DEBT

Short-term borrowings and current portion of long-term debt at December 31, 2018, and 2017 consisted of the following:



	December 31, 2018			December 31, 2017
Zero-coupon convertible subordinated notes	$	8.7		$	8.8
2.50% Senior Notes due 2018	—			400.0
Debt issuance costs	(0.5		)	(1.4		)
Capital lease obligation	7.9			8.3
Current portion of note payable	1.8			1.8
Total short-term borrowings and current portion of long-term debt	$	17.9		$	417.5

Long-term debt at December 31, 2018, and 2017 consisted of the following:



	December 31, 2018			December 31, 2017
4.625% Senior Notes due 2020	597.0			604.1
2.625% Senior Notes due 2020	500.0			500.0
3.75% Senior Notes due 2022	500.0			500.0
3.20% Senior Notes due 2022	500.0			500.0
4.00% Senior Notes due 2023	300.0			300.0
3.25% Senior Notes due 2024	600.0			600.0
3.60% Senior Notes due 2025	1,000.0			1,000.0
3.60% Senior Notes due 2027	600.0			600.0
4.70% Senior Notes due 2045	900.0			900.0
2014 Term loan	—			72.0
2017 Term loan	527.1			750.0
Debt issuance costs	(40.3		)	(48.2		)
Capital leases	51.0			57.8
Note payable	7.1			8.9
Total long-term debt	$	6,041.9		$	6,344.6

Credit Facilities

On September 15, 2017, the Company entered into a new $750.0 term loan which will mature on September 15, 2022. The 2017 term loan balance at December 31, 2018, was $527.1 and at December 31, 2017 was $750.0.

On December 19, 2014, the Company entered into a five-year term loan credit facility in the principal amount of $1,000.0 for the purpose of financing a portion of the cash consideration and the fees and expenses in connection with the transactions contemplated by the November 2, 2014 Merger Agreement to acquire Covance. The term loan credit facility was advanced in full on the Covance acquisition date and was amended on July 13, 2016 and further amended on September 15, 2017. The term loan credit facility was fully repaid in 2018. The 2014 term loan balance at December 31, 2017, was $72.0.

On September 15, 2017, the Company also entered into an amendment and restatement of its existing senior unsecured revolving credit facility, which was originally entered into on December 21, 2011, was amended and restated on December 15, 2015 and was further amended on July 13, 2016. The senior revolving credit facility consists of a five-year revolving facility in the principal amount of up to $1,000.0, with the option of increasing the facility by up to an additional $350.0, subject to the agreement of one or more new or existing lenders to provide such additional amounts and certain other customary conditions. The revolving credit facility also provides for a subfacility of up to $100.0 for swing line borrowings and a subfacility of up to $150.0 for issuances of letters of credit. The revolving credit facility is permitted to be used for general corporate purposes, including working capital, capital expenditures, funding of share repurchases and certain other payments, and acquisitions and other investments. There were no balances outstanding on the Company's current revolving credit facility at December 31, 2018, or December 31, 2017.

Under the Company's term loan facilities and the revolving credit facility, the Company is subject to negative covenants limiting subsidiary indebtedness and certain other covenants typical for investment grade-rated borrowers and the Company is required to maintain certain leverage ratios. The Company was in compliance with all covenants in the term loan facility and the revolving credit facility at December 31, 2018, and 2017. As of December 31, 2018, the ratio of total debt to consolidated EBITDA was 3.0 to 1.0.

The 2017 term loan credit facility accrues interest at a per annum rate equal to, at the Company’s election, either a LIBOR rate plus a margin ranging from 0.875% to 1.50%, or a base rate determined according to a prime rate or federal funds rate plus a margin ranging from 0.0% to 0.50%. Advances under the revolving credit facility accrue interest at a per annum rate equal to, at the Company’s election, either a LIBOR rate plus a margin ranging from 0.775% to 1.25%, or a base rate determined according to a prime rate or federal funds rate plus a margin ranging from 0.00% to 0.25%. Fees are payable on outstanding letters of credit under the revolving credit facility at a per annum rate equal to the applicable margin for LIBOR loans, and the Company is required to pay a facility fee on the aggregate commitments under the revolving credit facility, at a per annum rate ranging from 0.10% to 0.25%. The interest margin applicable to the credit facilities, and the facility fee and letter of credit fees payable under the revolving credit facility, are based on the Company’s senior credit ratings as determined by S&P and Moody’s.

