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Debt | 12 Months Ended
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Jan. 02, 2021
Debt [Abstract] |
Long-term Debt [Text Block] | The following table presents the components of notes payable at year end January 2, 2021 and December 28, 2019:
(millions) |  | 2020 |  | 2019
|  | Principal amount |  | Effective interest rate |  | Principal amount |  | Effective interest rate
U.S. commercial paper |  | $ | 25 |  |  | 0.20 | % |  | $ | 3 |  |  | 1.78 | %
Bank borrowings |  | 77 |  |  |  |  | 104 |  |  |
Total |  | $ | 102 |  |  |  |  | $ | 107 |  |  |
The following table presents the components of long-term debt at year end January 2, 2021 and December 28, 2019:
(millions) |  | 2020 |  | 2019
(a) 4.50% U.S. Dollar Notes due 2046 |  | $ | 638 |  |  | $ | 638 |
(b) 7.45% U.S. Dollar Debentures due 2031 |  | 621 |  |  | 621 |
(c) 2.10% U.S. Dollar Notes due 2030 |  | 496 |  |  | — |
(d) 4.30% U.S. Dollar Notes due 2028 |  | 596 |  |  | 595 |
(e) 3.40% U.S. Dollar Notes due 2027 |  | 596 |  |  | 596 |
(f) 3.25% U.S. Dollar Notes due 2026 |  | 742 |  |  | 741 |
(g) 1.25% Euro Notes due 2025 |  | 748 |  |  | 689 |
(h) 1.00% Euro Notes due 2024 |  | 756 |  |  | 692 |
(i) 2.65% U.S. Dollar Notes due 2023 |  | 542 |  |  | 539 |
(j) 2.75% U.S. Dollar Notes due 2023 |  | 204 |  |  | 201 |
(k) 3.125% U.S. Dollar Notes due 2022 |  | — |  |  | 353 |
(l) 0.80% Euro Notes due 2022 |  | 731 |  |  | 669 |
(m) 1.75% Euro Notes due 2021 |  | 610 |  |  | 558 |
(n) 3.25% U.S. Dollar Notes due 2021 |  | — |  |  | 198 |
(o) 4.0% U.S. Dollar Notes due 2020 |  | — |  |  | 601 |
Other |  | 93 |  |  | 124 |
|  | 7,373 |  |  | 7,815 |
Less current maturities |  | (627) |  |  | (620) |
Balance at year end |  | $ | 6,746 |  |  | $ | 7,195 |
(a)In March 2016, the Company issued $650 million of thirty-year 4.50% U.S. Dollar Notes, using the net proceeds for general corporate purposes, which included repayment of a portion of the Company's 7.45% U.S. Dollar Debentures due 2031 and a portion of its commercial paper borrowings. The effective interest rate on the Notes, reflecting issuance discount and hedge settlement, was 4.60% at January 2, 2021. (b)In March 2001, the Company issued long-term debt instruments, primarily to finance the acquisition of Keebler Foods Company, of which $625 million of thirty-year 7.45% Debentures remain outstanding. The effective interest rate on the Debentures, reflecting issuance discount and hedge settlement, was 7.56% at January 2, 2021. The Debentures contain standard events of default and covenants, and can be redeemed in whole or in part by the Company at any time at prices determined under a formula (but not less than 100% of the principal amount plus unpaid interest to the redemption date). (c)In May of 2020, the Company issued $500 million of ten-year 2.10% Notes, using the net proceeds for general corporate purposes, which included repayment of a portion of the $600 million 4.00% Notes due 2020 at maturity. The effective interest rate on the Notes reflecting issuance discount and hedge settlement, was 3.05% at January 2, 2021. (d)In May 2018, the Company issued $600 million of ten-year 4.30% Senior Notes, using the net proceeds for general corporate purposes, which included repayment of the Company's $400 million, seven-year 3.25% U.S. Dollar Notes due 2018 at maturity, and the repayment of a portion of the Company's commercial paper borrowings used to finance the acquisition of ownership interests in TAF and Multipro. The effective interest rate on the Notes, reflecting issuance discount and hedge settlement, was 4.34% at January 2, 2021. (e)In November 2017, the Company issued $600 million of ten-year 3.40% U.S. Dollar Notes, using the net proceeds for general corporate purposes, which included repayment of a portion of the Company's commercial paper borrowings used to finance the acquisition of Chicago Bar Company LLC, the maker of RXBAR. The effective interest rate on the Notes, reflecting issuance discount and hedge settlement, was 3.49% at January 2, 2021. (f)In March 2016, the Company issued $750 million of ten-year 3.25% U.S. Dollar Notes, using the net proceeds for general corporate purposes, which included repayment of a portion of the Company's 7.45% U.S. Dollar Debentures due 2031 and a portion of its commercial paper borrowings. The effective interest rate on these Notes, reflecting issuance discount, hedge settlement and interest rate swaps was 4.23% at January 2, 2021. In September 2016, the Company entered into interest rate swaps with notional amounts totaling $300 million, which effectively converted a portion of these Notes from a fixed rate to a floating rate obligation. These derivative instruments were designated as fair value hedges of the debt obligation. This interest rate swap was subsequently terminated and undesignated. In October 2018, the Company entered into interest rate swaps with notional amounts totaling $450 million, which effectively converted a portion of these Notes from a fixed rate to a floating rate obligation. These derivative instruments were designated as fair value hedges of the debt obligation. The Company subsequently terminated this interest rate swap. The resulting unamortized loss from swap activity of $5 million at January 2, 2021 will be amortized to interest expense over the remaining term of the Notes. (g)In March 2015, the Company issued €600 million (approximately $733 million at January 2, 2021, which reflects the discount, fees and translation adjustments) of ten-year 1.25% Euro Notes, using the proceeds from these Notes for general corporate purposes, which included repayment of a portion of the Company’s commercial paper borrowings. The effective interest rate on the Notes, reflecting issuance discount, hedge settlement and interest rate swaps, was 1.62% at January 2, 2021. The Notes were designated as a net investment hedge of the Company’s investment in its Europe subsidiary when issued. In May 2017, the Company entered into interest rate swaps with notional amounts totaling €600 million, which effectively converted these Notes from a fixed rate to a floating rate obligation. These derivative instruments were designated as fair value hedges of the debt obligation. The Company subsequently terminated the interest rate swaps, and the resulting unamortized gain of $17 million at January 2, 2021 will be amortized to interest expense over the remaining term of the Notes. (h)In May 2016, the Company issued €600 million (approximately $733 million USD at January 2, 2021, which reflects the discount, fees and translation adjustments) of eight-year 1.00% Euro Notes. The proceeds from these Notes were used for general corporate purposes, including, together with cash on hand and additional commercial paper borrowings, repayment of the Company's $750 million, seven-year 4.45% U.S. Dollar Notes due 2016 at maturity. The Notes were designated as a net investment hedge of the Company’s investment in its Europe subsidiary when issued. The effective interest rate on these Notes, reflecting issuance discount, hedge settlement and interest rate swaps was 0.17% at January 2, 2021. In November 2016, the Company entered into interest rate swaps with notional amounts totaling €300 million, which effectively converted a portion of these Notes from a fixed rate to a floating rate obligation. These derivative instruments were designated as fair value hedges of the debt obligation. In October 2018, the Company entered into interest rate swaps with notional amounts totaling €300 million, which effectively converted a portion of these Notes from a fixed rate to a floating rate obligation. The Company subsequently terminated these swaps, and the resulting unamortized gain of $17 million at January 2, 2021 will be amortized to interest expense over the remaining term of the Notes. In May of 2019, the Company entered into interest rate swaps with notional amounts totaling €600 million, which effectively converted a portion of these Notes from a fixed rate to a floating rate obligation. These derivative instruments were designated as fair value hedges of the debt obligation. The fair value adjustment for the interest rate swaps was $9 million at January 2, 2021, recorded as an increase in the hedged debt balance. (i)In November 2016, the Company issued $600 million of seven-year 2.65% U.S. Dollar Notes, using the net proceeds for general corporate purposes, which included repayment of the Company's 1.875% U.S. Dollar Notes due 2016 at maturity and a portion of its commercial paper borrowings. The effective interest rate on these Notes, reflecting issuance discount, hedge settlement and interest rate swaps was 3.08% at January 2, 2021. In 2016, the Company entered into interest rate swaps with notional amounts totaling $300 million, which effectively converted a portion of these Notes from a fixed rate to a floating rate obligation. These derivative instruments were