Debt

12 Months Ended

Dec. 31, 2018

Debt

Short-term borrowings, including current portion of long-term debt, consists of the following at December 31:



	2018		2017
3.00% note, due 2018	$	—	$	299,857
Borrowings on lines of credit	180,000		—
Other short-term borrowings	66,257		56,949
	$	246,257	$	356,806

Other short-term borrowings are primarily utilized to support working capital requirements. The weighted-average interest rate on these borrowings was 2.49% and 2.60% at December 31, 2018 and 2017, respectively.

The company has $200,000 in uncommitted lines of credit. There were $180,000 of outstanding borrowings under the uncommitted lines of credit at December 31, 2018 and no outstanding borrowings at December 31, 2017. These borrowings were provided on a short-term basis and the maturity is agreed upon between the company and the lender. The lines had an effective interest rate of 3.39% at December 31, 2018.

Long-term debt consists of the following at December 31:



	2018		2017
Asset securitization program	$	810,000	$	490,000
6.00% notes, due 2020	209,147		208,971
5.125% notes, due 2021	130,546		130,400
3.50% notes, due 2022	347,288		346,518
4.50% notes, due 2023	297,622		297,122
3.25% notes, due 2024	494,091		493,161
4.00% notes, due 2025	345,762		345,182
7.50% senior debentures, due 2027	109,776		109,694
3.875% notes, due 2028	494,095		493,563
Other obligations with various interest rates and due dates	788		18,434
	$	3,239,115	$	2,933,045

The 7.50% senior debentures are not redeemable prior to their maturity. All other notes may be called at the option of the company subject to "make whole" clauses.

The estimated fair market value of long-term debt at December 31, using quoted market prices, is as follows:



	2018		2017
3.00% notes, due 2018	$	—	$	300,500
6.00% notes, due 2020	214,500		224,000
5.125% notes, due 2021	134,500		139,000
3.50% notes, due 2022	345,000		355,000
4.50% notes, due 2023	303,500		315,500
3.25% notes, due 2024	467,000		491,000
4.00% notes, due 2025	340,500		356,500
7.50% senior debentures, due 2027	128,000		138,500
3.875% notes, due 2028	458,500		501,000

The carrying amount of the company's short-term borrowings in various countries, borrowings on lines of credit, revolving credit facility, asset securitization program, and other obligations approximate their fair value.

The company has a revolving credit facility that may be used by the company for general corporate purposes including working capital in the ordinary course of business, letters of credit, repayment, prepayment or purchase of long-term indebtedness, acquisitions, and as support for the company's commercial paper program, as applicable. In December 2018, the company amended its revolving credit facility and, among other things, increased its borrowing capacity from $1,800,000 to $2,000,000 and extended its term to mature in December 2023. Interest on borrowings under the revolving credit facility is calculated using a base rate or a Eurocurrency rate plus a spread (1.18% at December 31, 2018), which is based on the company's credit ratings, or an effective interest rate of 2.37% at December 31, 2018. The facility fee, which is based on the company's credit ratings, was .20% of the total borrowing capacity at December 31, 2018. There were no outstanding borrowings under the revolving credit facility at December 31, 2018 and 2017.

The company has a commercial paper program and the maximum aggregate balance of commercial paper notes outstanding may not exceed the borrowing capacity of $1,200,000. The company had no outstanding borrowings under this program as of December 31, 2018 and 2017. The commercial paper program had an effective interest rate of 2.93% for the year-ended December 31, 2018.

The company has an asset securitization program collateralized by accounts receivable of certain of its subsidiaries. In June 2018, the company amended its asset securitization program and, among other things, increased its borrowing capacity from $910,000

to $1,200,000 and extended its term to mature to June 2021. The asset securitization program is conducted through Arrow Electronics Funding Corporation ("AFC"), a wholly-owned, bankruptcy remote subsidiary. The asset securitization program does not qualify for true sale treatment. Accordingly, the accounts receivable and related debt obligation remain on the company's consolidated balance sheets. Interest on borrowings is calculated using a base rate plus a spread (.40% at December 31, 2018), or an effective interest rate of 2.91% at December 31, 2018. The facility fee is .40% of the total borrowing capacity.

At December 31, 2018 and 2017, the company had $810,000 and $490,000, respectively, in outstanding borrowings under the asset securitization program, which was included in "Long-term debt" in the company's consolidated balance sheets. Total collateralized accounts receivable of approximately $2,754,400 and $2,270,500, respectively, were held by AFC and were included in "Accounts receivable, net" in the company's consolidated balance sheets. Any accounts receivable held by AFC would likely not be available to other creditors of the company in the event of bankruptcy or insolvency proceedings before repayment of any outstanding borrowings under the asset securitization program.

Both the revolving credit facility and asset securitization program include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. The company was in compliance with all covenants as of December 31, 2018 and is currently not aware of any events that would cause non-compliance with any covenants in the future.

During March 2018, the company redeemed $300,000 principal amount of its 3.00% notes due March 2018.

During 2017, the company completed the sale of $500,000 principal amount of 3.875% notes due in 2028. The net proceeds of the offering of $494,625 were used to redeem the company's 6.875% senior debenture due June 2018 and refinance a portion of the company's 6.00% notes due April 2020, 5.125% notes due March 2021, and 7.50% notes due January 2027. The company recorded a loss on extinguishment of debt of $59,545 for 2017.

During 2017, the company completed the sale of $500,000 principal amount of 3.25% notes due in 2024. The net proceeds of the offering of $493,810 are expected to be used to redeem the company's debt obligations and for general corporate purposes.

In the normal course of business certain of the company’s subsidiaries have agreements to sell, without recourse, selected trade receivables to financial institutions. The company does not retain financial or legal interests in these receivables, and, accordingly they are accounted for as sales of the related receivables and the receivables are removed from the company’s consolidated balance sheets. Financing costs related to these transactions were not material and are included in "Interest and other financing expense, net" in the company’s consolidated statements of operations.

Annual payments of borrowings during each of the years 2019 through 2023 are $245,203, $1,019,711, $130,578, $347,288, and $297,622, respectively, and $1,443,722 for all years thereafter.

Interest and other financing expense, net, includes interest and dividend income of $47,860, $31,156, and $18,084 in 2018, 2017, and 2016, respectively. Interest paid, net of interest and dividend income, amounted to $213,913, $156,974, and $141,816 in 2018, 2017, and 2016, respectively.