Debt and Financing Arrangements

Long-term debt consists of the following:



	October 31, 2017				April 30, 2017
	Principal Outstanding		Carrying Amount (A)		Principal Outstanding		Carrying Amount (A)
1.75% Senior Notes due March 15, 2018	$	500.0	$	499.6	$	500.0	$	499.0
2.50% Senior Notes due March 15, 2020	500.0		497.2		500.0		496.6
3.50% Senior Notes due October 15, 2021	750.0		779.0		750.0		782.6
3.00% Senior Notes due March 15, 2022	400.0		397.0		400.0		396.6
3.50% Senior Notes due March 15, 2025	1,000.0		994.0		1,000.0		993.6
4.25% Senior Notes due March 15, 2035	650.0		642.9		650.0		642.6
4.38% Senior Notes due March 15, 2045	600.0		585.2		600.0		584.9
Term Loan Credit Agreement due March 23, 2020	400.0		398.8		550.0		548.6
Total long-term debt	$	4,800.0	$	4,793.7	$	4,950.0	$	4,944.5
Current portion of long-term debt	500.0		499.6		500.0		499.0
Total long-term debt, less current portion	$	4,300.0	$	4,294.1	$	4,450.0	$	4,445.5


(A)	Represents the carrying amount included in the Condensed Consolidated Balance Sheets, which includes the impact of terminated interest rate swaps, offering discounts, and capitalized debt issuance costs.

In September 2017, we entered into an unsecured revolving credit facility with a group of 11 banks, which provides for a revolving credit line of $1.8 billion and matures in September 2022. Additionally, we terminated the previous $1.5 billion credit facility. The new revolving credit facility includes $4.1 of capitalized debt issuance costs, which will be amortized to interest expense over the time for which the revolving credit facility is effective. Borrowings under the revolving credit facility bear interest on the prevailing U.S. Prime Rate, London Interbank Offered Rate (“LIBOR”), or Canadian Dealer Offered Rate, based on our election. Interest is payable either on a quarterly basis or at the end of the borrowing term. We did not have a balance outstanding under the current and previous revolving credit facilities at October 31, 2017 and April 30, 2017, respectively. As a result of the termination of the previous $1.5 billion credit facility, and because there are no subsidiary guarantors of the new $1.8 billion credit facility, the guarantees provided by the Company's subsidiaries, J. M. Smucker LLC and The Folgers Coffee Company (the “subsidiary guarantors”), related to the obligations under the senior unsecured delayed-draw Term Loan Credit Agreement (“Term Loan”) and all of our outstanding Senior Notes were released. For additional information, see Note 15: Guarantor and Non-Guarantor Financial Information.

In June 2017, we entered into a treasury lock, with a notional value of $300.0, to manage our exposure to interest rate volatility associated with anticipated debt financing in 2018. This interest rate contract is designated as a cash flow hedge, and as a result, the mark-to-market gains or losses on the contract are deferred and included as a component of accumulated other comprehensive income (loss) and reclassified to interest expense in the period during which the hedged transaction affects earnings. At October 31, 2017, an unrealized gain of $3.5 was deferred in accumulated other comprehensive income (loss) for this derivative instrument. For additional information, see Note 9: Derivative Financial Instruments. Furthermore, in the second quarter of 2018, we early adopted ASU 2017-12, Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities, which did not have a material impact on our condensed consolidated financial statements and disclosures. For further details, refer to Note 2: Recently Issued Accounting Standards.

In March 2015, we entered into the Term Loan with a syndicate of banks and an available commitment amount of $1.8 billion. Borrowings under the Term Loan bear interest on the prevailing U.S. Prime Rate or LIBOR, based on our election, and is payable either on a quarterly basis or at the end of the borrowing term. The weighted-average interest rate on the Term Loan at October 31, 2017, was 2.49 percent. The Term Loan requires quarterly amortization payments of 2.50 percent of the original principal amount. Voluntary prepayments are permitted without premium or penalty and are applied to the schedule of required quarterly minimum payment obligations in direct order of maturity. As of October 31, 2017, we have prepaid $1.4 billion on the Term Loan to date, including $150.0 in the second quarter and first six months of 2018, and therefore no additional payments are required until final maturity of the loan agreement on March 23, 2020. As a result of entering into the unsecured revolving credit facility in September 2017, we also amended the Term Loan to make certain changes to the representations and warranties, as well as the financial covenants.

Also in March 2015, we completed an offering of $3.7 billion in Senior Notes due beginning March 15, 2018 through March 15, 2045. The proceeds from the offering, along with the Term Loan, were used to partially finance the Big Heart acquisition, pay off the debt assumed as part of the acquisition, and prepay our privately placed Senior Notes.

All of our Senior Notes are unsecured, and interest is paid semiannually, with no required scheduled principal payments until maturity. We may prepay all or part of the Senior Notes at 100 percent of the principal amount thereof, together with the accrued and unpaid interest, and any applicable make-whole amount.

During 2014, we entered into an interest rate swap designated as a fair value hedge of the 3.50 percent Senior Notes due October 15, 2021, which was subsequently terminated in 2015. At October 31, 2017, the remaining benefit of $32.4 was recorded as an increase in the long-term debt balance and will be recognized ratably as a reduction to future interest expense over the remaining life of the related debt. For additional information, see Note 9: Derivative Financial Instruments.

We participate in a commercial paper program under which we can issue short-term, unsecured commercial paper not to exceed $1.8 billion at any time, which was increased from the previous limit of $1.0 billion in conjunction with entering into the new unsecured revolving credit facility in September 2017. The commercial paper program is backed by our revolving credit facility and reduces what we can borrow under the revolving credit facility by the amount of commercial paper outstanding. Commercial paper will be used as a continuing source of short-term financing for general corporate purposes. As of October 31, 2017 and April 30, 2017, we had $463.9 and $454.0 of short-term borrowings outstanding, respectively, which were issued under our commercial paper program at weighted-average interest rates of 1.41 percent and 1.15 percent, respectively.

Interest paid totaled $78.9 and $77.7 for the three months ended October 31, 2017 and 2016, respectively, and $83.5 and $81.3 for the six months ended October 31, 2017 and 2016, respectively. This differs from interest expense due to the timing of payments, effect of interest rate contracts, amortization of debt issuance costs, and capitalized interest.

Our debt instruments contain certain financial covenant restrictions, including a leverage ratio and an interest coverage ratio. We are in compliance with all covenants.