Debt

The following is a summary of outstanding debt as of December 31, (in millions):



	2014			2013
Medium-term notes	$	2,089.5		$	1,659.8
Commercial paper	28.0			95.0
Receivables facility	350.0			75.0
Other debt	14.4			6.6
Total debt	2,481.9			1,836.4
Short-term debt	(390.7		)	(174.0		)
Current portion of long-term debt	(6.7		)	(0.8		)
Long-term debt	$	2,084.5		$	1,661.6

During 2014 and 2013, the Company’s average commercial paper obligations outstanding were $114.4 million and $122.4 million, respectively, at average interest rates, including fees and commissions, of 2.7% and 2.9%, respectively.

The aggregate maturities of debt outstanding, based on the earliest date the obligation may become due, are as follows as of December 31, 2014 (in millions):



2015		2016		2017		2018		2019		Thereafter		Total
$	397.4	$	5.7	$	355.6	$	251.6	$	350.0	$	1,121.6	$	2,481.9

Medium-term Notes

The Company’s outstanding medium-term notes consisted of the following principal amounts and interest rate swap values as of December 31, (in millions):



	2014			2013
2.00% senior notes due 2015	$	—		$	250.0
2.05% senior notes due 2017	350.0			350.0
6.25% senior notes due 2018	250.0			250.0
10.60% senior notes due 2019	—			20.7
2.875% senior notes due 2019	350.0			—
4.70% senior notes due 2020	381.3			550.0
4.00% senior notes due 2022	250.0			250.0
4.00% senior notes due 2024	500.0			—
6.11% senior notes due 2028	1.5			1.5
Interest rate swaps	(11.8		)	(12.4		)
Gain on settled interest rate swap	18.5			—
Total medium-term notes	$	2,089.5		$	1,659.8

Average stated interest rate of all medium-term notes outstanding as of December 31, 2014 was 3.88%.

As of December 31, 2014, the Company was party to fixed-for-floating interest rate swaps designated as fair value hedges. The interest rate swaps relate to an aggregate $596.0 million principal amount of the medium-term notes and result in the Company effectively paying a floating rate of interest on the medium-term notes hedged by the interest rate swaps, which includes fixed-for-floating interest rate contracts with third-party financial institutions the Company entered into during 2012 relating to $346.0 million of the 4.70% medium-term notes due 2020 and during 2014 relating to $250.0 million of the 4.00% medium-term notes due 2024. During 2014, the Company, at its option, terminated and settled portions of interest rate swaps related to an aggregate $154.0 million principal amount of 4.70% medium-term notes with an original maturity date of August 2020 in connection with the repayment of the underlying notes. The Company paid $5.9 million to counterparties as settlement for the interest rate swaps. The Company also, at its option, terminated and settled an interest rate swap related to the $250.0 million principal amount of 6.25% medium-term notes with an original maturity of April 2018. The Company received cash proceeds of $18.7 million from the counterparty as settlement for the interest rate swap. The gain resulting from the early termination of the interest rate swap was deferred and will be amortized as an adjustment to interest expense over the remaining term of the debt originally hedged by the interest rate swap. The cash paid and received from the termination of the interest rate swaps is included in cash provided by operating activities in accrued liabilities and other in the Consolidated Statement of Cash Flows for 2014. See Footnote 11 for further details.

The medium-term note balances at December 31, 2014 and 2013 include mark-to-market adjustments of $11.8 million and $12.4 million, respectively, to record the fair value of the hedges of the fixed-rate debt, and the mark-to-market adjustments had the effect of decreasing the reported value of the medium-term notes. Compared to the stated rates of the underlying medium-term notes, the interest rate swaps, including amortization of settled interest rate swaps, had the effect of reducing interest expense by $13.9 million, $13.6 million and $21.8 million for 2014, 2013 and 2012, respectively.

