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Borrowings | 12 Months Ended
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Dec. 31, 2022
Debt Disclosure [Abstract] |
Borrowings | Borrowings Borrowings at December 31, 2022 and 2021 consisted of the following:
| 2022 |  | 2021
| (In millions)
3.20% Senior Notes, due June 2023(1) | $ | 100.0 |  |  | $ | 100.0 |
3.37% Senior Notes, due June 2025 | 100.0 |  |  | 100.0 |
3.00% Senior Notes, due May 2030 | 500.0 |  |  | 500.0 |
2.625% Senior Notes, due June 2031 | 500.0 |  |  | 500.0 |
$800.0 million Revolving Credit Facility, due November 2027 | 77.7 |  |  | — |
$200.0 million Term Facility, due November 2027 | 200.0 |  |  | — |
Other borrowings | 0.1 |  |  | 0.1 |
Total borrowings | 1,477.8 |  |  | 1,200.1 |
Less current portion | — |  |  | — |
Less deferred debt issuance costs | 7.9 |  |  | 8.4 |
Less unaccreted debt discount | 1.2 |  |  | 1.4 |
Long-term borrowings | $ | 1,468.7 |  |  | $ | 1,190.3 |
(1)As of December 31, 2022, the $100.0 million 3.20% Senior Notes, due in June 2023, have not been classified as Short-term borrowings on the Consolidated Balance Sheets as the Company has the ability and intent to either refinance or repay these Notes using the available borrowing capacity of the Revolving Facility, due November 2027. As a result, the 3.20% Senior Notes remain classified as Long-term borrowings on the Consolidated Balance Sheets as of December 31, 2022. Revolving Credit Facility and Term Facility On November 1, 2022, the Company amended and restated that certain five-year $800 million Credit Agreement, dated as of May 31, 2019 that was due to expire in May 2024 (the “Original Credit Agreement” and, as amended and restated, the “Credit Agreement”) along with certain of its subsidiaries, as borrowers (the “Borrowers”), Bank of America, N.A., as administrative agent, swing line lender and an issuer of letters of credit, with other agents party thereto. The Credit Agreement consists of a revolving credit facility (the “Revolving Facility”) in an aggregate principal amount of $800 million and a term credit facility (the “Term Facility”) available to the Company in an aggregate principal amount of $200 million, both of which have a final maturity date of November 1, 2027. The maturity date of the Revolving Facility may be extended under certain conditions for an additional one-year term. Up to $100 million of the Revolving Facility is available for the issuance of letters of credit. Additionally, up to $50 million of the Revolving Facility is available to the Company for swing line loans, available on a same-day basis. Proceeds of the Revolving Facility are available for use by the Borrowers for working capital and other general corporate purposes, including refinancing existing debt of the Company and its subsidiaries. The Company may request increases in the lending commitments under the Credit Agreement, but the aggregate lending commitments pursuant to such increases may not exceed $400 million. The Company has the right, subject to certain conditions set forth in the Credit Agreement, to designate certain foreign subsidiaries of the Company as borrowers under the Credit Agreement. In connection with any such designation, the Company is required to guarantee the obligations of any such subsidiaries under the Credit Agreement. Proceeds from the Credit Agreement were used by the Company to pay a portion of the consideration for the acquisition of Muon Group. Borrowings under the Credit Agreement bear interest, at either an alternate base rate or Term SOFR rate (or appropriate alternative currency reference rates) plus, in each case, an applicable margin. Such applicable margin is based on the better of the Company’s senior, unsecured, long-term debt rating or the Company’s applicable leverage ratio and can range from 0.00% to 1.275%. Interest is payable (a) in the case of base rate loans, quarterly, and (b) in the case of Term SOFR rate loans, on the last day of the applicable interest period selected, or every three months from the effective date of such interest period for interest periods exceeding three months. The Credit Agreement gives the Company the option to enter into a future environmental, social and governance amendment by which pricing may be adjusted pursuant to the Company’s performance measured against certain key performance indicators agreed by the Company and BofA Securities, Inc., as sustainability coordinator. The Credit Agreement requires payment to the lenders of a facility fee based upon the amount of the lenders’ commitments under the credit facility from time to time, equal to the applicable interest rate times the actual daily amount of the Revolving Facility. Voluntary prepayments of any loans and voluntary reductions of the unutilized portion of the commitments under the credit facility are permissible without penalty, subject to break funding payments and minimum notice and minimum reduction amount requirements. The Credit Agreement contains customary affirmative and negative covenants for such senior unsecured credit agreements. There are two key financial covenants that the Company is required to maintain in connection with the Credit Agreement and the Senior Notes, excluding the 3.00% Senior Notes and the 2.625% Senior Notes which have no financial covenants, a minimum interest coverage ratio of 3.0 to 1 and a maximum leverage ratio