Cummins Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

DEBT (Tables)

DEBT (Tables)

9 Months Ended

Sep. 29, 2019

Loans payable, commercial paper and the related weighted-average interest rates were as follows:



In millions	September 29, 2019		December 31, 2018
Loans payable ⁽¹⁾	$	103	$	54
Commercial paper ⁽²⁾	902		780

____________________________________

⁽¹⁾ Loans payable consist primarily of notes payable to various domestic and international financial institutions and it is not practicable to aggregate these notes and calculate a quarterly weighted-average interest rate.

⁽²⁾ The weighted-average interest rate, inclusive of all brokerage fees, was 2.18 percent and 2.59 percent at September 29, 2019 and December 31, 2018, respectively.

Summary of long-term debt

A summary of long-term debt was as follows:



In millions	Interest Rate	September 29, 2019			December 31, 2018
Long-term debt
Senior notes, due 2023	3.65%	$	500		$	500
Debentures, due 2027	6.75%	58			58
Debentures, due 2028	7.125%	250			250
Senior notes, due 2043	4.875%	500			500
Debentures, due 2098⁽¹⁾	5.65%	165			165
Other debt		70			64
Unamortized discount		(50		)	(52		)
Fair value adjustments due to hedge on indebtedness		41			25
Finance leases		122			132
Total long-term debt		1,656			1,642
Less: Current maturities of long-term debt		37			45
Long-term debt		$	1,619		$	1,597

____________________________________

⁽¹⁾ The effective interest rate on this debt is 7.48%.

Principal repayments on long-term debt

Principal payments required on long-term debt during the next five years are as follows:



In millions	2019		2020		2021		2022		2023
Principal payments	$	16	$	30	$	45	$	9	$	507

Fair value and carrying value of total debt

Based on borrowing rates currently available to us for bank loans with similar terms and average maturities, considering our risk premium, the fair values and carrying values of total debt, including current maturities, were as follows:



In millions	September 29, 2019		December 31, 2018
Fair value of total debt ⁽¹⁾	$	3,031	$	2,679
Carrying values of total debt	2,661		2,476

_________________________________________________

⁽¹⁾ The fair value of debt is derived from Level 2 inputs.

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details