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DEBT AND CREDIT ARRANGEMENTS | 12 Months Ended
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Dec. 29, 2023
Debt Disclosure [Abstract] |
DEBT AND CREDIT ARRANGEMENTS | NOTE 8: DEBT AND CREDIT ARRANGEMENTS Long-Term Debt Long-term debt, net, is summarized below:
(In millions) | December 29, 2023 |  | December 30, 2022
Variable-rate debt: |  |  |
Floating rate notes, due March 10, 2023 | $ | — |  |  | $ | 250 |
Term loan, due November 21, 2025 | 2,250 |  |  | — |
Fixed-rate debt: |  |  |
3.85% notes, due June 15, 2023 (“3.85% 2023 Notes”) | — |  |  | 800 |
3.95% notes, due May 28, 2024(1) | 350 |  |  | 350 |
3.832% notes, due April 27, 2025(1)(2) | 600 |  |  | 600 |
7.00% debentures, due January 15, 2026(3) | 100 |  |  | 100 |
3.85% notes, due December 15, 2026(1) | 550 |  |  | 550 |
5.40% notes, due January 15, 2027 (“5.4% 2027 Notes”)(1)(2) | 1,250 |  |  | — |
6.35% debentures, due February 1, 2028(1) | 26 |  |  | 26 |
4.40% notes, due June 15, 2028(1)(2) | 1,850 |  |  | 1,850 |
2.90% notes, due December 15, 2029(1) | 400 |  |  | 400 |
1.80% notes, due January 15, 2031(1)(2) | 650 |  |  | 650 |
5.40% notes, due July 31, 2033 (“5.4% 2033 Notes”)(1)(2) | 1,500 |  |  | — |
4.854% notes, due April 27, 2035(1)(2) | 400 |  |  | 400 |
6.15% notes, due December 15, 2040(1)(2) | 300 |  |  | 300 |
5.054% notes, due April 27, 2045(1)(2) | 500 |  |  | 500 |
5.60% notes, due July 31, 2053 (“5.6% 2053 Notes”)(1)(2) | 500 |  |  | — |
Total variable and fixed-rate debt | 11,226 |  |  | 6,776 |
Financing lease obligations and other debt | 300 |  |  | 222 |
Long-term debt, including the current portion of long-term debt | 11,526 |  |  | 6,998 |
Plus: unamortized bond premium | 51 |  |  | 70 |
Less: unamortized discounts and issuance costs | (54) |  |  | (25) |
Long-term debt, including the current portion of long-term debt, net | 11,523 |  |  | 7,043 |
Less: current portion of long-term debt, net | (363) |  |  | (818) |
Total long-term debt, net | $ | 11,160 |  |  | $ | 6,225 |
_______________ (1)We may redeem these notes, in whole or in part, at our option, at a pre-determined redemption price pursuant to their terms prior to the applicable maturity date. (2)Upon change of control combined with a below-investment-grade rating event, we may be required to make an offer to repurchase these notes at a pre-determined price pursuant to their terms. (3)The debentures are not redeemable prior to maturity. The maturities of long-term debt, including the current portion of long-term debt and excluding financing lease obligations, for the five years following the end of fiscal 2023 and, in total thereafter, are: $355 million in fiscal 2024; $2,855 million in fiscal 2025; $654 million in fiscal 2026; $1,254 million in fiscal 2027; $1,880 million in fiscal 2028; and $4,277 million thereafter. Long-Term Debt Issued Variable-Rate Debt. On November 22, 2022, we established a $2.25 billion, three-year senior unsecured term loan facility by entering into Term Loan 2025 with a syndicate of lenders that matures on November 21, 2025. The Term Loan 2025 provides for term loans in up to two separate draws no later than June 30, 2023, with the proceeds to be used: (i) to finance the acquisition of the TDL product line; (ii) to repay all amounts under the Floating 2023 Notes; (iii) to pay the fees, costs and expenses incurred in connection with the foregoing; and (iv) for general corporate purposes in an amount up to $40 million. At L3Harris’ election, borrowings under Term Loan 2025 will bear interest at: (i) the sum of the term Secured Overnight Financing Rate (“SOFR”) rate for any tenor comparable to the applicable interest period, plus 0.10%, plus an applicable margin between 1.125% and 1.875% (initially 1.250%) that varies based on the ratings of our senior unsecured long-term debt securities (“Senior Debt Ratings”); or (ii) the base rate (as described in L3Harris’ Current Report on Form 8-K filed with the SEC on August 4, 2022), plus an applicable margin between 0.125% and 0.875% (initially 0.250%) that varies based on the Senior Debt Ratings. The Term Loan 2025 requires L3Harris to pay a quarterly unused commitment fee commencing on January 17, 2023 at an applicable rate per annum between 0.090% and 0.250% (initially 0.110%) that varies based on the Senior Debt Ratings. We incurred $2 million of debt issuance costs related to the issuance of the Term Loan 2025, which will be amortized over the life of the Term Loan 2025 and will be included as a component of the “Interest expense, net” line item in our Consolidated Statement of Operations. The Term Loan 2025 also contains representations, warranties, covenants and events of default that are substantially similar to those in the 2022 Credit Agreement, as described above in these Notes. L3Harris may prepay amounts borrowed under the Term Loan 2025 at any time, and L3Harris is required to prepay all outstanding term loans ratably from the proceeds of any new indebtedness, subject to certain exceptions set forth in the Term Loan 2025, including with respect to any proceeds received from: (i) the 2022 Credit Agreement, as described above in these Notes; (ii) indebtedness incurred in the ordinary course of business; (iii) indebtedness used to fund any acquisition; (iv) refinancing; (v) commercial paper issuances; (vi) letters of credit; (vii) working capital facilities of foreign subsidiaries; and (viii) other indebtedness in an aggregate principal amount not greater than $500 million. On January 3, 2023, we drew $2 billion on Term Loan 2025 and utilized the proceeds to fund the cash consideration paid and a portion of the associated transaction and integration costs related to the TDL acquisition. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for further information on the TDL acquisition. On March 14, 2023, we drew an additional $250 million on Term Loan 2025 and utilized the proceeds to repay our Floating 2023 Notes. At December 29, 2023, we had $2.25 billion outstanding under Term Loan 2025. There were no borrowings outstanding under Term Loan 2025 at December 30, 2022. Borrowings under Term Loan 2025 bear interest at the sum of the term SOFR for any tenor comparable to the applicable interest period, plus 0.10%, plus an applicable margin between 1.125% and 1.875% that varies based on our Senior Debt Ratings. At December 29, 2023, the interest rate on Term Loan 2025 was 6.7%. Fixed-Rate Debt. On July 31, 2023, we closed the issuance and sale of the AJRD Notes. The AJRD Notes were used to fund a portion of the purchase price for the AJRD acquisition, which closed on July 28, 2023, and to pay related fees and expenses. Interest on the 5.4% 2027 Notes is payable semi-annually in arrears on January 15 and July 15 of each year, commencing on January 15, 2024. Interest on the 5.4% 2033 Notes and 5.6% 2053 Notes is payable semi-annually in arrears on January 31 and July 31 of each year, commencing on January 31, 2024. We may redeem the 5.4% 2027 Notes, 5.4% 2033 Notes and 5.6% 2053 Notes prior to January 15, 2027, April 30, 2033 and January 31, 2053, respectively, in whole or in part, at our option, at a redemption price equal to the greater of: (i) the sum of the present values of the remaining scheduled payments of the principal and interest thereon discounted to the redemption date on a semi-annual basis at the “Treasury Rate,” as defined in the AJRD Notes, plus 15 basis points for the 5.4% 2027 Notes and 25 basis points for the 5.4% 2033 Notes and 5.6% 2053 Notes, less interest accrued to the date of redemption; (ii) or 100% of the principal amount of the respective notes plus, in either case, accrued interest and unpaid interest thereon to the redemption date. After April 30, 2033 and January 31, 2053, we may redeem the 5.4% 2033 Notes and the 5.6% 2053 Notes, respectively, at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest thereon to the redemption date. Upon a “Change of Control Repurchase Event,” as defined in the AJRD Notes, we may be required to make an offer to repurchase the AJRD Notes at a price equal to 101% of the aggregate principal amount of the notes being repurchased, plus accrued interest on the notes being repurchased to, but not including, the date of repurchase. We incurred $9 million, $13 million, and $6 million of debt issuance costs for the 5.4% 2027 Notes, 5.4% 2033 Notes and 5.6% 2053 Notes, respectively, which are being amortized using the straight line method over the life of each respective note. Such amortization is included as a component of the “Interest expense, net” line item in our Consolidated Statement of Operations. There were no issuances of fixed-rate long-term debt during fiscal 2022. Long-Term Debt Repayments On March 14, 2023, we repaid the entire outstanding $250 million aggregate principal amount of our Floating 2023 Notes through a $250 million draw on Term Loan 2025 as described above under “Long-Term Debt Issued.” As we intended to issue long term debt to repay the Floating 2023 Notes, these notes were classified as “Long-term debt, net” in our Consolidated Balance Sheet at December 30, 2022. On June 15, 2023, we repaid the entire outstanding $800 million aggregate principal amount of our 3.85% 2023 Notes through cash on hand and the issuance of commercial paper during fiscal 2023. There were no repayments of variable and fixed-rate long-term debt during fiscal 2022. Fair Value of Debt The following table presents the carrying amounts and estimated fair values of our long-term debt:
| December 29, 2023 |  | December 30, 2022
(In millions) | Carrying Amount |  | Fair Value |  | Carrying Amount |  | Fair Value
Term Loan 2025(1) | $ | 2,250 |  |  | $ | 2,250 |  |  | $ | — |  |  | $ | — |
All other long-term debt, net (including current portion)(2) | 9,273 |  |  | 9,199 |  |  | 7,043 |  |  | 6,569 |
Long-term debt, including the current portion of long-term debt, net | $ | 11,523 |  |  | $ | 11,449 |  |  | $ | 7,043 |  |  | $ | 6,569 |
