Long-Term Debt and Credit Agreements

9 Months Ended

Sep. 30, 2024

The following table includes a summary of the Company’s long-term debt:


(In millions)	September 30, 2024		December 31, 2023

3.65% weighted-average private placement senior notes(1)	$	250	$	825
3.90% senior notes due May 15, 2027	750		750
4.375% senior notes due March 15, 2029	500		500
5.60% senior notes due March 15, 2034	500		—
Revolving credit agreement	—		—
Total	2,000		2,075
Unamortized debt premium	74		90
Unamortized debt discount	(1)		—
Unamortized debt issuance costs	(7)		(4)
Total debt	2,066		2,161
Less: current portion of long-term debt	—		575
Long-term debt	$	2,066	$	1,586

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(1)The 3.65% weighted-average senior notes include bullet maturities, of which $575 million was repaid in September 2024 and $250 million will mature in September 2026.

As of September 30, 2024, the Company was in compliance with all financial covenants for its revolving credit agreement and its 3.65% weighted-average private placement senior notes (the “private placement senior notes”).

Revolving Credit Agreement

On September 12, 2024, the Company entered into an Amendment No. 1 (the “Amendment”) relating to its revolving credit agreement with JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), and certain lenders and issuing banks party thereto (as amended by the Amendment, and further amended, supplemented or otherwise modified from time to time, the “Credit Agreement”). The Amendment has increased the aggregate revolving commitments under the Credit Agreement from $1.5 billion to $2.0 billion, extended the Credit Agreement maturity date from March 10, 2028 to September 12, 2029, made certain amendments to the representations and warranties, affirmative and negative covenants and events of default, and made certain other modifications. The Company incurred $4 million of debt issuance costs related to the Amendment which were capitalized and will be amortized over the term of the amended Credit Agreement.

Borrowings under the Credit Agreement bear interest at a rate per annum equal to, at the Company’s option, either a term secured overnight financing rate (“SOFR”) plus a 0.10 percent credit spread adjustment for all tenors or a base rate, plus, in each case, an interest rate margin which ranges from 0 to 75 basis points for base rate loans and 100 to 175 basis points for term SOFR loans, based on the Company’s credit rating. The commitment fee on the unused available credit is calculated at annual rates ranging from 10 basis points to 25 basis points, based on the Company’s credit rating. The maturity date of the Credit Agreement can be extended for additional one-year periods on up to two occasions upon the agreement of the Company and lenders holding at least 50 percent of the commitments under the Credit Agreement.

The Credit Agreement contains customary covenants, including the maintenance of a maximum leverage ratio of no more than 3.0 to 1.0 as of the last day of any fiscal quarter until such time as the Company has no other debt in a principal amount in excess of $75 million outstanding that has a financial maintenance covenant based on a leverage ratio, at which time the Credit Agreement requires maintenance of a ratio of total net debt to capitalization of no more than 65 percent (with all calculations based on definitions contained in the Credit Agreement).

As of September 30, 2024, the Company had no borrowings outstanding under its revolving credit agreement and unused commitments of $2.0 billion.

5.60% Senior Notes due March 15, 2034

On March 13, 2024, the Company issued $500 million aggregate principal amount of 5.60% senior notes due 2034 (the “2034 senior notes”). The 2034 senior notes will mature on March 15, 2034, and interest on such notes is payable semi-

annually. The 2034 senior notes are general, unsecured obligations of the Company. Under the terms of the indenture governing the 2034 senior notes, the Company may redeem all or any portion of the 2034 senior notes on any date at a price equal to the principal amount thereof, plus applicable redemption prices described in the governing indenture. The Company is also subject to various covenants and events of default customarily found in such debt instruments. The 2034 senior notes were issued at a discount of $1 million, and the Company incurred approximately $5 million of debt issuance costs that were capitalized and will be amortized over the term of such notes.