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v3.24.2

Debt | 6 Months Ended
--- | ---
Jun. 30, 2024
Debt Disclosure [Abstract] |
Debt | Debt Debt is comprised of the following at the dates indicated (in millions):
| June 30, 2024 |  | December 31, 2023
4.00% senior notes due 2024 (1) (2) | $ | 199 |  |  | $ | 198 |
4.875% senior notes due 2025 (1) | 499 |  |  | 498 |
3.90% senior notes due 2025 | 47 |  |  | 47 |
4.20% senior notes due 2026 | 1,981 |  |  | 1,980 |
6.375% senior notes due 2027 | 480 |  |  | 488 |
6.625% senior notes due 2029 | 474 |  |  | 486 |
5.375% senior notes due 2036 | 417 |  |  | 417 |
5.50% senior notes due 2046 | 658 |  |  | 658 |
Revolving credit facility (1) | 285 |  |  | 131 |
Other debt | 2 |  |  | 1 |
Total debt | 5,042 |  |  | 4,904 |
Short-term debt and current portion of long-term debt | (983) |  |  | (329) |
Long-term debt | $ | 4,059 |  |  | $ | 4,575 |
(1)Included in short-term debt and current portion of long-term debt at June 30, 2024. (2)Included in short-term debt and current portion of long-term debt at December 31, 2023. Senior Notes On February 9, 2024, Moody’s Corporation (“Moody’s”) downgraded the Company’s senior unsecured debt rating to “Ba3”. As a result of Moody’s downgrade, certain of the Company’s outstanding senior notes currently aggregating to approximately $3.1 billion (the “Coupon-Step Notes”) were subject to an interest rate increase of 25 basis points. The change to the interest rate due to the downgrade will increase the Company’s interest expense by approximately $8 million on an annualized basis (approximately $6 million in 2024). On February 14, 2024, S&P Global Inc. (“S&P”) downgraded the Company’s debt rating to “BB-”. As a result of the S&P downgrade, the Coupon-Step Notes were subject to an additional interest rate increase of 25 basis points. The change to the interest rate due to the downgrade will increase the Company’s interest expense by approximately $8 million on an annualized basis (approximately $6 million in 2024). The S&P and Moody’s downgrades will collectively increase the Company’s interest expense by approximately $16 million in the aggregate on an annualized basis (approximately $12 million in 2024). Revolving Credit Facility The Company had a $1.5 billion senior unsecured revolving credit facility (the “Credit Revolver”) maturing in August 2027. On March 27, 2023, the Company entered into an amendment (the “First Amendment”) to (i) include non-cash expenses resulting from grants of stock awards among the items that may be added to Consolidated Net Income when calculating Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), as defined in the First Amendment, and (ii) lower the Interest Coverage Ratio, as defined in the First Amendment, for the fiscal quarters ending on June 30, 2023, September 30, 2023, December 31, 2023 and March 31, 2024. On February 7, 2024, the Company, certain of its subsidiaries, as subsidiary borrowers, and certain of its subsidiaries, as subsidiary guarantors, entered into a second amendment to the Credit Revolver agreement (the “Second Amendment”). The Second Amendment, among other things, (i) reduced the commitments of the lenders from $1.5 billion to $1.0 billion, (ii) replaced the Company’s existing financial covenants with new financial covenants testing the Company’s Collateral Coverage Ratio and Total Net Leverage Ratio (each further defined in the Second Amendment), (iii) required the Company and certain of the Company’s domestic and foreign subsidiaries (collectively the “Guarantors”) to guarantee all obligations under the Credit Revolver including, without limitation, obligations in respect of extensions of credit to any of the borrowers, certain hedging obligations, certain cash management obligations, and certain supply chain financing obligations, and (iv) required the Company and the other Guarantors to grant a lien and security interest in certain of its assets consisting of eligible accounts receivable, eligible inventory, eligible equipment and eligible intellectual property, and all products and proceeds of the foregoing, subject to certain limitations. See Footnote 1 for further information with respect to the Company’s SCF Programs. The Credit Revolver provides for the issuance of up to $150 million of letters of credit, so long as there is sufficient availability for borrowing under the Credit Revolver. At June 30, 2024, the Company had $285 million of outstanding borrowings under the Credit Revolver and approximately $20 million of outstanding standby letters of credit issued against the Credit Revolver, with a net availability of approximately $695 million. Other The indentures governing the Company’s senior notes contain usual and customary nonfinancial covenants. The Company’s borrowing arrangements other than the senior notes contain usual and customary nonfinancial covenants and certain financial covenants, including minimum collateral coverage and net leverage ratios. Weighted average interest rates are as follows:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Total debt | 6.0 | % |  | 5.3 | % |  | 5.8 | % |  | 5.1 | %
Short-term debt | 7.5 | % |  | 6.8 | % |  | 7.8 | % |  | 6.5 | %
The fair value of the Company’s senior notes are based upon prices of similar instruments in the marketplace and are as follows (in millions):
| June 30, 2024 |  | December 31, 2023
| Fair Value |  | Book Value |  | Fair Value |  | Book Value
Senior notes | $ | 4,610 |  |  | $ | 4,755 |  |  | $ | 4,633 |  |  | $ | 4,772 |
The carrying amounts of all other debt approximates fair value.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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