Quarterly report pursuant to Section 13 or 15(d)

Long-Term Debt and Borrowing Arrangements

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Long-Term Debt and Borrowing Arrangements
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
Long-Term Debt and Borrowing Arrangements
8. LONG-TERM DEBT AND BORROWING ARRANGEMENTS
The Company’s indebtedness consisted of:
March 31, 2024 December 31, 2023
Long-term debt: (a)
Amount
Weighted Average Rate (b)
Amount
Weighted Average Rate (b)
$750 million revolving credit facility (due April 2027)
 $ 208  7.18% $ 160  7.30%
$400 million term loan A (due April 2027)
 379  7.19% 384  6.82%
$1.1 billion term loan B (due May 2030)
1,121  4.11% 1,123  4.10%
$500 million 4.375% senior unsecured notes (due August 2028)
 495  4.38% 495  4.38%
Finance leases 38  4.50% 39  4.50%
Total long-term debt 2,241  4.95% 2,201  4.77%
Less: Current portion of long-term debt 37  37 
Long-term debt $ 2,204  $ 2,164 
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(a)    The carrying amount of the term loans and senior unsecured notes are net of deferred debt issuance costs of $15 million and $16 million as of March 31, 2024 and December 31, 2023, respectively. The carrying amount of the term loan B is net of unamortized discounts of $5 million as of both March 31, 2024 and December 31, 2023, respectively.
(b)    Weighted average interest rates are based on the stated interest rate for the year-to-date periods and include the effects of hedging.
Maturities and Capacity
The Company’s outstanding debt as of March 31, 2024 matures as follows:
Long-Term Debt
Within 1 year $ 37 
Between 1 and 2 years 48 
Between 2 and 3 years 48 
Between 3 and 4 years 526 
Between 4 and 5 years 515 
Thereafter 1,067 
Total $ 2,241 

As of March 31, 2024, the available capacity under the Company’s revolving credit facility was as follows:
Revolving Credit Facility
Total capacity $ 750 
Less: Borrowings 208 
Less: Letters of credit 9 
Available capacity $ 533 
Revolving Credit Facility
The Company had $208 million and $160 million of outstanding borrowings on its revolving credit facility as of March 31, 2024 and December 31, 2023, respectively. Such borrowings are included within long-term debt on the Condensed Consolidated Balance Sheets.
Deferred Debt Issuance Costs
The Company classifies deferred debt issuance costs related to its revolving credit facility within other non-current assets on the Condensed Consolidated Balance Sheets. Such deferred debt issuance costs were $3 million as of both March 31, 2024 and December 31, 2023, respectively.
Cash Flow Hedge
In January 2024, we entered into new pay-fixed/receive-variable interest rate swaps that hedge the interest rate exposure on $275 million of our variable-rate debt with an effective date in the fourth quarter of 2024 and an expiration date in the fourth quarter of 2027. The weighted average fixed rate associated with the new swaps is 3.37% (plus applicable spreads). As of March 31, 2024, the Company has pay-fixed/receive-variable interest rate swaps which hedge the interest rate exposure on $1.1 billion, effectively representing more than 97% of the outstanding amount of its term loan B. The interest rate swaps have weighted average fixed rates (plus applicable spreads) ranging from 0.91% to 3.84% based on various effective dates for each of the swap agreements, with $600 million of swaps that expire in the second quarter of 2028 and $475 million expiring in the fourth quarter of 2027. For the three months ended March 31, 2024 and 2023, the weighted average fixed rate (plus applicable spreads) for the swaps were 1.69% and 1.86%, respectively. The aggregate fair value of these interest rate swaps was an asset of $26 million and $13 million as of March 31, 2024 and December 31, 2023, respectively, which was included within other non-current assets on the Condensed Consolidated Balance Sheets. The effect of interest rate swaps on interest expense, net on the Condensed Consolidated Statements of Income was $10 million and $7 million of income for the three months ended March 31, 2024 and 2023, respectively.
There was no hedging ineffectiveness recognized in the three months ended March 31, 2024 or 2023. The Company expects to reclassify $26 million of gains from accumulated other comprehensive income (“AOCI”) to interest expense during the next 12 months.
Interest Expense, Net
The Company incurred net interest expense of $28 million and $22 million for the three months ended March 31, 2024 and 2023, respectively. Cash paid related to such interest was $34 million and $29 million for the three months ended March 31, 2024 and 2023, respectively.