NOTE E – BORROWINGS AND CREDIT ARRANGEMENTS

We had total debt of $5.682 billion as of September 30, 2017 and $5.484 billion as of December 31, 2016. The debt maturity schedule for the significant components of our long-term debt obligations is presented below:



in millions, except interest rates	Maturity Date	As of
in millions, except interest rates	Maturity Date	September 30, 2017			December 31, 2016
January 2017 5.125% Notes	January 2017	$	—		$	250
October 2018 2.650% Notes	October 2018	600			600
January 2020 6.000% Notes	January 2020	850			850
May 2020 2.850% Notes	May 2020	600			600
May 2022 3.375% Notes	May 2022	500			500
May 2025 3.850% Notes	May 2025	750			750
October 2023 4.125% Notes	October 2023	450			450
November 2035 6.250% Notes	November 2035	350			350
January 2040 7.375% Notes	January 2040	300			300
August 2018 Term Loan	August 2018	—			150
August 2020 Term Loan	2018 - 2020	—			600
Debt Discount	2018 - 2040	(7		)	(8		)
Deferred Financing Costs	2018 - 2040	(20		)	(24		)
Interest Rate Swaps	2020 - 2023	42			51
Capital Lease Obligation	2018 - 2020	1			1
Long-term debt		$	4,416		$	5,420



Note:	The table above does not include unamortized amounts related to interest rate contracts designated as cash flow hedges.

Revolving Credit Facility

On August 4, 2017, we entered into a $2.250 billion revolving credit facility (the 2017 Facility) with a global syndicate of commercial banks and terminated our previous $2.000 billion revolving credit facility (the 2015 Facility), which was scheduled to mature April 2020. The 2017 Facility matures on August 4, 2022. Eurodollar and multicurrency loans under the 2017 Facility bear interest at LIBOR plus an interest margin of between 0.90 percent and 1.50 percent, based on our corporate credit ratings and consolidated leverage ratio (1.10 percent as of September 30, 2017). Under the credit agreement for the 2017 Facility (the 2017 Credit Agreement), we are required to pay a facility fee (0.15 percent as of September 30, 2017) based on our credit ratings and the total amount of revolving credit commitment, regardless of usage of the 2017 Facility. This facility provides backing for the commercial paper program described below. There were no borrowings outstanding under the 2017 Facility as of September 30, 2017 and no borrowings outstanding under the 2015 Facility as of December 31, 2016.

The 2017 Facility agreement in place requires that we maintain certain financial covenants, as follows:



	Covenant Requirement as of September 30, 2017	Actual as of September 30, 2017
Maximum leverage ratio (1)	3.5 times	2.3 times


(1)	Ratio of total debt to consolidated EBITDA, as defined by the credit agreement, for the preceding four consecutive fiscal quarters.

The 2017 Credit Agreement provides for an exclusion from the calculation of consolidated EBITDA, as defined by such agreement, through the agreed maturity, of any non-cash charges and up to $500 million in restructuring charges and restructuring-related expenses related to our current or future restructuring plans. As of September 30, 2017, we had $476 million of the restructuring charge exclusion remaining. In addition, any cash litigation payments (net of any cash litigation receipts), as defined by the 2017 Credit Agreement, are excluded from the calculation of consolidated EBITDA and any new debt issued to fund any tax deficiency payments is excluded from consolidated total debt, as defined in the 2017 Credit Agreement, provided that the sum of any excluded net cash litigation payments and any new debt issued to fund any tax deficiency payments does not exceed $2.624 billion in the aggregate. As of September 30, 2017, we had $2.358 billion of the combined legal and debt exclusion remaining.

As of and through September 30, 2017, we were in compliance with the required covenants.

Any inability to maintain compliance with these covenants could require us to seek to renegotiate the terms of our credit facility or seek waivers from compliance with these covenants, both of which could result in additional borrowing costs. Further, there can be no assurance that our lenders would agree to such new terms or grant such waivers.

