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Debt | 12 Months Ended
--- | ---
Sep. 30, 2024
Debt Disclosure [Abstract] |
Debt | 9. Debt As of September 30, 2024 and 2023, we had the following short- and long-term debt obligations:
(in thousands) |  | September 30, |
|  | 2024 |  |  | 2023 |
4.000% Senior Notes due 2028 |  | $ | 500,000 |  |  | $ | 500,000 |
3.625% Senior Notes due 2025 |  |  | 500,000 |  |  |  | 500,000 |
Credit facility revolver line(1)(2) |  |  | 262,000 |  |  |  | 202,000 |
Credit facility term loan(1)(2) |  |  | 490,625 |  |  |  | 500,000 |
Total debt |  |  | 1,752,625 |  |  |  | 1,702,000 |
Unamortized debt issuance costs for the Senior Notes(3) |  |  | (4,053 | ) |  |  | (6,215 | )
Total debt, net of issuance costs(4) |  | $ | 1,748,572 |  |  | $ | 1,695,785 |
(1) Unamortized debt issuance costs related to the credit facility were $2.3 million included in Other current assets and $5.2 million included in Other assets on the Consolidated Balance Sheet as of September 30, 2024 and $2.3 million included in Other current assets and $7.5 million included in Other assets on the Consolidated Balance Sheet as of September 30, 2023. (2) The stated maturity date under the credit facility on which both the revolver line and the term loan will mature and all amounts then outstanding will become due and payable is January 3, 2028. The term loan began amortizing in March 2024, with payment s remaining of $21.9 million in 2025, $25.0 million in 2026 and 2027, and $418.7 million in 2028. (3) Of the unamortized debt issuance costs for the Senior Note s, $0.4 million was included in Current portion of long-term debt and $3.6 million was included in Long-term debt on the Consolidated Balance Sheet as of September 30, 2024. As of September 30, 2023, all unamortized debt issuance costs for the Senior Notes were included in Long-term debt on the Consolidated Balance Sheets. (4) As of September 30, 2024, $521.5 million of debt was classifie d as short term, including $499.6 million associated with the 2025 Senior Notes and related debt issuance costs and $21.9 million associated with the credit facility term loan. As of September 30, 2023, $9.4 million of debt associated with the credit facility term loan w as classified as short term with the remaining balance classified as long term. Senior Unsecured Notes In February 2020, we issued $500 million in aggregate principal amount of 4.0% senior, unsecured long-term debt at par value, due in 2028 (the 2028 notes) and $500 million in aggregate principal amount of 3.625% senior, unsecured long-term debt at par value, due in February 2025 (the 2025 notes). As of September 30, 2024, the total estimated fair value of the 2028 and 2025 notes was approximately $485.7 million and $497.7 million, respectively, based on quoted prices for the notes on that date. We were in compliance with all the covenants for all our Senior Notes as of September 30, 2024. Terms of the 2028 and 2025 Notes Interest on the 2028 and 2025 notes is payable semi-annually on February 15 and August 15. The debt indenture for the 2028 and 2025 notes includes covenants that limit our ability to, among other things, incur additional debt, grant liens on our properties or capital stock, enter into sale and leaseback transactions or asset sales, and make capital distributions. We may, on one or more occasions, redeem the 2028 and 2025 notes in whole or in part at specified redemption prices. In certain circumstances constituting a change of control, we will be required to make an offer to repurchase the notes at a purchase price equal to 101% of the aggregate principal amount of the notes, plus accrued and unpaid interest. Our ability to repurchase the notes upon such event may be limited by law, by the indenture associated with the notes, by our then-available financial resources or by the terms of other agreements to which we may be party at such time. If we fail to repurchase the notes as required by the indenture, it would constitute an event of default under the indenture which, in turn, may also constitute an event of default under other obligations. Credit Agreement In January 2023, we entered into an amended and restated credit agreement for a new secured multi-currency bank credit facility with a syndicate of banks. Pursuant to the agreement, all revolving commitments under the prior credit agreement were replaced with the revolving commitments under the new credit facility. The new credit facility consists of (i) a $1.25 billion revolving credit facility, (ii) a $500 million term loan credit facility, and (iii) an incremental facility pursuant to which we may incur additional term loan tranches or increase the revolving credit facility. As of September 30, 2024, unused commitments under our credit facility were approximately $988.0 million and amounts available for borrowing were $972.1 million. As of September 30, 2024, the fair value of our credit facility approximates its book value. PTC Inc. and certain eligible foreign subsidiaries are eligible borrowers under the credit facility. Any borrowings by PTC Inc. under the credit facility would be guaranteed by PTC Inc.’s material domestic subsidiaries that become parties to the subsidiary guaranty, if any. Any borrowings by eligible foreign subsidiary borrowers would be guaranteed by PTC Inc. and any subsidiary guarantors and secured, subject to exceptions, by a first priority perfected security interest in substantially all existing and after-acquired personal property owned by PTC Inc. and its material domestic subsidiaries (except for certain indirect material domestic subsidiaries). As of September 30, 2024, $83.0 million was borrowed by an eligible foreign subsidiary borrower. Loans under the credit facility bear interest at variable rates that reset every 30 to 180 days depending on the base rate (for USD borrowings, either the adjusted Daily Simple RFR or adjusted Term SOFR) and period selected by us. The spread over the base rate depends on our total leverage ratio. As of September 30, 2024, the annual rate for borrowings outstanding was 6.9%. A quarterly revolving commitment fee on the undrawn portion of the revolving credit facility is required, ranging from 0.175% to 0.325% per annum, based upon our total leverage ratio. The credit facility limits our ability to, among other things: incur additional indebtedness; incur liens or guarantee obligations; pay dividends and make other distributions; make investments and enter into joint ventures; dispose of assets; and engage in transactions with affiliates, except on an arms-length basis. Under the credit facility, PTC Inc. and its material domestic subsidiaries may not invest cash or property in, or loan amounts to, PTC Inc.’s foreign subsidiaries in aggregate amounts exceeding $100 million for purposes other than acquisitions of businesses. The credit facility also requires that we maintain certain financial ratios. As of September 30, 2024, we were in compliance with all financial and operating covenants of the credit facility. In 2023, we incurred $13.4 million in financing costs in connection with the January 2023 credit facility and related arrangements, of which $4.2 million (related to a since-extinguished bridge loan) was expensed in the period and $9.2 million was recorded as deferred debt issuance costs and included in Other assets and Other current assets on the Consolidated Balance Sheet. Deferred debt issuance costs are expensed over the term of the obligations. Interest In 2024, 2023 and 2022, we incurred interest expense of $119.7 million, $129.4 million, and $54.3 million, respectively, and paid $137.0 million, $89.8 million and $48.5 million, respectively, of interest on our debt. Interest expense in the year ended 2023 includes $30.0 million of interest imputed on the $650.0 million deferred acquisition payment related to the ServiceMax acquisition. The average interest rate on borrowings outstanding during 2024, 2023 and 2022 was approximately 5.4%, 4.9% and 3.4%, respectively.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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