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Debt
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Debt DEBTThe carrying value of our credit facilities, finance leases and long-term debt as of December 31, 2022 and 2021 is listed in the following table, and is adjusted for the fair value of interest rate swaps, unamortized discounts, deferred issuance costs and the unamortized portion of adjustments to fair value recorded in purchase accounting. Original issue discounts and adjustments to fair value recorded in purchase accounting are amortized to interest expense over the term of the applicable instrument using the effective interest method.
  December 31, 2022December 31, 2021
MaturityInterest RatePrincipalAdjustmentsCarrying  ValuePrincipalAdjustmentsCarrying  Value
Credit facilities:
Uncommitted Credit FacilityVariable$— $— $— $— $— $— 
$3.0 billion - August 2026
Variable250.0 — 250.0 24.3 — 24.3 
Term LoanVariable1,000.0 — 1,000.0 — — — 
Commercial PaperVariable1,000.0 (1.8)998.2 — — — 
Senior notes:
May 20234.750300.0 (2.5)297.5 300.0 (0.1)299.9 
August 20242.500900.0 (3.0)897.0 900.0 (4.8)895.2 
March 20253.200500.0 (1.6)498.4 500.0 (2.2)497.8 
November 20250.875350.0 (1.9)348.1 350.0 (2.6)347.4 
July 20262.900500.0 (2.2)497.8 500.0 (2.8)497.2 
November 20273.375650.0 (3.1)646.9 650.0 (3.8)646.2 
May 20283.950800.0 (10.7)789.3 800.0 (12.4)787.6 
March 20302.300600.0 (5.2)594.8 600.0 (5.9)594.1 
February 20311.450650.0 (7.1)642.9 650.0 (7.9)642.1 
February 20321.750750.0 (6.0)744.0 750.0 (6.6)743.4 
March 20332.375700.0 (7.1)692.9 700.0 (7.6)692.4 
March 20356.086181.9 (12.2)169.7 181.9 (12.8)169.1 
March 20406.200399.9 (3.4)396.5 399.9 (3.6)396.3 
May 20415.700385.7 (4.8)380.9 385.7 (5.0)380.7 
March 20503.050400.0 (7.0)393.0 400.0 (7.1)392.9 
Debentures:
September 20357.400148.1 (30.0)118.1 148.0 (31.1)116.9 
Tax-exempt:
2023 - 2051
2.350 - 4.100
1,189.1 (7.1)1,182.0 1,189.1 (7.6)1,181.5 
Finance leases:
2023 - 2063
0.806 - 9.750
247.5 — 247.5 249.4 — 249.4 
Total Debt$11,902.2 $(116.7)11,785.5 $9,678.3 $(123.9)9,554.4 
Less: current portion(456.0)(8.2)
Long-term portion$11,329.5 $9,546.2 
Future Maturities of Debt
Aggregate principal maturities of notes payable, finance leases and other long-term debt as of December 31, 2022 follow:
2023$456.0 
2024931.1 
20251,860.6 
20261,840.7 
2027658.5 
Thereafter6,155.3 
$11,902.2 
Credit Facilities
The Credit Facility
In August 2021, we entered into a $3.0 billion unsecured revolving credit facility (the Credit Facility). Borrowings under the Credit Facility mature in August 2026. As permitted by the Credit Facility, we have the right to request two one-year extensions of the maturity date, but none of the lenders are committed to participate in such extensions. The Credit Facility also includes a feature that allows us to increase availability, at our option, by an aggregate amount of up to $1.0 billion through increased commitments from existing lenders or the addition of new lenders.
At our option, borrowings under the Credit Facility bear interest at a Base Rate, a daily floating LIBOR, or a Eurodollar Rate, plus a current applicable margin of 0.910% based on our Debt Ratings (all as defined in the Credit Facility agreement). On the earliest of (i) the date that all available tenors of United States dollar LIBOR have permanently or indefinitely ceased to be provided or have been announced to be no longer representative, (ii) June 30, 2023 or (iii) the effective date of an election to opt into a SOFR rate, the LIBOR rate will be replaced by a forward-looking term rate based on SOFR or a daily rate based on SOFR published on such date.
The Credit Facility is subject to facility fees based on applicable rates defined in the Credit Facility agreement and the aggregate commitment, regardless of usage. The Credit Facility can be used for working capital, capital expenditures, acquisitions, letters of credit and other general corporate purposes. The Credit Facility agreement requires us to comply with financial and other covenants. We may pay dividends and repurchase common stock if we are in compliance with these covenants.
