DEBT AND INTEREST

12 Months Ended

Dec. 31, 2020

DEBT AND INTEREST

DEBT AND INTEREST

7. DEBT AND INTEREST

Short-term Debt

The following table provides the components of the Company’s short-term debt obligations, along with applicable interest rates as of December 31, 2020 and 2019:

	2020				2019
			Average				Average
	Carrying		Interest		Carrying		Interest
(millions)	Value		Rate		Value		Rate
Short-term debt
Commercial paper		$-	-	%		$55.1	(0.30)	%
Notes payable		15.5	7.07	%		24.5	3.53	%
Long-term debt, current maturities		1.8				300.9
Total		$17.3				$380.5

Line of Credit

As of December 31, 2020, the Company had in place a $2.0 billion multi-currency revolving credit facility which expires in November 2022. The credit facility has been established with a diverse syndicate of banks and supports the Company’s U.S. and Euro commercial paper programs. There were no borrowings under the Company’s credit facility as of December 31, 2020 and 2019.

As of December 31, 2020, the Company had a $500 million 364-day revolving credit agreement which expires in April 2021. The credit agreement has been established with a diverse syndicate of banks and is to be used for general corporate purposes. There were no borrowings under the Company’s 364-day credit facility as of December 31, 2020.

Commercial Paper

The Company’s commercial paper program is used as a potential source of liquidity and consists of a $2.0 billion U.S. commercial paper program and a $2.0 billion Euro commercial paper program. The maximum aggregate amount of commercial paper that may be issued by the Company under its commercial paper programs may not exceed $2.0 billion.

As of December 31, 2019, the Company had $55.1 million (€50.0 million) of commercial paper outstanding under its Euro program. The Company had no outstanding commercial paper under its Euro or U.S. program as of December 31, 2020.

As of December 31, 2020, the Company’s short-term borrowing program was rated A-2 by Standard & Poor’s, P-2 by Moody’s and F-1 by Fitch.

Notes Payable

The Company’s notes payable consists of uncommitted credit lines with major international banks and financial institutions, primarily to support global cash pooling structures. As of December 31, 2020 and 2019, the Company had $15.5 million and $24.5 million, respectively, outstanding under these credit lines. Approximately $1,734 million and $1,378 million of these credit lines were available for use as of December 31, 2020 and 2019, respectively.

Long-term Debt

The following table provides the components of the Company’s long-term debt obligations, along with applicable interest rates as of December 31, 2020 and 2019:

		2020								2019
				Stated		Effective				Stated		Effective
	Maturity	Carrying		Interest		Interest		Carrying		Interest		Interest
(millions)	by Year	Value		Rate		Rate		Value		Rate		Rate
Long-term debt
Public notes (2020 principal amount)
Five year 2015 senior notes ($300 million)	2020		-	-	%	-	%		300.0	2.25	%	2.79	%
Ten year 2011 senior notes ($1.02 billion)	2021		-	-	%	-	%		1,018.3	4.35	%	4.43	%
Five year 2017 senior notes ($500 million)	2022		498.6	2.38	%	2.55	%		497.8	2.38	%	2.55	%
Seven year 2016 senior notes ($400 million)	2023		399.0	3.25	%	3.49	%		398.5	3.25	%	3.49	%
Seven year 2016 senior notes (€575 million)	2024		682.0	1.00	%	1.18	%		628.4	1.00	%	1.10	%
Ten year 2015 senior notes (€575 million)	2025		682.9	2.63	%	2.85	%		630.0	2.63	%	2.96	%
Ten year 2016 senior notes ($750 million)	2026		745.3	2.70	%	2.93	%		744.5	2.70	%	2.93	%
Ten year 2017 senior notes ($500 million)	2027		496.0	3.25	%	3.37	%		495.4	3.25	%	3.37	%
Ten year 2020 senior notes ($750 million)	2030		765.2	4.80	%	4.64	%		-	-	%	-	%
Ten year 2020 senior notes ($600 million)	2031		594.4	1.30	%	1.34	%		-	-	%	-	%
Thirty year 2011 senior notes ($458 million)	2041		452.2	5.50	%	5.56	%		451.9	5.50	%	5.56	%
Thirty year 2016 senior notes ($250 million)	2046		246.4	3.70	%	3.76	%		246.2	3.70	%	3.76	%
Thirty year 2017 senior notes ($700 million)	2047		611.9	3.95	%	4.16	%		610.4	3.95	%	4.15	%
Thirty year 2020 senior notes ($500 million)	2050		490.1	2.13	%	2.15	%		-	-	%	-	%
Private note (2020 principal amount)
Series B private placement senior notes ($250 million)	2023		-	-	%	-	%		249.6	4.32	%	4.36	%
Finance lease obligations and other			7.1						3.0
Total debt			6,671.1						6,274.0
Long-term debt, current maturities			(1.8)						(300.9)
Total long-term debt			$6,669.3						$5,973.1

Public Notes

The Company’s public notes may be redeemed by the Company at its option at redemption prices that include accrued and unpaid interest and a make-whole premium. Upon the occurrence of a change of control accompanied by a downgrade of the notes below investment grade rating, within a specified time period, the Company would be required to offer to repurchase the public notes at a price equal to 101% of the aggregate principal amount thereof, plus any accrued and unpaid interest to the date of repurchase. The public notes are senior unsecured and unsubordinated obligations of the Company and rank equally with all other senior and unsubordinated indebtedness of the Company.

Private Note

In September 2020, the Company redeemed the private note at redemption prices that included accrued and unpaid interest and a make-whole premium.

Covenants and Future Maturities

The Company is in compliance with all covenants under the Company’s outstanding indebtedness at December 31, 2020.

As of December 31, 2020, the aggregate annual maturities of long-term debt for the next five years were:

(millions)
2021	$ 2
2022	502
2023	400
2024	683
2025	683

Net Interest Expense

Interest expense and interest income incurred during 2020, 2019 and 2018 were as follows:

(millions)	2020		2019		2018
Interest expense		$304.8		$214.4		$235.5
Interest income		(14.6)		(23.7)		(14.4)
Interest expense, net		$290.2		$190.7		$221.1

Interest expense generally includes the expense associated with the interest on the Company’s outstanding borrowings. Interest expense also includes the amortization of debt issuance costs and debt discounts, which are both recognized over the term of the related debt.

During 2020, the Company retired certain long-term debt, and incurred debt refinancing charges of $83.1 million ($64.0 million after tax), which are included as a component of interest expense, net on the Consolidated Statement of Income.