Annual report pursuant to Section 13 and 15(d)

DEBT

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DEBT
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
DEBT
NOTE 12. DEBT
Loans Payable
Loans payable at December 31, 2024 and 2023 were $356 million and $280 million, respectively, and consisted primarily of loans payable to financial institutions. The weighted-average interest rate of loans payable at December 31 was as follows:
2024 2023
Weighted-average interest rate 2.85  % 3.92  %
Commercial Paper
Our committed credit facilities provide access up to $4.0 billion of unsecured, short-term promissory notes (commercial paper) pursuant to the Board authorized commercial paper programs. These programs facilitate the private placement of unsecured short-term debt through third-party brokers. We intend to use the net proceeds from the commercial paper borrowings for general corporate purposes. We had $1.3 billion and $1.5 billion in outstanding borrowings under our commercial paper programs at December 31, 2024 and 2023, respectively. The weighted-average interest rate for commercial paper at December 31 was as follows:
2024 2023
Weighted-average interest rate 4.49  % 5.43  %
Revolving Credit Facilities
On June 3, 2024, we entered into an amended and restated 5-year credit agreement that allows us to borrow up to $2.0 billion of unsecured funds at any time prior to June 3, 2029. The credit agreement amended and restated the prior $2.0 billion 5-year credit agreement that would have matured on August 18, 2026. We also entered into an amended and restated 364-day credit agreement that allows us to borrow up to $2.0 billion of unsecured funds at any time prior to June 2, 2025. This credit agreement amended and restated the prior $2.0 billion 364-day credit facility that matured on June 3, 2024.
Our committed credit facilities provide access up to $4.0 billion from our $2.0 billion 364-day credit facility that expires on June 2, 2025 and our $2.0 billion 5-year facility that expires on June 3, 2029. We intend to maintain credit facilities at the current or higher aggregate amounts by renewing or replacing these facilities at or before expiration. Amounts payable under our revolving credit facility rank pro rata with all of our unsecured, unsubordinated indebtedness. Up to $300 million under this credit facility is available for swingline loans. Based on our current long-term debt ratings, the applicable margin on Secured Overnight Financing Rate (SOFR) rate loans for the 364-day facility was 0.85 percent per annum and 0.975 percent for the 5-year facility. Advances under the facility may be prepaid without premium or penalty, subject to customary breakage costs. These revolving credit facilities are maintained primarily to provide backup liquidity for our commercial paper borrowings and general corporate purposes. Our credit agreements include various covenants, including, among others, maintaining a net debt to total capital ratio of no more than 0.65 to 1.0. At December 31, 2024, we were in compliance with the financial debt covenants. There were no outstanding borrowings under these facilities at December 31, 2024 and December 31, 2023.
The total combined borrowing capacity under the revolving credit facilities and commercial programs should not exceed $4.0 billion. At December 31, 2024, our $1.3 billion of commercial paper outstanding effectively reduced the $4.0 billion available capacity under our revolving credit facilities to $2.7 billion.
At December 31, 2024, we also had an additional $628 million available for borrowings under our uncommitted international and other domestic credit facilities.
Long-term Debt
A summary of long-term debt was as follows:
December 31,
In millions Interest Rate 2024 2023
Long-term debt
Hydrogenics promissory notes, due 2024 and 2025 —% 110  160 
Term loan, due 2025 (1)(2)
Variable —  1,150 
Senior notes, due 2025 (3)
0.75% 500  500 
Atmus term loan, due 2027 (4)
Variable —  600 
Debentures, due 2027 6.75% 58  58 
Debentures, due 2028 7.125% 250  250 
Senior notes, due 2029 4.90% 500  — 
Senior notes, due 2030 (3)
1.50% 850  850 
Senior notes, due 2034 5.15% 750  — 
Senior notes, due 2043 4.875% 500  500 
Senior notes, due 2050 2.60% 650  650 
Senior notes, due 2054 5.45% 1,000  — 
Debentures, due 2098 (5)
5.65% 165  165 
Other debt 160  94 
Unamortized discount and deferred issuance costs (89) (72)
Fair value adjustments due to hedge on indebtedness (85) (96)
Finance leases 125  111 
Total long-term debt 5,444  4,920 
Less: Current maturities of long-term debt (6)
660  118 
Long-term debt $ 4,784  $ 4,802 
(1) During 2024, we repaid the outstanding balance of the term loan.
(2) In September 2023, we entered into a series of interest rate swaps in order to trade a portion of the floating rate into fixed rate. See "Interest Rate Risk" in NOTE 20, "DERIVATIVES," for additional information.
(3) In 2021, we entered into a series of interest rate swaps to effectively convert from a fixed rate to floating rate. See "Interest Rate Risk" in NOTE 20, "DERIVATIVES," for additional information.
(4) See NOTE 21, "ATMUS INITIAL PUBLIC OFFERING (IPO) AND DIVESTITURE," for additional information.
(5) The effective interest rate is 7.48 percent.
(6) The weighted-average interest rates for the years ended December 31, 2024 and 2023, were 1.01 percent and 1.87 percent, respectively.
On February 20, 2024, we issued $2.25 billion aggregate principal amount of senior unsecured notes consisting of $500 million aggregate principal amount of 4.90 percent senior unsecured notes due in 2029, $750 million aggregate principal amount of 5.15 percent senior unsecured notes due in 2034 and $1.0 billion aggregate principal amount of 5.45 percent senior unsecured notes due in 2054. We received net proceeds of $2.2 billion. The senior unsecured notes pay interest semi-annually on February 20 and August 20, commencing on August 20, 2024. The indenture governing the senior unsecured notes contains covenants that, among other matters, limit (i) our ability to consolidate or merge into, or sell, assign, convey, lease, transfer or otherwise dispose of all or substantially all of our and our subsidiaries' assets to another person, (ii) our and certain of our subsidiaries' ability to create or assume liens and (iii) our and certain of our subsidiaries' ability to engage in sale and leaseback transactions.
Principal payments required on long-term debt during the next five years are as follows:
In millions 2025 2026 2027 2028 2029
Principal payments $ 660  $ 66  $ 102  $ 291  $ 534 

