DEBT AND CREDIT ARRANGEMENTS

12 Months Ended

Jan. 03, 2025

NOTE 8: DEBT AND CREDIT ARRANGEMENTS

Long-Term Debt

Long-term debt, net, is summarized below:


(In millions)	January 3, 2025	December 29, 2023

Variable-rate debt:
Term Loan 2025	$—	$2,250

Fixed-rate debt:(1)
3.95% 2024 Notes	—	350
3.832% notes, due April 2025(2)(3)	600	600
7.00% debentures, due January 2026(4)	100	100
3.85% notes, due December 2026(2)	550	550
5.40% notes, due January 2027 (“5.40% 2027 Notes”)(2)(3)(5)	1,250	1,250
6.35% debentures, due February 2028(2)	26	26
4.40% notes, due June 2028(2)(3)	1,850	1,850
5.05% notes, due June 2029 (“5.05% 2029 Notes”)(2)(3)	750	—
2.90% notes, due December 2029(2)	400	400
1.80% notes, due January 2031(2)(3)	650	650
5.25% notes, due June 2031 (“5.25% 2031 Notes”)(2)(3)	750	—
5.40% notes, due July 2033 (“5.40% 2033 Notes”)(2)(3)(5)	1,500	1,500
5.35% notes, due June 2034 (“5.35% 2034 Notes”)(2)(3)	750	—
4.854% notes, due April 2035(2)(3)	400	400
6.15% notes, due December 2040(2)(3)	300	300
5.054% notes, due April 2045(2)(3)	500	500
5.60% notes, due July 2053 (“5.60% 2053 Notes”)(2)(3)(5)	500	500
5.50% notes, due August 2054 (“5.50% 2054 Notes”)(2)(3)	600	—
Total variable and fixed-rate debt	11,476	11,226
Financing lease obligations and other debt	288	300
Long-term debt, including the current portion of long-term debt	11,764	11,526
Plus: unamortized bond premium	38	51
Less: unamortized discounts and issuance costs	(81)	(54)
Long-term debt, including the current portion of long-term debt, net	11,721	11,523
Less: current portion of long-term debt, net	(640)	(363)
Total long-term debt, net	$11,081	$11,160

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(1)All fixed-rate notes and debentures rank equally in right of payment.

(2)We may redeem these notes, in whole or in part, at our option, at a pre-determined redemption price pursuant to their terms prior to the

applicable maturity date.

(3)Upon change of control combined with a below-investment-grade rating event, we may be required to make an offer to repurchase these

notes at a pre-determined price pursuant to their terms.

(4)The debentures are not redeemable prior to maturity.

(5)Collectively, the “AJRD Notes.”

The maturities of long-term debt, including the current portion of long-term debt and excluding finance lease

obligations, for the five years following the end of fiscal 2024 and, in total thereafter, are: $610 million in fiscal

2025; $659 million in fiscal 2026; $1,254 million in fiscal 2027; $1,880 million in fiscal 2028; $1,154 million in

fiscal 2029; and $5,973 million thereafter.

Long-Term Debt Issuances. On March 13, 2024, we closed the issuance and sale of March Issued 2024 Notes.

The March Issued 2024 Notes were used to repay Term Loan 2025, including related fees and expenses, which had

an outstanding balance of $2.25 billion at December 29, 2023. Interest on the March Issued 2024 Notes is payable

semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2024.

On August 2, 2024, we closed the issuance and sale of $600 million aggregate principal amount of the 5.50%

2054 Notes, and used the net proceeds to repay borrowings under our CP Program. Interest on the 5.50% 2054

Notes is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on February 15,

2025.

We incurred debt issuance costs of $20 million and $7 million for the March Issued 2024 Notes and 5.50%

2054 Notes, respectively, which are being amortized over the life of each respective note. Such amortization is

included as a component of the “Interest expense, net” line item in our Consolidated Statement of Operations.

Long-Term Debt Repayments.

Fiscal 2024. On March 14, 2024, we repaid the entire outstanding $2.25 billion drawn on Term Loan 2025,

which at time of repayment had a variable interest rate of 6.7%, with proceeds from the issuance of the March

Issued 2024 Notes, which bear fixed interest rates between 5.05% and 5.35%. Additionally, during the quarter

ended June 28, 2024, we repaid the $350 million aggregate principal amount of our 3.95% 2024 Notes.