In November 2014, the Company completed the offering and sale of $850.0 million of unsecured senior notes, consisting of $350.0 million aggregate principal amount of 2.875% notes due 2019 (the “2.875% 2019 Notes”) and $500.0 million aggregate principal amount of 4.00% notes due 2024 (the “2024 Notes” and, together with the 2.875% 2019 Notes, the “Notes”). The aggregate net proceeds from the issuance of the Notes were $841.8 million, which were used to redeem $168.7 million of the $550.0 million principal amount outstanding 4.70% notes due 2020 (the “2020 Notes”), redeem the $250.0 million of outstanding 2.00% notes due 2015 (the “2015 Notes”), redeem the $20.7 million of outstanding 10.60% notes due 2019 (the “10.60% 2019 Notes”), reduce borrowings under the Company’s commercial paper program and receivables facility, finance acquisitions and for general corporate purposes. The Notes are senior obligations of the Company and rank equally with all of its other unsecured and unsubordinated indebtedness from time to time outstanding. The 2.875% 2019 Notes may be redeemed by the Company at any time prior to the date that is one month prior to the maturity date, and the 2024 Notes may be redeemed at any time prior to the date that is three months prior to the maturity date of the 2024 Notes, in whole or in part, at a redemption price plus accrued and unpaid interest to the date of redemption. The redemption price is equal to the greater of (1) 100% of the principal amount of the Notes being redeemed on the redemption date or (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of any payments of interest accrued through the date of the redemption), discounted to the date of redemption on a semiannual basis at a specified rate. If the 2.875% 2019 Notes are redeemed on or after a date that is one month prior to the maturity date of the 2.875% 2019 Notes, then the redemption price is equal to 100% of the principal amount of the 2.875% 2019 Notes being redeemed plus accrued interest to such redemption date. If the 2024 Notes are redeemed on or after a date that is three months prior to the maturity date of the 2024 Notes, then the redemption price is equal to 100% of the principal amount of the 2024 Notes being redeemed plus accrued interest to such redemption date. The Notes also contain a provision that allows holders of the Notes to require the Company to repurchase all or any part of the Notes if a change of control triggering event occurs. Under this provision, the repurchase of the Notes will occur at a purchase price of 101% of the outstanding principal amount, plus accrued and unpaid interest, if any, on such Notes to the date of repurchase. The Notes are classified as long-term debt in the Company’s Consolidated Balance Sheet at December 31, 2014, based on their maturity dates in 2019 and 2024.

In December 2014, the Company exercised the early redemption provisions of the 2015 Notes and repaid and retired the $250.0 million outstanding principal amount of the 2015 Notes. At settlement, the Company paid $251.9 million, which included a $1.9 million premium payable pursuant to the terms of the 2015 Notes. The Company recognized a loss of $2.3 million on extinguishment of the 2015 Notes, which included the premium paid and the write-off of unamortized debt issuance costs.

In December 2014, the Company also exercised the early redemption provisions of the 10.60% 2019 Notes and repaid and retired the remaining $20.7 million outstanding principal amount of the 10.60% 2019 Notes. At settlement, the Company made a cash payment of $28.1 million, which included a $7.4 million premium payable pursuant to the terms of the 10.60% 2019 Notes. The Company recognized a loss of $7.7 million on extinguishment of the 10.60% 2019 Notes, which included the premium paid and the write-off of unamortized debt issuance costs.

In December 2014, the Company completed a tender offer for the 2020 Notes and purchased $168.7 million principal amount of the $550.0 million outstanding 2020 Notes. Pursuant to the terms of the tender offer, the Company made a cash payment of $184.7 million, which included a $16.0 million premium payable pursuant to the terms of the tender offer. The Company recognized a loss on extinguishment of debt of $23.2 million in connection with the tender offer for the 2020 Notes, which included the premium paid, the write-off of unamortized debt issuance costs, transaction expenses and the settlement of interest rate swaps designated as fair value hedges of $154.0 million of the $168.7 million 2020 Notes tendered and repaid.

