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v3.25.1

Debt | 12 Months Ended
--- | ---
Feb. 02, 2025
Debt Disclosure [Abstract] |
Debt | DEBT Debt consisted of the following:
| February 2, 2025 |  | January 28, 2024
| Principal |  | Unamortized Discount and Debt Issuance Costs |  | Principal |  | Unamortized Discount and Debt Issuance Costs
Current maturities of long-term debt: |  |  |  |  |  |  |
Senior Term Loan due July 2028 | $ | 15 |  |  | $ | — |  |  | $ | 15 |  |  | $ | — |
Senior Term Loan due February 2031 | 9 |  |  | — |  |  | — |  |  | — |
| 24 |  |  | — |  |  | 15 |  |  | — |
Long-term debt: |  |  |  |  |  |  |
Senior ABL Credit Facility due February 2029 | 93 |  |  | — |  |  | 430 |  |  | — |
Senior Term Loan due July 2028 | 1,233 |  |  | 12 |  |  | 1,448 |  |  | 15 |
Senior Term Loan due February 2031 | 933 |  |  | 10 |  |  | — |  |  | — |
| 2,259 |  |  | 22 |  |  | 1,878 |  |  | 15 |
Total | $ | 2,283 |  |  | $ | 22 |  |  | $ | 1,893 |  |  | $ | 15 |
The debt obligations as of February 2, 2025 include the following debt agreements: Senior Term Loan Credit Facility On July 27, 2021, Core & Main LP entered into a Senior Term Loan Credit Facility (as defined herein) under which it can incur tranches of indebtedness. On May 21, 2024, Core & Main LP amended the terms of the $1,500 million senior term loan (as amended, the “2028 Senior Term Loan”), in order to reduce the effective applicable margin from 2.60% to 2.00%. The 2028 Senior Term Loan requires quarterly principal payments on the last business day of each fiscal quarter in an amount equal to approximately 0.25% of the original principal amount. The remaining balance is payable upon final maturity of the 2028 Senior Term Loan on July 27, 2028. The 2028 Senior Term Loan bears interest at a rate equal to (i) term secured overnight financing rate (“Term SOFR”) plus, in each case, an effective applicable margin of 2.00% or (ii) the base rate, which will be the highest of (x) the corporate base rate established by the administrative agent as its prime rate in effect at its principal office in New York City from time to time, (y) the overnight federal funds rate plus 0.50% per annum and (z) one-month Term SOFR (adjusted for maximum reserves) plus 1.00% per annum, plus, in each case, an applicable margin of 1.50%. The 2028 Senior Term Loan is subject to a Term SOFR “floor” of 0.00%. The weighted average interest rate, excluding the effect of the interest rate swap, of Core & Main LP’s outstanding borrowings under the 2028 Senior Term Loan as of February 2, 2025 was 6.31%. See further discussion of the interest rate swap below. Based on quotes from financial institutions (i.e., level 2 of the fair value hierarchy), the fair value of the 2028 Senior Term Loan was $1,254 million as of February 2, 2025. On February 9, 2024, Core & Main LP entered into an additional $750 million senior term loan (the “2031 Senior Term Loan” and, together with the 2028 Senior Term Loan, the “Senior Term Loan Credit Facility”). On December 17, 2024, Core & Main LP amended the terms of the 2031 Senior Term Loan, in order to reduce the effective applicable margin from 2.25% to 2.00% and increase the principal balance by $200 million to $944 million with the proceeds used to repay outstanding borrowings under the 2028 Senior Term Loan. The 2031 Senior Term Loan requires quarterly principal payments, payable on the last business day of each fiscal quarter, in an amount equal to approximately 0.25% of the amended principal amount of the 2031 Senior Term Loan. The remaining balance is payable upon final maturity of the 2031 Senior Term Loan on February 9, 2031. The 2031 Senior Term Loan bears interest at a rate equal to (i) Term SOFR plus, in each case, an applicable margin of 2.00% or (ii) an alternate base rate plus an applicable margin of 1.00%. The 2031 Senior Term Loan is subject to a Term SOFR “floor” of 0.00%. The weighted average interest rate, excluding the effect of the interest rate swap, of Core & Main LP’s outstanding borrowings under the 2031 Senior Term Loan as of February 2, 2025 was 6.31%. See further discussion of the interest rate swap below. Based on quotes from financial institutions (i.e., level 2 of the fair value hierarchy), the fair value of the 2031 Senior Term Loan was $946 million as of February 2, 2025. Asset-Based Credit Facility On February 9, 2024, Core & Main LP amended the terms of the credit agreement governing its senior asset-based revolving credit facility (as amended, the “Senior ABL Credit Facility”) in order to, among other things, extend the maturity from July 27, 2026 to February 9, 2029 and amend the credit agreement governing the Senior ABL Credit Facility to the extent necessary or appropriate to reflect the extension of the amended maturity. The Senior ABL Credit Facility has a borrowing capacity of up to $1,250 million, subject to borrowing base availability. Borrowings under the Senior ABL Credit Facility bear interest at either a Term SOFR rate plus an applicable margin