Bank Financing and Debt

3 Months Ended

Mar. 31, 2017

6) BANK FINANCING AND DEBT

The following table sets forth the Company’s debt.



	At			At
	March 31, 2017			December 31, 2016
Commercial paper		$	30		$	450
Senior debt (1.95% - 7.875% due 2017 - 2045) ^(a)		8,851			8,850
Obligations under capital leases		72			75
Total debt		8,953			9,375
Less commercial paper		30			450
Less current portion of long-term debt		23			23
Total long-term debt, net of current portion		$	8,900		$	8,902

(a) At March 31, 2017 and December 31, 2016, the senior debt balances included (i) a net unamortized discount of $50 million and $52 million, respectively, (ii) unamortized deferred financing costs of $42 million and $43 million, respectively, and (iii) an increase in the carrying value of the debt relating to previously settled fair value hedges of $4 million and $5 million, respectively. The face value of the Company’s senior debt was $8.94 billion at both March 31, 2017 and December 31, 2016.

At March 31, 2017, the Company classified $400 million of debt maturing in July 2017 as long-term debt on the Consolidated Balance Sheet, reflecting its intent and ability to refinance this debt on a long-term basis.

Commercial Paper

The Company had outstanding commercial paper borrowings under its $2.5 billion commercial paper program of $30 million and $450 million at March 31, 2017 and December 31, 2016, respectively, each with maturities of less than 45 days. The weighted average interest rate for these borrowings was 1.20% at March 31, 2017 and 0.98% at December 31, 2016.

Credit Facility

At March 31, 2017, the Company had a $2.5 billion revolving credit facility (the “Credit Facility”) which expires in June 2021. The Credit Facility requires the Company to maintain a maximum Consolidated Leverage Ratio of 4.5x at the end of each quarter as further described in the Credit Facility. At March 31, 2017, the Company’s Consolidated Leverage Ratio was approximately 2.8x.

The Consolidated Leverage Ratio is the ratio of the Company’s indebtedness from continuing operations, adjusted to exclude certain capital lease obligations, at the end of a quarter, to the Company’s Consolidated EBITDA for the trailing four consecutive quarters. Consolidated EBITDA is defined in the Credit Facility as operating income plus interest income and before depreciation, amortization and certain other noncash items.

The Credit Facility is used for general corporate purposes. At March 31, 2017, the Company had no borrowings outstanding under the Credit Facility and the remaining availability under the Credit Facility, net of outstanding letters of credit, was $2.49 billion.