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Debt
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Debt DEBT
The carrying value of our credit facilities, finance leases and long-term debt as of December 31, 2023 and 2022 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, 2023December 31, 2022
MaturityInterest RatePrincipalAdjustmentsCarrying  ValuePrincipalAdjustmentsCarrying  Value
Credit facilities:
Uncommitted Credit FacilityVariable$— $— $— $— $— $— 
$3.5 billion - August 2026
Variable297.1 — 297.1 250.0 — 250.0 
Term LoanVariable500.0 — 500.0 1,000.0 — 1,000.0 
Commercial PaperVariable496.0 (0.7)495.3 1,000.0 (1.8)998.2 
Senior notes:
May 20234.750— — — 300.0 (2.5)297.5 
August 20242.500900.0 (1.2)898.8 900.0 (3.0)897.0 
March 20253.200500.0 (0.9)499.1 500.0 (1.6)498.4 
November 20250.875350.0 (1.2)348.8 350.0 (1.9)348.1 
July 20262.900500.0 (1.6)498.4 500.0 (2.2)497.8 
November 20273.375650.0 (2.5)647.5 650.0 (3.1)646.9 
May 20283.950800.0 (8.9)791.1 800.0 (10.7)789.3 
April 20294.875750.0 (6.9)743.1 — — — 
March 20302.300600.0 (4.5)595.5 600.0 (5.2)594.8 
February 20311.450650.0 (6.2)643.8 650.0 (7.1)642.9 
February 20321.750750.0 (5.4)744.6 750.0 (6.0)744.0 
March 20332.375700.0 (6.5)693.5 700.0 (7.1)692.9 
December 20335.000650.0 (8.9)641.1 — — — 
April 20345.000800.0 (10.7)789.3 — — — 
March 20356.086181.9 (11.5)170.4 181.9 (12.2)169.7 
March 20406.200399.9 (3.3)396.6 399.9 (3.4)396.5 
May 20415.700385.7 (4.7)381.0 385.7 (4.8)380.9 
March 20503.050400.0 (6.8)393.2 400.0 (7.0)393.0 
Debentures:
September 20357.400148.1 (28.8)119.3 148.1 (30.0)118.1 
Tax-exempt:
2024 - 2053
3.750 - 4.900
1,289.1 (8.5)1,280.6 1,189.1 (7.1)1,182.0 
Finance leases:
2024 - 2063
0.806 - 9.750
251.3 — 251.3 247.5 — 247.5 
Total Debt$12,949.1 $(129.7)12,819.4 $11,902.2 $(116.7)11,785.5 
Less: current portion(932.3)(456.0)
Long-term portion$11,887.1 $11,329.5 
Future Maturities of Debt
Aggregate principal maturities of notes payable, finance leases and other long-term debt as of December 31, 2023 follow:
2024$932.3 
20251,364.5 
20261,385.9 
2027660.6 
2028841.4 
Thereafter7,634.7 
$12,819.4 
Loss on Extinguishment of Debt and Other Related Costs
In 2023, we incurred a loss on the early extinguishment of debt related to the early repayment of a portion of our Term Loan Facility (as defined below). We incurred non-cash charges related to the proportional share of unamortized deferred issuance costs of $0.2 million.
Credit Facilities
Uncommitted Credit Facility
In January 2022, we entered into a $200.0 million unsecured uncommitted revolving credit facility (the 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, 2023 and 2022, we had no borrowings outstanding under our Uncommitted Credit Facility.
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. In October 2023, we completed an upsize of the Credit Facility to $3.5 billion.
In February 2023, we entered into Amendment No. 1 to the Credit Facility (the Credit Facility Amendment) to add our subsidiary, USE Canada Holdings, Inc. (the Canadian Borrower), as an additional borrower under the Credit Facility. The Credit Facility Amendment provides that the aggregate of (i) all loans to the Canadian Borrower and (ii) all loans denominated in Canadian dollars cannot exceed $1.0 billion (the Canadian Sublimit). The Canadian Sublimit is part of, and not in addition to, the aggregate commitments under the Credit Facility.