Fiscal 2023. On March 14, 2023, we repaid the entire outstanding $250 million aggregate principal amount of

our Floating Rate Notes due March 2023 through a $250 million draw on Term Loan 2025. On June 15, 2023, we

repaid the entire outstanding $800 million aggregate principal amount of our 3.85% 2023 Notes through cash on

hand and the issuance of commercial paper during fiscal 2023.

Commercial Paper Program

On January 26, 2024, we lowered the maximum amount available under our CP Program to $3.0 billion from

$3.9 billion in accordance with the terms of the CP Program. At January 3, 2025, our CP Program was supported by

amounts available under the 2022 Credit Agreement and the 2024 Credit Agreement.

The commercial paper notes are sold at par less a discount representing an interest factor or, if interest bearing,

at par, and the maturities vary but may not exceed 397 days from the date of issue. The commercial paper notes will

rank at least pari passu with all other unsecured and unsubordinated indebtedness.

At January 3, 2025 and December 29, 2023, we had $515 million and $1,599 million in outstanding notes under

our CP Program, respectively, which is included as a component of the “Short-term debt” line item in our

Consolidated Balance Sheet. The outstanding notes under our CP Program had a weighted-average interest rate of

4.70% and 5.95% at January 3, 2025 and December 29, 2023, respectively.

Fair Value of Debt

The following table presents the carrying amounts and estimated fair values of our long-term debt:


	January 3, 2025		December 29, 2023
(In millions)	Carrying Amount	Fair Value	Carrying Amount	Fair Value

Term Loan 2025(1)	$—	$—	$2,250	$2,250
All other long-term debt, net (including current portion)(2)	11,721	11,467	9,273	9,199
Long-term debt, including the current portion of long-term debt, net	$11,721	$11,467	$11,523	$11,449

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(1)The carrying value of Term Loan 2025 approximates fair value due to its variable interest rate.

(2)The fair value was estimated using a market approach based on quoted market prices for our debt traded in the secondary market. If long-

term debt were measured at fair value in our consolidated balance sheet, it would be categorized as Level 2 within the fair value hierarchy.

The fair value of our short-term debt approximates the carrying value due to its short-term nature. If measured

at fair value, the commercial paper would be classified as level 2 and other short-term debt would be classified as

level 3 within the fair value hierarchy.

Credit Agreements

On January 26, 2024, we established a new $1.5 billion, 364-day senior unsecured revolving credit facility by

entering into a 364-day credit agreement maturing no later than January 24, 2025 with a syndicate of lenders. The

2024 Credit Agreement, which matured on January 24, 2025, replaced the 2023 Credit Agreement.

At our election, borrowings under the 2024 Credit Agreement, which were designated in U.S. Dollars, bore

interest at the sum of the term secured overnight financing rate or the Base Rate (as defined in the 2024 Credit

Agreement), plus an applicable margin that varied based on the ratings of our senior unsecured long-term debt

securities (“Senior Debt Ratings”). In addition to interest payable on the principal amount of indebtedness

outstanding, we were required to pay a quarterly unused commitment fee that varied based on our Senior Debt

Ratings.

The 2024 Credit Agreement contained representations, warranties, covenants and events of default that are

substantially similar to the 2022 Credit Agreement which established a $2.0 billion, five-year senior unsecured

revolving credit facility.

At January 3, 2025, we had no outstanding borrowings under our credit facility, had available borrowing capacity

of $2,985 million, net of outstanding notes under our CP Program, and were in compliance with all covenants under

the 2024 Credit Agreement and the 2022 Credit Agreement.

At December 29, 2023, we had no outstanding borrowings under our credit facility, had available borrowing

capacity of $2,801 million, net of outstanding notes under our CP Program, and were in compliance with all

covenants under the 2023 Credit Agreement and the 2022 Credit Agreement.

Interest Paid

Total interest paid was $654 million, $489 million and $296 million in fiscal 2024, 2023 and 2022, respectively.