Short-term Borrowings and Long-Term Debt

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Short-term Borrowings and Long-Term Debt

Short-term Borrowings and Long-term Debt

The Company’s short-term borrowings generally include lines of credit and term loan facilities with financial institutions to be utilized for general operating purposes. There were $160 million and $8 million of borrowings outstanding under these facilities as of September 30, 2022 and December 31, 2021, respectively.

In September 2022, the Company entered into a $77 million one-year term loan agreement. The Company pledged $92 million of certain land as collateral. The loan bears interest at a fixed rate of 4.75%. Principal is to be paid at maturity and interest is paid on a monthly basis.

Details of carrying amounts of long-term debt were as follows:

(in thousands)						September 30, 2022		December 31, 2021
Maturity Date	Interest rate (%)			Borrowing Limit
February 2024(1)	(4)			$	1,000,000	$	—	$	—
February 2023 - April 2025(2)	2.65	–	4.45	3,617		3,617		20,952
October 2023 - March 2027(3)	2.87	–	5.95	717,035		563,283		605,229
Total principal long-term debt				$	1,720,652	$	566,900	$	626,181
Less: current portion of long-term debt						(2,719)		(341,717)
Less: unamortized discounts						(3,112)		(1,274)
Total long-term debt						$	561,069	$	283,190

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(1)Relates to the Company’s 2021 revolving credit facility.

(2)The Company entered into various loan agreements with fixed interest rates for general operating purposes.

(3)At September 30, 2022, we had pledged up to $861 million of land and buildings as collateral against long-term loan facilities.

(4)Borrowings under the 2021 revolving credit facility bear interest, at the Company’s option, at a rate per annum equal to (i) a base rate equal to the highest of (A) the prime rate, (B) the higher of the federal funds rate or a composite overnight bank borrowing rate plus 0.50%, or (C) an adjusted LIBOR for a one-month interest period plus 1.00% or (ii) an adjusted LIBOR plus a margin equal to 1.00%.

In March 2022, the Company entered into a new five-year loan agreement to borrow $279 million, which was partially used to extinguish the $149 million August 2020 term loan facility which matured in March 2022 and to finance infrastructure of a fulfillment center. The Company pledged up to $335 million of certain existing land and a building as collateral. The loan bears interest at a fixed rate of 4.26%.

In October 2022, the Company entered into a two-year revolving facility agreement with a borrowing limit of $112 million that bears interest at the average of 91-days CD interest rate plus 2.30%. The revolving facility is secured by certain of the Company’s inventories.

The Company was in compliance with the covenants for each of its borrowings and debt agreements as of September 30, 2022.

The Company’s long-term debt is recorded at amortized cost. The fair value is estimated using Level 2 inputs based on the Company’s current interest rate for similar types of borrowing arrangements. The carrying amount of the long-term debt approximates its fair value as of September 30, 2022 and December 31, 2021 due primarily to the interest rates approximating market interest rates.