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Notes payable and long-term debt

9 Months Ended

Sep. 26, 2020

Debt Disclosure [Abstract]

Notes payable

Notes payable and long-term debt

The following table presents the components of notes payable at September 26, 2020 and December 28, 2019:

			September 26, 2020									December 28, 2019
(millions)			Principal amount			Effective interest rate						Principal amount			Effective interest rate
U.S. commercial paper			$	—		—		%				$	3		1.78		%
Bank borrowings			116									104
Total			$	116								$	107

In May of 2020, the Company issued $500 million of ten-year 2.10% Notes due 2030, resulting in net proceeds after debt discount of $496 million. The proceeds from these notes were used for general corporate purposes, including the payment of offering related fees and expenses, repayment of a portion of the $600 million 4.00% Notes due 2020 when they mature on December 15, 2020, and repayment of a portion of commercial paper borrowings. The Notes contain customary covenants that limit the ability of the Company and its restricted subsidiaries (as defined) to incur certain liens or enter into certain sale and lease-back transactions, as well as a change of control provision.

In connection with the May 2020 debt issuance, the Company terminated forward starting interest rate swaps with notional amounts totaling $500 million, resulting in a $51 million loss that will be amortized to interest expense over the term of the Notes.

In August 2019, the Company redeemed $191 million of its 4.15% U.S. Dollar Notes due November 2019, $248 million of its 4.00% U.S. Dollar Notes due 2020, $202 million of its 3.25% U.S. Dollar Notes due 2021, and $50 million of its 2.65% U.S. Dollar Notes due 2023. In connection with the debt redemption, the Company incurred $15 million of interest expense, consisting primarily of a premium on the tender offer and also including accelerated

losses on pre-issuance interest rate hedges, acceleration of unamortized debt discount and fees on the redeemed

debt and fees related to the tender offer.

In September 2019, the Company redeemed $309 million of its 4.15% U.S. Dollar Notes due November 2019, the

remaining principal balance subsequent to the August redemption. In connection with the debt redemption, the

Company incurred $1 million of interest expense, consisting primarily of a premium and also including accelerated

losses on pre-issuance interest rate hedges, acceleration of fees and debt discount on the redeemed debt and fees

related to the make whole call.

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- References

No definition available.

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- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

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