Debt

3 Months Ended

Nov. 28, 2020

Note 6. Debt

Debt at November 28, 2020 and August 29, 2020 consisted of the following:


	November 28,			August 29,
	2020			2020
Revolving Credit Facility	$	120,000		$	250,000
Uncommitted credit facilities		1,200			1,200
Private Placement Debt:
2.65% Senior notes, series A, due July 28, 2023		75,000			75,000
2.90% Senior notes, series B, due July 28, 2026		100,000			100,000
3.79% Senior notes, due June 11, 2025		20,000			20,000
2.60% Senior notes, due March 5, 2027		50,000			50,000
3.04% Senior notes, due January 12, 2023⁽¹⁾		50,000			50,000
3.42% Series 2018B notes, due June 11, 2021⁽¹⁾		20,000			20,000
2.40% Series 2019A notes, due March 5, 2024⁽¹⁾		50,000			50,000
Financing arrangements		1,267			194
Obligations under finance leases		3,395			3,715
Less: unamortized debt issuance costs		(732)			(843)
Total debt, including obligations under finance leases	$	490,130		$	619,266
Less: current portion, including obligations under finance leases		(23,225)	⁽²⁾		(122,248)	⁽³⁾
Total long-term debt, including obligations under finance leases	$	466,905		$	497,018

__________________________

(1)Represents private placement debt issued under Shelf Facility Agreements, discussed in further detail below.

(2)November 28, 2020 balance consists of $1,200 from the uncommitted credit facilities, $20,000 from the 2018B notes due June 11, 2021, $1,162 from financing arrangements, $1,271 from obligations under finance leases, and net of unamortized debt issuance costs expected to be amortized in the next 12 months.

(3)August 29, 2020 balance consists of $100,000 from the revolving credit facility, $1,200 from the uncommitted credit facilities, $20,000 from the 2018B notes due June 11, 2021, $194 from financing arrangements, $1,262 from obligations under finance leases, and net of unamortized debt issuance costs expected to be amortized in the next 12 months.

Revolving Credit Facilities

The Company has a $600,000 committed credit facility (the “Committed Facility”). The Committed Facility, which matures on April 14, 2022, provides for a five year unsecured revolving loan facility. The interest rate is based on either the London Interbank Offered Rate (“LIBOR”) or a base rate, plus in either case a spread based on the Company’s leverage ratio

at the end of each fiscal reporting quarter. Based on the interest period the Company selects, interest may be payable every one, two, or three months. Interest is reset at the end of each interest period. The Company currently elects to have loans under the Committed Facility bear interest based on LIBOR with one-month interest periods.

The Committed Facility permits up to $50,000 to be used to fund letters of credit. Outstanding letters of credit were $4,235 and $16,742 at November 28, 2020 and August 29, 2020, respectively.

During fiscal year 2019, the Company entered into six unsecured credit facilities that are uncommitted (the “Uncommitted Facilities”), totaling $440,000 of maximum uncommitted availability. During fiscal 2020, the Company extended, and in some cases amended, five of the Uncommitted Facilities (the “Amended Uncommitted Facilities”), totaling $410,000 of maximum uncommitted availability. On November 1, 2020, the Amended Uncommitted Facilities expired, and the Company did not have an outstanding balance.

During fiscal year 2020, the Company entered into an additional uncommitted credit facility (“New Uncommitted Credit Facility” and, together with the Amended Uncommitted Facilities, the “Uncommitted Credit Facilities”), totaling $5,000 of maximum uncommitted availability, under which $1,200 was outstanding at November 28, 2020.

An event of default under the Company’s Committed Facility is an event of default under the Uncommitted Credit Facilities. The interest rate on the Uncommitted Credit Facilities is based on LIBOR or the bank’s cost of funds or as otherwise agreed upon by the applicable bank and the Company. The $1,200 outstanding balance at the end of the first fiscal quarter of fiscal year 2021 and fiscal year 2020 under the Uncommitted Facilities and $100,000 of the Committed Facility at the end of fiscal year 2020 are classified as short-term in the Company’s Condensed Consolidated Balance Sheet.

During the thirteen-week period ended November 28, 2020, the Company did not borrow additional funds under its credit facilities and repaid $130,000 under all of its credit facilities. As of November 28, 2020, and August 29, 2020, the weighted average interest rates on borrowings under all of its credit facilities were 1.40% and 1.42%, respectively.

Private Placement Debt

In July 2016, the Company completed the issuance and sale of $75,000 aggregate principal amount of 2.65% Senior Notes, Series A, due July 28, 2023 and $100,000 aggregate principal amount of 2.90% Senior Notes, Series B, due July 28, 2026; in June 2018, the Company completed the issuance and sale of $20,000 aggregate principal amount of 3.79% Senior Notes, due June 11, 2025; and in March 2020, the Company completed the issuance and sale of an additional $50,000 aggregate principal amount of 2.60% Senior Notes, due March 5, 2027 (collectively “Private Placement Debt”). Interest is payable semiannually at the fixed stated interest rates.

Shelf Facility Agreements

In January 2018, the Company entered into Note Purchase and Private Shelf Agreements with Metropolitan Life Insurance Company (“Met Life Note Purchase Agreement”) and PGIM, Inc. (“Prudential Note Purchase Agreement”), and together referred to as the “Shelf Facility Agreements”. The Met Life Note Purchase Agreement provides for an uncommitted facility for the issuance and sale of up to an aggregate total of $250,000 of senior notes, at either fixed or floating rates. The Prudential Note Purchase Agreement provides for an uncommitted facility for the issuance and sale of up to an aggregate total of $250,000 of senior notes, at a fixed rate. As of November 28, 2020, the uncommitted availability under the Met Life Note Purchase Agreement and the Prudential Note Purchase Agreement is $180,000 and $200,000, respectively.

Each of the credit facilities, Private Placement Debt, and Shelf Facility Agreements impose several restrictive covenants including the requirement that the Company maintain a maximum consolidated leverage ratio of total indebtedness to EBITDA (earnings before interest expense, taxes, depreciation, amortization and stock-based compensation) of no more than 3.00 to 1.00 (or, at the election of the Company after it consummates a material acquisition, a four-quarter temporary increase to 3.50 to 1.00), and a minimum consolidated interest coverage ratio of EBITDA to total interest expense of at least 3.00 to 1.00, during the terms of the credit facilities, Private Placement Debt, and Shelf Facility Agreements. At November 28, 2020, the Company was in compliance with the operating and financial covenants of the credit facilities, Private Placement Debt, and Shelf Facility Agreements.

Financing Arrangements

From time to time, the Company enters into financing arrangements with vendors to purchase certain information technology equipment or software. The equipment or software acquired from these vendors is paid for over a specified period of time based on the terms agreed upon. During the thirteen-week period ended November 28, 2020, the Company entered into financing arrangements related to certain IT equipment and software totaling $1,286. The gross amount of property and equipment acquired under the financing arrangements and its accumulated amortization at November 28, 2020 was $1,286 and $107, respectively.