
Note 8.	Debt and Other Financing Arrangements



	Effective Interest Rate at September 30,		September 30,			December 31,
(Dollars in millions)	2017		2017			2016

Commercial Paper	(0.20	)%	$	1,299.5		$	953.3
Term Loan	2.32	%	750.0			825.0
1.85% 5-Year Senior Notes, Due 1/15/2018			—			500.0
Floating Rate 2-Year Senior Notes, Due 8/9/2018 (euro-denominated)	0.37	%	708.8			631.0
2.15% 3-Year Senior Notes, Due 12/14/2018	2.35	%	450.0			450.0
2.40% 5-Year Senior Notes, Due 2/1/2019	2.59	%	900.0			900.0
Floating Rate 2-Year Senior Notes, Due 7/24/2019 (euro-denominated)	0.09	%	590.7			—
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	4.23	%	300.0			300.0
1.50% 5-Year Senior Notes, Due 12/1/2020 (euro-denominated)	1.62	%	502.1			447.0
5.00% 10-Year Senior Notes, Due 1/15/2021	3.24	%	400.0			400.0
4.50% 10-Year Senior Notes, Due 3/1/2021	4.97	%	1,000.0			1,000.0
3.60% 10-Year Senior Notes, Due 8/15/2021	4.68	%	1,100.0			1,100.0
3.30% 7-Year Senior Notes, Due 2/15/2022	3.43	%	800.0			800.0
2.15% 7-Year Senior Notes, Due 7/21/2022 (euro-denominated)	2.28	%	590.7			525.9
3.15% 10-Year Senior Notes, Due 1/15/2023	3.30	%	800.0			800.0
3.00% 7-Year Senior Notes, Due 4/15/2023	4.90	%	1,000.0			1,000.0
4.15% 10-Year Senior Notes, Due 2/1/2024	4.16	%	1,000.0			1,000.0
0.75% 8-Year Senior Notes, Due 9/12/2024 (euro-denominated)	0.94	%	1,181.4			1,051.7
2.00% 10-Year Senior Notes, Due 4/15/2025 (euro-denominated)	2.10	%	756.1			673.1
3.65% 10-Year Senior Notes, Due 12/15/2025	3.77	%	350.0			350.0
1.40% 8.5-Year Senior Notes, Due 1/23/2026 (euro-denominated)	1.53	%	827.0			—
2.95% 10-Year Senior Notes, Due 9/19/2026	3.19	%	1,200.0			1,200.0
1.45% 10-Year Senior Notes, Due 3/16/2027 (euro-denominated)	1.66	%	590.7			—
3.20% 10-Year Senior Notes, Due 8/15/2027	3.38	%	750.0			—
1.375% 12-Year Senior Notes, Due 9/12/2028 (euro-denominated)	1.46	%	708.8			631.0
1.95% 12-Year Senior Notes, Due 7/24/2029 (euro-denominated)	2.08	%	827.0			—
2.875% 20-Year Senior Notes, Due 7/24/2037 (euro-denominated)	2.94	%	827.0			—
5.30% 30-Year Senior Notes, Due 2/1/2044	5.37	%	400.0			400.0
4.10% 30-Year Senior Notes, Due 8/15/2047	4.23	%	750.0			—
Other			21.2			13.0

Total Borrowings at Par Value			22,131.0			16,701.0
Fair Value Hedge Accounting Adjustments			(43.2		)	(49.3		)
Unamortized Premium, Net			3.3			52.2
Unamortized Debt Issuance Costs			(98.4		)	(76.0		)

Total Borrowings at Carrying Value			21,992.7			16,627.9
Less: Short-term Obligations and Current Maturities			2,762.3			1,255.5

Long-term Obligations			$	19,230.4		$	15,372.4

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, the amortization of any debt issuance costs and, if applicable, adjustments related to hedging.

See Note 11 for fair value information pertaining to the company’s long-term obligations.

