XML 32 R16.htm IDEA: XBRL DOCUMENT v3.22.2.2
Debt
 12 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Debt Debt
Long-term debt
Long-term debt at September 30, 2022 and 2021 consisted of the following:
20222021
 (In thousands)
Unsecured 0.625% Senior Notes, due March 2023
$1,100,000 $1,100,000 
Unsecured 3.00% Senior Notes, due June 2027
500,000 500,000 
Unsecured 2.625% Senior Notes, due September 2029
500,000 300,000 
Unsecured 1.50% Senior Notes, due January 2031
600,000 600,000 
Unsecured 5.95% Senior Notes, due October 2034
200,000 200,000 
Unsecured 5.50% Senior Notes, due June 2041
400,000 400,000 
Unsecured 4.15% Senior Notes, due January 2043
500,000 500,000 
Unsecured 4.125% Senior Notes, due October 2044
750,000 750,000 
Unsecured 4.30% Senior Notes, due October 2048
600,000 600,000 
Unsecured 4.125% Senior Notes, due March 2049
450,000 450,000 
Unsecured 3.375% Senior Notes, due September 2049
500,000 500,000 
Unsecured 2.85% Senior Notes, due February 2052
600,000 — 
Floating-rate term loan, due April 2022
— 200,000 
Floating-rate Senior Notes, due March 2023
1,100,000 1,100,000 
Medium term Series A notes, 1995-1, 6.67%, due December 2025
10,000 10,000 
Unsecured 6.75% Debentures, due July 2028
150,000 150,000 
Finance lease obligations (see Note 6)
51,850 18,739 
Total long-term debt8,011,850 7,378,739 
Less:
Net original issue discount on unsecured senior notes and debentures3,704 2,811 
Debt issuance cost46,042 45,271 
Current maturities2,201,457 2,400,452 
$5,760,647 $4,930,205 
Maturities of long-term debt, excluding our finance lease obligations, at September 30, 2022 were as follows by fiscal years (in thousands):
2023$2,200,000 
2024— 
2025— 
202610,000 
2027500,000 
Thereafter5,250,000 
$7,960,000 
On October 3, 2022, we completed a public offering of $500 million of 5.750% senior notes due fiscal 2053, with an effective interest rate of 4.504%, after giving effect to the estimated offering costs and settlement of our interest rate swaps, and $300 million of 5.450% senior notes due fiscal 2033, with an effective interest rate of 5.570%, after giving effect to the estimated offering costs. The net proceeds from the offering, after the underwriting discount and estimated offering expenses, of $789.4 million were used for general corporate purposes. In September 2022, we settled the interest rate swaps associated with the $500 million offering and received $197.1 million.
On January 14, 2022, we completed a public offering of $200 million of 2.625% senior notes due fiscal 2029, with an effective interest rate of 2.54%, after giving effect to the offering costs. The net proceeds from the offering, after the
underwriting discount and offering expenses, of $200.8 million were used to repay our $200 million floating-rate term loan on January 18, 2022.
On October 1, 2021, we completed a public offering of $600 million of 2.85% senior notes due fiscal 2052, with an effective interest rate of 2.58%, after giving effect to the offering costs and settlement of our interest rate swaps. The net proceeds from the offering, after the underwriting discount and offering expenses, of $589.8 million, will be used for general corporate purposes. In September 2021, we settled the interest rate swaps associated with this offering and received $62.2 million.
On March 9, 2021, we completed a public offering of $1.1 billion of 0.625% senior notes due fiscal 2023, with an effective interest rate of 0.834%, after giving effect to the offering costs, and $1.1 billion floating rate senior notes due fiscal 2023 that bear interest at a rate equal to the Three-Month LIBOR rate plus 0.38%. The net proceeds from the offering, after the underwriting discount and offering expenses, of $2.2 billion were used for the payment of unplanned natural gas costs incurred during Winter Storm Uri. The notes are subject to optional redemption at any time on or after September 9, 2021 at a price equal to 100% of the principal amount of the notes being redeemed, plus any accrued and unpaid interest thereon, if any, to, but excluding, the redemption date. As discussed in Note 9 to the consolidated financial statements, we intend to repay these notes in fiscal 2023 after the expected receipt of securitization funds.
