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Debt

6 Months Ended

Jun. 30, 2021

Debt

Debt

7. Debt

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Presented below are the Company’s debt carrying amounts, net of related discounts, premiums, and debt issuance costs as of June 30, 2021 and December 31, 2020:

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​	​	​	​	​	​	​	​
​	​	As of		​	As of		​
(in millions)	​	June 30, 2021		​	December 31, 2020		​
2.900% senior notes due June 1, 2030	​	$	594	​	$	594	​
3.200% senior notes due October 1, 2026	​	​	497	​	​	497	​
3.900% senior notes due June 1, 2050	​	​	390	​	​	390	​
6.625% senior notes due April 15, 2037	​	​	253	​	​	253	​
Amended term loan credit agreement due March 15, 2022	​	​	380	​	​	—	​
Revolving credit facility	​	​	—	​	​	—	​
Other long-term borrowings	​	​	15	​	​	14	​
Total long-term debt	​	​	2,129	​	​	1,748	​
Term loan credit agreement due April 12, 2021	​	​	—	​	​	380	​
Other short-term borrowings	​	​	72	​	​	58	​
Total short-term borrowings	​	​	72	​	​	438	​
Total debt	​	$	2,201	​	$	2,186	​

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On March 16, 2021, the Company amended and restated its term loan credit agreement (the “Amended Term Loan Credit Agreement”). The Amended Term Loan Credit Agreement restates the previous agreement by extending the maturity date of the borrowings under the previous agreement until March 15, 2022. No new borrowings under the Amended Term Loan Credit Agreement were incurred in connection with the amendment and restatement. Borrowings under the Amended Term Loan Credit Agreement bear interest at a variable annual rate based on a London Interbank Offering Rate (“LIBOR”) or a base rate, at the Company’s election, subject to the terms and conditions thereof, plus, in each case, an applicable margin. The Amended Term Loan Credit Agreement reduced the applicable interest rate margin for loans accruing interest based on LIBOR from 0.80 percent to 0.75 percent. The Company is required to pay a fee on the unused availability under the Amended Term Loan Credit Agreement. The Amended Term Loan Credit Agreement contains customary representations, warranties, covenants and events of default, including covenants restricting the incurrence of liens, the incurrence of indebtedness by the Company’s subsidiaries and certain fundamental changes involving the Company and its subsidiaries, subject to certain exceptions in each case. The Company must also maintain a specified maximum consolidated leverage ratio and a specified minimum consolidated interest coverage ratio. As of June 30, 2021, the Company was in compliance with these financial covenants. The occurrence of an event of default under the Amended 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 June 30, 2021 the Company entered into a new revolving credit agreement (the “Revolving Credit Agreement”) to replace the previous revolving credit agreement, which was terminated. The Revolving Credit Agreement provides for a five-year unsecured revolving credit facility in an aggregate principal amount of $1 billion outstanding at any time. The facility will mature on June 30, 2026.  Loans under the facility will accrue interest at a per annum rate equal, at the Company’s option, to either a LIBOR rate plus an applicable margin, or a base rate (generally determined according to the highest of the prime rate, the federal funds rate or the specified LIBOR rate plus 1.00%) plus an applicable margin. The Revolving Credit Agreement contains customary affirmative and negative covenants that, among other matters, specify customary reporting obligations, and that, subject to exceptions, restrict the incurrence of additional indebtedness by the Company’s subsidiaries, the incurrence of liens and the consummation of certain mergers, consolidations and sales of assets. The Company is subject to compliance, as of the end of each quarter, with a maximum leverage ratio of 3.5 to 1.0 and a minimum ratio of consolidated EBITDA to consolidated net interest expense of 3.5 to 1.0, as each such financial covenant is calculated for the most recently completed four-quarter period. As of June 30, 2021, the Company was in compliance with these covenants. The Company has the ability and intent to refinance the Amended Term Loan Credit Agreement on a long-term basis using the Revolving Credit Agreement or other sources prior to the maturity date.

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Other short-term borrowings as of June 30, 2021 and December 31, 2020, primarily include amounts outstanding under various unsecured local country operating lines of credit.

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- References

No definition available.

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- 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

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