of 3.50 to 1, which is the ratio of the Company’s consolidated total debt to its consolidated earnings before interest, income taxes, depreciation and amortization (“EBITDA”), both of which are tested quarterly and in the case of the leverage ratio, there is an option to increase the ratio to 4.00 for 12 months in connection with certain acquisitions. At December 31, 2022, the Company was in compliance with each financial covenant under the Credit Agreement and the Senior Notes, excluding the 3.00% Senior Notes and the 2.625% Senior Notes which have no financial covenants. While there are no financial covenants relating to the 3.00% Senior Notes and the 2.625% Senior Notes, they are subject to cross-default provisions. The negative covenants include restrictions on the Company’s ability to grant liens, enter into transactions resulting in fundamental changes (such as mergers or sales of all or substantially all of the assets of the Company), make certain subsidiary dividends or distributions, engage in materially different lines of businesses and allow subsidiaries to incur certain additional debt. The Credit Agreement also contains customary events of default (subject to grace periods, as appropriate). At December 31, 2022, there was $77.7 million outstanding under the Revolving Facility with an interest rate of 3.32% and $7.9 million of outstanding letters of credit, resulting in a net available borrowing capacity under the Revolving Facility of approximately $714.4 million. In addition, there was $200.0 million outstanding under the Term Facility with an interest rate of 5.83%. Issuance of 2.625% Senior Notes in 2021 On May 28, 2021, the Company completed a public offering of $500.0 million in aggregate principal amount of 2.625% Senior Notes due June 2031 (the “2.625% Senior Notes”). The net proceeds from the offering were approximately $494.7 million, after deducting the issuance discount of $0.6 million, the underwriting commission of $3.3 million and offering expenses of $1.4 million. The net proceeds were used to redeem and repay the $350.0 million aggregate principal amount outstanding of its 4.20% Senior Notes due December 15, 2021 (the “4.20% Senior Notes”) and a $6.7 million make-whole redemption premium, with the remaining balance used for general corporate purposes. The 2.625% Senior Notes bear interest at a rate of 2.625% per annum, which is payable semi-annually in arrears on June 15 and December 15 of each year. The 2.625% Senior Notes mature on June 15, 2031. The 2.625% Senior Notes were issued under an Indenture, dated as of December 6, 2010 (the “Base Indenture”), between the Company and Wells Fargo Bank, National Association, as trustee (the “Trustee”), as supplemented by the Fourth Supplemental Indenture, dated as of May 28, 2021 (the “Supplemental Indenture” and, together with the Base Indenture and other supplements thereto, the “Indenture”), between the Company and the Trustee. The Company may redeem all or a portion of the 2.625% Senior Notes at any time prior to maturity at the redemption prices set forth in the Indenture. The Indenture and the 2.625% Senior Notes contain covenants that limit the Company’s ability to, among other things, incur certain liens, enter into certain sale and leaseback transactions and enter into certain mergers, consolidations and transfers of substantially all of the Company’s assets. The terms of the 2.625% Senior Notes also require the Company to make an offer to repurchase the 2.625% Senior Notes upon a change of control triggering event (as defined in the Indenture) at a price equal to 101% of the principal amount plus accrued and unpaid interest, if any. The Indenture also provides for customary events of default, which include nonpayment, breach of covenants or warranties in the Indenture and certain events of bankruptcy, insolvency or reorganization. Generally, if an event of default occurs, the Trustee or holders of at least 25% of the then outstanding 2.625% Senior Notes may declare the principal amount of all of the 2.625% Senior Notes to be due and payable immediately. On May 17, 2021, the Company provided notice of its election to redeem early, on June 16, 2021, the $350.0 million aggregate principal amount outstanding of its 4.20% Senior Notes at a redemption price of $350.0 million plus a make-whole redemption premium of $6.7 million using proceeds from the Company’s 2.625% Senior Notes. In addition, the Company recognized the remaining $1.3 million of the pre-tax amount included in Accumulated other comprehensive loss in Shareholders’ equity related to the interest rate exchange agreement associated with the 4.20% Senior Notes and wrote off the remaining $0.1 million of deferred issuance costs and $0.1 million of the debt issuance discount associated with the 4.20% Senior Notes as well as $0.4 million of deferred taxes for a total loss on early debt redemption of $8.6 million which was recorded within Other (income) expense - net in the Consolidated Statements of Income. Issuance of 3.00% Senior Notes in 2020 On April 29, 2020, the Company completed a public offering of $500.0 million in aggregate principal amount of 3.00% Senior Notes due May 2030 (the “3.00% Senior Notes”). The net proceeds from the offering were approximately $494.4 million, after deducting the issuance discount of $0.9 million, the underwriting commission of $3.3 million and offering expenses