XML 25 R12.htm IDEA: XBRL DOCUMENT
v3.20.2

LONG-TERM DEBT | 12 Months Ended
--- | ---
May 31, 2020
Debt Disclosure [Abstract] |
LONG-TERM DEBT | 4. LONG-TERM DEBT
|  | May 31, 2020 |  |  | May 26, 2019 |
5.4% senior debt due November 2048 |  | $ | 1,000.0 |  |  | $ | 1,000.0 |
4.65% senior debt due January 2043 |  |  | 176.7 |  |  |  | 176.7 |
6.625% senior debt due August 2039 |  |  | 91.4 |  |  |  | 91.4 |
5.3% senior debt due November 2038 |  |  | 1,000.0 |  |  |  | 1,000.0 |
8.25% senior debt due September 2030 |  |  | 300.0 |  |  |  | 300.0 |
4.85% senior debt due November 2028 |  |  | 1,300.0 |  |  |  | 1,300.0 |
7.0% senior debt due October 2028 |  |  | 382.2 |  |  |  | 382.2 |
6.7% senior debt due August 2027 |  |  | 9.2 |  |  |  | 9.2 |
7.125% senior debt due October 2026 |  |  | 262.5 |  |  |  | 262.5 |
4.6% senior debt due November 2025 |  |  | 1,000.0 |  |  |  | 1,000.0 |
4.3% senior debt due May 2024 |  |  | 1,000.0 |  |  |  | 1,000.0 |
LIBOR plus 1.50% term loan due October 2023 |  |  | — |  |  |  | 200.0 |
3.2% senior debt due January 2023 |  |  | 837.0 |  |  |  | 837.0 |
3.25% senior debt due September 2022 |  |  | 250.0 |  |  |  | 250.0 |
LIBOR plus 1.375% term loan due October 2021 |  |  | — |  |  |  | 200.0 |
3.8% senior debt due October 2021 |  |  | 1,200.0 |  |  |  | 1,200.0 |
9.75% subordinated debt due March 2021 |  |  | 195.9 |  |  |  | 195.9 |
LIBOR plus 0.75% senior debt due October 2020 |  |  | — |  |  |  | 525.0 |
LIBOR plus 0.50% senior debt due October 2020 |  |  | 500.0 |  |  |  | 500.0 |
4.95% senior debt due August 2020 |  |  | 126.6 |  |  |  | 126.6 |
2.00% to 9.59% lease financing obligations due on various dates through 2033 |  |  | 155.1 |  |  |  | 165.4 |
Other indebtedness |  |  | 0.1 |  |  |  | 0.1 |
Total face value of debt |  |  | 9,786.7 |  |  |  | 10,722.0 |
Unamortized fair value adjustment |  |  | 21.2 |  |  |  | 24.5 |
Unamortized discounts |  |  | (17.2 | ) |  |  | (19.0 | )
Unamortized debt issuance costs |  |  | (44.6 | ) |  |  | (52.1 | )
Adjustment due to hedging activity |  |  | 0.2 |  |  |  | 0.9 |
Less current installments |  |  | (845.5 | ) |  |  | (20.6 | )
Total long-term debt |  | $ | 8,900.8 |  |  | $ | 10,655.7 |
The aggregate minimum principal maturities of the long-term debt for each of the five fiscal years following May 31, 2020, are as follows:
2021 |  | $ | 844.7 |
2022 |  |  | 1,221.4 |
2023 |  |  | 1,105.0 |
2024 |  |  | 1,015.0 |
2025 |  |  | 13.8 |
Pinnacle Acquisition Financing In the first quarter of fiscal 2019, in connection with the announcement of the acquisition of Pinnacle Foods Inc. (the "Pinnacle acquisition"), we secured $9.0 billion in fully committed bridge financing. Prior to the acquisition, we capitalized financing costs related to the bridge financing of $45.7 million to be amortized over the commitment period. Our net interest expense included $11.9 million for fiscal 2019 as a result of this amortization. The bridge facility was terminated in connection with the acquisition, and we recognized $33.8 million of expense within SG&A expenses in fiscal 2019 for the remaining unamortized financing costs. During the second quarter of fiscal 2019, to finance a portion of our acquisition of Pinnacle, we issued senior unsecured notes in an aggregate principal amount of $7.025 billion. We issued the new senior unsecured notes in seven tranches: floating rate senior notes due October 22, 2020 in an aggregate principal amount of $525.0 million with interest equal to three-month LIBOR plus 0.75%, 3.8% senior notes due October 22, 2021 in an aggregate principal amount of $1.20 billion; 4.3% senior notes due May 1, 2024 in an aggregate principal amount of $1.0 billion; 4.6% senior notes due November 1, 2025 in an aggregate principal amount of $1.0 billion; 4.85% senior notes due November 1, 2028 in an aggregate principal amount of $1.30 billion; 5.3% senior notes due November 1, 2038 in an aggregate principal amount of $1.0 billion; and 5.4% senior notes due November 1, 2048 in an aggregate principal amount of $1.0 billion. During the second quarter of fiscal 2019, to finance a portion of our acquisition of Pinnacle, we also borrowed $1.30 billion under a term loan agreement (the "Term Loan Agreement") with a syndicate of financial institutions providing for term loans to the Company in an aggregate principal amount of up to $1.30 billion. Our borrowings under the Term Loan Agreement consisted of a $650.0 million tranche of three-year term loans maturing on October 26, 2021 and a $650.0 million tranche of five-year term loans maturing on October 26, 2023. In connection with our acquisition of Pinnacle, we prepaid in full $2.40 billion of obligations and liabilities of Pinnacle under or in respect of Pinnacle's credit agreement and other debt agreements. We also redeemed $350.0 million in aggregate principal amount of Pinnacle's outstanding 5.875% senior notes due January 15, 2024 and recognized a charge of $3.9 million in fiscal 2019 as a cost of early retirement of debt. During fiscal 2019, we repaid $900.0 million of our borrowings under the Term Loan Agreement, which repayment consisted of $450.0 million of the three-year tranche