Debt and Financing Arrangements

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Debt and Financing Arrangements

6. Debt and Financing Arrangements

The following table summarizes the carrying value of the Company’s debt:

			June 30,		December 31,
(In millions)	Rate (1)		2024		2023
Unsecured notes due 2026 (2)	1.65	%	$	398	$	398
Unsecured notes due 2029 (3)	6.25	%	592		—
Unsecured notes due 2031 (4)	2.65	%	397		397
Unsecured notes due 2034 (5)	6.50	%	490		—
Three-Year Term Loan due 2025 (6)	6.57	%	185		235
Five-Year Term Loan due 2027 (7)(8)	6.69	%	399		499
Finance leases and other debt	Various		309		118
Total debt			2,770		1,647
Less: Current debt			219		27
Total Long-term debt			$	2,551	$	1,620

(1) Interest rate as of June 30, 2024.

(2) Net of unamortized debt issuance costs of $2 million as of June 30, 2024 and December 31, 2023.

(3) Net of unamortized debt issuance costs of $8 million as of June 30, 2024.

(4) Net of unamortized debt issuance costs of $3 million as of June 30, 2024 and December 31, 2023.

(5) Net of unamortized debt issuance costs of $10 million as of June 30, 2024.

(6) On June 27, 2024, the Company repaid $50 million of the Three-Year Term Loan due 2025.

(7) Net of unamortized debt issuance costs of $1 million as of June 30, 2024 and December 31, 2023.

(8) On May 6, 2024, the Company repaid $100 million of the Five-Year Term Loan due 2027.

Unsecured Notes

On April 25, 2024, the Company entered into an underwriting agreement to issue and sell $1.1 billion of Unsecured Notes, consisting of $600 million in aggregate principal amount of its 6.25% senior notes due 2029 (the “2029 Notes”) and $500 million in aggregate principal amount of its 6.50% senior notes due 2034 (the “2034 Notes”) in a registered public offering to fund the Wincanton Acquisition. The closing of the sale of the Unsecured Notes occurred on May 6, 2024.

The 2029 Notes bear interest at a rate of 6.25% per annum payable semiannually on May 6 and November 6 of each year, beginning on November 6, 2024, and maturing on May 6, 2029. The 2034 Notes bear interest at a rate of 6.50% per annum payable semiannually on May 6 and November 6 of each year, beginning on November 6, 2024, and maturing on May 6, 2034.

Three-Year Term Loan due 2027

On March 29, 2024, the Company entered into a three-year term loan credit agreement with the lenders and other parties from time to time party thereto and Bank of America N.A., as an administrative agent, that provided a three-year multicurrency £250 million unsecured term facility to fund the Wincanton Acquisition. Concurrently with the closing of the Unsecured Notes, the Company terminated the commitments under the Three-Year Term Loan due 2027. No amounts were drawn under the Three-Year Term Loan due 2027.

Bridge Term Loan

On February 29, 2024, the Company entered into a 364-day bridge term loan credit agreement that provided a £763 million unsecured Bridge Term Loan facility to fund the Wincanton Acquisition.

Concurrently with the closing of the Unsecured Notes, the Company terminated the commitments under the Bridge Term Loan. No amounts were drawn under the Bridge Term Loan.

Revolving Credit Facilities

On March 29, 2024, the Company terminated its previous revolving credit agreement expiring in 2026 and entered into a new revolving credit agreement with Bank of America N.A., as administrative agent and an issuing lender (the “Revolving Credit Agreement”). The Revolving Credit Agreement is a five-year unsecured, multicurrency revolving facility expiring in 2029. The aggregate commitment of all lenders under the Revolving Credit Agreement will be equal to $800 million, of which $100 million is available for the issuance of letters of credit.

Loans under the Revolving Credit Agreement will bear interest at a fluctuating rate per annum equal to (a) with respect to borrowings in U.S. Dollars, at the Company’s option the alternate base rate or term Secured Overnight Financing Rate (“SOFR”), (b) with respect to borrowings in Canadian Dollars, term Canadian Overnight Repo Rate Average (“CORRA”), (c) with respect to borrowings in Pounds Sterling, daily simple Sterling Overnight Index Average Rate (“SONIA”) and (d) with respect to borrowings in Euros, Euro Interbank Offered Rate (“EURIBOR”), in each case, plus an applicable margin calculated based on the Company’s credit ratings. No amounts were outstanding under the previous or new revolving credit agreements as of June 30, 2024 or December 31, 2023.

In connection with the Wincanton Acquisition, the Company assumed a revolving credit facility agreement (the “Wincanton Revolving Credit Agreement”) under which it may borrow up to approximately £175 million ($221 million as of June 30, 2024) in aggregate at any time, expiring in March 2027. Loans under the Wincanton Revolving Credit Agreement will bear interest at daily simple SONIA plus a fixed margin. As of June 30, 2024, the Company had £74 million ($94 million) of borrowings outstanding under this agreement.

Amounts drawn and repaid in 90 days or less under the revolving credit facilities are presented net in the Condensed Consolidated Statements of Cash Flows.

Factoring Programs

The Company sells certain of its trade receivables on a non-recourse basis to third-party financial institutions under various factoring agreements.

Information related to the trade receivables sold was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2024		2023		2024		2023
Receivables sold in period	$	364	$	269	$	655	$	532
Cash consideration	360		268		649		529
Net cash provided by operating cash flows	15		—		18		—

Covenants and Compliance

The covenants for the Company’s debt securities, which are customary for financings of this type, limit the Company’s ability to incur indebtedness and grant liens, among other restrictions. In addition, the facilities require the Company to maintain a consolidated leverage ratio below a specified maximum.

As of June 30, 2024, the Company complied with the covenants contained in its debt and financing arrangements.