Borrowings under the Credit Facility in United States dollars bear interest at a Base Rate, a daily floating SOFR or a term SOFR plus a current applicable margin of 0.910% based on our Debt Ratings (all as defined in the Credit Facility agreement). The Canadian dollar-denominated loans bear interest based on the Canadian Prime Rate or the Canadian Dollar Offered Rate plus a current applicable margin of 0.910% based on our Debt Ratings. As of December 31, 2023, C$201.5 million was outstanding against the Canadian Sublimit, with an average interest rate of 6.364%.
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 $297.1 million and $250.0 million outstanding under our Credit Facility as of December 31, 2023 and 2022, respectively. We had $336.5 million and $347.6 million of letters of credit outstanding under our Credit Facility as of December 31, 2023 and 2022, respectively. We also had $495.3 million and $1.0 billion of principal borrowings outstanding (net of related discount on issuance) under our commercial paper program as of December 31, 2023 and 2022, respectively. As a result, availability under our Credit Facility was $2,371.2 million and $1,402.4 million as of December 31, 2023 and 2022, respectively.
Term Loan Facility
On April 29, 2022, we entered into a $1.0 billion 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 interest rate for borrowings outstanding as of December 31, 2023 was 6.256%. 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.
We had $500.0 million and $1.0 billion of borrowings outstanding under the Term Loan Facility as of December 31, 2023 and 2022, respectively.
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, and in October 2023, was increased to $1.5 billion. The weighted average interest rate for borrowings outstanding as of December 31, 2023 is 5.508% with a weighted average maturity of approximately 18 days.
We had $496.0 million and $1.0 billion principal value of commercial paper issued and outstanding under the program as of December 31, 2023 and 2022, respectively. 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, 2023 and 2022, respectively.
Senior Notes
In March 2023, we issued $400.0 million of 4.875% senior notes due 2029 (the Existing 2029 Notes) and $800.0 million of 5.000% senior notes due 2034 (the 2034 Notes, and together, the Notes). The Notes are unsecured and unsubordinated and rank equally with our other unsecured obligations. We used the proceeds from the Notes for general corporate purposes, including the repayment of a portion of amounts outstanding under the Uncommitted Credit Facility, the Commercial Paper Program, the Credit Facility, and the Term Loan Facility. As a result of the Term Loan Facility repayment, we incurred a non-cash loss on the early extinguishment of debt related to the ratable portion of unamortized deferred issuance costs of $0.2 million.
In December 2023, we issued an additional $350.0 million of 4.875% senior notes due 2029 (the New 2029 Notes, and together with the Existing 2029 Notes, the 2029 Notes). After giving effect to the issuance of the New 2029 Notes, $750.0 million in aggregate principal amount of the 2029 Notes is outstanding. The New 2029 Notes are fungible with the Existing 2029 Notes, and taken together, the 2029 Notes are treated as a single series.
In December 2023, we also issued $650.0 million of 5.000% senior notes due 2033 (the 2033 Notes). Similar to the Notes above, the proceeds of these new senior notes were used for general corporate purposes, including the repayment of a portion of amounts outstanding under the Uncommitted Credit Facility, the Commercial Paper Program, the Credit Facility, and the Term Loan Facility.
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. These swap agreements settled in May 2023 along with our 4.750% Notes and are no longer included in our consolidated balance sheet.
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, these free-standing derivatives were reflected at their fair value of a $1.0 million liability and were included in other accrued liabilities in our consolidated balance sheet. These free-standing derivatives settled and matured in May 2023. For the years ended December 31, 2023, 2022 and 2021, we recognized a gain of $1.0 million and losses of $5.0 million and $4.4 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 December 31, 2022, 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 included in other accrued liabilities in our consolidated balance sheet.
