NOTE 7 – Financing Arrangements

The Company had total debt outstanding of $2.1 billion and $1.9 billion at December 31, 2018 and 2017, respectively. Short-term borrowings at December 31, 2018 and 2017 consist primarily of amounts outstanding under various unsecured local country operating lines of credit.

On August 18, 2017, the Company entered into a new Term Loan Credit Agreement (“Term Loan”) to establish a senior unsecured term loan credit facility. Under the Term Loan, the Company is allowed three borrowings in an amount of up to $500 million total. The Term Loan matures 18 months from the date of the final borrowing. As of October 25, 2017, the Company had initiated all three borrowings under the Term Loan totaling $420 million, due April 25, 2019. The proceeds were used to refinance $300 million of 1.8 percent senior notes due September 25, 2017, and pay down borrowings outstanding on the revolving credit facility. The Company paid $25 million towards the Term Loan in December 2017 and an additional $230 million towards the Term Loan for the year ended December 31, 2018. All payments were made with cash on-hand. The Company’s long-term debt as of December 31, 2018 includes the remaining Term Loan balance of $165 million that matures on April 25, 2019. This borrowing is included in long-term debt as the Company has the ability and intent to refinance it on a long-term basis prior to the maturity date.

All borrowings under the Term Loan facility will bear interest at a variable annual rate based on the LIBOR or base rate, at the Company’s election, subject to the terms and conditions thereof, plus, in each case, an applicable margin. The Term Loan Credit Agreement contains customary representations, warranties, covenants, events of default, terms and conditions, including limitations on liens, incurrence of debt, mergers and significant asset dispositions. The Company must also comply with a leverage ratio and interest coverage ratio. The occurrence of an event of default under the Term Loan Credit Agreement could result in all loans and other obligations being declared due and payable and the term loan credit facility being terminated.

On October 11, 2016, the Company entered into a new five-year, senior, unsecured $1 billion revolving credit agreement (the “Revolving Credit Agreement”) that replaced its previously existing $1 billion senior unsecured revolving credit facility.

Subject to certain terms and conditions, the Company may increase the amount of the revolving facility under the Revolving Credit Agreement by up to $500 million in the aggregate. The Company may also obtain up to two one-year extensions of the maturity date of the Revolving Credit Agreement at its requests and subject to the agreement of the lenders. All committed pro rata borrowings under the revolving facility will bear interest at a variable annual rate based on the LIBOR or base rate, at the Company’s election, subject to the terms and conditions thereof, plus, in each case, an applicable margin based on the Company’s leverage ratio (as reported in the financial statements delivered pursuant to the Revolving Credit Agreement) or the Company’s credit rating. Subject to specified conditions, the Company may designate one or more of its subsidiaries as additional borrowers under the Revolving Credit Agreement provided that the Company guarantees all borrowings and other obligations of any such subsidiaries thereunder.

The Revolving Credit Agreement contains customary representations, warranties, covenants, events of default, terms and conditions, including limitations on liens, incurrence of subsidiary debt and mergers. The Company must also comply with a leverage ratio covenant and an interest coverage ratio covenant. The occurrence of an event of default under the Revolving Credit Agreement could result in all loans and other obligations under the agreement being declared due and payable and the revolving credit facility being terminated.

As of December 31, 2018, there were $418 million in borrowings outstanding under the Revolving Credit Agreement. In addition to borrowing availability under its Revolving Credit Agreement, the Company has approximately $507 million of unused operating lines of credit in the various foreign countries in which it operates.

Long-term debt, net of related discounts, premiums and debt issuance costs consists of the following at December 31:


	As of		As of
(in millions)	December 31, 2018		December 31, 2017
3.2% senior notes due October 1, 2026	$	496	$	496
4.625% senior notes due November 1, 2020		399		398
6.625% senior notes due April 15, 2037		254		254
5.62% senior notes due March 25, 2020		200		200
Term loan credit agreement due April 25, 2019		165		395
Revolving credit facility		418		—
Fair value adjustment related to hedged fixed rate debt instruments		(1)		1
Long-term debt		1,931		1,744
Short-term borrowings		169		120
Total debt	$	2,100	$	1,864

The Company’s long-term debt matures as follows: $600 million in 2020, $500 million in 2026, and $250 million in 2037. The Company’s Term Loan of $165 million matures in 2019. This borrowing is included in long-term debt as the Company has the ability and intent to refinance it on a long-term basis prior to the maturity date.

The Company guarantees certain obligations of its consolidated subsidiaries. The amount of the obligations guaranteed aggregated $57 million and $56 million at December 31, 2018 and 2017, respectively.