_______________ (1)The carrying value of Term Loan 2025 approximates fair value due to its variable interest rate. (2)The fair value was estimated using a market approach based on quoted market prices for our debt traded in the secondary market. If our long-term debt in our balance sheet were measured at fair value, it would be categorized in Level 2 of the fair value hierarchy. The fair value of our short-term debt approximates the carrying value due to its short-term nature, with commercial paper classified as level 2 and other short-term debt classified as level 3 within the fair value hierarchy. Interest Paid Total interest paid was $489 million, $296 million and $284 million in fiscal 2023, 2022 and 2021, respectively. 2023 Credit Agreement On March 10, 2023, we established a $2.40 billion, 364-day senior unsecured revolving credit facility by entering into a 364-Day Credit Agreement with a syndicate of lenders. Proceeds of the initial funding of loans under the 2023 Credit Agreement were required to be used to finance a portion of the purchase price for the acquisition of AJRD and for the related fees, taxes, costs and expenses, and subsequent borrowings may be used for working capital purposes. At our election, borrowings under the 2023 Credit Agreement, which are designated in U.S. Dollars, bear interest at the sum of the term SOFR rate or the Base Rate (as defined in the 2023 Credit Agreement), plus an applicable margin. In addition to interest payable on the principal amount of indebtedness outstanding, beginning June 6, 2023, we are required to pay a quarterly unused commitment fee that varies based on our Senior Debt Ratings. The 2023 Credit Agreement also contains representations, warranties, covenants and events of default that are substantially similar to the existing 2022 Credit Agreement. The 2023 Credit Agreement matures in March 2024, provided that we may extend the maturity of any loans outstanding under the 2023 Credit Agreement by one year, subject to the satisfaction of certain conditions. On July 28, 2023, we borrowed $2.1 billion under the 2023 Credit Agreement and used the proceeds together with proceeds from the AJRD Notes to fund the AJRD acquisition and to pay related fees and expenses. All borrowings under the 2023 Credit Agreement were repaid using proceeds from commercial paper during fiscal 2023. At December 29, 2023 we had no outstanding borrowings and were in compliance with all covenants under the 2023 Credit Agreement. For additional information regarding the 2023 Credit Agreement, see our Current Report on Form 8-K filed on March 16, 2023. On January 26, 2024, we replaced the 2023 Credit Agreement with a new $1.5 billion, 364-day senior unsecured revolving credit facility maturing no later than January 24, 2025. 2022 Credit Agreement On July 29, 2022, we established a $2.0 billion, five-year senior unsecured revolving credit facility under the 2022 Credit Agreement, with a syndicate of lenders. The 2022 Credit Facility replaced the 2019 Credit Facility and provides for revolving loans, swingline loans and letters of credit, with a sub-limit of $200 million for swingline loans and a sub-limit of $350 million for letters of credit, with the option to request an increase of the maximum amount of commitments up to $3.0 billion. At our election, borrowings in U.S. Dollars under the 2022 Credit Agreement will bear interest either based on the SOFR rate or the Base Rate (each, as defined in the 2022 Credit Agreement), plus an applicable margin. We are also required to pay a quarterly unused commitment fee and letter of credit fees based on our Senior Debt Ratings. The 2022 Credit Facility contains certain affirmative covenants, including, but not limited to: reporting obligations; maintenance of corporate existence and good standing; compliance with laws; maintenance of properties and insurance; payment of taxes; compliance with ERISA and environmental, anti-money laundering, sanctions, export controls, anti-corruption and certain other laws; and visitation and inspection by the administrative agent and the lenders. The 2022 Credit Facility also contains certain negative covenants, including, but not limited to: limiting certain liens on assets; limiting certain mergers, consolidations or sales of assets; and limiting certain investments in unrestricted subsidiaries. The 2022 Credit Facility also requires that L3Harris not permit its ratio of Consolidated Total Indebtedness to Total Capital, each as defined in the 2022 Credit Facility, to be greater than 0.65:1.00. At December 29, 2023, we had no outstanding borrowings and were in compliance with all covenants under the 2022 Credit Facility. Commercial Paper Program On March 14, 2023, we established a new CP Program, which replaced our prior $1.0 billion commercial paper program. Under the CP Program, we may issue unsecured commercial paper notes up to a maximum aggregate amount of $3.9 billion, supported by amounts available under the 2022 Credit Agreement and the 2023 Credit Agreement. The commercial paper notes are sold at par less a discount representing an interest factor or, if interest bearing, at par, and the maturities vary but may not exceed 397 days from the date of issue. The commercial paper notes will rank at least pari passu with all other unsecured and unsubordinated indebtedness. At December 29, 2023, we had $1.6 billion in outstanding notes under our CP Program, primarily consisting of amounts used to repay $2.1 billion outstanding under the 2023 Credit Agreement and is included as a component of the “Short-term debt” line item in our Consolidated Balance Sheet. The outstanding notes have a weighted-average interest rate of 5.95% and mature at various dates. Proceeds from issuance of commercial paper with maturities greater than 90 days were $701 million during fiscal 2023. Repayments of commercial paper with maturities greater than 90 days were $184 million during fiscal 2023. During fiscal 2022, we had no commercial paper borrowings with original maturities more than 90 days from the date of issuance.

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