We had $250.0 million and $24.3 million outstanding under our Credit Facility as of December 31, 2022 and 2021, respectively. We had $347.6 million and $341.9 million of letters of credit outstanding under our Credit Facility as of December 31, 2022 and 2021, respectively. We also had $998.2 million of outstanding borrowings (net of related discount on issuance) under our commercial paper program as of December 31, 2022. In the event of a failed re-borrowing, we currently have availability under our Credit Facility to fund the commercial paper program until it is re-borrowed successfully. As a result, availability under our Credit Facility was $1,402.4 million and $2,633.8 million as of December 31, 2022 and 2021, respectively.
Uncommitted Credit Facility
In January 2022, we entered into a $200.0 million unsecured uncommitted revolving credit facility (the Uncommitted Credit Facility), which replaced the prior $135.0 million uncommitted credit facility. The Uncommitted Credit Facility bears interest at an annual percentage rate to be agreed upon by both parties. Borrowings under the Uncommitted Credit Facility can be used for working capital, letters of credit and other general corporate purposes. The agreement governing our Uncommitted Credit Facility requires us to comply with certain covenants. The Uncommitted Credit Facility may be terminated by either party at any time. As of December 31, 2022 and 2021, we had no borrowings outstanding under our Uncommitted Credit Facility.
Term Loan Credit Agreement
On April 29, 2022, we entered into a $1.0 billion term loan facility (the Term Loan Facility). The Term Loan Facility will mature on April 29, 2025 and bears interest at a base rate or a forward-looking SOFR, plus an applicable margin based on our debt ratings. The weighted average interest rate for the borrowings outstanding as of December 31, 2022 was 4.629%. We may prepay, without penalty, all or any part of the borrowings under the Term Loan Facility at any time.
On May 2, 2022, we completed the acquisition of US Ecology using proceeds from the Term Loan Facility and borrowings under the Credit Facility.
Commercial Paper Program
In May 2022, we entered into a commercial paper program for the issuance and sale of unsecured commercial paper in an aggregate principal amount not to exceed $500.0 million outstanding at any one time (the Commercial Paper Cap). In August 2022, the Commercial Paper Cap was increased to $1.0 billion. As of December 31, 2022, we had $1.0 billion principal value of commercial paper issued and outstanding under the program with a weighted average interest rate of 4.670% and a weighted average maturity of approximately 36 days for the year ended December 31, 2022. In the event of a failed re-borrowing, we currently have availability under our Credit Facility to fund amounts currently borrowed under the commercial paper program until they are re-borrowed successfully. Accordingly, we have classified these borrowings as long-term in our consolidated balance sheet as of December 31, 2022.
Interest Rate Swap and Lock Agreements
Our ability to obtain financing through the capital markets is a key component of our financial strategy. Historically, we have managed risk associated with executing this strategy, particularly as it relates to fluctuations in interest rates, by using a combination of fixed and floating rate debt. From time to time, we also have entered into interest rate swap and lock agreements to manage risk associated with interest rates, either to effectively convert specific fixed rate debt to a floating rate (fair value hedges), or to lock interest rates in anticipation of future debt issuances (cash flow hedges).
Fair Value Hedges
During the second half of 2013, we entered into various interest rate swap agreements (the 2013 Interest Rate Swaps) relative to our 4.750% fixed rate senior notes due in May 2023 (4.750% Notes). The goal was to reduce overall borrowing costs and rebalance our debt portfolio's ratio of fixed-to-floating interest rates. As of December 31, 2022, these swap agreements had a total notional value of $300.0 million and mature in May 2023. We pay interest at floating rates based on changes in LIBOR and receive interest at a fixed rate of 4.750%. In 2013, these transactions were designated as fair value hedges because the swaps hedge against the changes in fair value of the 4.750% Notes resulting from changes in interest rates.
Contemporaneously with the $250.0 million partial redemption of the 4.750% Notes in November 2020, we dedesignated the proportional share of these swap agreements as fair value hedges. There was no ineffectiveness recognized in the dedesignation of these fair value hedges. Following the dedesignation, the fair value of these free-standing derivatives was determined using standard valuation models with assumptions about interest rates being based on those observed in underlying markets (Level 2 in the fair value hierarchy). As of December 31, 2022 and 2021, these free-standing derivatives were reflected at their fair value of a $1.0 million liability and a $3.9 million asset, respectively, and are included in other accrued liabilities and other assets, respectively, in our consolidated balance sheets. For the years ended December 31, 2022, 2021 and 2020, we recognized losses of $5.0 million, $4.4 million and $0.1 million, directly in earnings as an adjustment to non-cash interest expense attributable to the change in fair value of the free-standing derivatives, respectively.
