Quarterly report [Sections 13 or 15(d)]

Long-Term Debt and Borrowing Arrangements

v3.26.1
Long-Term Debt and Borrowing Arrangements
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Long-Term Debt and Borrowing Arrangements
10. LONG-TERM DEBT AND BORROWING ARRANGEMENTS
The Company’s indebtedness consisted of:
March 31, 2026 December 31, 2025
Long-term debt: (a)
Amount
Weighted Average Rate (b)
Amount
Weighted Average Rate (b)
$1.0 billion revolving credit facility (due October 2030)
 $ —  5.20% $ 224  6.03%
$1.5 billion term loan B (due May 2030)
1,498  5.37% 1,502  5.42%
$650 million 5.625% senior unsecured notes (due March 2033)
 640  5.63% — 
$500 million 4.375% senior unsecured notes (due August 2028)
 497  4.38% 497  4.38%
$400 million term loan A (due April 2027)
 —  5.54% 337  6.10%
Other debt 15  2.23% — 
Total long-term debt 2,650  5.21% 2,560  5.36%
Less: Current portion of long-term debt 23  45 
Long-term debt $ 2,627  $ 2,515 
______________________
(a)    The carrying amount of the term loans and senior unsecured notes are net of deferred debt issuance costs of $19 million and $10 million as of March 31, 2026 and December 31, 2025, respectively. The carrying amount of the term loan B is net of unamortized discounts of $4 million as of both March 31, 2026 and December 31, 2025.
(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, 2026 matures as follows:
Long-Term Debt
Within 1 year $ 23 
Between 1 and 2 years 19 
Between 2 and 3 years 515 
Between 3 and 4 years 16 
Between 4 and 5 years 1,437 
Thereafter 640 
Total $ 2,650 
As of March 31, 2026, the available capacity under the Company’s revolving credit facility was as follows:
Revolving Credit Facility
Total capacity $ 1,000 
Less: Borrowings — 
Available capacity $ 1,000 
Revolving Credit Facility
The Company had no outstanding borrowings on its revolving credit facility as of March 31, 2026 and $224 million outstanding as of December 31, 2025. Such borrowings on its revolving credit facility are included within long-term debt on the Condensed Consolidated Balance Sheets.
5.625% Senior Unsecured Notes
In February 2026, the Company issued $650 million aggregate principal amount of senior unsecured notes, which mature in 2033 and bear interest at a rate of 5.625% per year, for net proceeds of $642 million. Interest is payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2026. The notes are redeemable in whole or in part at various times and premiums per their indenture, with the first call date of March 1, 2029 at a price of 102.813%. The Company used the net cash proceeds from the notes primarily to pay off then-outstanding borrowings under its revolving credit facility and term loan A.
Other Debt
During the first quarter, the Company assumed $15 million of mortgages that are secured by the two hotel properties that the Company acquired through the enforcement of its collateral on trade receivables, loans receivable and development advance notes owed to the Company by Revo. The mortgages have varying maturity dates ranging from 2026 to 2031 with a weighted average remaining term of 1.6 years. See Note 5 - Non-Cash Hotel Acquisitions for more details.
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 $4 million as of both March 31, 2026 and December 31, 2025.
Cash Flow Hedge
As of March 31, 2026, 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 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 both the three months ended March 31, 2026 and 2025, the weighted average fixed rate (plus applicable spreads) on the swaps was 3.58%. The aggregate fair value of these interest rate swaps was a net asset of $1 million and net liability of $10 million as of March 31, 2026 and December 31, 2025, respectively,
which were included within other non-current assets and other non-current liabilities on the Consolidated Balance Sheets, respectively. The swaps resulted in $3 million of income recognized in interest expense, net on the Condensed Consolidated Statements of Income during the three months ended March 31, 2025. Such income was immaterial during the three months ended March 31, 2026.
There was no hedging ineffectiveness recognized in the three months ended March 31, 2026 or 2025. The Company expects to reclassify gains of $1 million 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 $33 million for the three months ended March 31, 2026 and 2025, respectively. Cash paid related to such interest was $37 million and $39 million for the three months ended March 31, 2026 and 2025, respectively.