Quarterly report [Sections 13 or 15(d)]

Long-Term Debt and Borrowing Arrangements

v3.25.2
Long-Term Debt and Borrowing Arrangements
 6 Months Ended
Jun. 30, 2025
Debt Disclosure [Abstract]  
Long-Term Debt and Borrowing Arrangements
8. LONG-TERM DEBT AND BORROWING ARRANGEMENTS
The Company’s indebtedness consisted of:
June 30, 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)
 $ 221  6.28% $ 88  7.17%
$400 million term loan A (due April 2027)
 352  6.18% 364  7.02%
$1.5 billion term loan B (due May 2030)
1,507  5.33% 1,515  4.20%
$500 million 4.375% senior unsecured notes (due August 2028)
 497  4.38% 496  4.38%
Total long-term debt 2,577  5.32% 2,463  4.84%
Less: Current portion of long-term debt 45  43 
Long-term debt $ 2,532  $ 2,420 
______________________
(a)    The carrying amount of the term loans and senior unsecured notes are net of deferred debt issuance costs of $11 million and $13 million as of June 30, 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 June 30, 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 June 30, 2025 matures as follows:
Long-Term Debt
Within 1 year $ 45 
Between 1 and 2 years 558 
Between 2 and 3 years 15 
Between 3 and 4 years 512 
Between 4 and 5 years 1,447 
Thereafter — 
Total $ 2,577 
As of June 30, 2025, the available capacity under the Company’s revolving credit facility was as follows:
Revolving Credit Facility
Total capacity $ 750 
Less: Borrowings 221 
Available capacity $ 529 
Revolving Credit Facility
The Company had $221 million and $88 million of outstanding borrowings on its revolving credit facility as of June 30, 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 June 30, 2025 and December 31, 2024.
Cash Flow Hedge
As of June 30, 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 nearly 95% 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 six months ended June 30, 2025 and 2024, the weighted average fixed rate (plus applicable spreads) on the swaps was 3.58% and 1.74%, respectively. The aggregate fair value of these interest rate swaps was a net liability of $9 million and a net asset of $18 million as of June 30, 2025 and December 31, 2024, respectively, which were included within other non-current liabilities and other non-current assets on the Consolidated Balance Sheets, respectively. 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 June 30, 2025 and 2024, respectively, and $5 million and $20 million of income during the six months ended June 30, 2025 and 2024, respectively.
There was no hedging ineffectiveness recognized in the six months ended June 30, 2025 or 2024. The Company expects to reclassify $3 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 $34 million and $30 million for the three months ended June 30, 2025 and 2024, respectively and $68 million and $59 million for the six months ended June 30, 2025 and 2024, respectively. Cash paid related to such interest was $70 million and $58 million for the six months ended June 30, 2025 and 2024, respectively.
Early Extinguishment of Debt
The Company incurred non-cash early extinguishment of debt costs of $3 million during the three and six months ended June 30, 2024 relating to the repricing of the Company's term loan B.