ranging from 1.25% to 1.75%, or an alternate base rate plus an applicable margin ranging from 0.25% to 0.75%, depending on the borrowing capacity under the Senior ABL Credit Facility. Additionally, Core & Main LP pays a fee of 0.25% on unfunded commitments under the Senior ABL Credit Facility. As of February 2, 2025 and January 28, 2024 there were $93 million and $430 million amounts outstanding, respectively, under the Senior ABL Credit Facility with a weighted average interest rate of 7.75% as of February 2, 2025. The aforementioned debt agreements include customary affirmative and negative covenants, which include, among other things, restrictions on Core & Main LP’s ability to make distributions, pay dividends, create liens, incur additional indebtedness, make investments, dispose of assets and merge or consolidate with any other person. The Senior Term Loan Credit Facility may require accelerated repayment based upon cash flows generated in excess of operating and investing requirements when the Consolidated Secured Leverage Ratio (as defined in the agreement governing the Senior Term Loan Credit Facility) is greater than or equal to 3.25. In addition, the Senior ABL Credit Facility requires Core & Main LP to comply with a consolidated fixed charge coverage ratio of greater than or equal to 1.00 when availability under the Senior ABL Credit Facility is less than 10.0% of the lesser of (i) the then applicable borrowing base or (ii) the then aggregate effective commitments. The Company was in compliance with all debt covenants as of February 2, 2025. Substantially all of Core & Main LP’s assets are pledged as collateral for the Senior Term Loan Credit Facility and the Senior ABL Credit Facility. The aggregate amount of debt payments for the next five fiscal years are as follows:
Fiscal 2025 | $ | 24 |
Fiscal 2026 | 24 |
Fiscal 2027 | 24 |
Fiscal 2028 | 1,212 |
Fiscal 2029 | 102 |
Interest Rate Swaps Core & Main LP entered into an instrument in which it makes payments to a third party based upon a fixed interest rate of 0.693% and receives payments based upon the one-month Term SOFR rate. The interest rate swap has a notional amount of $800 million as of February 2, 2025. The notional amount decreases to $700 million on July 27, 2025 through the instrument maturity on July 27, 2026. This instrument is intended to reduce the Company's exposure to variable interest rates under the Senior Term Loan Credit Facility. As of February 2, 2025, this instrument resulted in an effective fixed rate of 2.693%, based upon the 0.693% fixed rate plus an effective applicable margin of 2.00%. On February 12, 2024, Core & Main LP entered into an additional instrument pursuant to which it will make payments to a third party based upon a fixed interest rate of 3.913% and receive payments based upon the one-month Term SOFR rate. The interest rate swap has a starting notional amount of $750 million that increases to $1,500 million on July 27, 2026 through the instrument maturity on July 27, 2028. The instrument is intended to reduce the Company’s exposure to variable interest rates under the Senior Term Loan Credit Facility. As of February 2, 2025, this instrument resulted in an effective fixed rate of 5.913%, based upon the 3.913% fixed rate plus an effective applicable margin of 2.00%. The fair value of these cash flow interest rate swaps was a $40 million and $67 million asset as of February 2, 2025 and January 28, 2024, respectively, which is included within other assets in the Balance Sheet.
| Fiscal Years Ended
Accumulated Other Comprehensive Income | February 2, 2025 |  | January 28, 2024 |  | January 29, 2023
Beginning of period balance | $ | 48 |  |  | $ | 70 |  |  | $ | 26 |
Measurement adjustment gain for interest rate swap | 23 |  |  | 21 |  |  | 66 |
Reclassification of (income) expense to interest expense | (47) |  |  | (42) |  |  | (13) |
Tax benefit (expense) on interest rate swap adjustments |  |  |  |  |
Measurement adjustment gain for interest rate swap | (6) |  |  | (4) |  |  | (11) |
Reclassification of (income) expense to interest expense | 12 |  |  | 8 |  |  | 2 |
Tax impact of exchange of Partnership Interests | — |  |  | (5) |  |  | — |
End of period balance | $ | 30 |  |  | $ | 48 |  |  | $ | 70 |
The cash flows related to settlement of the interest rate swaps are classified in the consolidated statements of cash flows based on the nature of the underlying hedged items. Fair value is based upon the present value of future cash flows under the terms of the contract and observable market inputs (level 2). Significant inputs used in determining fair value include forward-looking one-month Term SOFR rates and the discount rate applied to projected cash flows. As of February 2, 2025, the Company estimates $28 million of the cash flow interest rate swap gains will be reclassified from accumulated other comprehensive income into earnings over the next 12 months.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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