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Debt
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Debt DEBT
The carrying value of our credit facilities, finance leases and long-term debt as of December 31, 2021 and 2020 is listed in the following table, and is adjusted for the fair value of interest rate swaps, unamortized discounts, deferred issuance costs and the unamortized portion of adjustments to fair value recorded in purchase accounting. Original issue discounts and adjustments to fair value recorded in purchase accounting are amortized to interest expense over the term of the applicable instrument using the effective interest method.
  December 31, 2021December 31, 2020
MaturityInterest RatePrincipalAdjustmentsCarrying  ValuePrincipalAdjustmentsCarrying  Value
Credit facilities:
Uncommitted Credit FacilityVariable$— $— $— $— $— $— 
$2.25 billion - June 2023
Variable— — — 186.0 — 186.0 
$3.0 billion - August 2026
Variable24.3 — 24.3 — — — 
Senior notes:
May 20234.750300.0 (0.1)299.9 300.0 4.8 304.8 
August 20242.500900.0 (4.8)895.2 900.0 (6.6)893.4 
March 20253.200500.0 (2.2)497.8 500.0 (3.0)497.0 
November 20250.875350.0 (2.6)347.4 350.0 (3.3)346.7 
July 20262.900500.0 (2.8)497.2 500.0 (3.3)496.7 
November 20273.375650.0 (3.8)646.2 650.0 (4.5)645.5 
May 20283.950800.0 (12.4)787.6 800.0 (14.2)785.8 
March 20302.300600.0 (5.9)594.1 600.0 (6.5)593.5 
February 20311.450650.0 (7.9)642.1 650.0 (8.6)641.4 
February 20321.750750.0 (6.6)743.4 750.0 (7.1)742.9 
March 20332.375700.0 (7.6)692.4 — — — 
March 20356.086181.9 (12.8)169.1 181.9 (13.4)168.5 
March 20406.200399.9 (3.6)396.3 399.9 (3.6)396.3 
May 20415.700385.7 (5.0)380.7 385.7 (5.1)380.6 
March 20503.050400.0 (7.1)392.9 400.0 (7.3)392.7 
Debentures:
May 20219.250— — — 35.3 (0.1)35.2 
September 20357.400148.0 (31.1)116.9 148.1 (32.1)116.0 
Tax-exempt:
2023 - 2051
0.150 - 0.300 %
1,189.1 (7.6)1,181.5 1,111.2 (6.5)1,104.7 
Finance leases:
2022 - 2063
0.806 - 9.750 %
249.4 — 249.4 206.5 — 206.5 
Total Debt$9,678.3 $(123.9)9,554.4 $9,054.6 $(120.4)8,934.2 
Less: current portion(8.2)(168.1)
Long-term portion$9,546.2 $8,766.1 
Loss on Extinguishment of Debt and Other Related Costs
During the year ended December 31, 2020, we incurred a loss on the early extinguishment of debt and other related costs. We paid cash premiums during the year totaling $99.1 million and incurred non-cash charges related to the proportional share of unamortized discounts and deferred issuance costs of $2.8 million. The unamortized proportional share of certain cash flow hedges reclassified to earnings as non-cash interest expense was $1.8 million and the proportional share of our fair value hedges that were dedesignated and immediately recognized in earnings as a reduction to non-cash interest expense was $4.7 million.
Future Maturities of Debt
Aggregate principal maturities of notes payable, finance leases and other long-term debt as of December 31, 2021 follow:
2022$8.2 
2023475.2 
2024926.9 
2025856.7 
2026613.2 
Thereafter6,798.1 
$9,678.3 
Credit Facilities
The Credit Facility
In August 2021, we entered into a $3.0 billion unsecured revolving credit facility (the Credit Facility), which replaces the prior $2.25 billion unsecured revolving credit facility which would have matured in June 2023 (the Replaced Credit Facility). Borrowings under the Credit Facility mature in August 2026. As permitted by the Credit Facility, we have the right to request two one-year extensions of the maturity date but none of the lenders are committed to participate in such extension. The Credit Facility also includes a feature that allows us to increase availability, at our option, by an aggregate amount of up to $1.0 billion through increased commitments from existing lenders or the addition of new lenders.
