Financing Arrangements and Debt

3 Months Ended

Mar. 31, 2017

Financing Arrangements and Debt [Abstract]

Financing Arrangements and Debt

Note D – Financing Arrangements and Debt

At March 31, 2017, the Company has a $1.1 billion senior unsecured guaranteed credit facility (2016 facility) with a major banking consortium, which expires in August 2019.  At March 31, 2017, the Company had no outstanding borrowings under the 2016 facility, however, there were $171.9 million of outstanding letters of credit.  Advances under the 2016 facility will accrue interest based, at the Company’s option, on either the London Interbank Offered rate plus an applicable margin (Eurodollar rate) or the alternate base rate (as defined in the 2016 facility agreement) plus an applicable margin.  The Eurodollar rate and the applicable base rate, had there been any amounts borrowed under the 2016 facility at March 31, 2017, would have been 5.0% and 7.0%, respectively.  The Company also has a $630.0 million unsecured revolving credit facility (2011 facility) with a major banking consortium, which expires in June 2017.  At March 31, 2017, the Company had no outstanding borrowings or letters of credit under the 2011 facility.  Advances under the 2011 facility will accrue interest based, at the Company’s option, on either the Eurodollar rate or the alternate base rate (as defined in the 2011 facility agreement) plus an applicable margin.  The Eurodollar rate and the applicable base rate, had there been any amounts borrowed under the 2011 facility at March 31, 2017, would have been 2.45% and 4.45%, respectively.  At March 31, 2017, the Company was in compliance with all covenants related to both the 2016 facility and the 2011 facility.

The Company also has a shelf registration statement on file with the U.S. Securities and Exchange Commission that permits the offer and sale of debt and/or equity securities through October 2018.

The Company and its partners are parties to a 25-year lease of production equipment at the Kakap field offshore Malaysia.  The lease has been accounted for as a capital lease, and payments under the agreement are to be made over a 15-year period through June 2028.  Current maturities and long-term debt on the Consolidated Balance Sheet included  $13.0 million and $193.5 million, respectively, associated with this lease at March 31, 2017.