Debt

Short-term debt

Short-term debt at September 30 consisted of:



(Millions of dollars)		2017		2016
Commercial paper borrowings		$	—	$	200
Current portion of long-term debt
4.900% Notes due April 15, 2018		200		—
1.450% Notes due May 15, 2017	(A)	—		300
1.750% Notes due November 8, 2016		—		500
Other		3		1
Total short-term debt		$	203	$	1,001


(A)	All or a portion of the aggregate principal amount outstanding was repurchased during the first quarter of 2017, as further discussed below.

The weighted average interest rates for short-term debt were 4.90% and 1.49% at September 30, 2017 and 2016, respectively.

Long-term debt

Long-Term Debt at September 30 consisted of:



(Millions of dollars)		2017		2016
1.800% Notes due December 15, 2017	(A) (C)	—		1,248
4.900% Notes due April 15, 2018		—		201
5.000% Notes due May 15, 2019	(A) (C)	—		498
2.133% Notes due June 6, 2019	(B)	723		—
0.368% Notes due June 6, 2019	(B)	823		—
6.375% Notes due August 1, 2019	(A) (C)	—		776
2.675% Notes due December 15, 2019	(A)	1,121		1,245
2.404% Notes due June 5, 2020	(B)	996		—
3.250% Notes due November 12, 2020		698		698
3.125% Notes due November 8, 2021		1,003		1,018
2.894% Notes due June 6, 2022	(B)	1,791		—
Floating Rate Notes due June 6, 2022	(B)	497		—
1.000% Notes due December 15, 2022	(D)	586		—
3.300% Notes due March 1, 2023	(C)	296		304
3.875% Notes due May 15, 2024	(A) (C)	182		417
3.363% Notes due June 6, 2024	(B)	1,736		—
3.734% Notes due December 15, 2024	(A)	1,367		1,740
1.900% Notes due December 15, 2026	(D)	585		—
3.700% Notes due June 6, 2027	(B)	2,381		—
7.000% Debentures due August 1, 2027		166		168
6.700% Debentures due August 1, 2028		164		167
6.000% Notes due May 15, 2039		246		246
5.000% Notes due November 12, 2040		296		297
4.875% Notes due May 15, 2044	(C)	331		333
4.685% Notes due December 15, 2044		1,189		1,190
4.669% Notes due June 6, 2047	(B)	1,484		—
Other long-term debt		3		4
Total Long-Term Debt		$	18,667	$	10,550


(A)	All or a portion of the aggregate principal amount outstanding was repurchased during the first quarter of 2017, as further discussed below.


(B)	Notes issued during the third quarter of fiscal year 2017, as further discussed below.


(C)	All or a portion of the aggregate principal amount outstanding was redeemed during the third quarter of 2017, as further discussed below.


(D)	Notes issued during the first quarter of fiscal year 2017, as further discussed below.

The aggregate annual maturities of long-term debt including interest during the fiscal years ending September 30, 2018 to 2022 are as follows: 2018 — $823 million; 2019 — $2.2 billion; 2020 — $2.8 billion; 2021 — $1.2 billion; 2022 — $3.8 billion.

Other current credit facilities

In January 2016, the Company replaced an existing $1 billion syndicated credit facility with a $1.5 billion syndicated credit facility. During the first quarter of fiscal year 2017, the Company extended the expiration date of this credit facility to January 2022 from the original expiration date of January 2021. There were no borrowings outstanding under this credit facility at September 30, 2017. The credit facility, under which the Company may issue up to $100 million in letters of credit, can be used for general corporate purposes. It includes a provision that enables BD, subject to additional commitments made by the lenders, to access up to an additional $500 million in financing through the facility for a maximum aggregate commitment of $2 billion. The credit facility includes a single financial covenant that requires BD to maintain an interest expense coverage ratio of not less than 4-to-1 for the most recent four consecutive fiscal quarters. The Company was in compliance with this covenant as of September 30, 2017. The Company will replace this existing syndicated credit facility with a five-year senior unsecured revolving credit facility upon the closing of the Bard acquisition, as further discussed below. In addition, the Company has informal lines of credit outside of the United States.

