Debt and Financing Activities

Long-term debt consisted of the following:



	March 31,
(In millions)	2016			2015
U.S. Dollar notes ⁽¹⁾
Floating Rate Notes due September 10, 2015	$	—		$	400
0.95% Notes due December 4, 2015	—			500
3.25% Notes due March 1, 2016	—			600
5.70% Notes due March 1, 2017	500			500
1.29% Notes due March 10, 2017	700			700
1.40% Notes due March 15, 2018	500			499
7.50% Notes due February 15, 2019	350			349
2.28% Notes due March 15, 2019	1,100			1,100
4.75% Notes due March 1, 2021	599			599
2.70% Notes due December 15, 2022	400			400
2.85% Notes due March 15, 2023	400			400
3.80% Notes due March 15, 2024	1,100			1,100
7.65% Debentures due March 1, 2027	175			175
6.00% Notes due March 1, 2041	493			493
4.88% Notes due March 15, 2044	800			800
Foreign currency notes ⁽²⁾
4.00% Bonds due October 18, 2016	403			388
4.50% Bonds due April 26, 2017	583			563

Lease and other obligations	44			143
Total debt	8,147			9,709
Less current portion	(1,612		)	(1,529		)
Total long-term debt	$	6,535		$	8,180


(1)	Interest on these notes is payable semiannually each year. These notes are unsecured and unsubordinated obligations of the Company.


(2)	Interest on these Euro-denominated bonds is due annually each year.

Long-Term Debt

Our long-term debt includes both U.S. dollar and foreign currency denominated borrowings. At March 31, 2016 and March 31, 2015, $8,147 million and $9,709 million of total debt were outstanding, of which $1,612 million and $1,529 million were included under the caption “Current portion of long-term debt” within our consolidated balance sheets.

On March 5, 2014, we issued floating rate notes due September 10, 2015 in an aggregate principal amount of $400 million (“Floating Rate Notes”), 1.29% notes due March 10, 2017 in an aggregate principal amount of $700 million (“2017 Notes”), 2.28% notes due March 15, 2019 in an aggregate principal amount of $1,100 million (“2019 Notes”), 3.80% notes due March 15, 2024 in an aggregate principal amount of $1,100 million (“2024 Notes”) and 4.88% notes due March 15, 2044 in an aggregate principal amount of $800 million (“2044 Notes”). Interest on the 2017 Notes is payable on March 10 and September 10 of each year. Interest on the 2019 Notes, the 2024 Notes and the 2044 Notes is payable on March 15 and September 15 of each year. We utilized the net proceeds from the issuance of these notes (each note constitutes a “Series”) of $4,068 million, net of discounts and offering expenses, to repay the borrowings under our 2014 Bridge Loan, as further described below.

Each Series constitutes an unsecured and unsubordinated obligation of the Company and ranks equally with all of the Company’s existing and, from time-to-time, future unsecured and unsubordinated indebtedness outstanding. Each Series is governed by materially similar indentures and officers’ certificate specifying certain terms of each Series. Upon 30 days notice to holders of a Series, we may redeem that Series at any time prior to maturity, in whole or in part, for cash at redemption prices that include accrued and unpaid interest and a make-whole premium, as specified in the indenture and officers’ certificate relating to that Series. In the event of the occurrence of both (1) a change of control of the Company and (2) a downgrade of a Series below an investment grade rating by each of Fitch Ratings, Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services within a specified period, an offer must be made to purchase that Series from the holders at a price in cash equal to 101% of the then outstanding principal amount of that Series, plus accrued and unpaid interest to, but not including, the date of repurchase. The indenture and the related officers’ certificate for each Series, subject to the exceptions and in compliance with the conditions as applicable, specify that we may not incur liens, enter into sale and leaseback transactions or consolidate, merge or sell all or substantially all of our assets. The indentures also contain customary events of default provisions.

