DEBT | DEBT The carrying value of our credit facilities, finance leases and long-term debt as of June 30, 2021 and December 31, 2020 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, deferred issuance costs, 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. June 30, 2021 December 31, 2020 Maturity Interest Rate Principal Adjustments Carrying Value Principal Adjustments Carrying Value Credit facilities: Uncommitted Credit Facility Variable $ 113.7 $ — $ 113.7 $ — $ — $ — $1.0 billion - August 2021 Variable — — — — — — $2.25 billion - June 2023 Variable 100.0 — 100.0 186.0 — 186.0 Senior notes: May 2023 4.750 300.0 2.3 302.3 300.0 4.8 304.8 August 2024 2.500 900.0 (5.7) 894.3 900.0 (6.6) 893.4 March 2025 3.200 500.0 (2.6) 497.4 500.0 (3.0) 497.0 November 2025 0.875 350.0 (2.9) 347.1 350.0 (3.3) 346.7 July 2026 2.900 500.0 (3.1) 496.9 500.0 (3.3) 496.7 November 2027 3.375 650.0 (4.1) 645.9 650.0 (4.5) 645.5 May 2028 3.950 800.0 (13.3) 786.7 800.0 (14.2) 785.8 March 2030 2.300 600.0 (6.3) 593.7 600.0 (6.5) 593.5 February 2031 1.450 650.0 (8.4) 641.6 650.0 (8.6) 641.4 February 2032 1.750 750.0 (6.8) 743.2 750.0 (7.1) 742.9 March 2035 6.086 181.9 (13.1) 168.8 181.9 (13.4) 168.5 March 2040 6.200 399.9 (3.6) 396.3 399.9 (3.6) 396.3 May 2041 5.700 385.7 (5.0) 380.7 385.7 (5.1) 380.6 March 2050 3.050 400.0 (7.2) 392.8 400.0 (7.3) 392.7 Debentures: May 2021 9.250 — — — 35.3 (0.1) 35.2 September 2035 7.400 148.1 (31.6) 116.5 148.1 (32.1) 116.0 Tax-exempt: 2021 - 2050 0.120 - 0.250 1,111.2 (6.3) 1,104.9 1,111.2 (6.5) 1,104.7 Finance leases: 2021 - 2063 0.806 - 12.203 246.3 — 246.3 206.5 — 206.5 Total Debt $ 9,086.8 $ (117.7) 8,969.1 $ 9,054.6 $ (120.4) 8,934.2 Less: current portion (135.2) (168.1) Long-term portion $ 8,833.9 $ 8,766.1 Credit Facilities The 364-Day Credit Facility In August 2020, we entered into a $1.0 billion 364-day unsecured revolving credit facility (the 364-Day Credit Facility), which matures in August 2021. At our option, borrowings under the 364-Day Credit Facility bear interest at a Base Rate, or a Eurodollar Rate, plus an applicable margin based on our Debt Ratings (all as defined in the 364-Day Credit Facility agreement). The 364-Day Credit Facility is subject to facility fees based on applicable rates defined in the 364-Day Credit Facility agreement and the aggregate commitment, regardless of usage. Availability under our 364-Day Credit Facility totaled $1.0 billion as of June 30, 2021 and December 31, 2020. The 364-Day Credit Facility can be used for working capital, capital expenditures, acquisitions, and other general corporate purposes. The 364-Day Credit Facility agreement requires us to comply with financial and other covenants, which are consistent with the financial and other covenants included in our Credit Facility. We may pay dividends and repurchase common stock if we are in compliance with these covenants. As of June 30, 2021 and December 31, 2020, we had no borrowings outstanding under our 364-Day Credit Facility. The Credit Facility In 2018, we entered into a $2.25 billion unsecured revolving credit facility (as amended, the Credit Facility), which matures in June 2023. As permitted by the Credit Facility, we have the right to request two one 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. Availability under our Credit Facility totaled $1,808.5 million and $1,671.8 million as of June 30, 2021 and December 31, 2020, respectively. 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 $100.0 million and $186.0 million outstanding under our Credit Facility as of June 30, 2021 and December 31, 2020, respectively. We had $341.5 million and $376.5 million of letters of credit outstanding under our Credit Facility as of June 30, 2021 and December 31, 2020, respectively. Uncommitted Credit Facility We also have an Uncommitted Credit Facility, which bears interest at LIBOR or a Cost of Funds rate (both as defined in the Uncommitted Credit Facility agreement), plus an applicable margin. We can use borrowings under the Uncommitted Credit Facility for working capital 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 June 30, 2021, we had $113.7 million outstanding under our Uncommitted Credit Facility. As of December 31, 2020 , we had no borrowings outstanding under our Uncommitted Credit Facility. Senior Notes and Debentures During the second quarter of 2021, we paid the entire $35.3 million principal balance of our 9.250% debentures which matured in May 2021. In November 2020, we issued $350.0 million of 0.875% senior notes due November 2025 (the 0.875% Notes) and $750.0 million of 1.750% senior notes due February 2032 (the 1.750% Notes). We used the net proceeds from the 0.875% Notes and 1.750% Notes to redeem all $850.0 million of the outstanding 3.550% senior notes due June 2022 and $250.0 million of the $550.0 million outstanding 4.750% senior notes due May 2023 (the 4.750% Notes). In August 2020, we issued $650.0 million of 1.450% senior notes due February 2031 (the 1.450% Notes). We used the net proceeds to redeem all $600.0 million of the outstanding 5.250% senior notes due November 2021 plus a make-whole premium of $34.0 million. The remaining proceeds were used for general corporate purposes. In February 2020, we issued $600.0 million of 2.300% senior notes due March 2030 (the 2.300% Notes) and $400.0 million of 3.050% senior notes due March 2050 (the 3.050% Notes). We used the net proceeds from the 2.300% Notes and 3.050% Notes to repay $850.0 million of 5.000% senior notes that matured in March 2020. The remaining proceeds were used to repay amounts outstanding under our unsecured credit facilities as well as for general corporate purposes. Our senior notes and debentures are general unsecured obligations. Interest is payable semi-annually. 