At our option, borrowings under the Credit Facility bear interest at a Base Rate, a daily floating London Interbank Offered Rate (LIBOR), or a Eurodollar Rate, plus an applicable margin of 0.910% based on our Debt Ratings (all as defined in the Credit Facility agreement). On the earliest of (i) the date that all available tenors of U.S. dollar LIBOR have permanently or indefinitely ceased to be provided or have been announced to be no longer representative, (ii) June 30, 2023 or (iii) the effective date of an election to opt into a secured overnight financing rate (SOFR), the LIBOR rate will be replaced by a forward-looking term rate based on SOFR or a daily rate based on SOFR published on such date.
The Credit Facility is subject to facility fees based on applicable rates defined in the Credit Facility agreement and the aggregate commitment, regardless of usage. Availability under our Credit Facility and Replaced Credit Facility totaled $2,633.8 million and $1,671.8 million as of December 31, 2021 and 2020, respectively. The Credit Facility can be used for working capital, capital expenditures, acquisitions, letters of credit and other general corporate purposes. The Credit Facility agreement requires us to comply with financial and other covenants. We may pay dividends and repurchase common stock if we are in compliance with these covenants.
As of December 31, 2021 and 2020, we had $24.3 million and $186.0 million of borrowings outstanding under our Credit Facility and Replaced Credit Facility, respectively. We had $341.9 million and $376.5 million of letters of credit outstanding under our Credit Facility and Replaced Credit Facility as of December 31, 2021 and 2020, respectively.
Uncommitted Credit Facility
In January 2022, we entered into a $200.0 million unsecured uncommitted revolving credit facility (the Uncommitted Credit Facility), which replaced the prior $135.0 million uncommitted credit facility (the Replaced Uncommitted Credit Facility). The Uncommitted Credit Facility bears interest at an annual percentage rate to be agreed upon by both parties, rather than a LIBOR or Cost of Funds rate used in the Replaced Uncommitted Credit Facility (as defined in the Replaced Uncommitted Credit Facility agreement). Borrowings under the Uncommitted Credit Facility can be used for working capital, letters of credit, and other general corporate purposes. The agreement governing our Uncommitted Credit Facility requires us to comply with certain covenants. The Uncommitted Credit Facility may be terminated by either party at any time. As of December 31, 2021 and 2020, we had no borrowings outstanding under our Replaced Uncommitted Credit Facility.
Senior Notes and Debentures
In November 2021, we issued $700.0 million of 2.375% senior notes due 2033 (the 2.375% Notes). We used the net proceeds for general corporate purposes, including repayment of amounts outstanding under our unsecured and uncommitted credit facilities. Prior to such use, Republic may have temporarily invested the net proceeds in marketable securities and short-term investments.
During the second quarter of 2021, we paid the entire $35.3 million principal balance of our 9.250% debentures which matured in May 2021.
Our senior notes are general senior unsecured obligations. Interest is payable semi-annually.
Interest Rate Swap and Lock Agreements
Our ability to obtain financing through the capital markets is a key component of our financial strategy. Historically, we have managed risk associated with executing this strategy, particularly as it relates to fluctuations in interest rates, by using a combination of fixed and floating rate debt. From time to time, we also have entered into interest rate swap and lock agreements to manage risks associated with interest rates, either to effectively convert specific fixed rate debt to a floating rate (fair value hedges), or to lock interest rates in anticipation of future debt issuances (cash flow hedges).
Fair Value Hedges
During the second half of 2013, we entered into various interest rate swap agreements relative to our 4.750% fixed rate senior notes due in May 2023 (the 4.750% Notes). The goal was to reduce overall borrowing costs and rebalance our debt portfolio's ratio of fixed to floating interest rates. As of December 31, 2021, these swap agreements have a total notional value of $300.0 million and mature in May 2023. We pay interest at floating rates based on changes in LIBOR and receive interest at a fixed rate of 4.750%. In 2013, these transactions were designated as fair value hedges because the swaps hedge against the changes in fair value of the 4.750% Notes resulting from changes in interest rates.
