17.

DEBT

Short-term borrowings

The Company’s short-term borrowings consist of the following:


	2016		2015

Bank indebtedness [i]	$	8	$	25
Commercial paper [ii]		615		—

	$	623	$	25

[i]

In the third quarter of 2016, the Company entered into an agreement for a credit facility that is drawn in euros. The Company is required to secure any amounts drawn on the facility with a USD cash deposit of 105% of the outstanding euro balance. As of December 31, 2016, the gross amount outstanding under the credit facility was $185 million [€175 million]. The credit agreement includes a netting arrangement with the bank that provides for the legal right of setoff. Accordingly, as at December 31, 2016, this liability balance was offset against the related restricted cash deposit of $194 million. The remaining net cash deposit of $9 million was included in the prepaid expenses and other balance, and is restricted under the terms of the loan.

[ii]

During 2016, the Company established a U.S. commercial paper program [the “U.S. Program”] and a euro-commercial paper program [the “euro-Program”]. Under the U.S. Program, the Company may issue U.S. commercial paper notes [the “U.S. notes”] up to a maximum aggregate amount of U.S. $500 million. The U.S. Program is supported by the Company’s existing global credit facility. The proceeds from the issuance of the U.S. notes are being used for general corporate purposes. As at December 31, 2016, $295 million of U.S notes were outstanding, with a weighted-average interest rate of 1.04%, and maturities generally less than three months.

Under the euro-Program, the Company may issue euro-commercial paper notes [the “euro notes”] up to a maximum aggregate amount of €500 million or its equivalent in alternative currencies. The euro notes issued are being guaranteed by the Company’s existing global credit facility. The proceeds from the issuance of the euro notes are being used for general corporate purposes. As of December 31, 2016, $320 million [€304 million] of euro notes were outstanding, with a negative weighted-average interest rate of 0.07%, and maturities generally less than three months.

Long-term borrowings

[a]	The Company’s long-term debt, which is substantially uncollateralized, consists of the following:


	2016		2015

Senior Notes [note 17 [c]]
$750 million Senior Notes due 2024 at 3.625%	$	746	$	745
$650 million Senior Notes due 2025 at 4.150%		643		643
€550 million Senior Notes due 2023 at 1.900%		576		592
Cdn$425 million Senior Notes due 2022 at 3.100%		315		305
Bank term debt at a weighted average interest rate of approximately 7.3% [2015 – 8.1%], denominated primarily in Indian rupee, Chinese renminbi, euro and Brazilian real		117		202
Government loans at a weighted average interest rate of approximately 2.53% [2015 – 3.7%], denominated primarily in euro, Canadian dollar and Brazilian real		92		9
Other		44		42

		2,533		2,538
Less due within one year		139		211

	$	2,394	$	2,327

[b]	Future principal repayments on long-term debt are estimated to be as follows:


2017	$	139
2018		39
2019		26
2020		22
2021		20
Thereafter		2,287

	$	2,533

[c]

All of the Senior Notes pay a fixed rate of interest semi-annually except for the €550 million Senior Notes which pay a fixed rate of interest annually. The Senior Notes are unsecured obligations and do not include any financial covenants. The Company may redeem the Senior Notes in whole or in part at any time, at specified redemption prices determined in accordance with the terms of each of the respective indentures governing the Senior Notes. All of the Senior Notes were issued for general corporate purposes.

[d]

The Company’s $2.75 billion revolving credit facility matures on June 22, 2021. The facility includes a $200 million Asian tranche, a $100 million Mexican tranche and a tranche for Canada, U.S. and Europe, which is fully transferable between jurisdictions and can be drawn in U.S. dollars, Canadian dollars or euros.

[e]	Interest expense, net includes:


	2016			2015

Interest expense
Current	$	22		$	20
Long-term		78			38

		100			58
Interest income		(12	)		(14	)

Interest expense, net	$	88		$	44

[f]	Interest paid in cash was $99 million for the year ended December 31, 2016 [2015 - $54 million].

[g]	At December 31, 2016, the Company had commitments under operating leases requiring annual rental payments as follows:


	Total

2017	$	277
2018		237
2019		208
2020		183
2021		164
Thereafter		586

	$	1,655

For the year ended December 31, 2016, operating lease expense was $314 million [2015 - $285 million].