Debt

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Debt

13. Debt

The Company was obligated under the following debt instruments (in millions):

	September 30, 2024							December 31, 2023
	Principal		Debt Issuance Costs			Debt, Net		Principal		Debt Issuance Costs			Debt, Net
4.60% Senior notes due May 2028	$	300.0	$	(1.4	)	$	298.6	$	300.0	$	(1.7	)	$	298.3
3.10% Senior notes due March 2030		300.0		(2.2	)		297.8		300.0		(2.5	)		297.5
Other long-term debt		5.9		—			5.9		1.7		—			1.7
	$	605.9	$	(3.6	)	$	602.3	$	601.7	$	(4.2	)	$	597.5
Revolving credit facilities						$	934.5						$	175.0

On March 23, 2022, the Company entered into a Third Amended and Restated Credit Agreement with various lenders (the “Credit Agreement”). The Credit Agreement provides for an unsecured revolving credit facility (the “Revolving Credit Facility”) that matures in March 2027 with an initial maximum aggregate amount of availability of $1.1 billion. On April 3, 2024, the Company amended the Credit Agreement to increase the maximum aggregate amount of availability under the Revolving Credit Facility to $1.55 billion. At September 30, 2024, borrowings under the Revolving Credit Facility of $934.5 million and specified outstanding letters of credit of $24.5 million reduced available capacity under the Revolving Credit Facility to $591.0 million.

Under the Credit Agreement, the Company is obligated to pay (i) an unused commitment fee ranging from 0.080% to 0.225% per annum of the average daily unused portion of the aggregate revolving credit commitments under the Credit Agreement and (ii) a fee ranging from 0.438% to 1.500% per annum of the maximum amount available to be drawn for each letter of credit issued and outstanding under the Credit Agreement.

Borrowings under the Credit Agreement bear interest for dollar-denominated loans at a variable rate equal to (i) Term SOFR (the forward-looking secured overnight financing rate) plus a specified margin, which may be adjusted upward or downward depending on whether certain criteria are satisfied, or (ii) the base rate (which is the highest of (x) Bank of America, N.A.’s prime rate, (y) the federal funds rate plus 0.50% or (z) the sum of 1.00% plus one-month Term SOFR) plus a specified margin, which may be adjusted upward or downward depending on whether certain criteria are satisfied. At September 30, 2024, the interest spread on the Revolving Credit Facility was 112.5 basis points, resulting in an interest rate of 6.22%.

The Credit Agreement contains various restrictions and covenants, including a requirement that the Company maintain a leverage ratio at certain levels, subject to certain exceptions, restrictions on the ability of the Company and certain of its subsidiaries to consolidate or merge, create liens, incur additional subsidiary indebtedness and consummate acquisitions and a restriction on the disposition of all or substantially all of the assets of the Company and its subsidiaries taken as a whole.

The Credit Agreement requires the Company to maintain a maximum leverage ratio (defined as, with certain adjustments, the ratio of the Company’s consolidated indebtedness to the Company’s consolidated net income for the previous four quarters before interest, taxes, depreciation, amortization, non-cash charges and certain other items (EBITDA)) as of the last day of any quarter of 3.75 to 1.00, subject to the Company’s right to temporarily increase the maximum leverage ratio to 4.25 to 1.00 in connection with certain material acquisitions. The Company was in compliance with the financial covenant contained in the Credit Agreement as of September 30, 2024.

In conjunction with the AUSA acquisition on September 3, 2024, the Company assumed €2.5 million ($2.8 million) of outstanding debt. As of September 30, 2024, €2.5 million ($2.8 million) of notes remained outstanding with a weighted average interest rate of 0.11%.

In conjunction with the Hinowa acquisition on January 31, 2023, the Company assumed €16.3 million ($17.7 million) of outstanding debt, of which €14.3 million ($15.5 million) was repaid by the Company in February 2023. As of September 30, 2024, €2.8 million ($3.1 million) was outstanding at Hinowa with a weighted average interest rate of 1.27%.

In September 2019, the Company entered into an uncommitted line of credit to provide short-term finance support to operations in China. The line of credit carries a maximum availability of 426.0 million Chinese renminbi. There were no amounts outstanding on the line of credit as of September 30, 2024 or December 31, 2023. The line of credit carries a variable interest rate that is set by the lender, which was 3.85% at September 30, 2024.

In May 2018, the Company issued $300.0 million of 4.60% unsecured senior notes due May 15, 2028 (the “2028 Senior Notes”). In February 2020, the Company issued $300.0 million of 3.10% unsecured senior notes due March 1, 2030 (the “2030 Senior Notes”). The 2028 Senior Notes and the 2030 Senior Notes were issued pursuant to an indenture (the “Indenture”) between the Company and a trustee. The Indenture contains customary affirmative and negative covenants. The Company has the option to redeem the 2028 Senior Notes and 2030 Senior Notes at any time for a premium.

The fair value of the long-term debt is estimated based upon Level 2 inputs to reflect the market rate of the Company’s debt. At September 30, 2024, the fair value of the 2028 Senior Notes and the 2030 Senior Notes was estimated to be $301 million ($295 million at December 31, 2023) and $278 million ($269 million at December 31, 2023), respectively. The fair value of the revolving credit facilities approximated their carrying values at September 30, 2024 and December 31, 2023. See Note 19 for the definition of a Level 2 input.