At December 31, 2018, the Company had provided letters of credit aggregating approximately $72.2, primarily in connection with certain insurance programs. The Company’s availability under its Revolving Credit Facility is reduced by the amount of these letters of credit.

As of December 31, 2018, the effective interest rate on the revolving credit facility was 3.5% and on the 2017 term loan was 3.6%. As of December 31, 2017, the effective interest rate on the revolving credit facility was 2.7%, and the effective interest rate on the 2014 term loan was 2.8% and on the 2017 term loan was 2.6%.

Zero-Coupon Convertible Subordinated Notes

The Company had $8.6 and $9.0 aggregate principal amount at maturity of zero-coupon convertible subordinated notes (the Notes) due 2021 outstanding at December 31, 2018, and 2017, respectively. The Notes, which are due in 2021 and are subordinate to the Company’s bank debt, were sold at an issue price of $671.65 per $1,000.0 principal amount at maturity (representing a yield to maturity of 2.0% per year). Each one thousand dollar principal amount at maturity of the Notes is convertible into 13.4108 shares of the Company’s common stock, subject to adjustment in certain circumstances, if one of the following conditions occurs:

The sales price of the Company’s common stock for at least 20 trading days in a period of 30 consecutive trading days ending on the last trading day of the preceding quarter reaches specified thresholds (beginning at 120% and declining 0.1282% per quarter until it reaches approximately 110% for the quarter beginning July 1, 2021 of the accreted conversion price per share of common stock on the last day of the preceding quarter). The accreted conversion price per share will equal the issue price of a note plus the accrued original issue discount and any accrued contingent additional principal, divided by the number of shares of common stock issuable upon conversion of a note on that day. The conversion trigger price for the fourth quarter of 2018 was $78.64.


2)	The credit rating assigned to the notes by Standard & Poor's (S&P) Ratings Services is at or below BB-.


3)	The Notes are called for redemption.


4)	Specified corporate transactions have occurred (such as if the Company is party to a consolidation, merger or binding share exchange or a transfer of all or substantially all of its assets).

The Company may redeem for cash all or a portion of the Notes at any time at specified redemption prices per one thousand dollar principal amount at maturity of the Notes.

The Company has registered the notes and the shares of common stock issuable upon conversion of the Notes with the Securities and Exchange Commission.

During 2018 and 2017, the Company settled notices to convert $0.3 and $37.1 aggregate principal amount at maturity of its zero-coupon subordinated notes with a conversion value of $0.7 and $33.9, respectively. The total cash used for these settlements was $0.3 and $33.9 and the Company also issued 0.0 and 0.3 additional shares of common stock, respectively. As a result of these conversions, in 2018 and 2017 the Company also reversed approximately $0.2 and $13.7, respectively, of deferred tax liability to reflect the tax benefit realized upon issuance of the shares.

The Company announced that for the period of September 12, 2017, to March 10, 2018, the zero-coupon subordinated notes will accrue contingent cash interest at a rate of no less than 0.125% of the average market price of a zero-coupon subordinated note for the five trading days ended September 8, 2018, in addition to the continued accrual of the original issue discount.

On January 3, 2019, the Company announced that its zero-coupon subordinated notes may be converted into cash and common stock at the conversion rate of 13.4108 per $1,000.0 principal amount at maturity of the notes, subject to the terms of the zero-coupon subordinated notes and the Indenture, dated as of October 24, 2006, between the Company, and The Bank of New York Mellon as trustee and the conversion agent. In order to exercise the option to convert all or a portion of the zero-coupon subordinated notes, holders are required to validly surrender their zero-coupon subordinated notes at any time during the calendar quarter beginning January 1, 2019, through the close of business on the last business day of the calendar quarter, which is 5:00 p.m., New York City time, on Friday, March 31, 2019. If notices of conversion are received, the Company plans to settle the cash portion of the conversion obligation with cash on hand and/or borrowings under its revolving credit facility.

Senior Notes

On August 22, 2017, the Company issued new Senior Notes representing $1,200.0 in debt securities and consisting of a $600.0 aggregate principal amount of 3.25% Senior Notes due 2024 and a $600.0 aggregate principal amount of 3.60% Senior Notes due 2027. Interest on these notes is payable semi-annually on March 1 and September 1 of each year, commencing on March 1, 2018. Net proceeds from the offering of these notes were $1,190.1 after deducting underwriting discounts and other expenses of the offering. Net proceeds were used to pay off the 2.20% Senior Notes due August 23, 2017, as well as a portion of the cash consideration and the fees and expenses in connection with the Chiltern acquisition.