Contemporaneously with our $250.0 million redemption of the 4.750% Notes in 2020, we dedesignated the proportional share of these swap agreements as fair value hedges and recognized $4.7 million in earnings immediately as a reduction to non-cash interest expense. There was no ineffectiveness recognized in the dedesignation of these fair value hedges. Following the dedesignation, the fair value of these free standing derivatives was determined using standard valuation models with assumptions about interest rates being based on those observed in underlying markets (Level 2 in the fair value hierarchy). As of December 31, 2021 and 2020, these free standing derivatives are reflected at their fair value of $3.9 million and $8.3 million, respectively, and are included in other assets in our consolidated balance sheets. For the years ended December 31, 2021 and 2020, we recognized losses of $4.4 million and $0.1 million directly in earnings as an adjustment to non-cash interest expense attributable to the change in fair value of the free standing derivatives, respectively.
As of December 31, 2021 and 2020, the interest rate swap agreements that were designated as fair value hedges are reflected at their fair value of $4.7 million and $10.0 million, respectively, and are included in other assets in our consolidated balance sheets. To the extent they are effective, the remaining hedged portion of these interest rate swap agreements is included as an adjustment to long-term debt in our consolidated balance sheets.
We recognized net interest income of $7.9 million, $5.7 million and $1.0 million, respectively, during 2021, 2020 and 2019 related to net swap settlements for these interest rate swap agreements, which is included as an offset to interest expense in our consolidated statements of income.
For the years ended December 31, 2021, 2020 and 2019, we recognized a gain of $5.2 million, and losses of $5.7 million and $7.5 million, respectively, related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes. For the years ended December 31, 2021, 2020 and 2019, we recognized offsetting loss of $5.2 million, and gains of $7.6 million and $8.1 million, respectively, on the related interest rate swaps attributable to changes in the benchmark interest rate. The difference of these fair value changes for the years ended December 31, 2021, 2020 and 2019 was recorded directly in earnings as an adjustment to interest expense in our consolidated statements of income.
For further detail regarding the effect of our fair value hedging on interest expense, see Note 18, Financial Instruments, of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
Cash Flow Hedges
We have historically entered into multiple swap agreements designated as cash flow hedges to manage exposure to fluctuations in interest rates in anticipation of planned future issuances of senior notes. Upon the expected issuance of senior notes, we terminate the interest rate locks and settle with our counterparties. These transactions were accounted for as cash flow hedges. All of our cash flow hedges settled before December 31, 2020, thus there was no related asset or liability as of December 31, 2021 or December 31, 2020.
The fair value of our interest rate locks was determined using standard valuation models with assumptions about interest rates being based on those observed in underlying markets (Level 2 in the fair value hierarchy).
There was no unrealized gain or loss recognized in other comprehensive income for the year ended December 31, 2021. The total unrealized losses recognized in other comprehensive income for interest rate locks were $22.5 million and $30.2 million, net of tax, for the years ended December 31, 2020, and 2019, respectively.
As of December 31, 2021 and 2020, our previously terminated interest rate locks were recorded as components of accumulated other comprehensive loss of $25.8 million and $30.4 million, respectively, net of tax. The effective portion of the interest rate locks is amortized as an adjustment to interest expense over the life of the issued debt using the effective interest method. Over
the next 12 months, we expect to amortize approximately $4.3 million, net of tax, from accumulated other comprehensive loss to interest expense as a yield adjustment of our senior notes.