As of December 31, 2022 and 2021, the 2013 Interest Rate Swaps that were designated as fair value hedges are reflected at their fair value of a $1.2 million liability and a $4.7 million asset, respectively, and are included in other accrued liabilities and other assets, respectively, in our consolidated balance sheets. To the extent they are effective, the remaining hedged portion of these interest rate swap agreements is included as an adjustment to long-term debt in our consolidated balance sheets.
We recognized net interest income of $2.9 million, $7.9 million and $5.7 million, respectively, during 2022, 2021 and 2020, related to net swap settlements for these interest rate swap agreements, which is included as an offset to interest expense in our consolidated statements of income.
For the years ended December 31, 2022, 2021 and 2020, we recognized gains of $2.7 million and $5.2 million and a loss of $5.7 million, respectively, related to the impact of changes in the benchmark interest rate on the fair value of the hedged senior notes. For the years ended December 31, 2022, 2021 and 2020, we recognized offsetting losses of $6.0 million and $5.2 million and an offsetting gain of $7.6 million, respectively, on the related interest rate swaps attributable to changes in the benchmark interest rate. The difference of these fair value changes for the years ended December 31, 2022, 2021 and 2020 was recorded directly in earnings as an adjustment to interest expense in our consolidated statements of income.
For further detail regarding the effect of our fair value hedging on interest expense, see Note 18, Financial Instruments, of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
Cash Flow Hedges
We have historically entered into multiple swap agreements designated as cash flow hedges to manage exposure to fluctuations in interest rates in anticipation of planned future issuances of senior notes. Upon the expected issuance of senior notes, we terminate the interest rate locks and settle with our counterparties. These transactions were accounted for as cash flow hedges. All of our cash flow hedges settled on or before December 31, 2020. The fair value of our interest rate locks is determined
using standard valuation models with assumptions about interest rates being based on those observed in underlying markets (Level 2 in the fair value hierarchy).
As of December 31, 2022 and 2021, our previously terminated interest rate locks were recorded as components of accumulated other comprehensive loss of $21.4 million and $25.8 million, respectively, net of tax. The effective portion of the interest rate locks is amortized as an adjustment to interest expense over the life of the issued debt using the effective interest method. During 2022, 2021 and 2020, we recognized losses, net of tax of $4.4 million, $4.6 million and $5.8 million, respectively, as a result of this amortization. Over the next 12 months, we expect to amortize $3.9 million, net of tax, from accumulated other comprehensive loss to interest expense as a yield adjustment of our senior notes.
In connection with our acquisition of US Ecology, in the second quarter of 2022, we acquired and novated a floating-to-fixed interest rate swap agreement (the 2022 Interest Rate Swap) with an initial effective date of March 6, 2020 and an initial notional amount of $500 million relative to our Term Loan Facility. The interest rate swap matures in November 2026. The goal was to reduce overall borrowing costs. Under the terms of the acquired agreement, we pay interest at a fixed interest rate of 0.832% and received interest at floating rates based on changes in LIBOR. The interest rate swap is designated as a cash flow hedge. In May 2022, following the closing of the acquisition, we amended the reference rate from a floating rate based on LIBOR to a SOFR rate. In accordance with ASU 2020-04, the amendment of the reference rate did not result in dedesignation of the cash flow hedge. Changes in the fair value of the interest rate swap are recorded as a component of accumulated other comprehensive loss and are recognized in interest expense in the period in which the payment is settled.
The fair value of our floating-to-fixed interest rate swap is determined using standard valuation models with assumptions about interest rates being based on those observed in underlying markets (Level 2 in the fair value hierarchy). As of December 31, 2022, the 2022 Interest Rate Swap was recorded at its fair value of $36.0 million and is included in other assets in our consolidated balance sheets. During 2022, we recognized an unrealized gain of $8.4 million in accumulated other comprehensive income for the 2022 Interest Rate Swap.
As of December 31, 2022, the 2022 Interest Rate Swap was recorded as a component of accumulated other income of $5.1 million, net of tax. The effective portion of the Interest Rate Swap is amortized as an adjustment to interest expense over the life of the instrument using the effective interest method. During 2022, we recognized a gain, net of tax, of $3.3 million as a result of this amortization. Over the next 12 months, we expect to amortize approximately $3 million, net of tax, from accumulated other comprehensive income related to this instrument as an offset to interest expense in the period in which payments are settled.
