Debt

6 Months Ended

Jun. 30, 2019

Debt obligations



	As of
	June 30, 2019			December 31, 2018
	(In millions)
Long-term debt:
CAD 500 million 2.75% notes due 2020	$	381.8		$	366.6
CAD 500 million 2.84% notes due 2023	381.8			366.6
CAD 500 million 3.44% notes due 2026	381.8			366.6
$500 million 1.45% notes due 2019⁽¹⁾	500.0			500.0
$500 million 1.9% notes due 2019	—			499.8
$500 million 2.25% notes due 2020⁽²⁾⁽³⁾	499.4			499.0
$1.0 billion 2.1% notes due 2021⁽³⁾	1,000.0			1,000.0
$500 million 3.5% notes due 2022⁽²⁾	507.9			509.3
$2.0 billion 3.0% notes due 2026	2,000.0			2,000.0
$1.1 billion 5.0% notes due 2042	1,100.0			1,100.0
$1.8 billion 4.2% notes due 2046	1,800.0			1,800.0
EUR 500 million notes due 2019	—			573.4
EUR 800 million 1.25% notes due 2024	909.8			917.4
Finance leases and other⁽⁴⁾	131.1			43.0
Less: unamortized debt discounts and debt issuance costs	(60.4		)	(64.8		)
Total long-term debt (including current portion)	9,533.2			10,476.9
Less: current portion of long-term debt	(1,015.3		)	(1,583.1		)
Total long-term debt	$	8,517.9		$	8,893.8

Short-term borrowings:
Other short-term borrowings⁽⁵⁾	$	19.4		$	11.4
Current portion of long-term debt	1,015.3			1,583.1
Current portion of long-term debt and short-term borrowings	$	1,034.7		$	1,594.5


(1)	On July 15, 2019, we repaid our $500 million 1.45% notes through a combination of cash on hand and proceeds from net commercial paper issuances in July of approximately $400 million.


(2)	The fair value hedges related to these notes have been settled and are being amortized over the life of the respective note.

(3)

During the first quarter of 2019, we entered into cross currency swaps in order to hedge a portion of the foreign currency translational impacts of our European investment. As a result of the swaps, we economically converted a portion of our $1.0 billion 2.1% senior notes due 2021 and associated interest to EUR denominated, which will result in a EUR interest rate to be received at 0.71%. As of June 30, 2019, we also held outstanding cross currency swaps on our $500 million 2.25% notes due 2020 which result in a EUR interest rate to be received of 0.68%. See Note 11, "Derivative Instruments and Hedging Activities" for further details.

(4)

As of January 1, 2019, we reclassified approximately $3 million and $82 million of short-term and long-term finance lease liabilities from accounts payable and other current liabilities and other non-current liabilities to current portion of long-term debt and short-term borrowings and long-term debt, respectively, in connection with our adoption of the new lease accounting standard. See Note 2, "New Accounting Pronouncements" for further details.

(5)

As of June 30, 2019, we had $11.9 million in bank overdrafts and $43.4 million in bank cash related to our cross-border, cross-currency cash pool, for a net positive position of $31.5 million. As of December 31, 2018, we had $1.1 million in bank overdrafts and $88.9 million in bank cash related to our cross-border, cross-currency cash pool for a net positive position of $87.8 million. We had total outstanding borrowings of $5.6 million and $7.3 million under our two JPY overdraft facilities as of June 30, 2019 and December 31, 2018, respectively. In addition, we have USD, CAD and GBP lines of credit under which we had no borrowings as of June 30, 2019 or December 31, 2018.

Debt Fair Value Measurements

We utilize market approaches to estimate the fair value of certain outstanding borrowings by discounting anticipated future cash flows derived from the contractual terms of the obligations and observable market interest and foreign exchange rates. As of June 30, 2019 and December 31, 2018, the fair value of our outstanding long-term debt (including the current portion of long-term debt) was approximately $9.6 billion and $9.9 billion, respectively. All senior notes are valued based on significant observable inputs and classified as Level 2 in the fair value hierarchy. The carrying values of all other outstanding long-term borrowings and our short-term borrowings approximate their fair values and are also classified as Level 2 in the fair value hierarchy.

Revolving Credit Facility and Commercial Paper Program

As of June 30, 2019 and December 31, 2018, we had $1.5 billion available to draw on our $1.5 billion revolving credit facility, as there were no outstanding borrowings on the revolving credit facility nor was there any outstanding commercial paper. Subsequent to quarter end, we extended the maturity date of our revolving credit facility by one year to July 7, 2024.

The maximum leverage ratio, as defined by the revolving credit facility agreement, is 4.75x net debt to EBITDA, with a decline to 4.00x net debt to EBITDA as of the last day of the fiscal quarter ending December 31, 2020.

Under the terms of each of our debt facilities, we must comply with certain restrictions. These include customary events of default and specified representations, warranties and covenants, as well as covenants that restrict our ability to incur certain additional priority indebtedness (certain thresholds of secured consolidated net tangible assets), certain leverage threshold percentages, create or permit liens on assets, and restrictions on mergers, acquisitions, and certain types of sale lease-back transactions. As of June 30, 2019, we were in compliance with all of these restrictions and have met all debt payment obligations. All of our outstanding senior notes as of June 30, 2019 rank pari-passu.