Financing Arrangements and Debt

12 Months Ended

Dec. 31, 2024

Debt Disclosure [Abstract]

Financing Arrangements and Debt

Note F – Financing Arrangements and Debt

Long-term debt for the respective periods presented consisted of the following:

	December 31,
(Thousands of dollars)	2024		2023
Notes payable
5.875% notes, due December 2027	$	78,899	$	443,249
6.375% notes, due July 2028	148,590		372,226
7.05% notes, due May 2029	117,582		179,708
6.00% notes, due October 2032	600,000		—
5.875% notes, due December 2042 ¹	339,761		339,761
Total notes payable	1,284,832		1,334,944
Unamortized debt issuance cost and discount on notes payable	(14,336)		(10,107)
Total notes payable, net of unamortized discount	1,270,496		1,324,837
Finance lease obligations, due through November 2034	4,877		4,238
Total debt including current maturities	1,275,373		1,329,075
Current maturities	(871)		(723)
Total long-term debt	$	1,274,502	$	1,328,352

1 Coupon rate may fluctuate 25 basis points if rating is periodically downgraded or upgraded by S&P and Moody’s.

The amounts of long-term principal repayable over each of the next five years and thereafter are as follows: nil in 2025, nil in 2026, $78.9 million in 2027, $148.6 million in 2028, $117.6 million in 2029 and $939.8 million thereafter.

The Company also has a shelf registration statement on file with the SEC that permits the offer and sale of debt and/or equity securities through October 15, 2027.

Revolving Credit Facility

During the fourth quarter of 2024, the Company entered into a credit agreement governing a $1.35 billion senior unsecured guaranteed RCF with a maturity date of October 7, 2029. The RCF extends the borrowing term and increases the borrowing capacity of the previous RCF. On the date the Company achieves certain credit ratings (Investment Grade Ratings Date), certain covenants will be modified as set forth in the RCF. In addition, prior to Investment Grade Ratings Date, the Company will be required to comply with a maximum consolidated leverage ratio of 3.25x and a minimum consolidated interest coverage ratio of 2.50x. From and after the Investment Grade Ratings Date, the Company will be required to comply with a maximum ratio of consolidated total debt to consolidated total capitalization of 60%. Borrowings under the RCF bear interest at rates based on either the “Alternate Base Rate”, the “Adjusted Term Secured Overnight Financing Rate (SOFR) Rate”, or the “Adjusted Daily Simple SOFR Rate”, respectively, plus the “Applicable Rate”. The “Alternate Base Rate” of interest is the highest of (a) the Wall Street Journal prime rate in effect on such day, (b) the New York Federal Reserve Bank Rate in effect on such day plus ½ of 1% and (c) the Adjusted Term SOFR Rate for a one month interest period as published two U.S. Government Securities Business Days prior to such day (or if such day is not a U.S. Government Securities Business Day, the immediately preceding U.S. Government Securities Business Day) plus 1%. The “Adjusted Term SOFR Rate” of interest is equal to (a) the Term SOFR Rate for such Interest Period, plus (b) 0.10%. The “Adjusted Daily Simple SOFR Rate” of interest is equal to (a) the Daily Simple SOFR, plus (b) 0.10%. The “Applicable Rate” of interest means, for any day, the applicable rate per annum based upon the ratings of Moody’s Investors Service, Inc. and Standard and Poor’s Rating Services, respectively. The Company incurred $14.7 million in transaction costs and recorded the amount to “Deferred charges and other assets” in the Consolidated Balance Sheets, which is being amortized to interest expense over the term of the RCF. At December 31, 2024, the Company had no outstanding borrowings under the RCF and $0.4 million of outstanding letters of credit, which reduces the borrowing capacity of the RCF. At December 31, 2024, the interest rate in effect on borrowings under the facility would have been 6.68%. At December 31, 2024, the Company was in compliance with all covenants related to the RCF.

Debt Offering

On October 3, 2024, the Company closed the public offering of $600.0 million aggregate principal amount of new senior notes that bear interest at a rate of 6.000% per annum and mature on October 1, 2032. The Company has incurred transaction costs of $10.1 million on the issuance of these new notes. The Company will pay interest semi-annually on April 1 and October 1 of each year, beginning April 1, 2025. The proceeds of the $600.0 million notes were used to fund the repurchase and repayment of debt during the fourth quarter of 2024 to achieve a debt-neutral transaction.

Debt Extinguishment

In December 2024, the Company redeemed $79.0 million of the 2027 Notes. The total cost of the debt extinguishment of $1.2 million, consisting of cash costs of $0.8 million and non-cash costs of $0.4 million, is included in “Interest expense, net” on the Consolidated Statements of Operations for the year ended December 31, 2024.

In October 2024, the Company tendered an aggregate $521.1 million of its notes, comprised of: $258.8 million of the 2027 Notes, $200.2 million of the 2028 Notes and $62.1 million of the 2029 Notes. The total cost of the debt extinguishment of $18.2 million, consisting of cash costs of $14.9 million and non-cash costs of $3.3 million, is included in “Interest expense, net” on the Consolidated Statements of Operations for the year ended December 31, 2024.

In May 2024, the Company paid a total of $50.5 million to complete the open market repurchases of $26.5 million aggregate principal of its 2027 Notes and $23.5 million aggregate principal of its 2028 Notes. The total cost of debt extinguishment of $0.9 million, consisting of cash costs of $0.5 million and non-cash costs of $0.4 million, is included in “Interest expense, net” on the Consolidated Statements of Operations for the year ended December 31, 2024.

In November 2023, the Company tendered a total of $249.5 million of its 2027 Notes, 2028 Notes and 2029 Notes, retiring $250.0 million in aggregate principal. The cost of debt extinguishment of $1.3 million is included in “Interest expense, net” on the Consolidated Statement of Operations for the year ended December 31, 2023. There were no additional cash costs related to the November 2023 debt extinguishment on the 2027 Notes, 2028 Notes and 2029 Notes for the year ended December 31, 2023.

In September 2023, the Company redeemed the remaining $248.7 million principal outstanding of the 2025 Notes. The non-cash costs of debt extinguishment of $0.9 million were included in “Interest expense, net” on the Consolidated Statement of Operations for the year ended December 31, 2023.