DEBT

6 Months Ended

Jul. 04, 2021

Debt Disclosure [Abstract]

DEBT

NOTE 9. DEBT

Loans Payable and Commercial Paper

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

In millions	July 4, 2021			December 31, 2020
Loans payable (1)	$	54		$	169
Commercial paper	200		(2)	323		(3)
(1) Loans payable consist primarily of notes payable to various domestic and international financial institutions. 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 0.12 percent at July 4, 2021 and included $200 million of borrowings under the U.S. program.
(3) The weighted-average interest rate, inclusive of all brokerage fees, was negative 0.01 percent at December 31, 2020 and included $123 million of borrowings under the EUR program that were negative 0.34 percent and $200 million of borrowings under the U.S. program at 0.19 percent.

We can issue up to $3.5 billion of unsecured, short-term promissory notes (commercial paper) pursuant to the Board of Directors (the Board) authorized commercial paper programs. The 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.

Revolving Credit Facilities

We have access to committed credit facilities that total $3.5 billion, including the $1.5 billion 364-day facility that expires August 18, 2021 and our $2.0 billion five-year facility that expires on August 22, 2023. We maintain credit facilities at the current or higher aggregate amounts by renewing or replacing these facilities at or before expiration. These revolving credit facilities are maintained primarily to provide backup liquidity for our commercial paper borrowings and for general corporate purposes. There were no outstanding borrowings under these facilities at July 4, 2021 and December 31, 2020.

At July 4, 2021, the $200 million of outstanding commercial paper effectively reduced the $3.5 billion of revolving credit capacity to $3.3 billion.

At July 4, 2021, we also had an additional $243 million available for borrowings under our international and other domestic credit facilities.

Long-term Debt

A summary of long-term debt was as follows:

In millions	Interest Rate	July 4, 2021		December 31, 2020
Long-term debt
Senior notes, due 2023	3.65%	$	500	$	500
Senior notes, due 2025	0.75%	500		500
Debentures, due 2027	6.75%	58		58
Debentures, due 2028	7.125%	250		250
Senior notes, due 2030	1.50%	850		850
Senior notes, due 2043	4.875%	500		500
Senior notes, due 2050	2.60%	650		650
Debentures, due 2098(1)	5.65%	165		165
Other debt		143		132
Unamortized discount and deferred issuance costs		(70)		(72)
Fair value adjustments due to hedge on indebtedness		42		48
Finance leases		89		91
Total long-term debt		3,677		3,672
Less: Current maturities of long-term debt		57		62
Long-term debt		$	3,620	$	3,610
(1) The effective interest rate is 7.48%.

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

In millions	2021		2022		2023		2024		2025
Principal payments	$	39	$	57	$	535	$	30	$	506

Interest Rate Risk

We have interest rate lock agreements to reduce the variability of the cash flows of the interest payments on a total of $500 million of fixed rate debt forecast to be issued in 2023 to replace our senior notes at maturity. We recorded a net loss of $33 million and net gain of $28 million in "Other comprehensive income" for the three and six months ended July 4, 2021, compared with a net gain of $10 million and net loss of $69 million for the comparable periods in 2020.

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:

 

In millions	July 4, 2021		December 31, 2020
Fair value of total debt (1)	$	4,304	$	4,665
Carrying value of total debt	3,931		4,164
(1) The fair value of debt is derived from Level 2 inputs.