Long-Term Debt

6 Months Ended

Jun. 29, 2019

The following table shows the carrying value of the Company’s debt (in millions):



	June 29, 2019			December 31, 2018
Term Loan A	$	608		$	608
Term Loan B	445			445
Revolving Credit Facility	476			408
Receivables Financing Facilities	195			139
Total debt	$	1,724		$	1,600
Less: Debt issuance costs	(4		)	(5		)
Less: Unamortized discounts	(3		)	(4		)
Less: Current portion of debt	(156		)	(157		)
Total long-term debt	$	1,561		$	1,434

As of June 29, 2019, the future maturities of debt, excluding debt discounts and issuance costs, were as follows (in millions):



2019	$	43
2020	154
2021	1,527
2022	—
2023	—
Thereafter	—
Total future debt maturities	$	1,724

All borrowings as of June 29, 2019 were denominated in U.S. Dollars, except for €92 million under the Revolving Credit Facility that was borrowed in Euros.

The estimated fair value of the Company’s debt approximated $1.7 billion and $1.6 billion as of June 29, 2019 and December 31, 2018, respectively. These fair value amounts, developed based on inputs classified as Level 2 within the fair value hierarchy, represent the estimated value at which the Company’s lenders could trade its debt within the financial markets and does not represent the settlement value of these debt liabilities to the Company. The fair value of the debt will continue to vary each period based on a number of factors including fluctuations in market interest rates, as well as changes to the Company’s credit ratings.

Credit Facilities

The Company has entered into a credit agreement that provides for a Term Loan A, Term Loan B and Revolving Credit Facility.

As of June 29, 2019, the Term Loan A interest rate was 3.93%, and the Term Loan B interest rate was 4.18%. Borrowings under the Terms Loans bear interest at a variable rate plus an applicable margin. Interest payments are made monthly.

Under the credit agreement, the Company is required to prepay certain outstanding amounts in the event of certain circumstances or transactions. The Company may make prepayments against the Term Loans, in whole or in part, without premium or penalty. Term Loan A will mature on July 27, 2021 and Term Loan B will mature on October 27, 2021. The remaining principal on Term Loan A is due in quarterly installments starting in the third quarter of 2019, with the majority due upon maturity. All remaining principal on Term Loan B is due upon maturity.

The Revolving Credit Facility is available for working capital and other general corporate purposes, including letters of credit. As of June 29, 2019, the Company had letters of credit totaling $5 million, which reduced funds available for borrowings under the agreement from $800 million to $795 million. Borrowings bear interest at a variable rate plus an applicable margin. As of June 29, 2019, the Revolving Credit Facility had an average interest rate of 3.39%. Interest payments are made monthly. The Revolving Credit Facility will mature, and the related commitments will terminate on July 27, 2021. All remaining principal is due upon maturity.

Receivables Financing Facilities

The Company has a Receivables Financing Facility with a financial institution that has a borrowing limit of up to $180 million. As collateral, the Company pledges a perfected first-priority security interest in its U.S. domestically originated accounts receivable. The Company has accounted for transactions under the Receivables Financing Facility as secured borrowings. As amended during the second quarter of 2019, the Receivables Financing Facility will mature on March 29, 2021.

During the second quarter of 2019, the Company entered into an Additional Receivable Financing Facility with another financial institution, which allows for additional borrowings of up to $100 million, and thus total borrowings of up to $280 million, using the same U.S. domestically originated accounts receivables as collateral. The Company has also accounted for transactions under this Additional Receivables Financing Facility as secured borrowings. The Additional Receivables Financing Facility will mature on May 18, 2020.

As of June 29, 2019, the Company’s Consolidated Balance Sheets included $398 million of receivables that were pledged under the two Receivables Financing Facilities, of which $195 million had been borrowed against. Borrowings under the Receivables Financing Facilities bear interest at a variable rate plus an applicable margin. As of June 29, 2019, the Receivables Financing Facilities had an average interest rate of 3.30% and requires monthly interest payments.

Both the Revolving Credit Facility and Receivables Financing Facilities include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels.

The Company uses interest rate swaps to manage the interest rate risk associated with its debt. See Note 7, Derivative Instruments for further information.

As of June 29, 2019, the Company was in compliance with all debt covenants.