Quarterly report pursuant to Section 13 or 15(d)

Debt And Derivatives

v3.22.4
Debt And Derivatives
 3 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Debt And Derivatives DEBT AND DERIVATIVES
Table 6.1: Details of Debt
December 31, 2022 September 30, 2022
(in thousands)
Term Loan A, due 2026 $ 957,500  $ 971,250 
Term Loan B, due 2028 347,592  395,000 
Revolver 261,566  — 
Subsidiary loan agreements 7,135  64 
Total debt principal 1,573,793  1,366,314 
Less: Unamortized debt-issuance costs and discounts (9,339) (10,373)
Total debt 1,564,454  1,355,941 
Less: Current portion of long-term debt (77,479) (63,458)
Long-term debt $ 1,486,975  $ 1,292,483 
We entered into a credit agreement with JPMorgan Chase Bank, N.A. in May 2021 comprised of Term Loan A, Term Loan B, and a $600.0 million revolving credit facility ("Revolver"). During the first quarter of fiscal year 2023, we converted our interest rate index from the London Interbank Overnight Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR").
The Credit Agreement requires us to comply with a number of covenants, including leverage and interest coverage ratios. At December 31, 2022, we are in compliance with all covenants. We do not believe that the covenants represent a significant restriction on our ability to successfully operate the business or to pay dividends.
In addition to the corporate Credit Agreement, we hold smaller credit facilities in Australia, Canada, and the United Kingdom. These allow our businesses to borrow funds to meet any short-term working capital needs.
The following table sets forth future minimum principal payments due under our debt obligations as of December 31, 2022 for the remainder of fiscal year 2023 through fiscal year 2027 and thereafter:
Table 6.2: Details of Future Minimum Principal Payments Due
Amount Due
(in thousands)
January 1, 2023 through September 30, 2023 $ 57,873 
Year ended September 30, 2024 85,985 
Year ended September 30, 2025 92,860 
Year ended September 30, 2026 1,002,551 
Year ended September 30, 2027 3,485 
Thereafter 331,039 
Total Payments $ 1,573,793 
Interest Rate Derivative Instruments
To reduce our interest rate credit risk, we entered into interest-rate swap agreements covering $500 million of our Term Loan A, effectively setting a fixed rate for a portion of our debt. The balance of the debt pays interest based upon an index. The floating interest rate on these instruments was converted from LIBOR to SOFR in December 2022, concurrent with our debt agreements. In converting our debt and interest-rate swaps, we utilized the practical expedients allowed under ASU No. 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which allowed us to treat these amendments as though the modification was not substantial. At December 31, 2022, our effective interest rate, including the original issuance costs and discount rate, was 6.0%.
Our interest-rate swap agreements expire in May 2026, concurrently with the Term Loan A maturity. As of December 31, 2022, we had an asset of $29.0 million and a liability of $2.7 million, compared to an asset of $31.4 million as of September 30, 2022. These balances were recorded in "other assets" and "other liabilities", respectively, on our consolidated balance sheet. As these hedges are considered effective, all gains and losses are reported within accumulated other comprehensive income on our consolidated statement of comprehensive income.
Debt And Derivatives DEBT AND DERIVATIVES
Table 6.1: Details of Debt
December 31, 2022 September 30, 2022
(in thousands)
Term Loan A, due 2026 $ 957,500  $ 971,250 
Term Loan B, due 2028 347,592  395,000 
Revolver 261,566  — 
Subsidiary loan agreements 7,135  64 
Total debt principal 1,573,793  1,366,314 
Less: Unamortized debt-issuance costs and discounts (9,339) (10,373)
Total debt 1,564,454  1,355,941 
Less: Current portion of long-term debt (77,479) (63,458)
Long-term debt $ 1,486,975  $ 1,292,483 
We entered into a credit agreement with JPMorgan Chase Bank, N.A. in May 2021 comprised of Term Loan A, Term Loan B, and a $600.0 million revolving credit facility ("Revolver"). During the first quarter of fiscal year 2023, we converted our interest rate index from the London Interbank Overnight Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR").
The Credit Agreement requires us to comply with a number of covenants, including leverage and interest coverage ratios. At December 31, 2022, we are in compliance with all covenants. We do not believe that the covenants represent a significant restriction on our ability to successfully operate the business or to pay dividends.
In addition to the corporate Credit Agreement, we hold smaller credit facilities in Australia, Canada, and the United Kingdom. These allow our businesses to borrow funds to meet any short-term working capital needs.
The following table sets forth future minimum principal payments due under our debt obligations as of December 31, 2022 for the remainder of fiscal year 2023 through fiscal year 2027 and thereafter:
Table 6.2: Details of Future Minimum Principal Payments Due
Amount Due
(in thousands)
January 1, 2023 through September 30, 2023 $ 57,873 
Year ended September 30, 2024 85,985 
Year ended September 30, 2025 92,860 
Year ended September 30, 2026 1,002,551 
Year ended September 30, 2027 3,485 
Thereafter 331,039 
Total Payments $ 1,573,793 
Interest Rate Derivative Instruments
To reduce our interest rate credit risk, we entered into interest-rate swap agreements covering $500 million of our Term Loan A, effectively setting a fixed rate for a portion of our debt. The balance of the debt pays interest based upon an index. The floating interest rate on these instruments was converted from LIBOR to SOFR in December 2022, concurrent with our debt agreements. In converting our debt and interest-rate swaps, we utilized the practical expedients allowed under ASU No. 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which allowed us to treat these amendments as though the modification was not substantial. At December 31, 2022, our effective interest rate, including the original issuance costs and discount rate, was 6.0%.
Our interest-rate swap agreements expire in May 2026, concurrently with the Term Loan A maturity. As of December 31, 2022, we had an asset of $29.0 million and a liability of $2.7 million, compared to an asset of $31.4 million as of September 30, 2022. These balances were recorded in "other assets" and "other liabilities", respectively, on our consolidated balance sheet. As these hedges are considered effective, all gains and losses are reported within accumulated other comprehensive income on our consolidated statement of comprehensive income.