Long-term Debt and Interest Expense

12 Months Ended

Dec. 31, 2019

The components of long-term debt, including the effects of issuance costs and issuance discounts, are as follows:


	As of December 31,
	2019		2018
	(in millions)
Outstanding debt principal balances:

7.50% senior notes due 2020	$	450	$	450
3.45% senior notes due 2021	500		500
3.95% senior notes due 2022	600		600
4.45% senior notes due 2026	500		500
7.20% senior notes due 2028	250		250
	2,300		2,300
Issuance costs and discounts	(11)		(16)
Total debt	2,289		2,284
Less current portion of long-term debt	450		—
Long-term debt	$	1,839	$	2,284

Credit facility. The Company's long-term debt consists of senior notes, a revolving corporate credit facility (the "Credit Facility") and the effects of issuance costs and discounts. The Credit Facility is maintained with a syndicate of financial institutions (the "Syndicate") and has aggregate loan commitments of $1.5 billion. The Credit Facility has a maturity date of October 2023. As of December 31, 2019, the Company had no outstanding borrowings under the Credit Facility and was in compliance with its debt covenants.

Borrowings under the Credit Facility may be in the form of revolving loans or swing line loans. Revolving loans represent loans made ratably by the Syndicate in accordance with their respective commitments under the Credit Facility and bear interest, at the option of the Company, based on (a) a rate per annum equal to the higher of the prime rate announced from time to time by Wells Fargo Bank, National Association or the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System during the last preceding business day plus 0.5 percent plus a defined alternate base rate spread margin, which is currently 0.25 percent based upon the Company's debt rating or (b) a base Eurodollar rate, plus a margin (the "Applicable Margin"), which is currently 1.25 percent and is also determined by the Company's debt rating. Swing line loans represent loans made by a subset of the lenders in the Syndicate and may not exceed $150 million. Swing line loans under the Credit Facility bear interest at a rate per annum equal to the "ASK" rate for federal funds periodically published by the Dow Jones Market Service plus the Applicable Margin. Letters of credit outstanding under the Credit Facility are subject to a per annum fee, representing the Applicable Margin plus 0.125 percent. The Company also pays commitment fees on undrawn amounts under the Credit Facility that are determined by the Company's debt rating (currently 0.15 percent). Borrowings under the Credit Facility are general unsecured obligations.

The Credit Facility requires the maintenance of a ratio of total debt to book capitalization, subject to certain adjustments, not to exceed 0.65 to 1.0. As of December 31, 2019, the Company was in compliance with all of its debt covenants.

Senior notes. The Company's senior notes are general unsecured obligations ranking equally in right of payment with all other senior unsecured indebtedness of the Company and are senior in right of payment to all existing and future subordinated indebtedness of the Company. The Company is a holding company that conducts all of its operations through subsidiaries; consequently, the senior notes are structurally subordinated to all obligations of its subsidiaries. Interest on the Company's senior notes is payable semiannually.

Principal payments scheduled to be made on the Company's long-term debt are as follows (in millions):


2020	$	450
2021	$	500
2022	$	600
2023	$	—
2024	$	—
Thereafter	$	750

Interest expense activity is as follows:


	Year Ended December 31,
	2019		2018		2017
	(in millions)
Cash payments for interest	$	117	$	133	$	164
Accretion of finance lease	4		—		—
Amortization of issuance discounts	1		1		1
Amortization of capitalized loan fees	4		4		4
Net changes in accruals	—		(6)		(9)
Interest incurred	126		132		160
Less capitalized interest	(5)		(6)		(7)
Total interest expense	$	121	$	126	$	153