Note

Notes Payable, Long-Term Debt

and Lines of Credit

Notes Payable

Notes payable were

$31,468

and

$37,334

December 2, 2017

and

December 3, 2016,

respectively. This amount mainly represents various foreign subsidiaries’ other short-term borrowings that were

not

part of committed lines. The weighted-average interest rates on short-term borrowings were

11.0

percent,

13.7

percent and

8.1

percent in

2017,

2016

and

2015,

respectively. Fair values of these short-term obligations approximate their carrying values due to their short maturity. There were

funds drawn from the short-term committed lines at

December 2, 2017.

Long-Term Debt

	Weighted-Average
	Interest Rate at			Fiscal Year		Balance at			Balance at
Long-Term Debt	December 2, 2017			Maturity Date		December 2, 2017			December 3, 2016
Revolving credit facility		3.38	%		2022	$	-		$	-
Term Loan B 1		3.90	%		2024		2,125,993			-
Public Bond 2		3.62	%		2027		293,991			-
Term Loan A							-			265,373
Senior Notes, Series A							-			17,013
Senior Notes, Series B							-			33,151
Senior Notes, Series C							-			36,325
Senior Notes, Series D							-			64,795
Senior Notes, Series E							-			248,813
Other							458			467
Total debt						$	2,420,442		$	665,937

Less: current maturities							(21,515	)		(80,178	)
Total long-term debt, excluding current maturities						$	2,398,927		$	585,759

Term Loan B, due on

October 20, 2024,

$2,150,000

variable rate at the London Interbank Offered Rate (LIBOR) plus

2.25

percent (

3.53

percent at

December 2, 2017);

$1,050,000

swapped to a fixed rate of

4.28

percent.

Public Bond, due

February 15, 2027,

$300,000

4.00

percent fixed;

$150,000

swapped to a variable rate of

-month LIBOR plus

1.86

percent

October 20, 2017,

we entered into a secured term loan credit agreement (“

Term Loan B Credit Agreement”) with a consortium of financial institutions under which we established a

$2,150,000

term loan (“Term Loan B”) that we used to repay existing indebtedness, finance working capital needs, finance acquisitions, and for general corporate purposes. The Term Loan B Credit Agreement is secured by a security interest in substantially all of the personal property assets of the Company and each Guarantor, including

100%

of the equity interests in certain domestic subsidiaries and

65%

of the equity interests of

first

-tier foreign subsidiaries together with certain domestic material real property. At

December 2, 2017

a balance of

$2,150,000

was drawn on the Term Loan B. The interest rate on the Term Loan B is payable at the LIBOR rate plus

2.25

percent (

3.53

percent at

December 2, 2017).

The interest rate is based on a leverage grid. The Term Loan B Credit Agreement expires on

October 20, 2024.

We entered into interest rate swap agreements to hedge

$1,050,000

of the Term Loan B to a fixed interest rate of

4.28

percent. We are subject to mandatory prepayments in the

first

quarter of each fiscal year equal to

50%

of Excess Cash Flow, as defined in the Term Loan B Credit Agreement, of the prior fiscal year less any voluntary prepayments made during that fiscal year. The Excess Cash Flow Percentage (ECF Percentage) shall be reduced to

25%

when our Secured Leverage Ratio is below

4.25:1.00

and to

when our Secured Leverage Ratio is below

3.75:1.00.

The

first

measurement period is fiscal year

2018

and the

first

prepayment is due in the

first

fiscal quarter of

2019.

We have

not

estimated the prepayment for the

first

quarter of fiscal year

2019

or for future years in the table above, and have listed only the scheduled amortization payments.

December 16, 2016

and

February 24, 2017

our Senior Notes, Series A and B matured, respectively. On

October 20, 2017

we repaid the Term Loan A and Senior Notes, Series C, D & E, wit

h proceeds from the Term Loan B issuance. Interest rate swaps associated with Senior Notes, Series C and E, were terminated with the repayment of these instruments. We recognized a

$168

net gain related to the termination of these interest rate swaps which was recorded as other income, net in our Consolidated Statements of Income. We paid a make whole premium of

$25,535

which was recorded as other expense, net in our Consolidated Statements of Income. Proceeds from the issuance of the Term Loan B were also used to acquire Royal Adhesives. See Note

for further discussion of our acquisition of Royal Adhesives.