of $1.4 million. The net proceeds were used to redeem and repay the $300.0 million aggregate principal amount outstanding of its 4.50% Senior Notes due December 15, 2020 (the “4.50% Senior Notes”) and the related accrued interest and a make-whole redemption premium, with the remaining balance used for general corporate purposes. The 3.00% Senior Notes bear interest at a rate of 3.00% per annum, which is payable semi-annually in arrears on May 1 and November 1 of each year. The 3.00% Senior Notes mature on May 1, 2030. The Company may redeem all or a portion of the 3.00% Senior Notes at any time prior to maturity at the redemption prices set forth in the Indenture governing the 3.00% Senior Notes. The Indenture and 3.00% Senior Notes contain covenants that limit the Company’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale-leaseback transactions and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all of the Company’s assets. The terms of the 3.00% Senior Notes also require the Company to make an offer to repurchase the 3.00% Senior Notes upon a change of control triggering event (as defined in the Indenture) at a price equal to 101% of the principal amount plus accrued and unpaid interest, if any. The Indenture also provides for customary events of default, which include nonpayment, breach of covenants in the Indenture and certain events of bankruptcy and insolvency. Generally, if an event of default occurs, the Trustee or holders of at least 25% of the then outstanding 3.00% Senior Notes may declare the principal amount of all of the 3.00% Senior Notes to be due and payable immediately. On April 27, 2020, the Company provided notice of its election to redeem early, on May 27, 2020, the $300.0 million aggregate principal amount outstanding of its 4.50% Senior Notes at a redemption price of $300.0 million plus a make-whole redemption premium of $6.8 million and accrued and unpaid interest of $6.1 million using proceeds from the Company’s 3.00% Senior Notes. In addition, the Company recognized the remaining $1.4 million of the pre-tax amount included in Accumulated other comprehensive loss in Shareholders’ equity related to the interest rate exchange agreement associated with the 4.50% Senior Notes and wrote off the remaining $0.1 million of deferred issuance costs and $0.1 million of the debt issuance discount associated with the 4.50% Senior Notes for a total loss on early debt redemption of $8.4 million which was recorded within Other (income) expense - net in the Consolidated Statements of Income. Issuance of 3.20% Senior Notes and 3.37% Senior Notes in 2016 On June 13, 2016, the Company completed a private placement of a $100 million aggregate principal amount of 3.20% Senior Notes due June 13, 2023 (the “3.20% Senior Notes”) and a $100 million aggregate principal amount of 3.37% Senior Notes due June 13, 2025 (the “3.37% Senior Notes” and together with the 3.20% Senior Notes, the “2016 Private Placement Notes”) pursuant to a Note Purchase Agreement dated June 13, 2016 (the “Purchase Agreement”). Each series of the 2016 Private Placement Notes bears interest at the stated amount per annum, which is payable semi-annually in arrears on each June 13 th and December 13 th. The 2016 Private Placement Notes are unsecured obligations of the Company and rank pari passu in right of payment with all of the Company’s other unsecured, unsubordinated debt. The Company may at any time prepay all, or any portion of the 2016 Private Placement Notes, provided that such portion is greater than 5% of the aggregate principal amount of the 2016 Private Placement Notes then outstanding. In the event of a prepayment, the Company will pay an amount equal to par plus accrued interest plus a make-whole amount. In addition, the Company may repurchase the 2016 Private Placement Notes by making an offer to all holders of the 2016 Private Placement Notes, subject to certain conditions. The Purchase Agreement contains certain covenants that restrict the Company’s ability to, among other things, transfer or sell assets, incur indebtedness, create liens, transact with affiliates and engage in certain mergers or consolidations or other change of control transactions. In addition, the Company must comply with the leverage ratio and interest coverage ratio described above and the Purchase Agreement also limits the outstanding principal amount of priority debt that may be incurred by the Company to 15% of consolidated assets. The Purchase Agreement provides for customary events of default. In the case of an event of default arising from specified events of bankruptcy or insolvency, all of the outstanding 2016 Private Placement Notes will become due and payable immediately without further action or notice. In the case of payment event of default, any holder of the 2016 Private Placement Notes affected thereby may declare all of the 2016 Private Placement Notes held by it due and payable immediately. In the case of any other event of default, a majority of the holders of the 2016 Private Placement Notes may declare all of the 2016 Private Placement Notes to be due and payable immediately. Total borrowings at December 31, 2022 have scheduled maturities as follows:
(In millions) |
2023 | $ | 100.0 |
2024 | — |
2025 | 100.1 |
2026 | — |
2027 | 277.7 |
Thereafter | 1,000.0 |
Total borrowings | $ | 1,477.8 |

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