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Debt
12 Months Ended
Dec. 31, 2024
Debt  
Debt

6. Debt

Short-term borrowings, including the current portion of long-term debt, consist of the following at December 31:

(thousands)

    

2024

    

2023

3.25% notes, due September 2024

$

$

499,224

4.00% notes, due April 2025

349,808

Commercial paper

 

 

1,121,882

Other short-term borrowings

 

170

 

32,848

$

349,978

$

1,653,954

The company has $500.0 million in uncommitted lines of credit. There were no outstanding borrowings under the uncommitted lines of credit at December 31, 2024 and 2023. These borrowings were provided on a short-term basis and their maturity is agreed upon between the company and the lender. The uncommitted lines of credit had a weighted-average effective interest rate of 5.18% and 5.83% at December 31, 2024 and 2023, respectively.

The company has a commercial paper program and the maximum aggregate balance of commercial paper outstanding may not exceed the borrowing capacity of $1.2 billion. Amounts outstanding under the commercial paper program are backstopped by available commitments under the company’s revolving credit facility. The company had no outstanding borrowings under this program at December 31, 2024 and $1.1 billion in outstanding borrowings at December 31, 2023. The commercial paper program had a weighted-average effective interest rate of 5.21% and 5.90% at December 31, 2024 and 2023, respectively.

Long-term debt consists of the following at December 31:

(thousands)

    

2024

    

2023

Revolving credit facility

$

30,000

$

North American asset securitization program

633,000

198,000

4.00% notes, due 2025

 

 

349,061

6.125% notes, due 2026

 

 

497,661

7.50% senior debentures, due 2027

 

110,266

 

110,184

3.875% notes, due 2028

 

497,775

 

497,098

5.15% notes, due 2029

 

495,209

 

2.95% notes, due 2032

 

495,576

 

495,039

5.875% notes, due 2034

494,986

Other obligations with various interest rates and due dates

 

16,971

 

6,510

$

2,773,783

$

2,153,553

The 7.50% senior debentures are not redeemable prior to their maturity. All other notes may be called at the option of the company subject to “make whole” clauses.

The estimated fair market value of long-term debt at December 31, using quoted market prices, is as follows:

(thousands)

    

2024

    

2023

4.00% notes, due 2025

$

$

343,500

6.125% notes, due 2026

502,000

7.50% senior debentures, due 2027

 

115,000

 

117,000

3.875% notes, due 2028

 

481,500

 

475,000

5.15% notes, due 2029

 

498,000

 

2.95% notes, due 2032

426,000

425,000

5.875% notes, due 2034

 

502,500

 

The carrying amount of the company’s other short-term borrowings, 4.00% notes due in 2025, revolving credit facility, North American asset securitization program, commercial paper, and other obligations approximate their fair value.

The company has a $2.0 billion revolving credit facility maturing in September 2026. The facility may be used by the company for general corporate purposes including working capital in the ordinary course of business, letters of credit, repayment, prepayment or purchase of long-term indebtedness, acquisitions, and as support for the company’s commercial paper program, as applicable. Interest on borrowings under the revolving credit facility is calculated using a base rate or SOFR, plus a spread (1.08% at December 31, 2024), which is based on the company’s credit ratings, plus a credit spread adjustment of 0.10% or an effective interest rate of 5.48% at December 31, 2024. The facility fee, which is based on the company’s credit ratings, was 0.175% of the total borrowing capacity at December 31, 2024. The company had $30.0 million in outstanding borrowings under the revolving credit facility at December 31, 2024 and no outstanding borrowings under the revolving credit facility at December 31, 2023.

The company has a North American asset securitization program collateralized by accounts receivable of certain of its subsidiaries. The company may borrow up to $1.5 billion under the program which matures in September 2027. The program is conducted through AFC, a wholly-owned, bankruptcy remote subsidiary. The North American asset securitization program does not qualify for sale treatment. Accordingly, the accounts receivable and related debt obligation remain on the company’s consolidated balance sheets. Interest on borrowings is calculated using a base rate plus a spread (0.40% at December 31, 2024), plus a credit spread adjustment of 0.10% or an effective interest rate of 4.83% at December 31, 2024. The facility fee is 0.40% of the total borrowing capacity.

The company had $633.0 million and $198.0 million in outstanding borrowings under the North American asset securitization program at December 31, 2024 and 2023, respectively, which was included in “Long-term debt” in the company’s consolidated balance sheets. Total collateralized accounts receivable of approximately $3.0 billion and $2.7 billion were held by AFC and were included in “Accounts receivable, net” on the company’s consolidated balance sheets at December 31, 2024 and 2023, respectively. Any accounts receivable held by AFC would likely not be available to other creditors of the company in the event of bankruptcy or insolvency proceedings of the company before repayment of any outstanding borrowings under the North American asset securitization program.

Both the revolving credit facility and North American asset securitization program include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels. As of December 31, 2024, the company was in compliance with all such financial covenants.

During the third quarter of 2024, the company completed the sale of $500.0 million principal amount of 5.15% notes, due 2029. The net proceeds of the offering of $494.9 million were used for general corporate purposes and to repay the $500.0 million principal amount of its 3.25% notes, due September 2024, which were redeemed at maturity.

During the second quarter of 2024, the company completed the sale of $500.0 million principal amount of 5.875% notes, due 2034. The net proceeds of the offering of $494.7 million were used for general corporate purposes and to repay the $500.0 million principal amount of its 6.125% notes, due 2026, which were redeemed in April 2024.

Annual payments of borrowings during each of the years 2025 through 2029 are $350.1 million, $39.8 million, $747.3 million, $503.4 million, and $500.0 million, respectively, and $1.0 billion for all years thereafter.

Interest and other financing expense, net, includes interest and dividend income of $54.5 million, $66.4 million, and $33.7 million in 2024, 2023, and 2022, respectively. Interest paid, net of interest and dividend income, amounted to $199.0 million, $274.1 million, and $175.6 million in 2024, 2023, and 2022, respectively.