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Debt Obligations
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Debt Obligations Debt Obligations
June 30,December 31,
20262025
(in millions)
7.250% Senior Secured Notes due 2031 (“Senior Notes”)
$1,000 $1,000 
Term Loan A Facility1,000 — 
Term Loan B Facility1,000 — 
Unamortized debt issuance costs and discounts, net(46)(17)
Total long-term debt2,954 983 
Less: current portion of long-term debt, net113 — 
Long-term debt, net of current portion$2,841 $983 
The estimated fair value of our long-term debt obligations was $3.03 billion and $1.03 billion as of June 30, 2026 and December 31, 2025, respectively. Fair values of our Senior Notes were estimated using Level 2 inputs, based on external market data for debt with similar terms and maturities. The fair values of our variable rate term loans were estimated to approximate their face values.
On January 2, 2026, in connection with the Separation, we borrowed $1.0 billion under a term loan due January 2031 provided for in our October 2025 credit agreement (the “Term Loan A Facility”). On January 2, 2026, we also entered into a credit agreement providing for an additional term loan of $1.0 billion due January 2031 (the “Term Loan B Facility” and together with the Term Loan A Facility, the “Term Loans”), which was fully funded on that date. The Term Loans and our $750 million revolving credit facility (the “Revolving Credit Facility” and together with the Term Loans, the “Senior Credit Facilities”) are secured by substantially all the assets of the Company and its material, wholly-owned U.S. subsidiaries, subject to certain exceptions.
Term Loan A Facility and Term Loan B Facility require repayment of initial amounts borrowed of 5.00% and 7.00%, respectively, per annum payable in quarterly installments beginning on September 30, 2026, with the balance being payable at maturity. Contractual maturities of our debt obligations as of June 30, 2026 totaled $60 million in 2026 and approximately $120 million per year from 2027 to 2030, with the remainder payable in 2031.
The Term Loan A Facility and the Revolving Credit Facility contain a financial covenant that requires us to maintain a maximum consolidated first lien net leverage ratio, as defined in the credit agreement governing the Term Loan A Facility and the Revolving Credit Facility, of not greater than 3.50:1.00, beginning with the third quarter of 2026. As of June 30, 2026, no events of default have occurred under these facilities.
Derivatives and Hedging
In March 2026, we entered into interest rate swaps designated as cash flow hedges to manage our exposure to interest rate risk related to variable-rate debt obligations. As of June 30, 2026, the notional amount of these derivatives was $1.0 billion, and the fair values totaled $13 million, of which $5 million was recorded within other current assets and the remainder within other noncurrent assets in our consolidated balance sheet as of June 30, 2026. The fair values of these financial instruments are primarily based on Level 2 inputs derived from valuation models that use observable market data. Changes in fair value of derivative instruments classified as cash flow hedges are recognized in accumulated other comprehensive income until the hedged item affects earnings. During the three and six months ended June 30, 2026, derivative gains (losses) recognized within interest expense on our consolidated statement of income were not material.
Cash flows related to derivative instruments designated as cash flow hedges are classified in our consolidated statements of cash flows based on the classifications of the underlying cash flows.