Debt

3 Months Ended

Apr. 03, 2020

Note M — Debt

Long-term debt is summarized below:



	April 3, 2020			January 3, 2020

	(In millions)
Variable-rate debt:
Floating rate notes, due April 30, 2020	$	250		$	250
Floating rate notes, due March 10, 2023	250			—
Total variable-rate debt	500			250
Fixed-rate debt:
4.95% notes, due February 15, 2021	650			650
3.85% notes, due June 15, 2023	800			800
3.95% notes, due May 28, 2024	350			350
3.832% notes, due April 27, 2025	600			600
7.0% debentures, due January 15, 2026	100			100
3.85% notes, due December 15, 2026	550			550
6.35% debentures, due February 1, 2028	26			26
4.40% notes, due June 15, 2028	1,850			1,850
2.900% notes, due December 15, 2029	400			400
4.854% notes, due April 27, 2035	400			400
6.15% notes, due December 15, 2040	300			300
5.054% notes, due April 27, 2045	500			500
Other	48			49
Total fixed-rate debt	6,574			6,575
Total debt	7,074			6,825
Plus: unamortized bond premium	145			154
Less: unamortized discounts and issuance costs	(29		)	(28		)
Total debt, net	7,190			6,951
Less: current portion of long-term debt, net	(896		)	(257		)
Total long-term debt, net	$	6,294		$	6,694

For additional information on our long-term debt, see Note 14: “Debt” in the Notes to Consolidated Financial Statements in our Fiscal Transition Period Form 10-KT.

Long-Term Debt Issued in the Quarter Ended April 3, 2020

On March 13, 2020, we completed the issuance and sale of $250 million in aggregate principal amount of Floating Rate Notes due March 10, 2023 (the “Floating Rate Notes 2023”). The Floating Rate Notes 2023 bear interest at a floating rate, reset quarterly, equal to three-month LIBOR rate plus 0.75% per year. Interest on the Floating Rate Notes 2023 is payable quarterly in arrears on March 10, June 10, September 10 and December 10 of each year, commencing on June 10, 2020. The Floating Rate Notes 2023 are unsecured and unsubordinated and rank equally in right of payment with all other unsecured and unsubordinated indebtedness. The Floating Rate Notes 2023 are not redeemable at our option prior to maturity. Debt issuance costs related to the issuance of the Floating Rate Notes 2023 were not material. Following the end of the quarter, we used the net proceeds from the sale of the Floating Rate Notes 2023, together with cash on hand, to repay at maturity the aggregate principal amount of our Floating Rate Notes due April 30, 2020 and for general corporate purposes.

Debt Exchange

In connection with the L3Harris Merger, on July 2, 2019, we settled our previously announced exchange offers in which eligible holders of L3 senior notes (“L3 Notes”) could exchange such outstanding notes for (1) up to $3.35 billion aggregate principal amount of new notes issued by L3Harris (“New L3Harris Notes) and (2) one dollar in cash for each $1,000 of principal amount. Each series of the New L3Harris Notes issued has an interest rate and maturity date that is identical to the L3 Notes.



	Aggregate Principal Amount of L3 Notes (prior to debt exchange)		Aggregate Principal Amount of New L3Harris Notes Issued		Aggregate Principal Amount of Remaining L3 Notes

	(In millions)
4.95% notes due February 15, 2021 (“4.95% 2021 Notes”)	$	650	$	501	$	149
3.85% notes due June 15, 2023 (“3.85% 2023 Notes”)	800		741		59
3.95% notes due May 28, 2024 (“3.95% 2024 Notes”)	350		326		24
3.85% notes due December 15, 2026 (“3.85% 2026 Notes”)	550		535		15
4.40% notes due June 15, 2028 (“4.40% 2028 Notes”)	1,000		918		82
Total	$	3,350	$	3,021	$	329

On March 31, 2020, we commenced offers to eligible holders (“Exchange Offers”) to exchange any and all outstanding notes issued by L3Harris as set forth in the table above (the “Original Notes”), which were previously issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), for an equal principal amount of new notes registered under the Securities Act (the “Exchange Notes”).

The Exchange Notes were offered to satisfy L3Harris’ obligations under the registration rights agreement entered into as part of the issuance of the Original Notes, which occurred in exchange for notes previously issued by L3 in connection with the L3Harris Merger.

The terms of the Exchange Notes issued in the Exchange Offers are substantially identical to the terms of the corresponding series of the Original Notes, except that the Exchange Notes are registered under the Securities Act and the transfer restrictions, registration rights and related additional interest provisions applicable to the Original Notes do not apply to the Exchange Notes. Each series of Exchange Notes is part of the same corresponding series of the Original Notes and were issued under the same base indenture.

The Exchange Offers expired at 5:00 p.m., New York City time, on May 1, 2020. On May 5, 2020, we settled the Exchange Offers and issued Exchange Notes for validly tendered Original Notes.