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Debt and Finance Lease Obligations | 9 Months Ended
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Sep. 27, 2024
Long-Term Debt and Lease Obligation [Abstract] |
Debt and Finance Lease Obligations | Debt and Finance Lease Obligations The following is a summary of long-term debt and finance lease obligations (U.S. dollars in millions):
| September 27, 2024 |  | December 29, 2023
Senior unsecured revolving credit facility (see Credit Facility below) | $ | 269.6 |  |  | $ | 400.0 |
Finance lease obligations | 6.7 |  |  | 7.5 |
Total debt and finance lease obligations | 276.3 |  |  | 407.5 |
Less: Current maturities | (1.5) |  |  | (1.4) |
Long-term debt and finance lease obligations | $ | 274.8 |  |  | $ | 406.1 |
Credit Facility On October 1, 2019, we entered into a Second Amended and Restated Credit Agreement (as amended, the “Second A&R Credit Agreement”) with Bank of America, N.A. as administrative agent and BofA Securities, Inc. as sole lead arranger and sole bookrunner and certain other lenders. The Second A&R Credit Agreement provided for a five-year, $0.9 billion syndicated senior unsecured revolving credit facility maturing on October 1, 2024. The Second A&R Credit Agreement was subsequently amended on December 30, 2022, to replace the Eurocurrency Rate with the Term Secured Overnight Financing Rate ("Term SOFR" effective January 3, 2023. On February 21, 2024, we entered into Amendment No. 2 to the Second Amended and Restated Credit Agreement (the “2024 Amended Credit Facility”) with Bank of America, N.A. as administrative agent and BofA Securities, Inc. as sole lead arranger and sole bookrunner and certain other lenders. The 2024 Amended Credit Facility provides for a five-year, $0.75 billion syndicated senior unsecured revolving credit facility maturing on February 21, 2029. Amounts borrowed under the revolving credit facility accrue interest at a rate equal to the Term SOFR rate plus a margin that ranges from 1.0% to 1.625% based on our Consolidated Leverage Ratio (as defined in the 2024 Amended Credit Facility). The 2024 Amended Credit Facility also permits, under certain conditions, $200 million of Permitted Receivables Financing (as defined in the 2024 Amended Credit Facility). In addition, we pay a fee on unused commitments at a rate equal to 0.150% to 0.250% based on our Consolidated Leverage Ratio. The 2024 Amended Credit Facility provides for an accordion feature that permits us, without the consent of the other lenders, to request that one or more lenders provide us with increases in revolving credit facility or term loans up to an aggregate of $300 million (“Incremental Increases”). The aggregate amount of Incremental Increases can be further increased to the extent that after giving effect to the proposed increase in revolving credit facility commitments or term loans our Consolidated Leverage Ratio, on a pro forma basis, would not exceed 2.75 to 1.00. Our ability to request such increases or term loans is subject to our compliance with customary conditions set forth in the 2024 Amended Credit Facility including compliance, on a pro forma basis, with certain financial covenants and ratios. Upon our request, each lender may decide, in its sole discretion, whether to increase all or a portion of its revolving credit facility commitment or provide term loans. The 2024 Amended Credit Facility contains similar financial covenants to those included within the Second A&R Credit Agreement. Specifically, it requires us to maintain 1) a Consolidated Leverage Ratio of not more than 3.75 to 1.00 at any time during any period of four consecutive fiscal quarters, subject to certain exceptions and 2) minimum Consolidated Interest Coverage Ratio of not less than 2.25 to 1.00 as of the end of any fiscal quarter. Additionally, it requires us to comply with certain other covenants, including limitations on capital investments, the amount of dividends that can be paid in the future, the amounts and types of liens and indebtedness, material asset sales, and mergers. Under the 2024 Amended Credit Facility, we are permitted to declare or pay cash dividends in any fiscal year up to an amount that does not exceed the greater of (i) an amount equal to (1) the greater of (A) 50% of the Consolidated Net Income (as defined in the 2024 Amended Credit Facility) for the immediately preceding fiscal year or (B) $25 million (the "Base Dividend Basket") plus (2) commencing in the fiscal year ending December 26, 2025 any portion of the Base Dividend Basket not used in the immediately preceding fiscal year, or (ii) the greatest amount which would not cause the Consolidated Leverage Ratio (determined on a pro forma basis as of the date of declaration or payment) to exceed 3.50 to 1.00. It also provides an allowance for stock repurchases to be an amount not exceeding the greater of (i) (A) $50,000,000 (the "Base Redemption Basket") plus (B) commencing in the fiscal year ending December 26, 2025, any portion of the Base Redemption Basket not used in the immediately preceding fiscal year or (ii) the greatest amount which would not cause the Consolidated Leverage Ratio (determined on a pro forma basis as of the date of such repurchase) to exceed 3.50 to 1.00. As of September 27, 2024, we were in compliance with all the covenants contained in the 2024 Amended Credit Facility. In connection with the 2024 Amended Credit Facility, we paid lender and third-party fees of $2.1 million associated with the amendment. We concluded that the amendment resulted in a modification of debt and as such, determined that debt issuance costs incurred in connection with the 2024 Amended Credit Facility would be deferred and amortized over the term of the new arrangement. Debt issuance costs of $1.9 million and $0.1 million are included in other noncurrent assets on our Consolidated Balance Sheets as of September 27, 2024 and December 29, 2023, respectively. The following is a summary of the material terms of the 2024 Amended Credit Facility and other working capital facilities at September 27, 2024 (U.S. dollars in millions):
| Term |  | Maturity date |  | Interest rate |  | Borrowing limit |  | Available borrowings, net of letters of credit and bank guarantees |  |
Bank of America credit facility | 5 years |  | February 21, 2029 |  | 6.20% |  | $ | 750.0 |  |  | $ | 480.4 |  |  |
Rabobank letter of credit facility | 364 days |  | June 12, 2025 |  | Varies |  | 25.0 |  |  | 17.8 |  |  |
Other working capital facilities | Varies |  | Varies |  | Varies |  | 30.9 |  |  | 13.5 |  |  |
|  | $ | 805.9 |  |  | $ | 511.7 |  |  |
The margin for Term SOFR advances as of September 27, 2024 was 1.250%. We intend to use funds borrowed under the 2024 Amended Credit Facility from time to time for general corporate purposes, which may include working capital needs, capital expenditures, funding of possible acquisitions, share repurchases, and satisfaction of other obligations. As of September 27, 2024, we applied $31.1 million to letters of credit and bank guarantees issued from Rabobank Nederland, Bank of America, and other banks. During 2018, we entered into interest rate swaps in order to hedge the risk of the fluctuation on future interest payments related to our variable rate borrowings from our revolving credit facility. Refer to Note 13, “Derivative Financial Instruments.”
Debt and Finance Lease Obligations | Debt and Finance Lease Obligations The following is a summary of long-term debt and finance lease obligations (U.S. dollars in millions):
| September 27, 2024 |  | December 29, 2023
Senior unsecured revolving credit facility (see Credit Facility below) | $ | 269.6 |  |  | $ | 400.0 |
Finance lease obligations | 6.7 |  |  | 7.5 |
Total debt and finance lease obligations | 276.3 |  |  | 407.5 |
Less: Current maturities | (1.5) |  |  | (1.4) |
Long-term debt and finance lease obligations | $ | 274.8 |  |  | $ | 406.1 |
Credit Facility On October 1, 2019, we entered into a Second Amended and Restated Credit Agreement (as amended, the “Second A&R Credit Agreement”) with Bank of America, N.A. as administrative agent and BofA Securities, Inc. as sole lead arranger and sole bookrunner and certain other lenders. The Second A&R Credit Agreement provided for a five-year, $0.9 billion syndicated senior unsecured revolving credit facility maturing on October 1, 2024. The Second A&R Credit Agreement was subsequently amended on December 30, 2022, to replace the Eurocurrency Rate with the Term Secured Overnight Financing Rate ("Term SOFR" effective January 3, 2023. On February 21, 2024, we entered into Amendment No. 2 to the Second Amended and Restated Credit Agreement (the “2024 Amended Credit Facility”) with Bank of America, N.A. as administrative agent and BofA Securities, Inc. as sole lead arranger and sole bookrunner and certain other lenders. The 2024 Amended Credit Facility provides for a five-year, $0.75 billion syndicated senior unsecured revolving credit facility maturing on February 21, 2029. Amounts borrowed under the revolving credit facility accrue interest at a rate equal to the Term SOFR rate plus a margin that ranges from 1.0% to 1.625% based on our Consolidated Leverage Ratio (as defined in the 2024 Amended Credit Facility). The 2024 Amended Credit Facility also permits, under certain conditions, $200 million of Permitted Receivables Financing (as defined in the 2024 Amended Credit Facility). In addition, we pay a fee on unused commitments at a rate equal to 0.150% to 0.250% based on our Consolidated Leverage Ratio. The 2024 Amended Credit Facility provides for an accordion feature that permits us, without the consent of the other lenders, to request that one or more lenders provide us with increases in revolving credit facility or term loans up to an aggregate of $300 million (“Incremental Increases”). The aggregate amount of Incremental Increases can be further increased to the extent that after giving effect to the proposed increase in revolving credit facility commitments or term loans our Consolidated Leverage Ratio, on a pro forma basis, would not exceed 2.75 to 1.00. Our ability to request such increases or term loans is subject to our compliance with customary conditions set forth in the 2024 Amended Credit Facility including compliance, on a pro forma basis, with certain financial covenants and ratios. Upon our request, each lender may decide, in its sole discretion, whether to increase all or a portion of its revolving credit facility commitment or provide term loans. The 2024 Amended Credit Facility contains similar financial covenants to those included within the Second A&R Credit Agreement. Specifically, it requires us to maintain 1) a Consolidated Leverage Ratio of not more than 3.75 to 1.00 at any time during any period of four consecutive fiscal quarters, subject to certain exceptions and 2) minimum Consolidated Interest Coverage Ratio of not less than 2.25 to 1.00 as of the end of any fiscal quarter. Additionally, it requires us to comply with certain other covenants, including limitations on capital investments, the amount of dividends that can be paid in the future, the amounts and types of liens and indebtedness, material asset sales, and mergers. Under the 2024 Amended Credit Facility, we are permitted to declare or pay cash dividends in any fiscal year up to an amount that does not exceed the greater of (i) an amount equal to (1) the greater of (A) 50% of the Consolidated Net Income (as defined in the 2024 Amended Credit Facility) for the immediately preceding fiscal year or (B) $25 million (the "Base Dividend Basket") plus (2) commencing in the fiscal year ending December 26, 2025 any portion of the Base Dividend Basket not used in the immediately preceding fiscal year, or (ii) the greatest amount which would not cause the Consolidated Leverage Ratio (determined on a pro forma basis as of the date of declaration or payment) to exceed 3.50 to 1.00. It also provides an allowance for stock repurchases to be an amount not exceeding the greater of (i) (A) $50,000,000 (the "Base Redemption Basket") plus (B) commencing in the fiscal year ending December 26, 2025, any portion of the Base Redemption Basket not used in the immediately preceding fiscal year or (ii) the greatest amount which would not cause the Consolidated Leverage Ratio (determined on a pro forma basis as of the date of such repurchase) to exceed 3.50 to 1.00. As of September 27, 2024, we were in compliance with all the covenants contained in the 2024 Amended Credit Facility. In connection with the 2024 Amended Credit Facility, we paid lender and third-party fees of $2.1 million associated with the amendment. We concluded that the amendment resulted in a modification of debt and as such, determined that debt issuance costs incurred in connection with the 2024 Amended Credit Facility would be deferred and amortized over the term of the new arrangement. Debt issuance costs of $1.9 million and $0.1 million are included in other noncurrent assets on our Consolidated Balance Sheets as of September 27, 2024 and December 29, 2023, respectively. The following is a summary of the material terms of the 2024 Amended Credit Facility and other working capital facilities at September 27, 2024 (U.S. dollars in millions):
| Term |  | Maturity date |  | Interest rate |  | Borrowing limit |  | Available borrowings, net of letters of credit and bank guarantees |  |
Bank of America credit facility | 5 years |  | February 21, 2029 |  | 6.20% |  | $ | 750.0 |  |  | $ | 480.4 |  |  |
Rabobank letter of credit facility | 364 days |  | June 12, 2025 |  | Varies |  | 25.0 |  |  | 17.8 |  |  |
Other working capital facilities | Varies |  | Varies |  | Varies |  | 30.9 |  |  | 13.5 |  |  |
|  | $ | 805.9 |  |  | $ | 511.7 |  |  |
The margin for Term SOFR advances as of September 27, 2024 was 1.250%. We intend to use funds borrowed under the 2024 Amended Credit Facility from time to time for general corporate purposes, which may include working capital needs, capital expenditures, funding of possible acquisitions, share repurchases, and satisfaction of other obligations. As of September 27, 2024, we applied $31.1 million to letters of credit and bank guarantees issued from Rabobank Nederland, Bank of America, and other banks. During 2018, we entered into interest rate swaps in order to hedge the risk of the fluctuation on future interest payments related to our variable rate borrowings from our revolving credit facility. Refer to Note 13, “Derivative Financial Instruments.”

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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