SUBSEQUENT EVENTS

Embraco Sale Transaction

On April 23, 2018, our Board of Directors approved the sale of Embraco and we subsequently entered into an agreement to sell the compressor business for a cash purchase price of $1.08 billion, subject to customary adjustments including for indebtedness, cash and working capital at closing.

Embraco is reported within our Latin America reportable segment and met the criteria for held for sale accounting subsequent to March 31, 2018. The operations of Embraco will not meet the criteria to be presented as discontinued operations in future periods.

The carrying amounts of the major classes of Embraco's assets and liabilities as of March 31, 2018 and December 31, 2017 include the following:



Millions of dollars	March 31, 2018		December 31, 2017
Cash and cash equivalents	$	119	$	117
Accounts receivable, net of allowance of $8 and $7, respectively	216		202
Inventories	229		215
Prepaid and other current assets	57		61
Property, net of accumulated depreciation of $760 and $740, respectively	382		390
Other noncurrent assets	60		36
Total assets	$	1,063	$	1,021

Accounts payable	$	376	$	392
Accrued expenses	27		25
Accrued advertising and promotion	18		24
Other current liabilities	122		54
Other noncurrent liabilities	54		56
Total liabilities	$	597	$	551

Term Loan Agreement

On April 23, 2018, the Company entered into a Term Loan Agreement (the "Term Loan Agreement") by and among the Company, Citibank, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A. as Syndication Agent, and certain other financial institutions. Citibank, N.A. and JPMorgan Chase Bank, N.A. acted as Joint Lead Arrangers and Joint Bookrunners for the Term Loan Agreement. The Term Loan Agreement provides for an aggregate lender commitment of $1.0 billion. The Term Loan Agreement has a maturity date of April 22, 2019, which date may be extended by the Company, in its discretion, prior to the maturity date for an additional six months.

The interest and fee rates payable with respect to the term loan facility based on the Company's current debt rating are as follows: (1) the spread over LIBOR is 1.125%; (2) the spread over prime is 0.125%; and (3) the ticking fee is 0.125%, as of the date hereof. The Term Loan Agreement contains customary covenants and warranties including, among other things, a debt to capitalization ratio of less than or equal to 0.60 to 1.00 as of the last day of each fiscal quarter, and a rolling twelve month interest coverage ratio required to be greater than or equal to 3.0 to 1.0 for each fiscal quarter. In addition, the covenants limit the Company's ability to (or to permit any subsidiaries to), subject to various exceptions and limitations: (i) merge with other companies; (ii) create liens on its property; (iii) incur debt or off-balance sheet obligations at the subsidiary level; (iv) enter into transactions with affiliates, except on an arms-length basis; (v) enter into agreements restricting the payment of subsidiary dividends or restricting the making of loans or repayment of debt by subsidiaries to the Company or other subsidiaries; and (vi) enter into agreements restricting the creation of liens on its assets.

For additional information regarding the Term Loan Agreement, see Part II, Item 5 of this quarterly report.