In June 2012, the Company completed the offering and sale of $500.0 million of unsecured senior notes, consisting of $250.0 million aggregate principal amount 2015 Notes and $250.0 million aggregate principal amount of 4.0% notes due 2022 (the “2022 Notes”). The aggregate net proceeds from these notes were $495.1 million and were used to fund the redemption of all of the $436.7 million of junior convertible subordinated debentures, which underlie the outstanding 5.25% convertible preferred securities with an aggregate liquidation preference of $421.2 million, to reduce short-term borrowings and for general corporate purposes. The 2022 Notes are senior obligations of the Company and rank equally with all of its other unsecured and unsubordinated indebtedness from time to time outstanding and may be redeemed at any time prior to the date that is three months prior to the maturity date of the 2022 Notes, in whole or in part, at a redemption price plus accrued and unpaid interest to the date of redemption. The redemption price is equal to the greater of (1) 100% of the principal amount of the 2022 Notes being redeemed on the redemption date and (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of any payments of interest accrued through the date of the redemption), discounted to the date of redemption on a semiannual basis at a specified rate. If the 2022 Notes are redeemed on or after a date that is three months prior to the maturity date of the 2022 Notes, then the redemption price is equal to 100% of the principal amount of the 2022 Notes being redeemed plus accrued interest to such redemption date. The 2022 Notes also contain a provision that allows holders of the 2022 Notes to require the Company to repurchase all or any part of the 2022 Notes if a change of control triggering event occurs. Under this provision, the repurchase of the 2022 Notes will occur at a purchase price of 101% of the outstanding principal amount, plus accrued and unpaid interest, if any, on such Notes to the date of repurchase. The 2022 Notes are classified as long-term debt in the Company’s Consolidated Balance Sheets at December 31, 2014 and 2013, based on their maturity date in 2022.

In December 2012, the Company completed the offering and sale of $350.0 million aggregate principal amount of 2.05% notes due 2017 (the “2017 Notes”). The net proceeds of $346.8 million from the issuance of the 2017 Notes, together with cash on hand and short-term borrowings, were used to repay the $500.0 million outstanding principal amount of 5.50% notes due 2013 (the “2013 Notes”). The 2017 Notes are senior obligations of the Company and rank equally with all of its other unsecured and unsubordinated indebtedness from time to time outstanding. The 2017 Notes may be redeemed by the Company at any time prior to the maturity date, in whole or in part, at a redemption price plus accrued and unpaid interest to the date of redemption. The redemption price is equal to the greater of (1) 100% of the principal amount of the 2017 Notes being redeemed on the redemption date and (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of any payments of interest accrued through the date of the redemption), discounted to the date of redemption on a semiannual basis at a specified rate. The 2017 Notes also contain a provision that allows holders of the 2017 Notes to require the Company to repurchase all or any part of the 2017 Notes if a change of control triggering event occurs. Under this provision, the repurchase of the 2017 Notes will occur at a purchase price of 101% of the outstanding principal amount, plus accrued and unpaid interest, if any, on such 2017 Notes to the date of repurchase. The 2017 Notes are classified as long-term debt in the Company’s Consolidated Balance Sheets at December 31, 2014 and 2013, based on their maturity date in 2017.

In December 2012, the Company repaid and retired the $500.0 million outstanding principal amount of the 2013 Notes. At settlement, the Company made cash payments of $512.9 million, which included accrued interest of $5.8 million through settlement and a $7.1 million premium payable due to the early repayment pursuant to the terms of the 2013 Notes. The Company recognized a loss of $4.1 million on extinguishment of the 2013 Notes, which includes the $7.1 million premium net of the remaining $3.0 million unamortized gain on terminated interest rate swaps attributable to the 2013 Notes. During 2012, the Company repaid and retired $250.0 million principal amount of the 6.75% senior notes due March 2012 and repaid and retired $8.5 million principal amount of extant 6.11% medium-term notes due 2028.

Junior Convertible Subordinated Debentures

In 1997, a 100% owned finance subsidiary (the “Subsidiary”) of the Company issued 10.0 million shares of 5.25% convertible preferred securities (the “Preferred Securities”). Holders of the Preferred Securities were entitled to cumulative cash dividends of 5.25% of the liquidation preference of $50 per Preferred Security, or $2.625 per year. Each of these Preferred Securities was convertible into 0.9865 of a share of the Company’s common stock. During 2005 and 2004, the Company purchased an aggregate of 1.6 million shares of its Preferred Securities from holders at an average price of $45.27 per share ($71.3 million).

The proceeds received by the Subsidiary from the issuance of the Preferred Securities were invested in the Company’s 5.25% Junior Convertible Subordinated Debentures (the “Debentures”), with a scheduled maturity date of December 1, 2027. In addition, the Subsidiary received approximately $15.5 million of the Company’s Debentures as payment for $15.5 million that the Company borrowed from the Subsidiary to purchase all of the common equity interests in the Subsidiary. As a result, the Company issued an aggregate of $515.5 million of Debentures, and the Subsidiary was the sole holder of the Debentures.

