SEC Filings

10-Q
MEDTRONIC PLC filed this Form 10-Q on 09/01/2017
Entire Document
 


Debt and Capital
Our capital structure consists of equity and interest-bearing debt. We use a combination of bank borrowings and commercial paper issuances to fund our short-term financing needs. Current debt, including the current portion of our long-term debt and capital lease obligations, was $8.1 billion at July 28, 2017 compared to $7.5 billion at April 28, 2017. We utilize Senior Notes to meet our long-term financing needs. Long-term debt was $26.0 billion at July 28, 2017, as compared to $25.9 billion at April 28, 2017.
Total debt at July 28, 2017 was $34.0 billion, as compared to $33.4 billion at April 28, 2017. The increase in total debt was primarily driven by increased commercial paper borrowings of $572 million.
On August 3, 2017, we used a portion of the proceeds received from Cardinal Health, Inc. in connection with the divestiture of a portion of our Patient Monitoring & Recovery division to repay our senior unsecured term loan, including accrued interest, for $3.0 billion.
We maintain a commercial paper program for short-term financing, which allows us to issue unsecured commercial paper notes on a private placement basis up to a maximum aggregate amount outstanding at any time of $3.5 billion. At July 28, 2017, we had $1.5 billion of commercial paper outstanding, as compared to $901 million at April 28, 2017. During the three months ended July 28, 2017, the weighted average original maturity of the commercial paper outstanding was approximately 32 days, and the weighted average interest rate was 1.22 percent. The issuance of commercial paper reduces the amount of credit available under our existing line of credit, as explained below.
We also have a $3.5 billion syndicated line of credit facility ($3.5 Billion Revolving Credit Facility) which expires in January 2020. The $3.5 Billion Revolving Credit Facility provides backup funding for the commercial paper program and may also be used for general corporate purposes. The $3.5 Billion Revolving Credit Facility provides us with the ability to increase our borrowing capacity by an additional $500 million at any time during the term of the agreement. At each anniversary date of the $3.5 Billion Revolving Credit Facility, but not more than twice prior to the maturity date, we could also request a one-year extension of the maturity date. At July 28, 2017 and April 28, 2017, no amounts were outstanding on the committed line of credit.
Interest rates on advances of our $3.5 Billion Revolving Credit Facility are determined by a pricing matrix, based on our long-term debt ratings assigned by S&P and Moody’s. For additional information on our credit ratings status by S&P and Moody's, refer to the "Liquidity and Capital Resources" section of this Management's Discussion and Analysis. Facility fees are payable on the credit facility and are determined in the same manner as the interest rates. The agreements also contain customary covenants, all of which we remain in compliance with at July 28, 2017.
We repurchase shares from time to time as part of our focus on returning value to our shareholders. In June 2015, our Board of Directors authorized, subject to the ongoing existence of sufficient distributable reserves, the redemption of 80 million of our ordinary shares. At April 28, 2017, we had used 51 million of the 80 million shares authorized under the June 2015 share redemption program. In June 2017, our Board of Directors authorized the expenditure of up to $5.0 billion for new share repurchases, replacing the previous 2015 repurchase authorization to redeem up to an aggregate number of ordinary shares. During the three months ended July 28, 2017, we repurchased a total of 14 million at an average price per share of $85.28. At July 28, 2017, we had approximately $4.9 billion remaining under the share repurchase program authorized by our Board of Directors.
For more information on credit arrangements, see the "Liquidity and Capital Resources" section of this Management's Discussion and Analysis, Note 7 to the current period's consolidated financial statements, and Note 8 to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 28, 2017.

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