Debt and Financing Arrangements (Notes)

12 Months Ended

Sep. 30, 2019

Short-term debt consisted of the following (in millions):



	September 30,
	2019			2018
Bank borrowings and commercial paper	$	10		$	1,306
Weighted average interest rate on short-term debt outstanding	2.0		%	2.8		%

The Company had no commercial paper outstanding as of September 30, 2019 and $879 million as of September 30, 2018.

In June 2019, TSarl, a subsidiary of the Company, terminated its $1.25 billion committed revolving credit facility scheduled to expire in August 2020. In connection with the termination, the Company repaid all of the outstanding obligations in respect of principal, interest and fees under the credit facility. In relation to the termination of the credit facility, TSarl completed all of its obligations under the Term Loan Credit Agreement, dated as of March 10, 2016 (the "Term Facility") by repaying all of the outstanding obligations under the Term Facility, which included $364 million term loan scheduled to mature in March 2020. Other debt held at TSarl was also repaid, including a 364-day $250 million floating rate term loan scheduled to mature in March 2020 and an 18-month 215 million euro floating rate euro term loan scheduled to mature in July 2019. No amounts remain outstanding on the $4.0 billion TSarl merger-related debt as of September 30, 2019.

In March 2019, a 364-day $250 million committed revolving credit facility expired. The Company entered into a new $250 million committed revolving credit facility scheduled to expire in March 2020. As of September 30, 2019 there were no draws on the facility.

In February 2019, a 364-day $150 million committed revolving credit facility expired. The Company entered into a new $150 million committed revolving credit facility scheduled to expire in February 2020. As of September 30, 2019 there were no draws on the facility.

In January 2019, the Company entered into a $750 million term loan due the earlier of January 2020 or five business days from the closing on the sale of the Power Solutions business. Proceeds from the term loan were used for general corporate purposes. Following the sale of the Power Solutions business, the loan was repaid in May 2019.

In January 2019, a 364-day $200 million committed revolving credit facility expired. The Company entered into a new $350 million committed revolving credit facility scheduled to expire in January 2020. Following the sale of the Power Solutions business, the facility was reduced to $200 million. As of September 30, 2019 there were no draws on the facility.

Long-term debt consisted of the following (in millions; due dates by fiscal year):



	September 30,
	2019		2018
Unsecured notes
JCI plc - 5.00% due in 2020 ($453 million par value)	453		452
JCI Inc. - 5.00% due in 2020 ($47 million par value)	47		47
JCI plc - 0.00% due in 2021 (€750 million par value)	818		868
JCI plc - 4.25% due in 2021 ($204 million par value)	204		446
JCI Inc. - 4.25% due in 2021 ($53 million par value)	53		53
JCI plc - 3.75% due in 2022 ($171 million par value)	171		427
JCI Inc. - 3.75% due in 2022 ($22 million par value)	22		22
JCI plc - 4.625% due in 2023 ($25 million par value)	26		37
Tyco International Finance S.A. ("TIFSA") - 4.625% due in 2023 ($7 million par value)	7		8
JCI plc - 1.00% due in 2023 (€888 million par value)	967		1,154
JCI plc - 3.625% due in 2024 ($453 million par value)	453		468
JCI Inc. - 3.625% due in 2024 ($31 million par value)	31		31
JCI plc - 1.375% due in 2025 (€423 million par value)	471		501
TIFSA - 1.375% due in 2025 (€54 million par value)	60		69
JCI plc - 3.90% due in 2026 ($487 million par value)	521		755
TIFSA - 3.90% due in 2026 ($51 million par value)	51		52
JCI plc - 6.00% due in 2036 ($342 million par value)	339		388
JCI Inc. - 6.00% due in 2036 ($8 million par value)	8		8
JCI plc - 5.70% due in 2041 ($190 million par value)	189		269
JCI Inc. - 5.70% due in 2041 ($30 million par value)	30		30
JCI plc - 5.25% due in 2042 ($155 million par value)	155		242
JCI Inc. - 5.25% due in 2042 ($6 million par value)	6		8
JCI plc - 4.625% due in 2044 ($444 million par value)	441		441
JCI Inc. - 4.625% due in 2044 ($6 million par value)	6		6
JCI plc - 5.125% due in 2045 ($477 million par value)	567		867
TIFSA - 5.125% due in 2045 ($23 million par value)	22		23
JCI plc - 6.95% due in 2046 ($32 million par value)	32		121
JCI Inc. - 6.95% due in 2046 ($4 million par value)	4		4
JCI plc - 4.50% due in 2047 ($500 million par value)	496		496
JCI plc - 4.95% due in 2064 ($341 million par value)	340		434
JCI Inc. - 4.95% due in 2064 ($15 million par value)	15		15
TSarl - Term Loan A - LIBOR plus 1.25% due in 2020	—		364
TSarl - Term Loan B - €215 million; EURIBOR plus 0.62% due in 2020	—		250
JCI plc - Term Loan - 25 billion yen; LIBOR JPY plus 0.40% due in 2022	232		309
Other	3		3
Gross long-term debt	7,240		9,668
Less: current portion	501		1
Less: debt issuance costs	31		44
Net long-term debt	$	6,708	$	9,623

The installments of long-term debt maturing in subsequent fiscal years are: 2020 - $501 million; 2021 - $1,075 million; 2022 - $425 million; 2023 - $1,001 million; 2024 - $485 million; 2025 and thereafter - $3,753 million. The Company’s long-term debt includes various financial covenants, none of which are expected to restrict future operations.

Total interest paid on both short and long-term debt for continuing operations for the fiscal years ended September 30, 2019, 2018 and 2017 was $369 million, $401 million and $432 million, respectively.

Financing Arrangements

In June 2019, the Company repurchased at par, $2.5 million of its 5.25% fixed rate notes, plus accrued interest, scheduled to mature in 2041.

In May 2019, the Company completed the debt tender offer to purchase up to $1.5 billion in aggregate principal amount of certain of its outstanding notes for $1.6 billion total consideration. The Company recognized a loss on the extinguishment of debt of $60 million, which was recorded within net financing charges in the consolidated statements of income.

In May 2019, the Company repaid 10 billion yen of the 35 billion yen five-year syndicated floating rate term loan, plus accrued interest, scheduled to mature in September 2022.

In April 2019, the Company repurchased at a discount, 4.7 million euro of its 1.375% fixed rate euro notes, plus accrued interest, scheduled to mature in 2025.

In February 2019, the Company repurchased at a discount, $12 million of its 3.9% fixed rate notes, plus accrued interest, scheduled to mature in 2026.

Net Financing Charges

The Company's net financing charges line item in the consolidated statements of income for the years ended September 30, 2019, 2018 and 2017 contained the following components (in millions):



	Year Ended September 30,
	2019			2018			2017

Interest expense, net of capitalized interest costs	$	335		$	409		$	446
Banking fees and bond cost amortization	28			30			49
Loss on debt extinguishment	60			—			—
Interest income	(61		)	(13		)	(11		)
Net foreign exchange results for financing activities	(12		)	(25		)	(18		)
Net financing charges	$	350		$	401		$	466