NOTE 5. FINANCING AND CAPITAL

Financing

The carrying value of the components of our long-term debt were as follows ($ in millions):



	June 29, 2018		December 31, 2017
U.S. dollar-denominated commercial paper	$	339.8	$	665.1
Euro-denominated commercial paper	275.2		282.7
U.S. dollar variable interest rate term loan due 2019	500.0		500.0
Yen variable interest rate term loan due 2022	124.5		122.4
1.80% senior unsecured notes due 2019	299.3		298.9
2.35% senior unsecured notes due 2021	746.5		745.9
3.15% senior unsecured notes due 2026	891.5		891.0
4.30% senior unsecured notes due 2046	546.8		546.8
Other long-term debt	3.1		3.4
Long-term debt	3,726.7		4,056.2
Less: current portion of long-term debt	799.3		—
Long-term debt, net of current maturities	$	2,927.4	$	4,056.2

Unamortized debt discounts, premiums and issuance costs of $16.1 million and $18.2 million as of June 29, 2018 and December 31, 2017, respectively, are netted against the aggregate principal amounts of the components of debt table above. Refer to Note 9 of our 2017 Annual Report on Form 10-K for further details of our debt financing.

We generally satisfy any short-term liquidity needs that are not met through operating cash flows and available cash primarily through issuances of commercial paper under our U.S. dollar and Euro-denominated commercial paper programs (“Commercial Paper Programs”). Credit support for the Commercial Paper Programs is provided by a five-year $1.5 billion senior unsecured revolving credit facility that expires on June 16, 2021 (the “Revolving Credit Facility”) which can also be used for working capital and other general corporate purposes. As of June 29, 2018, no borrowings were outstanding under the Revolving Credit Facility.

The details of our Commercial Paper Programs as of June 29, 2018 are as follows ($ in millions):



	Carrying value		Annual effective rate		Weighted average remaining maturity (in days)
U.S. dollar-denominated commercial paper	$	339.8	2.39	%	9
Euro-denominated commercial paper	$	275.2	(0.10	)%	76

We classified our borrowings outstanding under the Commercial Paper Programs as long-term debt in the accompanying Consolidated Condensed Balance Sheets as we had the intent and ability, as supported by availability under the Revolving Credit Facility referenced above, to refinance these borrowings for at least one year from the balance sheet date.

As of June 29, 2018, we were in compliance with all of our covenants.

Capital

On June 29, 2018, we issued 1,380,000 shares of 5.0% Mandatory Convertible Preferred Stock, Series A (“MCPS”) with a par value of $0.01 per share and liquidation preference of $1,000 per share, which included the exercise of an over-allotment option in full to purchase 180,000 shares. We received $1.34 billion in proceeds from the issuance of the MCPS, net of $36 million of issuance costs. We will use the net proceeds from the issuance of MCPS to fund our acquisition activities and for general corporate purposes, including repayment of debt, working capital and capital expenditures. We expect to pay up to an additional $1.5 million in issuance costs in the third quarter of 2018.

Each outstanding share of MCPS will convert automatically on July 1, 2021 (“the mandatory conversion date”) into between 10.8554 and 13.2979 common shares, subject to anti-dilution adjustments. The number of shares of our common stock issuable on conversion will be determined based on the average volume weighted average price per share of our common stock over the 20 consecutive trading day period preceding the mandatory conversion date. At any time prior to July 1, 2021, holders may elect to convert each share of the MCPS into shares of common stock at the rate of 10.8554, subject to anti-dilution adjustments. In the event of a fundamental change, the MCPS will convert at the fundamental change rates specified in the certificate of designations, and the holders of MCPS would be entitled to a fundamental change make-whole dividend.

We may pay declared dividends in cash or, subject to certain limitations, in shares of our common stock, or in any combination of cash and shares of our common stock in January, April, July and October of each year, commencing on October 1, 2018 and ending on July 1, 2021. Dividends that are declared will be payable on the dividend payment dates to holders of record on the immediately preceding March 15, June 15, September 15 and December 15 (each a “record date”), whether or not such holders convert their shares, or such shares are automatically converted, after the corresponding record date.

Dividends on our MCPS are payable on a cumulative basis when, as and if declared by our Board, at an annual rate of 5.0% of the liquidation preference of $1,000 per share (equivalent to $50.00 annually per share). The dividend on the MCPS for the first dividend period will be $12.78 per share and will be payable, when, as and if declared, on October 1, 2018 to the holders of record at the close of business on September 15, 2018. No dividends on our MCPS were declared as of June 29, 2018.

Subsequent Event

On July 20, 2018, we prepaid $325 million of our outstanding U.S variable interest rate term loan due in 2019. There were no prepayment penalties associated with this payment.