
Note 9.	Debt and Other Financing Arrangements



	Effective Interest Rate at December 31,		December 31,		December 31,
(Dollars in millions)	2015		2015		2014

Commercial Paper	1.14	%	$	49.6	$	—
Term Loan			—		1,275.0
4.40% 5-Year Senior Notes, Due 3/1/2015			—		500.0
3.20% 5-Year Senior Notes, Due 5/1/2015			—		450.0
5.00% 10-Year Senior Notes, Due 6/1/2015			—		250.0
3.50% 5-Year Senior Notes, Due 1/15/2016			—		400.0
3.20% 5-Year Senior Notes, Due 3/1/2016			—		900.0
2.25% 5-Year Senior Notes, Due 8/15/2016	2.29	%	1,000.0		1,000.0
1.30% 3-Year Senior Notes, Due 2/1/2017	0.91	%	900.0		900.0
1.85% 5-Year Senior Notes, Due 1/15/2018	1.85	%	500.0		500.0
2.15% 3-Year Senior Notes, Due 12/14/2018	2.15	%	450.0		—
2.40% 5-Year Senior Notes, Due 2/1/2019	2.44	%	900.0		900.0
6.00% 10-Year Senior Notes, Due 3/1/2020	2.98	%	750.0		750.0
4.70% 10-Year Senior Notes, Due 5/1/2020	3.34	%	300.0		300.0
1.50% 5-Year Senior Notes, Due 12/1/2020 (euro-denominated)	1.51	%	461.6		—
5.00% 10-Year Senior Notes, Due 1/15/2021	3.25	%	400.0		400.0
4.50% 10-Year Senior Notes, Due 3/1/2021	3.12	%	1,000.0		1,000.0
3.60% 10-Year Senior Notes, Due 8/15/2021	2.89	%	1,100.0		1,100.0
3.30% 7-Year Senior Notes, Due 2/15/2022	3.30	%	800.0		800.0
2.15% 7-Year Senior Notes, Due 7/21/2022 (euro-denominated)	2.18	%	543.1		—
3.15% 10-Year Senior Notes, Due 1/15/2023	3.21	%	800.0		800.0
4.15% 10-Year Senior Notes, Due 2/1/2024	4.07	%	1,000.0		1,000.0
2.00% 10-Year Senior Notes, Due 4/15/2025 (euro-denominated)	2.03	%	695.2		774.3
3.65% 10-Year Senior Notes, Due 12/15/2025	3.67	%	350.0		—
5.30% 30-Year Senior Notes, Due 2/1/2044	5.30	%	400.0		400.0
Other			16.3		23.2

Total Borrowings at Par Value			12,415.8		14,422.5
Fair Value Hedge Accounting Adjustments			6.2		(0.5		)
Unamortized Premium, Net			104.7		142.0

Total Borrowings at Carrying Value			12,526.7		14,564.0
Less: Short-term Obligations and Current Maturities			1,052.8		2,212.4

Long-term Obligations			$	11,473.9	$	12,351.6

The effective interest rates for the fixed-rate debt include the stated interest on the notes, the accretion of any discount or amortization of any premium and, if applicable, adjustments related to hedging.

See Note 12 for fair value information pertaining to the company’s long-term obligations.

As of December 31, 2015, the annual repayment requirements for debt obligations are as follows:



(In millions)

2016	$	1,053.0
2017	902.2
2018	952.2
2019	901.9
2020	1,513.6
2021 and Thereafter	7,092.9

	$	12,415.8

As of December 31, 2015, short-term obligations and current maturities of long-term obligations in the accompanying balance sheet included $50 million of commercial paper, short-term bank borrowings and borrowings under lines of credit of certain of the company’s subsidiaries. The weighted average interest rate for short-term borrowings was 1.14% at December 31, 2015. The company had no outstanding short-term borrowings at December 31, 2014. In addition to available borrowings under the company’s revolving credit agreements, discussed below, the company had unused lines of credit of $122 million as of December 31, 2015. These unused lines of credit generally provide for short-term unsecured borrowings at various interest rates.

