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| Debt | Note G – Debt Short-term borrowings, including current portion of long-term debt, consist of the following:
The 7.50% senior debentures are not redeemable prior to their maturity.
There were no outstanding borrowings under these uncommitted lines of credit as of July 4, 2026, and December 31, 2025. Borrowings under these arrangements are generally short-term in nature, with maturity dates and interest rates determined at the time of borrowing. The company’s weighted-average effective interest rate on borrowings outstanding under these arrangements was 4.08% and 4.37% at July 4, 2026, and December 31, 2025, 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 July 4, 2026, and December 31, 2025. The commercial paper program had a weighted-average effective interest rate of 4.04% and 4.26% at July 4, 2026 and December 31, 2025, respectively. Long-term debt consists of the following:
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, using quoted market prices, is as follows:
The carrying amount of the company’s other short-term borrowings; 7.50% senior debentures, due January 2027; revolving credit facility; and other obligations approximate their fair value. The company has a $2.0 billion revolving credit facility maturing in June 2030. 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 July 4, 2026), which is based on the company’s credit ratings, or an effective interest rate of 7.86% and 5.01% at July 4, 2026, and December 31, 2025, respectively. The facility fee, which is based on the company’s credit ratings, was 0.175% of the total borrowing capacity at July 4, 2026. The company had $50.0 million in outstanding borrowings under the revolving credit facility at July 4, 2026, and no outstanding borrowings at December 31, 2025. 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 July 4, 2026) and a credit spread adjustment of 0.10% or a weighted-average effective interest rate of 4.14% at July 4, 2026. The effective interest rate was 4.19% at December 31, 2025. The facility fee is 0.40% of the total borrowing capacity. The company had no outstanding borrowings under the under the North American asset securitization program at July 4, 2026, and $970.0 million in outstanding borrowings at December 31, 2025, which was included in “Long-term debt” on the company’s consolidated balance sheets. Total collateralized accounts receivable of approximately $3.4 billion and $3.0 billion were held by AFC and were included in “Accounts receivable, net” on the company’s consolidated balance sheets at July 4, 2026, and December 31, 2025, 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 July 4, 2026, the company was in compliance with all such financial covenants. In the second quarter of 2025, the company repaid $350.0 million principal amount of its 4.00% notes due April 2025. Interest and dividend income of $26.2 million and $47.1 million for the second quarter and first six months of 2026, respectively, and $8.4 million and $18.5 million for the second quarter and first six months of 2025, respectively, were recorded in “Interest and other financing expense, net” within the company’s consolidated statements of operations. The increase for the second quarter and first six months of 2026, compared to the year-earlier periods was primarily due to higher cash balances within cash pooling accounts and interest income on outstanding tariff receivables collected during the period related to the Global Components supply chain services offerings. |
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