DEBT AND INTEREST

3 Months Ended

Mar. 31, 2020

DEBT AND INTEREST

DEBT AND INTEREST

5. DEBT AND INTEREST

Short-term Debt

The following table provides the components of the Company’s short-term debt obligations as of March 31, 2020 and December 31, 2019.

	March 31		December 31
(millions)	2020		2019
Short-term debt
Commercial paper		$1,000.9		$55.1
Notes payable		36.2		24.6
Long-term debt, current maturities		1.2		300.9
Total		$1,038.3		$380.6

Line of Credit

As of March 31, 2020, the Company had a $2.0 billion multi-year credit facility which expires in November 2022. The credit facility has been established with a diverse syndicate of banks and supports the Company’s U.S. and Euro commercial paper programs. There were no borrowings under the Company’s credit facility as of either March 31, 2020 or December 31, 2019.

Commercial Paper

The Company’s commercial paper program is used as a source of liquidity and consists of a $2.0 billion U.S. commercial paper program and a $2.0 billion Euro commercial paper program. The maximum aggregate amount of commercial paper that may be issued by the Company under its commercial paper programs may not exceed $2.0 billion.

As of March 31, 2020, the Company had $297.5 million (€270.0 million) of commercial paper outstanding under its Euro program and $703.4 million outstanding under its U.S. program. As of December 31, 2019, the Company had $55.1 million (€50.0 million) of commercial paper outstanding under its Euro program.

Notes Payable

The Company’s notes payable consists of uncommitted credit lines with major international banks and financial institutions, primarily to support global cash pooling structures. As of March 31, 2020 and December 31, 2019, the Company had $36.2 million and $24.6 million, respectively, outstanding under these credit lines.

Long-term Debt

The following table provides the components of the Company’s long-term debt obligations, including current maturities, as of March 31, 2020 and December 31, 2019.

	Maturity	March 31		December 31
(millions)	by Year	2020		2019
Long-term debt
Public notes (2020 principal amount)
Five year 2015 senior notes ($300 million)	2020		$-		$300.0
Ten year 2011 senior notes ($1.02 billion)	2021		1,018.6		1,018.3
Five year 2017 senior notes ($500 million)	2022		498.0		497.8
Seven year 2016 senior notes ($400 million)	2023		398.6		398.5
Seven year 2016 senior notes (€575 million)	2024		629.4		628.4
Ten year 2015 senior notes (€575 million)	2025		630.8		630.0
Ten year 2016 senior notes ($750 million)	2026		744.7		744.5
Ten year 2017 senior notes ($500 million)	2027		495.6		495.4
Ten year 2020 senior notes ($750 million)	2030		766.6		-
Thirty year 2011 senior notes ($458 million)	2041		452.0		451.9
Thirty year 2016 senior notes ($250 million)	2046		246.3		246.2
Thirty year 2017 senior notes ($700 million)	2047		610.7		610.4
Private notes (2020 principal amount)
Series B private placement senior notes ($250 million)	2023		249.6		249.6
Finance lease obligations and other			4.3		3.4
Total debt			6,745.2		6,274.4
Long-term debt, current maturities			(1.2)		(300.9)
Total long-term debt			$6,744.0		$5,973.5

Public Notes

In March 2020, the Company issued $750 million aggregate principal ten year fixed rate notes with a coupon rate of 4.80%, with an effective interest rate of 4.58%. The proceeds will be used to repay a portion of the Company’s outstanding commercial paper and for general corporate purposes.

The Company’s public notes may be redeemed by the Company at its option at redemption prices that include accrued and unpaid interest and a make-whole premium. Upon the occurrence of a change of control accompanied by a downgrade of the public notes below investment grade rating, within a specified time period, the Company would be required to offer to repurchase the public notes at a price equal to 101% of the aggregate principal amount thereof, plus any accrued and unpaid interest to the date of repurchase. The public notes are senior unsecured and unsubordinated obligations of the Company and rank equally with all other senior and unsubordinated indebtedness of the Company.

Private Notes

The Company’s private notes may be redeemed by the Company at its option at redemption prices that include accrued and unpaid interest and a make-whole premium. Upon the occurrence of specified changes of control involving the Company, the Company would be required to offer to repurchase the private notes at a price equal to 100% of the aggregate principal amount thereof, plus any accrued and unpaid interest to the date of repurchase. Additionally, the Company would be required to make a similar offer to repurchase the private notes upon the occurrence of specified merger events or asset sales involving the Company, when accompanied by a downgrade of the private notes below investment grade rating, within a specified time period. The private notes are unsecured senior obligations of the Company and rank equal in right of payment with all other senior indebtedness of the Company. The private notes shall be unconditionally guaranteed by subsidiaries of the Company in certain circumstances, as described in the note purchase agreement as amended.

Covenants

The Company is in compliance with its debt covenants as of March 31, 2020.

Net Interest Expense

Interest expense and interest income recognized during the first quarter of 2020 and 2019 were as follows:

	First Quarter Ended
	March 31
(millions)	2020		2019
Interest expense		$52.7		$56.1
Interest income		(4.6)		(6.7)
Interest expense, net		$48.1		$49.4

Subsequent Events

In April 2020, the Company executed a $500 million 364-day revolving credit agreement to be used for general corporate purposes with a diverse syndicate of banks. In addition, the Company executed a $305 million term credit agreement that expires on June 15, 2020.