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External Debt and Financing Arrangements
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
External Debt and Financing Arrangements

8. External Debt and Financing Arrangements

Unsecured Senior Notes

 

In March 2022, the Company issued $900 million in aggregate principal amount of senior unsecured notes in a registered public offering consisting of $450 million of 4.00% senior unsecured notes maturing in 2032 and $450 million of 4.50% senior unsecured notes maturing in 2052 (together, the “2022 Notes”). The Company used the net proceeds from the 2022 Notes offering to pay down a portion of the outstanding balance on the 2021 Term Loan, as described below.

At December 31, 2022, the Company had aggregate outstanding notes in the principal amount of $2.7 billion, with varying maturities (the “Notes”). The Notes are unsecured senior obligations of the Company. The following table provides a summary of the Company’s outstanding Notes, including the carrying value

of the Notes, net of underwriting commissions, price discounts and debt issuance costs as of December 31, 2022 and December 31, 2021:

(in millions)

 

 

 

 

 

 

 

Net Carrying Value

 

Coupon Rate

Principal Amount

 

 

Issuance Date

 

Maturity Date

 

December 31, 2022

 

 

December 31, 2021

 

4.000% Senior Notes

$

500.0

 

 

June 2015

 

June 2025

 

$

498.1

 

 

$

497.4

 

4.000% Senior Notes

 

600.0

 

 

September 2018

 

September 2023

 

 

599.2

 

 

 

598.2

 

3.250% Senior Notes

 

700.0

 

 

September 2019

 

September 2029

 

 

695.0

 

 

 

694.2

 

4.000% Senior Notes

 

450.0

 

 

March 2022

 

March 2032

 

 

445.8

 

 

 

-

 

4.500% Senior Notes

 

450.0

 

 

March 2022

 

March 2052

 

 

435.4

 

 

 

-

 

Total Senior Notes

$

2,700.0

 

 

 

 

 

 

$

2,673.5

 

 

$

1,789.8

 

As of December 31, 2022 and December 31, 2021, the components of long-term debt were as follows:

(In millions)

 

2022

 

 

2021

 

Notes (due 2023 to 2052)

 

$

2,673.5

 

 

$

1,789.8

 

2022 Revolving Credit Agreement

 

 

—

 

 

 

520.0

 

2021 Term Loan

 

 

—

 

 

 

400.0

 

Total debt

 

 

2,673.5

 

 

 

2,709.8

 

Less: current portion

 

 

599.2

 

 

 

400.0

 

Total long-term debt

 

$

2,074.3

 

 

$

2,309.8

 

 

Credit Facilities

In August 2022, the Company entered into a third amended and restated $1.25 billion revolving credit facility (the “2022 Revolving Credit Agreement”), and borrowings thereunder will be used for general corporate purposes. The maturity date of the facility is August 2027. Interest rates under the 2022 Revolving Credit Agreement are variable based on SOFR at the time of the borrowing and the Company’s long-term credit rating, and can range from SOFR + 1.02% to SOFR + 1.525%. Under the 2022 Revolving Credit Agreement, the Company is required to maintain a minimum ratio of consolidated EBITDA to consolidated interest expense of 3.0 to 1.0. Consolidated EBITDA is defined as consolidated net income before interest expense, income taxes, depreciation, amortization of intangible assets, losses from asset impairments and certain other one-time adjustments. In addition, the Company’s ratio of consolidated debt minus certain cash and cash equivalents to consolidated EBITDA generally may not exceed 3.5 to 1.0. On December 31, 2022 and December 31, 2021, our outstanding borrowings under this credit facility and our previous revolving credit facility were zero and $520.0 million, respectively. As of December 31, 2022, we believe we are in compliance with all covenants under this credit facility.

In November 2021, the Company entered into a 364-day, $400 million term loan credit agreement (“2021 Term Loan”) for general corporate purposes that matured in November 2022. On March 1, 2022, the Company entered into a First Amendment and Incremental Agreement to the 2021 Term Loan (the "First Amendment"). The First Amendment provided for an increase in the principal amount from $400 million to $600 million as well as the transition from LIBOR to SOFR interest rates. As a result, interest rates under the 2021 Term Loan were variable based on SOFR at the time of the borrowing and the Company's long-term credit rating and could range from SOFR + 0.725% to SOFR + 1.350%. On March 18, 2022, the Company entered into a Second Amendment and Incremental Agreement to the 2021 Term Loan (the "Second Amendment") increasing the principal amount from $600 million to $1.1 billion. All other terms and conditions remained the same under the First Amendment and Second Amendment. Proceeds from

the increased 2021 Term Loan were used to repay outstanding balances under our previous revolving credit facility. The outstanding $1.1 billion under the 2021 Term Loan was repaid on March 25, 2022 with proceeds from the 2022 Notes and other existing sources of liquidity.

 

We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to $20.5 million in aggregate as of December 31, 2022 and $17.5 million as of December 31, 2021, of which there were no outstanding balances as of December 31, 2022 and 2021. The weighted-average interest rates on these borrowings were zero in 2022 and 2021.

Commercial Paper

In November 2021, the Company established a commercial paper program (the “Commercial Paper Program”) pursuant to which the Company may issue unsecured commercial paper notes. The Company’s 2022 Revolving Credit Agreement is the liquidity backstop for the repayment of any notes issued under the Commercial Paper Program, and as such, borrowings under the Commercial Paper Program are included in Long-term debt in the consolidated balance sheets. Amounts available under the Commercial Paper Program may be borrowed, repaid and re-borrowed, with the aggregate principal amount outstanding at any time, including borrowings under the 2022 Revolving Credit Agreement, not to exceed $1.25 billion. The Company plans to use net proceeds from any issuances under the Commercial Paper Program for general corporate purposes.

 

In our debt agreements, there are normal and customary events of default which would permit the lenders to accelerate the debt if not cured within applicable grace periods, such as failure to pay principal or interest when due or a change in control of the Company. There were no events of default as of December 31, 2022.

Debt payments due during the next five years as of December 31, 2022 are $600 million in 2023, zero in 2024, $500 million in 2025, zero in 2026, zero in 2027 and $1,600 million in 2028 and beyond. Interest payments due during the next five years as of December 31, 2022 are $105 million in 2023, $152 million in 2024 through 2025, $122 million in 2026 through 2027 and $642 million in 2028 and beyond.