Debt

12 Months Ended

Dec. 31, 2019

11.

Debt

At December 31, 2019 and 2018, our long-term debt and interest rates on that debt were as follows (dollars in millions):

	December 31, 2019					December 31, 2018
	Amount		Interest Rate			Amount		Interest rate
Revolving Credit Facility, due August 2021	$	—		—	%	$	—		—	%
2.45% Senior Notes, net of discount of $0.4 million as of December 31, 2018, due December 2020		—		—	%		499.6		2.45	%
3.90% Senior Notes, net of discount of $0.1 million as of December 31, 2018, due June 2022		—		—	%		399.9		3.90	%
4.50% Senior Notes, net of discount of $0.8 million and $1.0 million as of December 31, 2019 and 2018, respectively, due November 2023		699.2		4.50	%		699.0		4.50	%
3.65% Senior Notes, net of discount of $0.6 million and $0.7 million as of December 31, 2019 and 2018, respectively, due September 2024		399.4		3.65	%		399.3		3.65	%
3.40% Senior Notes, net of discount of $1.3 million and $1.5 million as of December 31, 2019 and 2018, respectively, due December 2027		498.7		3.40	%		498.5		3.40	%
3.00% Senior Notes, net of discount of $0.7 million as of December 31, 2019, due December 2029		499.3		3.00	%		—		—	%
4.05% Senior Notes, net of discount of $3.5 million as of December 31, 2019, due December 2049		396.5		4.05	%		—		—	%
Total		2,493.1		3.77	%		2,496.3		3.64	%
Less current portion		—		—	%		—		—	%
Less unamortized debt issuance costs		16.3					12.6
Total long-term debt	$	2,476.8		3.77	%	$	2,483.7		3.64	%

On November 21, 2019, the Company issued $500.0 million of 3.00% senior notes due 2029 and $400.0 million of 4.05% senior notes due 2049, through a registered public offering and notified the holders of its $500.0 million of 2.45% notes due December 15, 2020 and $400.0 million of 3.90% notes due June 15, 2022 that it would redeem those notes in December 2019. On December 6, 2019, PCA completed the redemption of the old 2.45% notes for $509.7 million, which included a redemption premium of $3.8 million and $5.8 million of accrued and unpaid interest. On December 23, 2019, PCA completed the redemption of the old 3.90% notes for $418.7 million, which included a redemption premium of $18.4 million and $0.3 million of accrued and unpaid interest. PCA used the proceeds of the offering of the new 3.00% and 4.05% notes and cash on hand to fund the redemptions and the $8.3 million of debt issuance costs. The debt issuance costs will be amortized to interest expense using the effective interest method over the terms of the notes.

As of December 31, 2019, the details of our borrowings were as follows:

•

Senior Unsecured Credit Agreement. On October 18, 2013, we entered into a $1.65 billion senior unsecured credit facility. Loans bear interest at LIBOR plus a margin that is determined based upon our credit ratings. On August 29, 2016, we amended and restated this credit facility to include a new term loan facility (that was subsequently repaid in full in 2017) to finance an acquisition and to extend the maturity of the revolving credit facility to 2021. We have repaid all amounts borrowed under the credit facility, and the current facility now only includes a $350.0 million unsecured revolving credit facility with variable interest (LIBOR plus a margin) due August 2021. During 2019, we did not borrow under the Revolving Credit Facility. At December 31, 2019, we had $20.8 million of outstanding letters of credit that were considered outstanding on the revolving credit facility, resulting in $329.2 million of unused borrowing capacity. The outstanding letters of credit were primarily for workers compensation. We are required to pay commitment fees on the unused portions of the credit facility.

•

3.90% Senior Notes. On June 26, 2012, we issued $400.0 million of 3.90% senior notes due June 15, 2022, through a registered public offering. The senior notes were repaid on December 23, 2019 with the proceeds received from the November 2019 note offering discussed above and cash on hand.

