FINANCING ARRANGEMENTS |
3 Months Ended |
|---|---|
Mar. 31, 2025 | |
| Debt Disclosure [Abstract] | |
| FINANCING ARRANGEMENTS | FINANCING ARRANGEMENTS The Company has a five-year senior unsecured multi-currency revolving facility, for an aggregate principal amount of $700 million, that expires on May 12, 2028. The Company also has a $700 million commercial paper program. The $700 million multi-currency revolving credit facility serves as a back-up to the commercial paper facility, resulting in an aggregate of $700 million as the total available credit under the commercial paper facility and the multi-currency revolving credit facility. The Company had outstanding borrowings of $140 million and $410 million under the commercial paper facility at March 31, 2025 and December 31, 2024, respectively, and no outstanding borrowings under the multi-currency revolving credit facility. The Company also has access to $33 million in uncommitted short-term financing available under lines of credit from various financial institutions, which is reduced by other outstanding short-term borrowings of $9 million. On March 19, 2025, the Company entered into a 364-day term loan of $435 million with a maturity date of March 18, 2026 (the “Bridge Loan”). Borrowings under the Bridge Loan will bear interest at a fluctuating rate per annum equal to, at the Company’s option, (i) the forward-looking Secured Overnight Financing Rate (such borrowings, “Term Benchmark Loans”), or (ii) a base rate, plus, in each case, an applicable margin calculated based on the Company’s credit ratings from Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services at the time and, in the case of Term Benchmark Loans, an adjustment of 10 basis points. In the event that the Bridge Loan remains outstanding for more than 90, 180, or 270 days, the Company will be obligated to pay duration fees of 0.50%, 0.75% and 1.00%, respectively, of the principal amounts outstanding on such dates. The net proceeds were $432 million, net of issuance fees totaling $3 million. The proceeds are being used to repay borrowings under the commercial paper facility and for other general corporate purposes. At March 31, 2025, the weighted-average interest rate for short-term debt, inclusive of the Bridge Loan, was 5.6%. At March 31, 2025, the Company had $584 million of borrowings available under lines of credit, including lines available under its short-term arrangements and revolving credit facility. The Company’s revolving credit facility, term loans, and senior notes contain certain affirmative and negative debt covenants relating to the Company's operations and financial condition. At March 31, 2025, the Company was in compliance with all debt covenants. Interest expense, net includes interest income of $4 million and $5 million for the three months ended March 31, 2025 and 2024, respectively. Interest income primarily relates to interest-bearing cash equivalents and customer financing for the Company’s direct-to-consumer aligner solutions.
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