On September 30, 2016, the Company announced the successful completion of consent solicitations for the 5.00% convertible Senior Notes due 2017 and 2018, totaling $130.0, assumed as part of the acquisition of Sequenom. On October 20, 2016, the Company retired $129.9 of these outstanding notes, and paid an additional $5.6 relating to the early retirement of the subsidiary indebtedness (recorded as interest expense in the Consolidated Statement of Operations).

On January 30, 2015, the Company issued the Covance acquisition notes, which represent $2,900.0 in debt securities consisting of $500.0 aggregate principal amount of 2.625% Senior Notes due 2020, $500.0 aggregate principal amount of 3.20% Senior Notes due 2022, $1,000.0 aggregate principal amount of 3.60% Senior Notes due 2025 and $900.0 aggregate principal amount of 4.70% Senior Notes due 2045. Interest on these notes is payable semi-annually on February 1 and August 1 of each year, commencing on August 1, 2015. Net proceeds from the offering of the Covance acquisition notes were $2,870.2 after deducting underwriting discounts and other estimated expenses of the offering. Net proceeds were used to pay a portion of the cash consideration and the fees and expenses in connection with the Covance acquisition.

On November 1, 2013, the Company issued $700.0 in new Senior Notes pursuant to the Company’s effective shelf registration on Form S-3. The Senior Notes consisted of $400.0 aggregate principal amount of 2.50% Senior Notes due 2018 and $300.0 aggregate principal amount of 4.00% Senior Notes due 2023. Interest on these notes is payable semi-annually on November 1 and May 1 of each year, commencing on May 1, 2014. The net proceeds were used to repay all of the outstanding borrowings under the Company’s former revolving credit facility and for general corporate purposes.

During the third quarter of 2013, the Company entered into two fixed-to-variable interest rate swap agreements for the 4.625% Senior Notes due 2020 with an aggregate notional amount of $600.0 and variable interest rates based on one-month LIBOR plus 2.298% to hedge against changes in the fair value of a portion of the Company's long-term debt. These derivative financial instruments are accounted for as fair value hedges of the Senior Notes due 2020 outstanding at that time. These interest rate swaps are included in other long-term assets or liabilities, as applicable, and added to the value of the Senior Notes, with an aggregate fair value of ($3.1) at December 31, 2018.

The Senior Notes due 2022 bear interest at the rate of 3.75% per annum, payable semi-annually on February 23 and August 23 of each year, commencing February 23, 2013.

During the first quarter of 2018, the Company entered into six U.S. dollar (USD) to Swiss Franc cross-currency swap agreements with an aggregate notional value of $600.0 and which were accounted for as a hedge against its net investment in a Swiss subsidiary. Of the notional value, $300.0 was due to mature in 2022 and $300.0 was due to mature in 2025. These cross currency swaps maturing in 2022 and 2025 were settled on December 10, 2018 in cash.

During the fourth quarter of 2018, the Company entered into six new USD to Swiss Franc cross-currency swap agreements with an aggregate notional value of $600.0 and which are accounted for as a hedge against its net investment in a Swiss subsidiary. Of the notional value, $300.0 matures in 2022 and $300.0 matures in 2025. These cross currency swaps maturing in 2022 and 2025 are included in other long-term assets with an aggregate fair value of $(1.0) and $(1.8), respectively, as of December 31, 2018. Changes in the fair value of the cross-currency swaps are charged or credited through accumulated other comprehensive income in the Consolidated Balance Sheet until the hedged item is recognized in earnings.

The scheduled payments of long-term debt and future minimum lease payments for capital leases at the end of 2018 are summarized as follows:



	Notes and Other			Capital Leases			Total
2019	$	10.0		$	14.8		$	24.8
2020	1,100.0			13.8			1,113.8
2021	—			12.0			12.0
2022	1,527.1			10.8			1,537.9
2023	300.0			10.7			310.7
Thereafter	3,063.8			34.5			3,098.3
	6,000.9			96.6			6,097.5
Less amounts representing interest	—			(37.7		)	(37.7		)
Total long-term debt	6,000.9			58.9			6,059.8
Less current portion	(10.0		)	(7.9		)	(17.9		)
Long-term debt, due beyond one year	$	5,990.9		$	51.0		$	6,041.9