We recognized net interest expense of $2.2 million and net interest income of $2.9 million and $7.9 million, respectively, during 2023, 2022 and 2021, related to net swap settlements for these interest rate swap agreements, which is included in interest expense in our consolidated statements of income.
For the years ended December 31, 2023, 2022 and 2021, we recognized losses of $2.3 million and gains of $2.7 million and $5.2 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, 2023, 2022 and 2021, we recognized offsetting gains of $1.2 million and offsetting losses of $6.0 million and $5.2 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, 2023, 2022 and 2021 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.
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, 2023 and 2022, our previously terminated interest rate locks were recorded as components of accumulated other comprehensive loss of $15.9 million and $21.4 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 2023, 2022 and 2021, we recognized losses, net of tax of $3.8 million, $4.4 million and $4.6 million, respectively, as a result of this amortization. Over the next 12 months, we expect to amortize $2.7 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 and an initial fair value of $29.1 million. The initial fair value is reclassified into earnings as non-cash interest expense on a systematic basis over the life of the interest rate swap. As of December 31, 2023, and 2022, the 2022 Interest Rate Swap has a notional value of $350 million and $390 million, respectively. 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 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, 2023 and 2022, the 2022 Interest Rate Swap was recorded at its fair value of $24.3 million and $36.0 million, respectively, and is included in other assets in our consolidated balance sheets.
During the years ended December 31, 2023 and 2022, we recognized unrealized gains of $12.2 million and $8.4 million, respectively, in accumulated other comprehensive loss for the 2022 Interest Rate Swap. As of December 31, 2023 and 2022, the 2022 Interest Rate Swap was recorded as a gain within accumulated other comprehensive loss of $4.3 million and $5.1 million,
respectively, 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 the years ended December 31, 2023 and 2022, we recognized gains, net of tax, of $13.1 million and $3.3 million, respectively, as a result of this amortization. Over the next 12 months, we expect to amortize approximately $5 million, net of tax, from accumulated other comprehensive loss 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
Extended Interest Rate Locks, Offsetting Interest Rate Swaps
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, 2023, the fair value of the Extended Interest Rate Locks were assets of $54.0 million, which were included in prepaid and other current assets and other assets in our consolidated balance sheets. As of December 31, 2022, the fair value of the Extended Interest Rate Locks were assets of $69.8 million, which were included in other assets in our consolidated balance sheets. As of December 31, 2023, the fair value of the Offsetting Interest Rate Swaps were liabilities of $78.2 million, which were included in other accrued liabilities and other long-term liabilities in our consolidated balance sheets. As of December 31, 2022, the fair value of the Offsetting Interest Rate Swaps were liabilities of $99.7 million, which were included in other long-term liabilities in our consolidated balance sheets.
For the year ended December 31, 2023, we recognized a loss of $15.4 million on the change in fair value of the Extended Interest Rate Locks, with an offsetting gain of $13.5 million, on the change in fair value of the Offsetting Interest Rate Swaps. 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. 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, 2023, we had $1,280.6 million of certain variable rate tax-exempt financings outstanding, with maturities ranging from 2024 to 2053. As of December 31, 2022, we had $1,182.0 million of variable rate tax-exempt financings outstanding, with maturities ranging from 2023 to 2051.
In September 2023, the California Municipal Finance Authority issued, for our benefit, $100 million of Solid Waste Disposal Revenue Bonds. The proceeds from the issuance, after deferred issuance costs, were used to fund the acquisition, construction, improvement, installation, and/or equipping of certain solid waste disposal facilities located within California. The initial remarketing period for this tax-exempt financing is 10 years. Our remaining 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, 2023 and 2022.
Finance Leases
As of December 31, 2023, we had finance lease liabilities of $251.3 million with maturities ranging from 2024 to 2063. As of December 31, 2022, we had finance lease liabilities of $247.5 million with maturities ranging from 2023 to 2063.
Interest Paid
Interest paid, excluding net swap settlements for our fair value hedges, was $422.9 million, $311.5 million and $249.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.