Note 3 - Long-term Debt

3 Months Ended

Mar. 31, 2025

Notes to Financial Statements

Debt Disclosure [Text Block]

3. Long-term Debt

As of March 31, 2025 and December 31, 2024, long-term debt consisted of obligations under our 2019 Senior Credit Agreement (as defined below), our 5.875% senior notes due 2026 (the “2026 Notes”), our 7.0% senior notes due 2027 (the “2027 Notes”), our 4.75% senior notes due 2030 (the “2030 Notes”) and our 5.375% notes due 2031 (the “2031 Notes”), as follows (in millions):

	March 31,			December 31,
	2025			2024
Long-term debt:
2019 Senior Credit Facility:
2021 Term Loan (matures December 1, 2028)	$	1,380		$	1,395
2024 Term Loan (matures June 4, 2029)		496			498
2026 Notes (matures July 15, 2026)		10			10
2027 Notes (matures May 15, 2027)		528			528
2029 Notes (matures July 15, 2029)		1,250			1,250
2030 Notes (matures October 15, 2030)		790			790
2031 Notes (matures November 15, 2031)		1,219			1,219
Total outstanding principal, including current portion		5,673			5,690
Unamortized deferred loan costs - Senior Credit Facility		(31	)		(34	)
Unamortized deferred loan costs - 2027 Notes		(3	)		(3	)
Unamortized deferred loan costs - 2029 Notes		(12	)		(12	)
Unamortized deferred loan costs - 2030 Notes		(7	)		(8	)
Unamortized deferred loan costs - 2031 Notes		(11	)		(12	)
Less current portion		(20	)		(20	)
Long-term debt, less deferred financing costs	$	5,589		$	5,601
Borrowing availability under Revolving Credit Facility	$	692		$	674

Revolving Credit Facility. On March 31, 2025, we entered into a fourth amendment (the “Fourth Amendment”) of our Senior Credit Agreement. The Fourth Amendment, among other things, increases the aggregate commitments under the Revolving Credit Facility (the “Revolving Credit Facility”) by $20 million, resulting in aggregate commitments under the Revolving Credit Facility of $700 million. Borrowings under the Revolving Credit Facility bear interest, at our option, at either the SOFR rate or the Base Rate, in each case, plus an applicable margin. The costs associated with the amendment were not material.

Because of their relationship to the interest rate caps, described below, borrowings under the 2021 Term Loan and 2019 Term Loan bear interest at the 1-month SOFR rate, plus applicable margin. As of March 31, 2025, the interest rate on the balance outstanding under the 2024 Term Loan and the 2021Term Loan were 7.4% and 9.6%, respectively.

Repurchase of Debt. On May 6, 2024, our Board of Directors authorized us to use up to $250 million of available liquidity to repurchase our outstanding indebtedness. On November 20, 2024, our Board of Directors replenished and extended the repurchase authorization through December 31, 2025. The extent of such repurchases, including the amount and timing of any repurchases, will depend on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. This repurchase program does not require us to repurchase a minimum amount of debt, and it may be modified, suspended or terminated at any time without prior notice. We currently have approximately $240 million of availability to repurchase our outstanding indebtedness remaining under this authorization.

Interest Rate Caps. On February 23, 2023, we entered into two interest rate caps pursuant to an International Swaps and Derivatives Association Master Agreement (the “ISDA Master Agreement”) with two counterparties, Wells Fargo Bank, NA and Truist Bank, respectively. On June 25, 2024, we amended the notional amount of the interest rate caps in order to better match the outstanding amounts of the related outstanding indebtedness. At March 31, 2025 and December 31, 2024, the caps had a combined notional value of approximately $1.9 billion and mature on December 31, 2025. The interest rate caps protect us against adverse fluctuations in interest rates by reducing our exposure to variability in cash flows on a portion of our variable-rate debt. The interest rate caps are designated as cash flow hedges of our risk of changes in our cash flows attributable to changes in 1-month SOFR on our outstanding variable-rate debt in accordance with ASC 815. We elected to apply the optional expedient in ASC 848, Reference Rate Reform, that enabled us to consider the amended swaps a continuation of the existing contracts. As a result, the transition did not have an impact on our hedge accounting or a material impact to our financial statements.

The interest rate caps, as amended, effectively limit the annual interest charged on our 2021 Term Loan and our 2024 Term Loan to a maximum of 1-month Adjusted Term SOFR of 4.96% and 5.047%. We are required to pay aggregate fees in connection with the interest rate caps of approximately $34 million that is due and payable at maturity on December 31, 2025. On the initial designation date, we recognized an asset and corresponding liability for the deferred premium payable equal to $34 million. The asset is amortized into interest expense straight-line over the term of the hedging relationship. At March 31, 2025 and December 31, 2024, the recorded value of the asset was $9 million and $12 million, net of accumulated amortization, respectively. At March 31, 2025 and December 31, 2024, the fair value of the derivative liability was $33 million and $32 million, respectively. We present the deferred premium, the asset, and the fair value of the derivative, net within other accrued expenses in our condensed consolidated balance sheets.

The ISDA Master Agreement, together with its related schedules, contain customary representations, warranties and covenants. The interest rate caps were not entered into for speculative trading purposes. Changes in the fair value of the interest rate caps are reported as a component of other comprehensive income. Actual gains and losses are reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and are presented in the same income statement line item as the earnings effect of the hedged transaction. Gains and losses on the derivative instrument representing hedge components excluded from the assessment of effectiveness are recognized currently in earnings and are presented in the same line of the income statement for the hedged item. We recognized $3 million of amortization expense for the asset during each of the three months ended March 31, 2025 and 2024, which is included as a component of cash flows from operating activities in our condensed consolidated statements of cash flows. Cash flows received from the counterparties pursuant to the interest rate caps are included as components of cash flows from financing activities in our condensed consolidated statements of cash flows. During the three months ended March 31, 2025, we did not receive a refund of interest under the rate caps. During the three months ended March 31, 2024, we received $2 million of cash payments from the counterparties that we reclassified as reductions of interest expense from the interest rate caps in our condensed consolidated statements of operations.

For all of our interest bearing obligations, we made interest payments of approximately $121 million and $75 million during the three-months ended March 31, 2025 and 2024, respectively. During the three-months ended March 31, 2025 and 2024, we capitalized less than $1 million of interest payments related to the Assembly Atlanta project, respectively.

As of March 31, 2025, the aggregate minimum principal maturities of our long-term debt for the remainder of 2025 and the succeeding five years were as follows (in millions):

	Minimum Principal Maturities
Year	2019 Senior Credit Agreement		2026 Notes		2027 Notes		2029 Notes		2030 Notes		2031 Notes		Total
Remainder of 2025	$	15	$	-	$	-	$	-	$	-	$	-	$	15
2026		20		10		-		-		-		-		30
2027		20		-		528		-		-		-		548
2028		1,344		-		-		-		-		-		1,344
2029		477		-		-		1,250		-		-		1,727
2030		-		-		-		-		790		-		790
Thereafter		-		-		-		-		-		1,219		1,219
Total	$	1,876	$	10	$	528	$	1,250	$	790	$	1,219	$	5,673

As of March 31, 2025, there were no significant restrictions on the ability of our subsidiaries to distribute cash to us or to the guarantor subsidiaries. The 2019 Senior Credit Agreement contains affirmative and restrictive covenants with which we must comply. The 2026 Notes, the 2027 Notes, the 2029 Notes, the 2030 Notes and the 2031 Notes also include covenants with which we must comply. As of March 31, 2025 and December 31, 2024, we were in compliance with all required covenants under all our debt obligations.