Credit Facilities

The company has a revolving credit facility with a bank group that provides for up to $2.00 billion of unsecured multi-currency revolving credit. The facility expires in July 2018. The agreement calls for interest at either a LIBOR-based rate or a rate based on the prime lending rate of the agent bank, at the company’s option. The agreement contains affirmative, negative and financial covenants, and events of default customary for financings of this type. The financial covenant requires the company to maintain a Consolidated Leverage Ratio of debt to EBITDA (as defined in the agreement) below 3.5 to 1.0 and an Interest Coverage Ratio of EBITDA (as defined in the agreement) to interest expense of 3.0 to 1.0. The credit agreement permits the company to use the facility for working capital; acquisitions; repurchases of common stock, debentures and other securities; the refinancing of debt; and general corporate purposes. The credit agreement allows for the issuance of letters of credit, which reduces the amount available for borrowing. If the company borrows under this facility, it intends to leave undrawn an amount equivalent to outstanding commercial paper to provide a source of funds in the event that commercial paper markets are not available. As of December 31, 2015, no borrowings were outstanding under the facility, although available capacity was reduced by approximately $65 million as a result of outstanding letters of credit.

Commercial Paper Program

The company has a U.S. commercial paper program pursuant to which it may issue and sell unsecured, short-term promissory notes (CP Notes). Maturities may not exceed 397 days from the date of issue and the CP Notes rank pari passu with all of the company’s other unsecured and unsubordinated indebtedness. CP Notes are issued on a private placement basis under customary terms in the commercial paper market and are not redeemable prior to maturity nor subject to voluntary prepayment. CP Notes are issued at a discount from par, or, alternatively, are sold at par and bear varying interest rates on a fixed or floating basis. As of December 31, 2015, outstanding borrowings under this program were $50 million, with a weighted average remaining period to maturity of 47 days and are classified as short-term obligations in the accompanying balance sheet.

Term Loan

In connection with the acquisition of Life Technologies, the company entered into an unsecured term loan agreement. The term loan agreement called for interest at either a LIBOR-based rate or a rate based on the prime lending rate of the agent bank, at the company’s option. As of December 31, 2015, all borrowings under the term loan agreement had been repaid. The company recorded a charge of $3 million for the early extinguishment of this debt in 2015.

Senior Notes

Interest on the euro-denominated senior notes is payable annually. Interest on each of the other senior notes is payable semi-annually. Each of the notes may be redeemed at any time at a redemption price of 100% of the principal amount plus a specified make-whole premium plus accrued interest. The company is subject to certain affirmative and negative covenants under the indentures governing the senior notes, the most restrictive of which limits the ability of the company to pledge principal properties as security under borrowing arrangements.

In 2015, the company redeemed its 5% Senior Notes due June 1, 2015, 3.50% Senior Notes due January 1, 2016 and 3.20% Senior Notes due March 1, 2016 and recorded charges totaling $9 million for the early extinguishment of this debt.

The 4.40% Senior Notes due 2015, 3.50% Senior Notes due 2016, 6.00% Senior Notes due 2020 and 5.00% Senior Notes due 2021 were assumed by the company in connection with the Life Technologies acquisition. The fair value of these senior notes on the date of acquisition exceeded the par value by $207 million which was recorded as part of the carrying value of the underlying debt and will be amortized as a reduction of interest expense over the remaining terms of the respective debt instruments. This adjustment does not affect cash interest payments.

Interest Rate Swap Arrangements

The company has entered into LIBOR-based interest rate swap arrangements with various banks on several of its outstanding senior notes. The aggregate amounts of the swaps are equal to the principal amounts of the notes and the payment dates of the swaps coincide with the interest payment dates of the notes. The swap contracts provide for the company to pay a variable interest rate and receive a fixed rate. The variable interest rates reset monthly. The swaps have been accounted for as fair value hedges of the notes. See Note 12 for additional information. The following table summarizes the outstanding interest rate swap arrangements on the company's senior notes at December 31, 2015:



	Aggregate Notional Amount			Pay Rate as of
(Dollars in millions)	Aggregate Notional Amount		Pay Rate	December 31, 2015		Receive Rate

1.30% Senior Notes due 2017	$	900.0	1-month LIBOR + 0.6616%	0.9054	%	1.30	%
4.70% Senior Notes due 2020	300.0		1-month LIBOR + 3.1560%	3.3998	%	4.70	%
4.50% Senior Notes due 2021	1,000.0		1-month LIBOR + 2.8680%	3.1118	%	4.50	%
3.60% Senior Notes due 2021	1,100.0		1-month LIBOR + 1.9370%	2.2675	%	3.60	%