During 2012, the Company redeemed the $436.7 million of remaining outstanding Debentures. Because the Preferred Securities were mandatorily redeemable upon the retirement of the Debentures at maturity or upon acceleration of the Debentures, the Preferred Securities were concurrently redeemed at 100% of the liquidation preference of $421.2 million. In conjunction with the redemption of the Debentures and the Preferred Securities, the Company received cash proceeds of $15.5 million representing liquidation of the Company’s equity interest in the Subsidiary. The Company repaid the Debentures at 100% of their face amount; therefore, substantially all of the $6.0 million loss on extinguishment of the Debentures was due to the write-off of deferred financing costs.

Receivables-Related Borrowings

In September 2013, the Company amended its receivables facility to increase available borrowings from $200.0 million to up to $350.0 million and extend the expiration date to September 2015 (the “Receivables Facility”). Under the Receivables Facility, the Company and certain operating subsidiaries (collectively, “the Originators”) sell their receivables to a financing subsidiary as the receivables are originated. The financing subsidiary is wholly owned by the Company and is the owner of the purchased receivables and the borrower under the Receivables Facility. The assets of the financing subsidiary are restricted as collateral for the payment of debt or other obligations arising under the Receivables Facility, and the financing subsidiary’s assets and credit are not available to satisfy the debts and obligations owed to the Company’s or any other Originator’s creditors. The Company includes the financing subsidiary’s assets, liabilities and results of operations in its consolidated financial statements. The Receivables Facility requires, among other things, that the Company maintain a certain interest coverage ratio, and the Company was in compliance with such requirement as of December 31, 2014. The financing subsidiary owned $774.0 million of outstanding accounts receivable as of December 31, 2014, and these amounts are included in accounts receivable, net in the Company’s Consolidated Balance Sheet at December 31, 2014. The amount that may be borrowed under the Receivables Facility is subject to various limitations based on the character of the receivables owned by the financing subsidiary. The Company had outstanding borrowings of $350.0 million under the Receivables Facility as of December 31, 2014, which have been classified as short-term borrowings and bear interest at a weighted-average rate of 0.9%.

Revolving Credit Facility and Commercial Paper

On December 2, 2011, the Company entered into a five-year credit agreement (the “Credit Agreement”) with a syndicate of banks. As extended, the Credit Agreement provides for an unsecured syndicated revolving credit facility with a maturity date of December 2019, and an aggregate commitment at any time outstanding of up to $800.0 million (the “Facility”). The Company may from time to time request increases in the aggregate commitment to up to $1.25 billion upon the satisfaction of approval requirements. The Company may request extensions of the maturity date of the Facility (subject to lender approval) for additional one-year periods. Borrowings under the Facility will be used for general corporate purposes, and the Facility provides the committed backup liquidity required to issue commercial paper. Accordingly, commercial paper may be issued only up to the amount available for borrowing under the Facility. Under the Facility, the Company may borrow funds on a variety of interest rate terms. The Facility also provides for the issuance of up to $100.0 million of letters of credit, so long as there is a sufficient amount available for borrowing under the Facility. The Company may borrow, prepay and re-borrow amounts under the Facility at any time prior to termination of the Facility. As of December 31, 2014, there were no borrowings or standby letters of credit issued or outstanding under the Facility, and there was $28.0 million of commercial paper outstanding.

In addition to the committed portion of the Facility, the Credit Agreement provides for extensions of competitive bid loans from one or more lenders (at the lenders’ discretion) of up to $500.0 million, which are not a utilization of the amount available for borrowing under the Facility.

The Credit Agreement contains customary representations and warranties, covenants and events of default. The covenants set forth in the Credit Agreement include certain affirmative and negative operational and financial covenants, including, among other things, restrictions on the Company’s ability to incur certain liens, make fundamental changes to its business or engage in transactions with affiliates, limitations on the amount of indebtedness that may be incurred by the Company’s subsidiaries and a requirement that the Company maintain certain interest coverage and total indebtedness to total capital ratios, as defined in the Credit Agreement. In addition, the Credit Agreement provides for certain events of default, the occurrence of which could result in the acceleration of the Company’s obligations under the Credit Agreement and the termination of the lenders’ obligation to extend credit pursuant to the Credit Agreement. As of December 31, 2014, the Company was in compliance with the provisions of the Credit Agreement.