February 14, 2017,

we issued

$300,000

aggregate principal of

-year unsecured public notes (“

Public Notes”) due

February 15, 2027

with a fixed coupon of

4.00

percent. Proceeds from this debt issuance were used to repay

$138,000

outstanding under the revolving credit facility at that time and prepay

$158,750

of our Term Loan A. We entered into interest rate swap agreements to hedge

$150,000

of the

$300,000

Public Notes to a variable interest rate of

-month LIBOR plus

1.86

percent. As a result of applying shortcut method fair value hedge accounting, the change in the fair value of the interest rate swap and an equivalent amount for the change in the fair value of the debt will be reflected in other income (expense).

We adopted ASU

No.

2015

03,

Interest-Imputation of Interest (Subtopic

835

): Simplifying the Presentation of Debt Issue Costs

, during the quarter ended

March 4, 2017

on a retrospective basis. The impact of adopting ASU

No.

2015

on our financial statements was the reclassification of deferred debt issuance costs related to our long-term debt, with the exception of our revolving credit facility, from an asset to a direct deduction to the corresponding debt. Reclassifications from an asset to a direct deduction to the corresponding debt of

$2,386

was included in our Consolidated Balance Sheets as of

December 3, 2016.

Long-term debt had an estimated fair value

$2,452,034

and

$693,283

as of

December 2, 2017

and

December 3, 2016,

respectively. The fair value of long-term debt is based on quoted market prices for the same or similar issues or on the current rates offered for debt of similar maturities. The estimated fair value of these long-term obligations is

not

necessarily indicative of the amount that would be realized in a current market exchange.

Lines of Credit

As of

December 2, 2017,

lines of credit were as follows:

Term		Committed				Drawn				Available
Long-term lines of credit		$	400,000			$	-			$	398,257

September 29, 2017,

we amended our revolving credit facility to become effective with consummation of our acquisition of Royal Adhesives.

The revolving credit agreement is now secured along with the Term Loan B Credit Agreement, by a

first

-priority security interest in substantially all of the personal property assets of the Company and each Guarantor, including

100%

of the equity interests in certain domestic subsidiaries and

65%

of the equity interests of

first

-tier foreign subsidiaries. Interest on the revolving credit facility is payable at the LIBOR plus

2.00

percent (

3.27

percent at

December 2, 2017).

A facility fee of

0.30

percent of the unused commitment under the revolving credit facility is payable quarterly. The interest rates and the facility fee are based on a leverage grid. The revolving credit facility matures

April 12, 2022.

Our revolving credit facility accounted for the entire committed lines of credit.

The secured, multi-currency revolving credit facility can be drawn upon for general corporate purposes up to a maximum of

$400,000,

less issued letters of credit. At

December 2, 2017,

letters of credit reduced the available amount under the revolving credit facility by

$1,743.

The credit agreement expires on

April 12, 2022.

The secu

red Term Loan B Credit Agreement and secured revolving credit facility are subject to certain covenants and restrictions. Restrictive covenants include, but are

not

limited to, limitations on secured and unsecured borrowings, intercompany transfers and investments,

third

party investments, dispositions of assets, leases, liens, dividends and distributions, and contains a maximum secured debt to trailing

twelve

months EBITDA requirement. Certain covenants becomes less restrictive after meeting leverage or other financial ratios. In addition, we cannot be a member of any consolidated group as defined for income tax purposes other than with our subsidiaries. At

December 2, 2017

all financial covenants were met. At

December 2, 2017,

all financial covenants were met.

Maturities of long-term debt for the next

five

fiscal years follow:

Fiscal Year		2018				2019				2020				2021				2022				Thereafter
Long-term debt obligations		$	21,515			$	21,500			$	21,500			$	21,500			$	21,500			$	2,312,927