For further detail regarding the effect of our cash flow hedging on interest expense, see Note 18, Financial Instruments, of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
Derivative Contracts
Contemporaneously with the issuance of our 2.300% Notes in February 2020, we amended interest rate lock agreements with a notional value of $550.0 million, extending the mandatory maturity date from 2020 to 2030 and dedesignated them as cash flow hedges (the 2020 Extended Interest Rate Locks). Contemporaneously with the issuance of our 2.500% Notes in August 2019 we amended interest rate lock agreements with a notional value of $375.0 million, extending the mandatory maturity date from 2019 to 2024 and dedesignated them as cash flow hedges (2019 Extended Interest Rate Locks and collectively with the 2020 Extended Interest Rate Locks referred to as the Extended Interest Rate Locks). There was no ineffectiveness recognized in the termination of these cash flow hedges. In addition, we entered into offsetting interest rate swaps to offset future exposures to fair value fluctuations of the Extended Interest Rate Locks (the 2019 Offsetting Interest Rate Swap and the 2020 Offsetting Interest Rate Swap, or collectively the Offsetting Interest Rate Swaps). The fair value of these free standing derivatives was determined using standard valuation models with assumptions about interest rates being based on those observed in underlying markets (Level 2 in the fair value hierarchy).
As of December 31, 2021 and 2020, the fair values of the Extended Interest Rate Locks were liabilities of $49.9 million and $103.0 million, respectively, which were included in other long-term liabilities in our consolidated balance sheet. As of December 31, 2021, the fair value of the 2019 Offsetting Interest Rate Swap was an asset of $11.1 million, which was recorded in other assets in our consolidated balance sheet, and the fair value of the 2020 Offsetting Interest Rate Swap was a liability of $0.8 million, which was included in other long-term liabilities in our consolidated balance sheet. As of December 31, 2020, the fair values of the Offsetting Interest Rate Swaps were assets of $55.5 million, which were included in other assets in our consolidated balance sheet. For the year ended December 31, 2021, we recognized a gain of $44.3 million on the change in fair value of the Extended Interest Rate Locks, with an offsetting loss of $44.0 million, on the Offsetting Interest Rate Swaps. For the year ended December 31, 2020, we recognized a loss of $55.6 million on the change in fair value of the Extended Interest Rate Locks, with an offsetting gain of $52.9 million on the Offsetting Interest Rate Swaps. The changes in fair value were recorded directly in earnings as an adjustment to interest expense in our consolidated statements of income.
Tax-Exempt Financings
As of December 31, 2021, we had $1,181.5 million of certain variable rate tax-exempt financings outstanding with maturities ranging from 2023 to 2051. As of December 31, 2020, we had $1,104.7 million of certain variable rate tax-exempt financings outstanding with maturities ranging from 2021 to 2050. During the year ended December 31, 2021 and 2020, we issued $205.0 million and $60.0 million, respectively, of new tax-exempt financings.
In the fourth quarter of 2021, the Pennsylvania Economic Development Financing Authority issued, for our benefit, $30.0 million of Solid Waste Disposal Revenue Bonds. The proceeds from the issuance, after deferred issuance costs, will be used to fund qualifying landfill-related expenditures in the Commonwealth of Pennsylvania, of which $17.2 million has been incurred and reimbursed to us. As of December 31, 2021, we had $139.0 million of restricted cash and marketable securities, of which $12.4 million represented proceeds from the issuance of the tax-exempt bonds.
All of our tax-exempt financings are remarketed either quarterly or semi-annually by remarketing agents to effectively maintain a variable yield. The holders of the bonds can put them back to the remarketing agents at the end of each interest period. If the remarketing agent is unable to remarket our bonds, the remarketing agent can put the bonds to us. In the event of a failed remarketing, we currently have availability under our Credit Facility to fund these bonds until they are remarketed successfully. Accordingly, we have classified these borrowings as long-term in our consolidated balance sheet as of December 31, 2021 and 2020.
Finance Leases
We had finance lease liabilities of $249.4 million and $206.5 million as of December 31, 2021 and 2020, respectively, with maturities ranging from 2022 to 2063 and 2021 to 2063, respectively.
Interest Paid
Interest paid, excluding net swap settlements for our fair value hedges, was $249.4 million, $325.1 million, and $346.8 million for the years ended December 31, 2021, 2020 and 2019, respectively.