Debt

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Debt

Debt

Credit Agreement

In March 2022, we entered into a credit agreement (the Credit Agreement) with Wells Fargo Bank, National Association (Wells Fargo), as administrative agent and a swingline lender, and various other lender parties, which provides for: (1) an unsecured revolving credit facility of up to $1.2 billion; and (2) a second unsecured revolving credit facility of up to $800.0 million (which facilities may, at our request, be increased by up to $500.0 million in the aggregate subject to obtaining commitments from existing or new lenders for such increase and other conditions). In accordance with the terms of the Credit Agreement, in March 2024, we extended the maturity date of the Credit Agreement by one year, to March 2029.

At our option, amounts borrowed under the Credit Agreement bear interest at either an adjusted Term Secured Overnight Finance Rate (Term SOFR) or a fluctuating base rate, in each case, plus an applicable margin determined on a quarterly basis based on our consolidated ratio of total indebtedness to EBITDA (as calculated in accordance with the Credit Agreement). To date, we have elected to calculate interest on the outstanding balance at an adjusted Term SOFR plus an applicable margin.

On March 31, 2022, we borrowed $800.0 million under the Credit Agreement, and used the funds to repay outstanding indebtedness under a prior credit agreement.

As of December 31, 2023, our outstanding aggregate principal balance under the Credit Agreement was $700.0 million. During the three months ended March 31, 2024, we paid down $100.0 million of our balance under the Credit Agreement, which brought our aggregate outstanding balance down to $600.0 million as of March 31, 2024. Although our credit facility matures in 2029, we classified $400.0 million of the outstanding balance as a current liability on our consolidated balance sheet as of March 31, 2024, as we intend to repay this amount within one year.

The Credit Agreement contains customary events of default and customary affirmative and negative covenants. As of March 31, 2024, we were in compliance with these covenants.

The interest expense reported in our consolidated statements of operations for the three months ended March 31, 2024 and 2023 is related to our borrowings under the Credit Agreement