the redemption, we incurred a pre-tax loss on debt extinguishment of $13 million ($8 million after-tax), which primarily represented the premiums.

Repayments at maturity

In 2018, we repaid at maturity our €500 million Euro-denominated bond due April 26, 2017 and our $500 million 1.40% notes due March 15, 2018. In 2017, we repaid at maturity our €350 million Euro-denominated bond (or, approximately $385 million) due October 18, 2016, our $500 million 5.70% notes due March 1, 2017 and our $700 million 1.29% notes due March 10, 2017. In 2016, we repaid at maturity our $400 million floating rate notes due September 10, 2015, our $500 million 0.95% notes due December 4, 2015, our $600 million 3.25% notes due March 1, 2016 and a term loan balance of $93 million.

Other Information

Scheduled principal payments of long-term debt are $1,129 million in 2019, $353 million in 2020, $337 million in 2021, $634 million in 2022, $403 million in 2023 and $5,024 million thereafter.

Revolving Credit Facilities

We have a syndicated $3.5 billion five-year senior unsecured revolving credit facility (the “Global Facility”), which has a $3.15 billion aggregate sublimit of availability in Canadian dollars, British pound sterling and Euros. The Global Facility matures on October 22, 2020. Borrowings under the Global Facility bear interest based upon the London Interbank Offered Rate, Canadian Dealer Offered Rate for credit extensions denominated in Canadian Dollars, a prime rate, or alternative overnight rates as applicable, plus agreed margins. The Global Facility contains a financial covenant which obligates the Company to maintain a debt to capital ratio of no greater than 65% and other customary investment grade covenants. If we do not comply with these covenants, our ability to use the Global Facility may be suspended and repayment of any outstanding balances under the Global Facility may be required. At March 31, 2018, we were in compliance with all covenants. There were no borrowings under this facility during 2018, 2017 and 2016, and no borrowings outstanding as of March 31, 2018 and 2017.

We also maintain bilateral credit lines primarily denominated in Euros with a total committed and uncommitted balance of $242 million as of March 31, 2018. Borrowings and repayments were not material in 2018 and 2017. During 2016, we borrowed $641 million and repaid $635 million under these credit lines primarily related to short‑term borrowings. These credit lines have interest rates ranging from 0.2% to 6%. As of March 31, 2018, borrowings outstanding under these credit lines were not material.

Commercial Paper

We maintain a commercial paper program to support our working capital requirements and for other general corporate purposes. Under the program, the Company can issue up to $3.5 billion in outstanding commercial paper notes. During 2018 and 2017, we borrowed $20,542 million and $8,283 million and repaid $20,725 million and $8,100 million under the program. During 2016, there were no material commercial paper issuances. At March 31, 2018, there were no commercial paper notes outstanding. At March 31, 2017, we had $183 million commercial paper notes outstanding with a weighted average interest rate of 1.20%.