loans and $450.0 million of the five-year tranche loans. During fiscal 2020, we repaid the remaining $400.0 million outstanding principal balances of our borrowings under the Term Loan Agreement, of which repayment consisted of $200.0 million of the three-year tranche loans and $200.0 million of the five-year tranche loans. The Term Loan Agreement was terminated after these repayments. During fiscal 2020, we also redeemed the entire outstanding $525.0 million aggregate principal amount of our floating rate notes due October 22, 2020 in two separate redemptions totaling $250.0 million and $275.0 million in the third and fourth quarters of fiscal 2020, respectively. In the first quarter of fiscal 2019, we entered into deal-contingent forward starting interest rate swap contracts (see Note 17) to hedge a portion of the interest rate risk related to our anticipated issuance of long-term debt to help finance the Pinnacle acquisition. During the second quarter of fiscal 2019, we terminated the interest rate swap contracts and received proceeds of $47.5 million. This gain was deferred in accumulated other comprehensive income and is being amortized as a reduction of interest expense over the lives of the related debt instruments. Our net interest expense was reduced by $3.5 million and $2.0 million in fiscal 2020 and fiscal 2019, respectively, due to the impact of these interest rate swap contracts. Other Long-Term Debt During the fourth quarter of fiscal 2020, we entered into an unsecured term loan agreement (the "Credit Agreement") with a financial institution. The Credit Agreement provides for delayed draw term loans to the Company in an aggregate principal amount not in excess of $600.0 million (subject to increase to a maximum aggregate principal amount of $750.0 million). The Credit Agreement matures on May 21, 2023. As of May 31, 2020, there were no outstanding borrowings under the Credit Agreement. Borrowings under the Credit Agreement will bear interest at, at the Company's election, either (a) LIBOR plus a percentage spread (ranging from 1.125% to 1.75%) based on the Company's senior unsecured long-term indebtedness ratings or (b) the alternate base rate, described in the Credit Agreement as the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) one-month LIBOR plus 1.00%, plus a percentage spread (ranging from 0% to 0.625%) based on the Company's senior unsecured long-term indebtedness ratings. The Company may voluntarily prepay term loans under the Credit Agreement, in whole or in part, without penalty, subject to certain conditions. In fiscal 2018, we entered into a term loan agreement (the "Prior Term Loan Agreement") with a financial institution. The Prior Term Loan Agreement provided for term loans to the Company in an aggregate principal amount not to exceed $300.0 million, maturing on February 26, 2019. During the fourth quarter of fiscal 2018, we borrowed the full amount of the $300.0 million provided for under the Prior Term Loan Agreement. During the second quarter of fiscal 2019, we repaid in full the principal balance of all term loans outstanding under the Prior Term Loan Agreement. This did not result in a significant gain or loss. In fiscal 2018, we repaid the remaining principal balance of $70.0 million of our 2.1% senior notes on the maturity date of March 15, 2018, the remaining principal balance of $119.6 million of our 1.9% senior notes on the maturity date of January 25, 2018, and the remaining capital lease liability balance of $28.5 million in connection with the early exit of an unfavorable lease contract. In fiscal 2018, we issued $500.0 million aggregate principal amount of floating rate notes due October 9, 2020. The notes bear interest at a rate equal to three-month LIBOR plus 0.50% per annum. General Our most restrictive debt agreement (the Revolving Credit Facility (as defined in Note 5)) generally requires our ratio of earnings before interest, taxes, depreciation and amortization ("EBITDA") to interest expense not to be less than 3.0 to 1.0 and our ratio of funded debt to EBITDA not to exceed certain decreasing specified levels, ranging from 5.25 through the first quarter of fiscal 2021 to 3.75 from the second quarter of fiscal 2023 and thereafter, with each ratio to be calculated on a rolling four-quarter basis. As of May 31, 2020, we were in compliance with all financial covenants under the Revolving Credit Facility. Net interest expense consists of:
|  | 2020 |  |  | 2019 |  |  | 2018 |
Long-term debt |  | $ | 495.9 |  |  | $ | 385.9 |  |  | $ | 161.2 |
Short-term debt |  |  | 0.9 |  |  |  | 15.0 |  |  |  | 4.8 |
Interest income |  |  | (3.1 | ) |  |  | (6.8 | ) |  |  | (3.8 | )
Interest capitalized |  |  | (6.6 | ) |  |  | (2.7 | ) |  |  | (3.5 | )
|  | $ | 487.1 |  |  | $ | 391.4 |  |  | $ | 158.7 |
Interest paid from continuing operations was $494.6 million, $375.6 million, and $164.5 million in fiscal 2020, 2019, and 2018, respectively.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for long-term debt. + 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 + Details
Name: | us-gaap_LongTermDebtTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration