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DEBT
 12 Months Ended
Dec. 28, 2024
Debt Disclosure [Abstract]  
DEBT

NOTE 9. DEBT

Debt consists of the following:

 

 

 

December 28,

 

 

December 30,

 

(In millions)

 

2024

 

 

2023

 

Short-term borrowings and current maturities of long-term debt:

 

 

 

 

 

 

Finance lease obligations

 

$

9

 

 

$

9

 

Total

 

$

9

 

 

$

9

 

Long-term debt, net of current maturities:

 

 

 

 

 

 

New Facilities loans under the Third Amended Credit Agreement, due 2025

 

 

—

 

 

 

53

 

Revolving Loan Facility loans under the Fourth Amended Credit
   Agreement, due 2029

 

 

160

 

 

 

—

 

Revenue bonds, due in varying amounts periodically through 2029

 

 

75

 

 

 

75

 

American & Foreign Power Company, Inc. 5% debentures, due 2030

 

 

16

 

 

 

16

 

Finance lease obligations

 

 

19

 

 

 

21

 

Total

 

$

270

 

 

$

165

 

The Company was in compliance with all applicable covenants of existing loan agreements at December 28, 2024.

FOURTH AMENDED CREDIT AGREEMENT

On May 9, 2024, the Company entered into the Fourth Amended and Restated Credit Agreement (the “Fourth Amended Credit Agreement”), which provides for an $800 million asset-based revolving credit facility (the “Revolving Loan Facility”). The Revolving Loan Facility matures on May 9, 2029. The Fourth Amended Credit Agreement replaced the Company’s then existing amended and restated credit agreement, the Third Amended and Restated Credit Agreement (the “Third Amended Credit Agreement”), that was due to mature in April 2025. The Company retired $53 million of outstanding asset-based first-in, last-out term loan facility (the “FILO Term Loan Facility”) loans under the Third Amended Credit Agreement prior to its amendment, resulting in no remaining FILO Term Loan Facility loans. The Company incurred $5 million of new debt issuance costs related to the Fourth Amended Credit Agreement, which will be recognized in interest expense through May 2029, the maturity date of the Revolving Loan Facility. The Company recognized less than $1 million of loss from modification of debt related to this transaction in the second quarter of 2024, which represented the write-off of certain unamortized debt issuance costs as of the closing date of the transaction.

As provided by the Fourth Amended Credit Agreement, available amounts that can be borrowed at any given time are based on percentages of certain outstanding accounts receivable, credit card receivables, inventory, and cash value of company-owned life insurance policies. The Revolving Loan Facility includes two sub-facilities of (1) up to $775 million which is available to the Company and certain of the Company’s domestic subsidiaries (which includes a letter of credit sub-facility of up to $300 million (inclusive of the Canadian L/C Sublimit referred to below) and a swingline loan sub-facility of up to $115 million), and (2) up to $25 million which is available to certain of the Company’s Canadian subsidiaries (which included a letter of credit sub-facility of up to $25 million (the “Canadian L/C Sublimit”) and a swingline loan sub-facility of up to $5 million). Certain of the Company’s subsidiaries guarantee the obligations under the Revolving Loan Facility (the “Guarantors”). All loans borrowed under the Revolving Loan Facility may be borrowed, repaid and reborrowed from time to time until the maturity date of May 9, 2029, as provided in the Fourth Amended Credit Agreement.

All amounts borrowed under the Revolving Loan Facility, as well as the obligations of the Guarantors, are secured by a lien on the Company’s and such Guarantors’ accounts receivables, inventory, cash, cash equivalents, deposit accounts, intercompany loan rights, certain pledged notes, certain life insurance policies, certain related assets, and the proceeds thereof in each case. At the Company’s option, borrowings made pursuant to the Fourth Amended Credit Agreement bear interest at either, (i) the alternate base rate (as defined in the Fourth Amended Credit Agreement), (ii) the Adjusted Term SOFR Rate for the Interest Period in effect (as such terms are defined in the Fourth Amended Credit Agreement) or (iii) a rate per annum equal to the Adjusted Daily Simple SOFR (as defined in the Fourth Amended Credit Agreement) plus, in either case, a certain margin based on the aggregate average quarterly availability under the Fourth Amended Credit Agreement).

The Fourth Amended Credit Agreement contains representations, warranties, affirmative and negative covenants, and default provisions. The absence of existing defaults, in addition to the accuracy of representations and warranties in all material respects, are conditions precedent to borrowing. The most significant of these covenants and default provisions include limitations in certain circumstances on acquisitions, dispositions, share repurchases and the payment of cash dividends.

The Revolving Loan Facility also includes provisions whereby if the aggregate availability is less than 12.5% of the total revolving commitments (or, if less, 12.5% of the Borrowing Base), the Company’s cash collections go first to the agent to satisfy outstanding borrowings. Further, if total availability falls below 10% of the total revolving commitments (or, if less, 10% of the Borrowing Base), a fixed charge coverage ratio test is required. Any event of default that is not cured within the applicable permitted period, including non-payment of amounts when due, any debt in excess of $25 million becoming due before the scheduled maturity date thereof, or the acquisition of more than 40% of the ownership of the Company by any person or group, within the meaning of the Securities and Exchange Act of 1934, could result in a termination of the Revolving Loan Facility and all amounts outstanding becoming immediately due and payable.

In 2024, the Company elected to draw down $715 million under the Third and Fourth Amended Credit Agreement for working capital management and timing of collections and disbursements. Of this amount, $555 million was repaid in 2024, resulting in $160 million of revolving loans outstanding under the Revolving Loan Facility at December 28, 2024. At December 28, 2024, the Company had $41 million of outstanding standby letters of credit, and $478 million of available credit under the Fourth Amended Credit Agreement.

OTHER SHORT- AND LONG-TERM DEBT

As a result of the OfficeMax merger, the Company assumed the liability for the amounts in the table above on page 83 related to the (i) Revenue bonds, due in varying amounts periodically through 2029, and (ii) American & Foreign Power Company, Inc. 5% debentures, due 2030. Also, the Company has finance lease obligations which relate to buildings and equipment, and various other financing obligations for the amounts included in the table above on page 83.

SCHEDULE OF DEBT MATURITIES

Aggregate annual maturities of recourse debt, finance lease, and other financing obligations are as follows:

 

(In millions)

 

 

 

2025

 

$

10

 

2026

 

 

40

 

2027

 

 

37

 

2028

 

 

3

 

2029

 

 

175

 

Thereafter

 

 

17

 

Total

 

 

282

 

Less interest on finance leases

 

 

(3

)

Total

 

 

279

 

Less:

 

 

 

Current portion

 

 

(9

)

Total long-term debt

 

$

270