First Quarter Fiscal Year 2017 Debt-Related Transactions

In December 2016, the Company issued euro-denominated debt consisting of 500 million euros of 1.000% notes and 500 million euros of 1.900% notes. The Company used the net proceeds from this long-term debt offering, together with other sources of liquidity, to fund the Company's repurchase of certain of its senior notes outstanding. Under this cash tender offer, the Company repurchased all or a portion of the aggregate principal amounts of certain of its long-term notes outstanding, totaling $1.689 billion, at an aggregate market price of $1.764 billion. The carrying value of these long-term notes was $1.727 billion, and the Company recognized a loss on this debt extinguishment of $42 million, which was recorded in December 2016 as Other income (expense), net, on the Company’s consolidated statements of income.

Third Quarter Fiscal Year 2017 Debt-Related Transactions

In connection with the Company's agreement to acquire Bard, as previously discussed in Note 9, the Company's capital structure was impacted in the third quarter by the debt-related transactions discussed below.


•	The Company entered into a three-year senior unsecured term loan facility of $2.25 billion. The proceeds from this facility may only be used to fund a portion of the cash consideration for the Bard acquisition, as well as the fees and expenses incurred in connection with this acquisition, which is expected to close in the fourth calendar quarter of 2017.

•

The Company also entered into a five-year senior unsecured revolving credit facility that will provide borrowing of up to $2.25 billion when the facility becomes effective upon the closing of the Bard acquisition. The facility, which will expire in May 2022, will replace the syndicated credit facility the Company currently has in place, as discussed above. The Company intends to use the new revolving facility to fund general corporate needs and to redeem, repurchase or defease certain of Bard's outstanding senior unsecured notes that will be assumed upon the closing of the acquisition.

•

The Company issued senior unsecured U.S. notes with an aggregate principal amount of $9.675 billion. If the Company's acquisition of Bard does not close by April 23, 2018, or if the agreement to acquire Bard is terminated prior to this date, the Company will be required to redeem all of the senior unsecured U.S. notes issued as detailed above, except for the notes which are due in 2019. The notes would be redeemed at a special mandatory redemption price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest to, but excluding, the redemption date.


•	The Company issued Euro-denominated debt consisting of 700 million euros of 0.368% Notes due June 6, 2019.

•

The Company redeemed all or a portion of the aggregate principal amounts of certain of its long-term senior notes outstanding, totaling $1.717 billion, at an aggregate market price of $1.776 billion. The carrying value of these long-term notes was $1.745 billion and the Company recognized a loss on this debt extinguishment of $31 million, which was recorded in June 2017 as Other income (expense), net, on the Company’s consolidated statements of income.


•	Upon securing the permanent financing arrangements discussed above, an agreement for $15.7 billion of fully committed bridge financing that was entered into concurrently with the execution of the agreement to acquire Bard was terminated.

Also in connection with the Company's agreement to acquire Bard, the Company commenced offers to exchange certain outstanding notes issued by Bard for a like-amount of new notes to be issued by the Company. The offers are conditioned upon the closing of the Bard acquisition and the expiration of these offers will be extended until the acquisition closes. The aggregate principal amounts of Bard notes which have been validly tendered for notes issued by the Company since the offers were commenced in May are provided below.



(Millions of dollars)	Aggregate Principal Amount		Principal Amount Accepted for Exchange
4.400% Notes due January 15, 2021	$	500	$	428
3.000% Notes due May 15, 2026	500		470
6.700% Notes due December 1, 2026	150		137
Total	$	1,150	$	1,035

Capitalized interest

The Company capitalizes interest costs as a component of the cost of construction in progress. A summary of interest costs and payments for the years ended September 30 is as follows:



(Millions of dollars)	2017		2016		2015
Charged to operations	$	521	$	388	$	371
Capitalized	32		30		30
Total interest costs	$	553	$	418	$	401
Interest paid, net of amounts capitalized	$	435	$	392	$	313