Quarterly report [Sections 13 or 15(d)]

Long-Term Debt and Borrowing Arrangements

v3.25.1
Long-Term Debt and Borrowing Arrangements
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Long-Term Debt and Borrowing Arrangements
8. LONG-TERM DEBT AND BORROWING ARRANGEMENTS
The Company’s indebtedness consisted of:
March 31, 2025 December 31, 2024
Long-term debt: (a)
Amount
Weighted Average Rate (b)
Amount
Weighted Average Rate (b)
$750 million revolving credit facility (due April 2027)
 $ 161  6.30% $ 88  7.17%
$400 million term loan A (due April 2027)
 359  6.18% 364  7.02%
$1.5 billion term loan B (due May 2030)
1,512  5.33% 1,515  4.20%
$500 million 4.375% senior unsecured notes (due August 2028)
 496  4.38% 496  4.38%
Total long-term debt 2,528  5.30% 2,463  4.84%
Less: Current portion of long-term debt 45  43 
Long-term debt $ 2,483  $ 2,420 
______________________
(a)    The carrying amount of the term loans and senior unsecured notes are net of deferred debt issuance costs of $12 million and $13 million as of March 31, 2025 and December 31, 2024, respectively. The carrying amount of the term loan B is net of unamortized discounts of $5 million as of both March 31, 2025 and December 31, 2024.
(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, 2025 matures as follows:
Long-Term Debt
Within 1 year $ 45 
Between 1 and 2 years 45 
Between 2 and 3 years 476 
Between 3 and 4 years 512 
Between 4 and 5 years 16 
Thereafter 1,434 
Total $ 2,528 
As of March 31, 2025, the available capacity under the Company’s revolving credit facility was as follows:
Revolving Credit Facility
Total capacity $ 750 
Less: Borrowings 161 
Available capacity $ 589 
Revolving Credit Facility
The Company had $161 million and $88 million of outstanding borrowings on its revolving credit facility as of March 31, 2025 and December 31, 2024, respectively. Such borrowings were 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 $2 million as of both March 31, 2025 and December 31, 2024.
Cash Flow Hedge
As of March 31, 2025, the Company has pay-fixed/receive-variable interest rate swaps in place to hedge interest rate exposure on $1.4 billion on its variable-rate debt, effectively covering over 94% of its outstanding term loan B. These swaps carry weighted average fixed rates (plus applicable spreads) ranging from 3.31% to 3.84% based on the effective dates of each agreement, with $475 million of swaps expiring in the fourth quarter of 2027, $600 million expiring in the second quarter of 2028, and $350 million expiring in the third quarter of 2028. For the three months ended March 31, 2025 and 2024, the weighted average fixed rate (plus applicable spreads) on the swaps was 3.58% and 1.69%, respectively. As of March 31, 2025, the aggregate fair value of the swaps was a $1 million net asset, of which $2 million was recorded within other non-current assets and $1 million was recorded in other non-current liabilities on the Condensed Consolidated Balance Sheets. As of December 31, 2024, the aggregate fair value of the swaps was an $18 million asset, recorded within other non-current assets on the Condensed Consolidated Balance Sheets. The swaps resulted in $3 million and $10 million of income recognized in interest expense, net on the Condensed Consolidated Statements of Income during the three months ended March 31, 2025 and 2024, respectively.
There was no hedging ineffectiveness recognized in the three months ended March 31, 2025 or 2024. The Company expects to reclassify $5 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 $33 million and $28 million for the three months ended March 31, 2025 and 2024, respectively. Cash paid related to such interest was $39 million and $34 million for the three months ended March 31, 2025 and 2024, respectively.