Short Term Debt Instruments

9 Months Ended

Jul. 31, 2014

Line of Credit Facility [Abstract]

Short-Term Debt Instruments

Short-Term Debt Instruments

We have an $850 million five-year revolving syndicated credit facility that expires on October 1, 2017. We pay an annual fee of $35,000 plus 8.5 basis points for any unused amount. The facility provides a line of credit for letters of credit of $10 million of which $1.8 million and $2.1 million were issued and outstanding as of July 31, 2014 and October 31, 2013, respectively. These letters of credit are used to guarantee claims from self-insurance under our general and automobile liability policies. The credit facility bears interest based on the 30-day London Interbank Offered Rate (LIBOR) plus from 75 to 125 basis points, based on our credit ratings. Amounts borrowed are continuously renewable until the expiration of the facility in 2017 provided that we are in compliance with all terms of the agreement.

We have an $850 million unsecured CP program that is backstopped by the revolving syndicated credit facility. The amounts outstanding under the revolving syndicated credit facility and the CP program, either individually or in the aggregate, cannot exceed $850 million. The notes issued under the CP program may have maturities not to exceed 397 days from the date of issuance and bear interest based on, among other things, the size and maturity date of the note, the frequency of the issuance and our credit ratings, plus a spread of 5 basis points. Any borrowings under the CP program rank equally with our other unsecured debt. The notes under the CP program are not registered and are offered and issued pursuant to an exemption from registration. Due to the seasonal nature of our business, amounts borrowed can vary significantly during the period.

As of July 31, 2014, we had $490 million of notes outstanding under the CP program, as included in “Short-term debt” in “Current Liabilities” in the Condensed Consolidated Balance Sheets with original maturities ranging from 7 to 60 days from their dates of issuance at a weighted average interest rate of .17%. As of October 31, 2013, our outstanding notes under the CP program, included in the Condensed Consolidated Balance Sheets as stated above, were $400 million.

We did not have any borrowings under the revolving syndicated credit facility for the three or nine months ended July 31, 2014. A summary of the short-term debt activity under our CP program for the three months and nine months ended July 31, 2014 is as follows.

In millions	Three Months			Nine Months
Minimum amount outstanding during period	$	330		$	325
Maximum amount outstanding during period	$	495		$	625
Minimum interest rate during period	.11		%	.10		%
Maximum interest rate during period	.18		%	.43		%
Weighted average interest rate during period	.16		%	.20		%

Our five-year revolving syndicated credit facility’s financial covenants require us to maintain a ratio of total debt to total capitalization of no greater than 70%. At July 31, 2014, our actual ratio was 56%.