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 In 2013, we entered into various interest rate swap agreements relative to the 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 June 30, 2021, these swap agreements had a total notional value of $300.0 million and mature in May 2023, which is identical to the maturity of the hedged senior notes. We pay interest at floating rates based on changes in LIBOR and receive interest at a fixed rate of 4.750%. These transactions were designated as fair value hedges because the swaps hedge against the changes in fair value of the fixed rate senior notes resulting from changes in interest rates. Contemporaneously with the $250.0 million partial redemption of the 4.750% Notes, 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 June 30, 2021 and December 31, 2020, these free-standing derivatives were reflected at their fair value of $6.3 million and $8.3 million, respectively, and were included in other assets in our consolidated balance sheets. For the three and six months ended June 30, 2021, we recognized a loss of $0.8 million and $2.0 million, respectively, directly in earnings as an adjustment to non-cash interest expense attributable to the change in fair value of the free-standing derivatives. As of June 30, 2021 and December 31, 2020, the interest rate swap agreements that were designated as fair value hedges were reflected at their fair value of $7.6 million and $10.0 million, respectively, and were included in other assets in our consolidated balance sheets. To the extent they are effective, these interest rate swap agreements are included as an adjustment to long-term debt in our consolidated balance sheets. We recognized net interest income of $2.0 million and $1.3 million during the three months ended June 30, 2021 and 2020, respectively, and net interest income of $3.9 million and $2.0 million during the six months ended June 30, 2021 and 2020, respectively, related to net settlements for these interest rate swap agreements, which was included as an offset to interest expense in our consolidated statements of income. For the three months ended June 30, 2021 and 2020, we recognized gains of $1.1 million and less than $0.1 million, respectively, on the change in fair value of the hedged senior notes and an offsetting loss of $1.0 million and gain of $0.8 million, respectively, on the related interest rate swaps, both attributable to changes in the benchmark interest rate. For the six months ended June 30, 2021 and 2020, we recognized a gain of $2.6 million and a loss of $9.7 million, respectively, on the change in fair value of the hedged senior notes with an offsetting loss of $2.4 million and an offsetting gain of $11.1 million on the related interest rate swaps, both attributable to changes in the benchmark interest rate. The difference of these fair value changes for the three and six months ended June 30, 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, refer to Note 11, Financial Instruments , of the notes to our unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q. 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, thus there was no related asset or liability as of June 30, 2021 or 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). There was no unrealized gain or loss recognized in other comprehensive income for the three or six months ended June 30, 2021. For the three and six months ended June 30, 2020, total unrealized loss recognized in other comprehensive income for interest rate locks was $0.1 million and $22.3 million, net of tax, respectively. As of June 30, 2021 and December 31, 2020, our previously terminated interest rate locks were recorded as components of accumulated other comprehensive loss, net of tax of $28.1 million and $30.4 million, respectively. The amortization of the terminated interest rate locks is recorded as an adjustment to interest expense over the life of the issued debt using the effective interest method. Over the next 12 months, we expect to amortize approximately $4.5 million, net of tax, from accumulated other comprehensive loss to interest expense as a yield adjustment of our senior notes. For further detail regarding the effect of our cash flow hedging on interest expense, refer to Note 11, Financial Instruments , of the notes to our unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q. 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 (the 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 (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, in both years we entered into offsetting interest rate swaps to offset future exposures to fair value fluctuations of the Extended Interest Rate Locks (the 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 June 30, 2021 and December 31, 2020, the fair values of the Extended Interest Rate Locks were liabilities of $70.0 million and $103.0 million, respectively, which were included in other long-term liabilities in our consolidated balance sheets. As of June 30, 2021 and December 31, 2020, the fair value of the Offsetting Interest Rate Swaps were assets of $26.2 million and $55.5 million, respectively, which were included in other assets in our consolidated balance sheet. For the three and six months ended June 30, 2021, we recognized losses of $18.2 million and gains of $28.9 million, respectively, on the change in fair value of the Extended Interest Rate Locks with offsetting gains of $17.6 million and offsetting losses of $29.1 million, respectively, on the change in fair value of the Offsetting Interest Rate Swaps. For the three and six months ended June 30, 2020, we recognized losses of $10.2 million and $71.5 million, respectively, on the change in fair value of the Extended Interest Rate Locks with offsetting gains of $10.6 million and $69.2 million, respectively, 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 June 30, 2021 and December 31, 2020, we had $1,104.9 million and $1,104.7 million of certain variable rate tax-exempt financings outstanding, respectively, with maturities ranging from 2021 to 2050. During the second quarter of 2020, we issued $60.0 million of tax-exempt financings. 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 $2.25 billion unsecured revolving 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 June 30, 2021 and December 31, 2020. Finance Leases |