For further detail regarding the effect of our cash flow hedging on interest expense, see Note 18, Financial Instruments, of the notes to our audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
Derivative Contracts
Contemporaneously with the issuance of our 2.300% Notes in February 2020, we amended interest rate lock agreements with an aggregate notional value of $550.0 million, extending the mandatory maturity date from 2020 to 2030, and dedesignated them as cash flow hedges (2020 Extended Interest Rate Locks). Contemporaneously with the issuance of our 2.500% Notes in August 2019, we amended interest rate lock agreements with an aggregate notional value of $375.0 million, extending the mandatory maturity date from 2019 to 2024, and dedesignated them as cash flow hedges (2019 Extended Interest Rate Locks and collectively with the 2020 Extended Interest Rate Locks referred to as the Extended Interest Rate Locks). There was no ineffectiveness recognized in the termination of these cash flow hedges. In addition, we entered into offsetting interest rate swaps to offset future exposures to fair value fluctuations of the Extended Interest Rate Locks (2019 Offsetting Interest Rate Swap and the 2020 Offsetting Interest Rate Swap, or collectively the Offsetting Interest Rate Swaps). The fair value of these free-standing derivatives was determined using standard valuation models with assumptions about interest rates being based on those observed in underlying markets (Level 2 in the fair value hierarchy).
As of December 31, 2022 and 2021, the fair values of the Extended Interest Rate Locks were assets of $69.8 million and liabilities of $49.9 million, respectively, which were included in other assets and other long-term liabilities, respectively, in our consolidated balance sheets.
As of December 31, 2022 and 2021, the fair value of the 2019 Offsetting Interest Rate Swap was a liability of $17.8 million and an asset of $11.1 million, which were included in other long-term liabilities and other assets, respectively, in our consolidated balance sheets. As of December 31, 2022 and 2021, the fair values of the 2020 Offsetting Interest Rate Swap were liabilities of $81.9 million and $0.8 million, respectively, which were included in other long-term liabilities in our consolidated balance sheets.
For the year ended December 31, 2022, we recognized a gain of $109.4 million on the change in fair value of the Extended Interest Rate Locks, with an offsetting loss of $107.3 million, on the change in fair value of the Offsetting Interest Rate Swaps. For the year ended December 31, 2021, we recognized a gain of $45.1 million on the change in fair value of the Extended
Interest Rate Locks, with an offsetting loss of $44.8 million, on the change in fair value of the Offsetting Interest Rate Swaps. The changes in fair value were recorded directly in earnings as an adjustment to interest expense in our consolidated statements of income.
Tax-Exempt Financings
As of December 31, 2022 and 2021 we had $1,182.0 million and $1,181.5 million of certain variable rate tax-exempt financings outstanding, respectively, with maturities ranging from 2023 to 2051. During 2021, we issued $205.0 million of tax-exempt financings.
In the fourth quarter of 2021, the Pennsylvania Economic Development Financing Authority issued, for our benefit, $30.0 million of Solid Waste Disposal Revenue Bonds. The proceeds from the issuance, after deferred issuance costs, will be used to fund qualifying landfill-related expenditures in the Commonwealth of Pennsylvania, of which $30.0 million and $17.2 million was incurred and reimbursed to us as of December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, we had $127.6 million and $139.0 million, respectively, of restricted cash and marketable securities. As of December 31, 2021, $12.4 million of the restricted cash and marketable securities balance represented proceeds from the issuance of the tax-exempt bonds.
All of our tax-exempt financings are remarketed either quarterly or semiannually by remarketing agents to effectively maintain a variable yield. The holders of the bonds can put them back to the remarketing agents at the end of each interest period. If the remarketing agent is unable to remarket our bonds, the remarketing agent can put the bonds to us. In the event of a failed remarketing, we currently have availability under our Credit Facility to fund these bonds until they are remarketed successfully. Accordingly, we classified these borrowings as long-term in our consolidated balance sheets as of December 31, 2022 and 2021.
Finance Leases
We had finance lease liabilities of $247.5 million and $249.4 million as of December 31, 2022 and 2021, respectively, with maturities ranging from 2023 to 2063.
Interest Paid
Interest paid, excluding net swap settlements for our fair value hedges, was $311.5 million, $249.4 million and $325.1 million for the years ended December 31, 2022, 2021 and 2020, respectively.