On October 1, 2020, we completed a public offering of $600 million of 1.50% senior notes due 2031, with an effective interest rate of 1.71%, after giving effect to the offering costs and settlement of our interest rate swaps. The net proceeds from the offering, after the underwriting discount and offering expenses, of $592.3 million, were used for general corporate purposes, including the repayment of working capital borrowings pursuant to our commercial paper program and the related settlement of our interest rate swaps.
Short-term Debt
We utilize short-term debt to provide cost-effective, short-term financing until it can be replaced with a balance of long-term debt and equity financing that achieves the Company’s desired capital structure with an equity-to-total-capitalization ratio between 50% and 60%, inclusive of long-term and short-term debt. Our short-term borrowing requirements are driven primarily by construction work in progress and the seasonal nature of the natural gas business.
Our short-term borrowing requirements are satisfied through a combination of a $1.5 billion commercial paper program and four committed revolving credit facilities with third-party lenders that provide $2.5 billion of total working capital funding.
The primary source of our funding is our commercial paper program, which is supported by a five-year unsecured $1.5 billion credit facility. On March 31, 2022, we amended this agreement to (i) extend the maturity date from March 31, 2026 to March 31, 2027 and (ii) replace the London interbank offered rate (the LIBOR Rate) with the forward-looking term rate based on the secured overnight financing rate (the SOFR Rate) as the interest rate benchmark. The facility now bears interest at a base rate or at a SOFR-based rate for the applicable interest period, plus a margin ranging from zero percent to 0.25 percent for base rate advances or a margin ranging from 0.75 percent to 1.25 percent for SOFR-based advances, based on the Company’s credit ratings. Additionally, the facility contains a $250 million accordion feature, which provides the opportunity to increase the total committed loan to $1.75 billion. At September 30, 2022, there was $185.0 million outstanding under our commercial paper program with a weighted average interest rate of 3.06% and weighted average maturities of less than one month. At September 30, 2021, there were no amounts outstanding under our commercial paper program
We also have a $900 million three-year unsecured revolving credit facility which is used to provide additional working capital funding. On March 31, 2022, we amended this agreement to (i) extend the maturity date from March 31, 2024 to March 31, 2025 and (ii) replace the LIBOR Rate with the SOFR Rate as the interest benchmark. This facility now bears interest at a base rate or at a SOFR-based rate for the applicable interest period, plus a margin ranging from zero percent to 0.25 percent for base rate advances or a margin ranging from 0.75 percent to 1.25 percent for SOFR-based advances, based on the Company's credit ratings. Additionally, the facility contains a $100 million accordion feature, which provides the opportunity to increase the total committed loan to $1.0 billion. At September 30, 2022 and 2021, there were no borrowings outstanding under this facility.
Additionally, we have a $50 million 364-day unsecured facility, which was renewed April 1, 2022 and is used to provide working capital funding. There were no borrowings outstanding under this facility as of September 30, 2022 and 2021.
Finally, we have a $50 million 364-day unsecured revolving credit facility, which was renewed March 31, 2022 and is used to issue letters of credit and to provide working capital funding. At September 30, 2022, there were no borrowings outstanding under the new facility; however, outstanding letters of credit reduced the total amount available to us to $44.4 million.
Debt Covenants
The availability of funds under these credit facilities is subject to conditions specified in the respective credit agreements, all of which we currently satisfy. These conditions include our compliance with financial covenants and the continued accuracy of representations and warranties contained in these agreements. We are required by the financial covenants in each of these facilities to maintain, at the end of each fiscal quarter, a ratio of total-debt-to-total-capitalization of no greater than 70 percent. At September 30, 2022, our total-debt-to-total-capitalization ratio, as defined, was 47 percent. In addition, both the interest margin and the fee that we pay on unused amounts under each of these facilities are subject to adjustment depending upon our credit ratings.
These credit facilities and our public indentures contain usual and customary covenants for our business, including covenants substantially limiting liens, substantial asset sales and mergers. Additionally, our public debt indentures relating to our senior notes and debentures, as well as certain of our revolving credit agreements, each contain a default provision that is triggered if outstanding indebtedness arising out of any other credit agreements in amounts ranging from in excess of $15 million to in excess of $100 million becomes due by acceleration or is not paid at maturity. We were in compliance with all of our debt covenants as of September 30, 2022. If we were unable to comply with our debt covenants, we would likely be required to repay our outstanding balances on demand, provide additional collateral or take other corrective actions.