Indebtedness

12 Months Ended

Dec. 28, 2019

Long-term Debt

The following is a summary of indebtedness outstanding:



(In thousands)	2019			2018

Credit agreement loans	$	600,000		$	—
Senior notes	425,000			425,000
Capital lease obligations (under ASC Topic 840)	—			4,914
Other	14,162			14,162

Debt and capital lease obligations	1,039,162			444,076
Less: debt issuance costs	(780		)	(360		)

Debt and capital lease obligations, net	1,038,382			443,716
Less: current portion	—			(4,914		)

Long-term debt	$	1,038,382		$	438,802

Credit Agreement

In May 2019 and November 2019, we entered into amendments to our Third Amended and Restated Credit Agreement (as amended, the "Credit Agreement") with a syndicate of lenders. The Credit Agreement provides for an unsecured revolving credit facility expiring in May 2024, and includes: (a) a revolving credit loan facility of up to $1.00 billion at any time outstanding, and (b) a letter of credit facility of up to $100 million at any time outstanding (which is a sub-facility of the $1.00 billion revolving credit loan facility). The Credit Agreement also includes an accordion feature allowing an increase of the credit facility of up to an additional $200 million ($1.20 billion in the aggregate) at any time outstanding, subject to lender participation and the satisfaction of specified conditions. Borrowings outstanding under the Credit Agreement are due in May 2024, with prepayment permitted at any time. Proceeds may be used for working capital and general corporate purposes, including but not limited to certain business acquisitions and purchases under our share repurchase programs. The Credit Agreement provides certain restrictions on our ability to borrow, incur liens, sell assets and pay dividends, and contains certain leverage and interest coverage covenants.

Generally, interest on revolving credit loans is payable at a variable rate based on LIBOR, prime, or the U.S. federal funds rate, plus a spread that varies depending on leverage ratios maintained. Unused commitment, letter of credit, and other fees are also payable under the Credit Agreement. As of December 28, 2019, the interest rate on revolving credit loans outstanding was 2.54% based on LIBOR plus the applicable spread.

As of December 28, 2019, we had outstanding revolving credit loans and letters of credit of $600 million and $30 million, respectively; which reduced our available borrowing capacity to $370 million under the Credit Agreement.

Senior Notes

On December 4, 2014, we entered into a Master Note Purchase Agreement (the "Master Note Purchase Agreement") with the Purchasers listed therein, pursuant to which we may issue and sell up to an aggregate principal amount of $1.50 billion of unsecured senior promissory notes to those Purchasers electing to purchase. In January 2015, we issued $500 million aggregate principal amount of unsecured Senior Notes ("Senior Notes"), pursuant to the Master Note Purchase Agreement. The issuance consisted of $225 million of 3.18% Series 2015-A Notes due February 15, 2022, $200 million of 3.58% Series 2015-B Notes due February 14, 2025, and $75 million in floating rate Series 2015-C Notes due February 15, 2022. Interest is payable semiannually on February 15th and August 15th in each year, commencing on August 15, 2015 for the Series 2015-A Notes and Series 2015-B Notes. The Master Note Purchase Agreement contains certain leverage and interest coverage ratio covenants and provides certain restrictions on our ability to borrow, incur liens, sell assets, and other customary terms. Proceeds from the Senior Notes are available for general corporate purposes. As of December 28, 2019, the remaining $1.00 billion available for sale is uncommitted and subject to participation by the Purchasers under the Master Note Purchase Agreement.

In March 2018, we repaid our $75 million floating rate Series 2015-C Notes due February 15, 2022.

Capital Lease Obligations

Capital lease obligations primarily related to the procurement of hardware and health care devices, accounted for in accordance with ASC Topic 840.

Other

Other indebtedness includes estimated amounts payable through September 1, 2025, under an agreement entered into in September 2015.

2019 Shelf Agreement

In November 2019, we entered into a Master Note Agreement (the "2019 Shelf Agreement"), pursuant to which we may issue and sell up to an aggregate principal amount of $1.05 billion of unsecured senior promissory notes ("Notes") over a three year period. The $1.05 billion available for sale is uncommitted and subject to participation by the Purchasers under the 2019 Shelf Agreement. The Notes will be priced based on real-time quotes for treasuries and credit spreads at the time of issuance and will either be Fixed Rate Notes or Floating Rate Notes, depending on the terms agreed to between us and the Purchasers. Proceeds from the Notes may be used for general corporate purposes. No Notes have been issued under the 2019 Shelf Agreement as of December 28, 2019.

Covenant Compliance

As of December 28, 2019, we were in compliance with all debt covenants.

Interest Rate Swap

We are exposed to market risk from fluctuations in the variable interest rates on outstanding indebtedness under our Credit Agreement. In order to manage this exposure, we have entered into an interest rate swap agreement, with an initial notional amount of $600 million, to hedge the variability of cash flows associated with such interest obligations through May 2024. The interest rate swap has an effective start date of May 13, 2019, and is designated as a cash flow hedge, which effectively fixes the interest rate on the hedged indebtedness under our Credit Agreement at 3.06%. As of December 28, 2019, this swap was in a net liability position with an aggregate fair value of $17 million, which is presented in our consolidated balance sheets in other current liabilities. We classify fair value measurements of our interest rate swap as Level 2, as further described in Note (11).

Our interest rate swap agreement is accounted for in accordance with ASC Topic 815, Derivatives and Hedging. Such agreement is designated as a cash flow hedge and considered to be highly effective under hedge accounting principles. Therefore, the swap agreement is recognized in our consolidated balance sheets as either an asset or liability, measured at fair value. Changes in the fair value of the swap agreement are initially recorded in accumulated other comprehensive loss, net and then subsequently recognized in our consolidated statements of operations in the periods in which earnings are affected by the hedged item. All cash flows associated with the swap agreement are classified as operating activities in our consolidated statements of cash flows.

Maturities of indebtedness outstanding at the end of 2019 are as follows:



(In thousands)	Credit Agreement Loans		Senior Notes		Other		Total

2020	$	—	$	—	$	—	$	—
2021	—		—		—		—
2022	—		225,000		—		225,000
2023	—		—		—		—
2024	600,000		—		—		600,000
2025 and thereafter	—		200,000		14,162		214,162

Total	$	600,000	$	425,000	$	14,162	$	1,039,162