designated as fair value hedges of the debt obligation. The Company subsequently terminated the interest rate swaps, and the resulting unamortized loss of $7 million at January 2, 2021 will be amortized to interest expense over the remaining term of the Notes. In 2019, the Company redeemed $50 million of the Notes. In connection with the debt redemption, the Company incurred $2 million of interest expense, consisting primarily of a premium on the tender offer. (j)In February 2013, the Company issued $400 million ($189 million previously redeemed) of ten-year 2.75% U.S. Dollar Notes, using net proceeds from these Notes for general corporate purposes, including, together with cash on hand, to repay a portion of the Company’s $750 million 4.25% U.S. Dollar Notes that matured in March 2013. The effective interest rate on these Notes, reflecting issuance discount hedge settlement and interest rate swaps, was 4.17%. In September 2016, the Company entered into interest rate swaps with notional amounts totaling $211 million, which effectively converted these Notes from a fixed rate to a floating rate obligation. These derivative instruments were designated as fair value hedges of the debt obligation. The Company subsequently terminated the interest rate swaps, and the resulting unamortized loss of $6 million at January 2, 2021 will be amortized to interest expense over the remaining term of the Notes. (k)In May 2012, the Company issued $700 million ($342 million previously redeemed) of ten-year 3.125% U.S. Dollar Notes, using the net proceeds from these Notes for general corporate purposes, including financing a portion of the acquisition of Pringles. During 2020, the Company redeemed the remaining $358 million of the Notes. In conjunction with the debt redemption, the Company incurred $17 million of interest expense, consisting primarily of a premium on the tender offer. (l)In May 2017, the Company issued €600 million (approximately $733 million USD at January 2, 2021, which reflects the discount and translation adjustments) of five-year 0.80% Euro Notes, using the proceeds from these Notes for general corporate purposes, including, repayment of the Company's $400 million, five-year 1.75% U.S. Dollar Notes due 2017 at maturity. The effective interest rate on the Notes, reflecting issuance discount and hedge settlement, was 0.87%. The Notes were designated as a net investment hedge of the Company's investment in its Europe subsidiary when issued. (m)In May 2014, the Company issued €500 million (approximately $611 million at January 2, 2021, which reflects the discount and translation adjustments) of seven-year 1.75% Euro Notes, using the proceeds from these Notes for general corporate purposes, which included repayment of a portion of the Company’s commercial paper borrowings. The effective interest rate on the Notes, reflecting issuance discount and hedge settlement, was 2.36% at January 2, 2021. The Notes were designated as a net investment hedge of the Company’s investment in its Europe subsidiary when issued. (n)In May 2018, the Company issued $400 million of three-year 3.25% Senior Notes, using the net proceeds for general corporate purposes, which included repayment of the Company's $400 million, seven-year 3.25% U.S. Dollar Notes due 2018 at maturity, and the repayment of a portion of the Company's commercial paper borrowings used to finance the acquisition of ownership interests in TAF and Multipro. In 2019, the Company redeemed $202 million of the Notes. In connection with the dept redemption, the Company incurred $6 million of interest expense, consisting primarily of a premium on the tender offer. In 2020, the Company redeemed the remaining $198 million of the Notes. In conjunction with the debt redemption, the Company incurre d $3 million of interest expense, consisting primarily of a premium on the tender offer. (o)In December 2010, the Company issued $1.0 billion ($150 million previously redeemed) of ten-year 4.0% fixed rate U.S. Dollar Notes, using the net proceeds from these Notes for incremental pension and postretirement benefit plan contributions and to retire a portion of its commercial paper. In 2019, the Company redeemed $248 million of the Notes. In connection with the debt redemption, the Company incurred $6 million of interest expense, consisting primarily of a premium on the tender offer, which was partially offset by accelerated gains on pre-issuance interest rate hedges. The remaining balance was redeemed at maturity in