•

4.50% Senior Notes. On October 22, 2013, we issued $700.0 million of 4.50% senior notes due November 1, 2023, through a registered public offering.

•

3.65% Senior Notes. On September 5, 2014, we issued $400.0 million of 3.65% senior notes due September 15, 2024, through a registered public offering.

•

2.45% Senior Notes. On December 13, 2017, we issued $500.0 million of 2.45% senior notes due December 15, 2020, through a registered public offering. The senior notes were repaid on December 6, 2019 with the proceeds received from the November 2019 note offering discussed above and cash on hand.

•

3.40% Senior Notes. On December 13, 2017, we issued $500.0 million of 3.40% senior notes due December 15, 2027, through a registered public offering.

•

3.00% Senior Notes. On November 21, 2019, we issued $500.0 million of 3.00% senior notes due December 15, 2029, through a registered public offering.

•

4.05% Senior Notes. On November 21, 2019, we issued $400.0 million of 4.05% senior notes due December 15, 2049, through a registered public offering.

The instruments governing our indebtedness contain financial and other covenants that limit the ability of PCA and its subsidiaries to enter into sale and leaseback transactions, incur liens, incur indebtedness at the subsidiary level, enter into certain transactions with affiliates, merge or consolidate with any other person or sell or otherwise dispose of all or substantially all of our assets. Our credit facility also requires us to comply with certain financial covenants, including maintaining a minimum interest coverage ratio and a maximum leverage ratio. A failure to comply with these restrictions could lead to an event of default, which could result in an acceleration of any outstanding indebtedness and/or prohibit us from drawing on the revolving credit facility. Such an acceleration may also constitute an event of default under the senior notes indenture. At December 31, 2019, we were in compliance with these covenants.

At December 31, 2019, we have $2,493.1 million of fixed-rate senior notes outstanding. At December 31, 2019, the fair value of our fixed-rate debt was estimated to be $2,616.2 million. The difference between the book value and fair value is due to the difference between the period-end market interest rate and the stated rate of our fixed-rate debt. We estimated the fair value of our fixed-rate debt using quoted market prices (Level 2 inputs), discussed further in Note 2, Summary of Significant Accounting Policies.

Repayments, Interest, and Other

In December 2019, we used the net proceeds from the November 2019 offering of the new 3.00% and 4.05% notes and cash on hand to redeem the 2.45% notes and 3.90% notes. We completed the redemption of the old 2.45% notes and 3.90% notes for $509.7 million and $418.7 million, respectively, which included redemption premiums and accrued and unpaid interest.

In 2018, we used cash on hand to repay debt outstanding of $150.0 million under the 6.50% Senior Notes due March 15, 2018 at maturity.

In 2017, we used the net proceeds from our 2.45% and 3.40% senior note offerings and other cash on hand to repay approximately $1.0 billion of borrowings outstanding under old term loan facilities.

As of December 31, 2019, annual principal maturities for debt, excluding unamortized debt discount, are: none for 2020 through 2022; $700.0 million for 2023; and $1.8 billion for 2024 and thereafter.

Interest payments paid in connection with the Company’s debt obligations for the years ended December 31, 2019, 2018, and 2017, were $114.0 million (including redemption premiums of $22.2 million), $97.0 million, and $96.3 million, respectively.

Included in interest expense, net, are amortization of financing costs and amortization of treasury lock settlements. Amortization of treasury lock settlements was $18.2 million net loss in 2019 (including a $13.1 million write-off of the remaining balance for treasury locks related to the November 2019 debt refinancing), a $5.3 million net loss in 2018, and a $5.7 million net loss in 2017. Amortization of financing costs in 2019, 2018, and 2017 was $4.5 million (including a $1.8 million write-off of deferred debt issuance costs related to the November 2019 debt refinancing), $2.7 million, and $4.0 million (including a $1.8 million write-off of deferred debt issuance costs related to the December 2017 debt refinancing), respectively.