Quarterly report pursuant to Section 13 or 15(d)

Debt

v3.22.1
Debt
3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
Debt Debt
 
Debt consists of the following ($ in millions):
  March 31, 2022 December 31, 2021
$2,500 million 4.25% Senior Notes due December 15, 2027
$ 2,485  $ 2,484 
$2,300 million 2.45% Senior Notes due July 15, 2028
2,304  2,304 
$3,500 million 4.625% Senior Notes due December 15, 2029
3,500  3,500 
$2,000 million 3.375% Senior Notes due February 15, 2030
2,000  2,000 
$2,200 million 3.00% Senior Notes due October 15, 2030
2,200  2,200 
$2,200 million 2.50% Senior Notes due March 1, 2031
2,200  2,200 
$1,300 million 2.625% Senior Notes due August 1, 2031
1,300  1,300 
Total senior notes 15,989  15,988 
Term loan facility 2,196  2,195 
Revolving credit agreement 213  149 
Construction loan payable 182  184 
Finance leases and other 518  493 
Debt issuance costs (166) (171)
Total debt 18,932  18,838 
Less current portion (292) (267)
 Long-term debt $ 18,640  $ 18,571 

Of the Company's total debt, approximately 15% is variable rate debt tied to London Interbank Offered Rate (LIBOR). The debt agreements that may be impacted by the discontinuation of LIBOR include provisions that the Company believes are sufficient for the Company to transition from the existing LIBOR rates to the prevailing successor market rates as necessary.

Senior Notes

In connection with the Magellan Acquisition in January 2022, the Company redeemed Magellan’s existing outstanding 4.4% Senior Notes due 2024 and paid off the existing Credit Agreement using Magellan’s cash on hand. The Company recognized an immaterial net pre-tax gain on extinguishment including related fees and expenses and the write-off of the unamortized premium.

Foreign Currency Swap

In order to manage the foreign exchange risk associated with an intercompany note receivable related to the Circle Health acquisition, the Company entered into a foreign currency swap agreement for a notional amount of $705 million, to purchase £509 million. The swap agreement was formally designated and qualified as a fair value hedge. All gains and losses due to changes in the fair value of the foreign currency swap completely offset changes in the remeasurement of the intercompany note receivable within investment and other income in the Consolidated Statement of Operations, resulting in no net impact to the Consolidated Statement of Operations.

On March 31, 2022, the interest rate swap settled in connection with its expiration, and the Company received cash proceeds of $35 million. The Company does not hold or issue any derivative instruments for trading or speculative purposes.

Construction Loan

In October 2017, the Company executed a $200 million non-recourse construction loan to fund the expansion of the Company's corporate headquarters. Until final completion of the construction project, which occurred in July 2021, the loan bore interest based on one month LIBOR plus 2.70%, which reduced to LIBOR plus 2.00% at the time construction was completed. The agreement contains financial and non-financial covenants similar to those contained in the Company Credit Facility. The Company guaranteed completion of the construction project associated with the loan. As of March 31, 2022, the Company had $182 million in borrowings outstanding under the loan, which is included in the current portion of long-term debt.

In April 2022, the Company extended the term of the loan for an additional one year. The extension reduced interest on the loan to SOFR plus 1.85% and matures in April 2023.