December of 2020. In December of 2020, the Company redeemed $198 million of its 3.25% U.S. Dollar Notes due May 2021, and $358 million of its 3.125% U.S. Dollar Notes due 2022. In connection with the debt redemption, the Company incurred $20 million of interest expense, primarily consisting of premium on the tender offer, acceleration of unamortized debt discount on the redeemed debt, fees related to the tender offer, and also included accelerated losses on pre-issuance interest rate hedges. In the third quarter of 2019, the Company redeemed $500 million of its 4.15% U.S. Dollar Notes due 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 $16 million of interest expense, consisting primarily of a premium on the tender offer, acceleration of unamortized debt discount on the redeemed debt, fees related to the tender offer, and also included accelerated gains and losses on pre-issuance interest rate hedges. All of the Company’s 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 and also contain a change of control provision. There are no significant restrictions on the payment of dividends by the Company. The Company was in compliance with all these covenants as of January 2, 2021. The Company and two of its subsidiaries (the Issuers) maintain a program under which the Issuers may issue euro-commercial paper notes up to a maximum aggregate amount outstanding at any time of $750 million or its equivalent in alternative currencies. The notes may have maturities ranging up to 364 days and will be senior unsecured obligations of the applicable Issuer. Notes issued by subsidiary Issuers will be guaranteed by the Company. The notes may be issued at a discount or may bear fixed or floating rate interest or a coupon calculated by reference to an index or formula. There were no commercial paper notes outstanding under this program as of January 2, 2021 and December 28, 2019. At January 2, 2021, the Company had $3.0 billion of short-term lines of credit and letters of credit, of which $2.9 billion were unused and available for borrowing primarily on an unsecured basis. These lines were comprised principally of the January 2018 unsecured $1.5 billion Five-Year Credit Agreement, which expires in 2023, and an unsecured $1.0 billion 364-Day Credit Agreement. The Five-Year Credit Agreement allows the Company to borrow, on a revolving credit basis, up to $1.5 billion, which includes the ability to obtain letters of credit in an aggregate stated amount up to $75 million and to obtain European swingline loans in an aggregate principal amount up to the equivalent of $300 million. In January 2021, the Company entered into an unsecured 364-Day Credit Agreement to borrow, on a revolving credit basis, up to $1.0 billion at any time outstanding, to replace the $1.0 billion 364-day facility that expired in January 2021. The Five-Year and 364 Day Credit Agreements which had no outstanding borrowings as January 2, 2021, contain customary covenants and warranties, including specified restrictions on indebtedness, liens and a specified interest expense coverage ratio. If an event of default occurs, then, to the extent permitted, the administrative agents may terminate the commitments under the credit facilities, accelerate any outstanding loans under the agreements, and demand the deposit of cash collateral equal to the lender's letter of credit exposure plus interest. The Company was in compliance with all financial covenants contained in these agreements at January 2, 2021 and December 28, 2019. Scheduled principal repayments on long-term debt are (in millions): 2021–$627; 2022–$755; 2023–$782; 2024–$750; 2025–$739; 2026 and beyond–$3,733. Financial institutions have issued standby letters of credit conditionally guaranteeing obligations on behalf of the Company totaling $82 million, including $49 million secured and $33 million unsecured, as of January 2, 2021. These obligations are related primarily to insurance programs. There were no amounts drawn down on the letters of credit as of January 2, 2021. The Company has issued guarantees for a certain portion of debt of unconsolidated affiliates. These arrangements include cross guarantees back from the other shareholder in proportion to their ownership of the unconsolidated affiliates. These guarantees are not material to the Company. Interest expense capitalized as part of the construction cost of fixed assets was immaterial for all periods presented.

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