Commercial Paper

In June 2017, we launched a commercial paper program that allowed the Company to have a maximum of $2.000 billion in commercial paper outstanding. In August 2017, we increased our commercial paper program’s maximum to $2.250 billion, in line with the increased size of the 2017 Facility. As of September 30, 2017 there was $1.260 billion of commercial paper outstanding. The commercial paper program is backed by the 2017 Facility. Commercial paper issued as of September 30, 2017 had a weighted average maturity of 29 days and a weighted average yield of 1.65 percent.

Term Loans

As of September 30, 2017, we had no amounts outstanding under our unsecured term loan facilities and $750 million outstanding as of December 31, 2016. These facilities include an unsecured term loan facility maturing August 2018 (August 2018 Term Loan) and an unsecured term loan facility maturing August 2020 (August 2020 Term Loan). The August 2018 Term Loan had $150 million outstanding as of December 31, 2016 and was fully repaid as of June 30, 2017. The August 2020 Term Loan had $600 million outstanding as of December 31, 2016 and was fully repaid as of September 30, 2017.

Senior Notes

We had senior notes outstanding of $4.400 billion as of September 30, 2017 and $4.650 billion as of December 31, 2016. On January 12, 2017, we used our existing credit facilities to repay the $250 million plus interest of our senior notes due in January 2017. Our senior notes were issued in public offerings, are redeemable prior to maturity and are not subject to any sinking fund requirements. Our senior notes are unsecured, unsubordinated obligations and rank on parity with each other. These notes are effectively junior to borrowings under our credit and security facility and to the extent borrowed by our subsidiaries, to liabilities of our subsidiaries (see Other Arrangements below).

Other Arrangements

As of December 31, 2016, we maintained a $300 million credit and security facility secured by our U.S. trade receivables maturing on June 9, 2017. On February 7, 2017, we amended the terms of this credit and security facility, including increasing the facility size to $400 million and extending the facility maturity date to February 2019. We had no borrowings outstanding under this facility as of September 30, 2017 and $60 million as of December 31, 2016.

We have accounts receivable factoring programs in certain European countries that we account for as sales under FASB ASC Topic 860, Transfers and Servicing. These agreements provide for the sale of accounts receivable to third parties, without recourse, of up to $449 million as of September 30, 2017. We have no retained interests in the transferred receivables, other than collection and administrative responsibilities and, once sold, the accounts receivable are no longer available to satisfy creditors in the event of bankruptcy. We de-recognized $167 million of receivables as of September 30, 2017 at an average interest rate of 1.6 percent and $152 million as of December 31, 2016 at an average interest rate of 1.8 percent.

In addition, we have uncommitted credit facilities with a commercial Japanese bank that provide for borrowings, promissory notes discounting and receivables factoring of up to 22.0 billion Japanese yen (approximately $196 million as of September 30, 2017). We de-recognized $162 million of notes receivable and factored receivables as of September 30, 2017 at an average interest rate of 1.3 percent and $149 million of notes receivable as of December 31, 2016 at an average interest rate of 1.6 percent. De-recognized accounts and notes receivable are excluded from trade accounts receivable, net in the accompanying unaudited condensed consolidated balance sheets.

We had outstanding letters of credit of $37 million as of September 30, 2017 and $44 million as of December 31, 2016, which consisted primarily of bank guarantees and collateral for workers' compensation insurance arrangements. As of September 30, 2017 and December 31, 2016, none of the beneficiaries had drawn upon the letters of credit or guarantees; accordingly, we did not recognize a related liability for our outstanding letters of credit in our consolidated balance sheets as of September 30, 2017 or December 31, 2016. We believe we will generate sufficient cash from operations to fund these arrangements and intend to fund these arrangements without drawing on the letters of credit.

As of and through September 30, 2017, we were in compliance with all the required covenants related to our debt obligations. For additional information regarding the terms of our debt agreements, refer to Note F - Borrowings and Credit Arrangements of the consolidated financial statements in our most recent Annual Report on Form 10-K.