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Debt

12 Months Ended

Dec. 31, 2020

10.

Debt

At December 31, 2020 and 2019, our long-term debt and interest rates on that debt were as follows (dollars in millions):

	December 31, 2020					December 31, 2019
	Amount		Interest Rate			Amount		Interest rate
Revolving Credit Facility, due August 2021	$	—		—	%	$	—		—	%
4.50% Senior Notes, net of discount of $0.6 million and $0.8 million as of December 31, 2020 and 2019, respectively, due November 2023		699.4		4.50	%		699.2		4.50	%
3.65% Senior Notes, net of discount of $0.5 million and $0.6 million as of December 31, 2020 and 2019, respectively, due September 2024		399.5		3.65	%		399.4		3.65	%
3.40% Senior Notes, net of discount of $1.2 million and $1.3 million as of December 31, 2020 and 2019, respectively, due December 2027		498.8		3.40	%		498.7		3.40	%
3.00% Senior Notes, net of discount of $0.6 million and $0.7 million as of December 31, 2020 and 2019, respectively, due December 2029		499.4		3.00	%		499.3		3.00	%
4.05% Senior Notes, net of discount of $3.4 million and $3.5 million as of December 31, 2020 and 2019, respectively, due December 2049		396.6		4.05	%		396.5		4.05	%
Total		2,493.7		3.77	%		2,493.1		3.77	%
Less current portion		—		—	%		—		—	%
Less unamortized debt issuance costs		14.3					16.3
Total long-term debt	$	2,479.4		3.77	%	$	2,476.8		3.77	%

On November 21, 2019, the Company issued $500.0 million of 3.00% senior notes due 2029 and $400.0 million of 4.05% senior notes due 2049, through a registered public offering and notified the holders of its $500.0 million of 2.45% notes due December 15, 2020 and $400.0 million of 3.90% notes due June 15, 2022 that it would redeem those notes in December 2019. On December 6, 2019, PCA completed the redemption of the old 2.45% notes for $509.7 million, which included a redemption premium of $3.8 million and $5.8 million of accrued and unpaid interest. On December 23, 2019, PCA completed the redemption of the old 3.90% notes for $418.7 million, which included a redemption premium of $18.4 million and $0.3 million of accrued and unpaid interest. PCA used the proceeds of the offering of the new 3.00% and 4.05% notes and cash on hand to fund the redemptions and the $8.3 million of debt issuance costs. The debt issuance costs are amortized to interest expense using the effective interest method over the terms of the notes.

As of December 31, 2020, the details of our borrowings were as follows:

•

Senior Unsecured Credit Agreement. On August 29, 2016, we entered into an amended and restated credit facility, which included a term loan facility (that was subsequently repaid in full in 2017) to finance an acquisition and a five-year revolving credit facility to 2021. Currently, our credit facility only includes a $350.0 million unsecured revolving credit facility with variable interest (LIBOR plus a margin) due August 2021. During 2020, we did not borrow under the Revolving Credit Facility. At December 31, 2020, we had $23.7 million of outstanding letters of credit that were considered outstanding on the revolving credit facility, resulting in $326.3 million of unused borrowing capacity. The outstanding letters of credit were primarily for workers compensation. We are required to pay commitment fees on the unused portions of the credit facility.

•

4.50% Senior Notes. On October 22, 2013, we issued $700.0 million of 4.50% senior notes due November 1, 2023, through a registered public offering.

•

3.65% Senior Notes. On September 5, 2014, we issued $400.0 million of 3.65% senior notes due September 15, 2024, through a registered public offering.

•

3.40% Senior Notes. On December 13, 2017, we issued $500.0 million of 3.40% senior notes due December 15, 2027, through a registered public offering.

•

3.00% Senior Notes. On November 21, 2019, we issued $500.0 million of 3.00% senior notes due December 15, 2029, through a registered public offering.

•

4.05% Senior Notes. On November 21, 2019, we issued $400.0 million of 4.05% senior notes due December 15, 2049, through a registered public offering.

The instruments governing our indebtedness contain financial and other covenants that limit the ability of PCA and its subsidiaries to enter into sale and leaseback transactions, incur liens, incur indebtedness at the subsidiary level, enter into certain transactions with affiliates, merge or consolidate with any other person or sell or otherwise dispose of all or substantially all of our assets. Our credit facility also requires us to comply with certain financial covenants, including maintaining a minimum interest coverage ratio and a maximum leverage ratio. A failure to comply with these restrictions could lead to an event of default, which could result in an acceleration of any outstanding indebtedness and/or prohibit us from drawing on the revolving credit facility. An acceleration under the revolving credit facility may also constitute an event of default under the senior notes indenture. At December 31, 2020, we were in compliance with these covenants.

At December 31, 2020, we have $2,493.7 million of fixed-rate senior notes outstanding. At December 31, 2020, the fair value of our fixed-rate debt was estimated to be $2,827.1 million. The difference between the book value and fair value is due to the difference between the period-end market interest rate and the stated rate of our fixed-rate debt. We estimated the fair value of our fixed-rate debt using quoted market prices (Level 2 inputs), discussed further in Note 2, Summary of Significant Accounting Policies.

Repayments, Interest, and Other

In 2020, we did not repay any outstanding debt, as we did not have any maturities of our Senior Notes during 2020.

In December 2019, we used the net proceeds from the November 2019 offering of the new 3.00% and 4.05% notes and cash on hand to redeem the 2.45% notes and 3.90% notes. We completed the redemption of the old 2.45% notes and 3.90% notes for $509.7 million and $418.7 million, respectively, which included redemption premiums and accrued and unpaid interest.

In 2018, we used cash on hand to repay debt outstanding of $150.0 million under the 6.50% Senior Notes due March 15, 2018 at maturity.

As of December 31, 2020, annual principal maturities for debt, excluding unamortized debt discount, are: none for 2021 through 2022, $700.0 million for 2023; $400.0 million for 2024; and $1.4 billion for 2025 and thereafter.

Interest payments paid in connection with the Company’s debt obligations for the years ended December 31, 2020, 2019, and 2018 were $97.0 million, $114.0 million (including redemption premiums of $22.2 million), and $97.0 million, respectively.

Included in interest expense, net, are amortization of financing costs and, for 2019 and 2018, amortization of treasury lock settlements. Amortization of financing costs in 2020, 2019, and 2018 was $2.0 million, $4.5 million (including a $1.8 million write-off of deferred debt issuance costs related to the November 2019 debt refinancing), and $2.7 million, respectively. Amortization of treasury lock settlements was an $18.2 million net loss in 2019 (including a $13.1 million write-off of the remaining balance for treasury locks related to the November 2019 debt refinancing) and a $5.3 million net loss in 2018.