Credit Facilities

The company has a revolving credit facility with a bank group that provides for up to $2.50 billion of unsecured multi-currency revolving credit. The facility expires in July 2021. The agreement calls for interest at either a LIBOR-based rate, a EURIBOR-based rate (for funds drawn in Euro) 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 covenants in our revolving credit facility (the Facility) include a Consolidated Leverage Ratio (total debt-to-Consolidated EBITDA) and a Consolidated Interest Coverage ratio (Consolidated EBITDA to Consolidated Interest Expense), as such terms are defined in the Facility. Specifically, the company has agreed that, so long as any lender has any commitment under the Facility, any letter of credit is outstanding under the Facility, or any loan or other obligation is outstanding under the Facility, it will maintain a maximum Consolidated Leverage Ratio of 4.5:1.0 for the third and fourth quarter of 2017, with such maximum ratio stepping down to 4.0:1.0 for the first and second quarters of 2018 and then stepping down to 3.5:1.0 for the third quarter of 2018 and thereafter. The company has also agreed that so long as any lender has any commitment under the Facility or any letter of credit is outstanding under the Facility, or any loan or other obligation is outstanding under the Facility, it will maintain a minimum Consolidated Interest Coverage Ratio of 3.0:1.0 as of the last day of any fiscal quarter. As of September 30, 2017, no borrowings were outstanding under the facility, although available capacity was reduced by approximately $73 million as a result of outstanding letters of credit.

Commercial Paper Programs

The company has commercial paper programs pursuant to which it may issue and sell unsecured, short-term promissory notes (CP Notes). Under the U.S. program, a) maturities may not exceed 397 days from the date of issue and b) the 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. Under the euro program, maturities may not exceed 183 days and may be denominated in euro, U.S. dollars, Japanese yen, British pounds sterling, Swiss franc, Canadian dollars or other currencies. Under both programs, the CP Notes are issued at a discount from par (or premium to par, in the case of negative interest rates), or, alternatively, are sold at par and bear varying interest rates on a fixed or floating basis. As of September 30, 2017, outstanding borrowings under these programs were $1.30 billion, with a weighted average remaining period to maturity of 41 days and are classified as short-term obligations in the accompanying balance sheet.

Term Loan

In connection with the acquisition of Patheon (Note 2), the company entered into a $1.50 billion 364-day unsecured term loan facility. The term loan 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 term loan agreement contains affirmative, negative and financial covenants, and events of default customary for financings of this type. The financial covenants are consistent with those in the revolving credit facility described above.

Senior Notes

Interest on the floating rate senior notes is payable quarterly. Interest is payable annually on the other euro-denominated senior notes and semi-annually on all other senior notes. Each of the notes may be redeemed 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.

Thermo Fisher Scientific (Finance I) B.V., a wholly-owned finance subsidiary of the company issued the Floating Rate Senior Notes due 2018 included in the table above. This subsidiary has no independent function other than financing activities. The Floating Rate Senior Notes due 2018 are fully and unconditionally guaranteed by the company and no other subsidiaries of the company have guaranteed the obligations.

During the third quarter of 2017, the company issued the Floating Rate Senior Notes due 2019, the 1.40% Senior Notes due 2026, the 3.20% Senior Notes due 2027, the 1.95% Senior Notes due 2029, the 2.875% Senior Notes due 2037 and the 4.10% Senior Notes due 2047, included in the table above. The proceeds from these issuances, along with the proceeds of the term loan described above and the stock issuance described in Note 10, were used to fund the acquisition of Patheon (Note 2).

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 11 for additional information. The following table summarizes the outstanding interest rate swap arrangements on the company's senior notes at September 30, 2017:



	Aggregate Notional Amount		Pay Rate as of
(Dollars in millions)	Aggregate Notional Amount	Pay Rate	September 30, 2017		Receive Rate

4.50% Senior Notes due 2021	1,000.0	1-month LIBOR + 3.4420%	4.6792	%	4.50	%
3.60% Senior Notes due 2021	1,100.0	1-month LIBOR + 2.5150%	3.7494	%	3.60	%
3.00% Senior Notes due 2023	1,000.0	1-month LIBOR + 1.7640%	2.9984	%	3.00	%