The $250 million 7.125 percent debentures and $165 million 5.65 percent debentures are unsecured and are not subject to any sinking fund requirements. We can redeem these debentures at any time prior to maturity at the greater of par plus accrued interest or an amount designed to ensure that the debenture holders are not penalized by the early redemption.
Our debt agreements contain several restrictive covenants. The most restrictive of these covenants applies to our revolving credit facility which will upon default, among other things, limit our ability to incur additional debt or issue preferred stock, enter into sale-leaseback transactions, sell or create liens on our assets, make investments and merge or consolidate with any other entity. At December 31, 2024, we were in compliance with all of the financial debt covenants under our borrowing agreements.
Shelf Registration
As a well-known seasoned issuer, we filed an automatic shelf registration for an undetermined amount of debt and equity securities with the Securities and Exchange Commission (SEC) on February 8, 2022, which expired on February 9, 2025. Under this shelf registration we were able to offer debt securities, common stock, preferred and preference stock, depositary shares, warrants, stock purchase contracts and stock purchase units. We plan to file a new shelf registration statement shortly after the filing of this annual report on Form 10-K to replace the expired automatic shelf registration statement.
Interest Expense
For the years ended December 31, 2024, 2023 and 2022, total interest incurred was $387 million, $383 million and $204 million, respectively, and interest capitalized was $17 million, $8 million and $5 million, respectively.
Fair Value of 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:
December 31,
In millions 2024 2023
Fair values of total debt (1)
$ 6,651  $ 6,375 
Carrying value of total debt 7,059  6,696 
(1) The fair value of debt is derived from Level 2 input measures.