Senior Bridge Term Loan Facilities

In connection with our acquisition of Celesio, in January 2014, we entered into a $5.5 billion 364‑day unsecured Senior Bridge Term Loan Agreement (the “2014 Bridge Loan”) under terms substantially similar to those in our existing revolving credit facility. On February 4, 2014, we borrowed $4,957 million under this facility with such proceeds and cash on hand used to fund the acquisition of Celesio. On March 10, 2014, we repaid $4,076 million of the 2014 Bridge Loan borrowings with funds obtained from the issuance of long-term debt. On March 11, 2014, we repaid the remaining balance of the 2014 Bridge Loan borrowings using funds drawn on our Accounts Receivable Sales Facility and cash on hand. On April 30, 2014, the commitments under the 2014 Bridge Loan automatically terminated upon the settlement of the tender offers for the remaining common shares of Celesio. During the time it was outstanding, the 2014 Bridge Loan borrowings bore interest at 1.39% per annum, based on the London Interbank Offered Rate plus a margin based on the Company’s credit rating. Interest expense for 2014 included a total of $46 million of fees related to the 2014 Bridge Loan and a bridge loan agreement entered into during the third quarter of 2014 in anticipation of an earlier acquisition of Celesio.

Other Information

Scheduled future payments of long-term debt are $1,612 million in 2017, $1,092 million in 2018, $1,458 million in 2019, $3 million in 2020, $2 million in 2021 and $3,980 million thereafter.

In 2016, we repaid our $400 million floating rate notes due September 10, 2015 at maturity, $500 million 0.95% notes due December 4, 2015 at maturity and $600 million 3.25% notes due March 1, 2016 at maturity. In 2014, we repaid our $350 million 6.50% Notes due February 15, 2014.

Revolving Credit Facilities

During the third quarter of 2016, we entered into a syndicated $3.5 billion five-year senior unsecured revolving credit facility (the “Global Facility”). The Global Facility has a $3.15 billion aggregate sublimit of availability in Canadian dollars, British pound sterling and Euros. The remaining terms and conditions of the Global Facility are substantially similar to those previously in place under the $1.3 billion revolving credit facility which was terminated in October 2015. There were no borrowings outstanding under this facility as of March 31, 2016.

The Global Facility contains a financial covenant which obligates the Company to maintain a debt to capital ratio of no greater than 65% and other customary investment grade covenants. If we do not comply with these covenants, our ability to use the Global Facility may be suspended and repayment of any outstanding balances under the Global Facility may be required. At March 31, 2016, we were in compliance with all covenants.

At March 31, 2015, we had a syndicated $1.3 billion five-year senior unsecured revolving credit facility with the original expiration date in September 2016, as well as a syndicated €500 million five-year senior unsecured revolving credit facility with the original expiration date in February 2018. Both revolving credit facilities were terminated in connection with the execution of a new $3.5 billion global facility in October 2015, as discussed above. There were no borrowings outstanding under these facilities during the last three years, and as of March 31, 2015.

We also maintain bilateral credit lines primarily denominated in Euros with a total committed and uncommitted balance of $427 million. These credit lines have interest rates ranging from 0.18% to 6.00%. During 2016 and 2015, we borrowed $641 million and $225 million and repaid $635 million and $267 million under these credit lines primarily related to short‑term borrowings. Borrowings and repayments during 2014 were not material. As of March 31, 2016 and 2015, there were $28 million and $29 million outstanding under these credit lines.

Accounts Receivable Facilities

Following the execution of the Global Facility, we also terminated an accounts receivable sales facility (the “AR Facility”) with a committed balance of $1.35 billion during the third quarter of 2016. There were no borrowings outstanding under the AR Facility during 2016 and 2015. In 2014, we borrowed $550 million under the AR Facility and repaid $550 million. At March 31, 2015, there were no secured borrowings and related securitized accounts receivable outstanding under the AR Facility. The AR Facility contained requirements relating to the performance of the accounts receivable and covenants relating to the Company. If we did not comply with these covenants, our ability to use the AR Facility would have been suspended and repayment of any outstanding balances under the AR Facility would have been required. At March 31, 2015, we were in compliance with all covenants.

We also have Accounts Receivable Factoring Facilities (the “Factoring Facilities”) denominated in foreign currencies. Transactions under these facilities are accounted for as secured borrowings and have interest rates ranging from 0.85% to 1.26%. During 2016, 2015 and 2014, we borrowed $919 million, $2,875 million and $570 million and repaid $1,055 million, $2,908 million and $575 million in short-term borrowings under these facilities. At March 31, 2016 and 2015, there were $7 million and $135 million in secured borrowings outstanding under these facilities. All of the Factoring Facilities expired through April 2016.

Commercial Paper

We maintain a commercial paper program to support our working capital requirements and for other general corporate purposes. In November 2015, we replaced the existing program with a new commercial paper program through which the Company can issue up to $3.5 billion in outstanding notes. There were no material commercial paper issuances during the last three years and no amounts outstanding at March 31, 2016.