DEBT

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

DEBT

DEBT

Short-Term Borrowings

We had $128 million and $189 million of outstanding borrowings from U.S. commercial paper issuances as of December 31, 2022 and January 1, 2022, respectively, with a weighted average interest rate of 4.84% and 0.32%, respectively.

We have a Euro-Commercial Paper Program under which we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding of $500 million. Proceeds from issuances under this program may be used for general corporate purposes. The maturities of the notes vary, but may not exceed 364 days from the date of issuance. Our payment obligations with respect to any notes issued under this program are backed by our revolving credit facility (the “Revolver”). There are no financial covenants under this program. We had balances of $213 million and $113.1 million outstanding under this program as of December 31, 2022 and January 1, 2022, respectively, with a weighted average interest rate of 2.06% and (0.47)%, respectively.

Short-Term Credit Facilities

Subsequent to fiscal year 2022, in January 2023, we extended the maturity date of the Revolver by one year to February 13, 2026, and increased the commitments by $400 million, from $800 million to $1.2 billion. Additionally, we amended the Revolver to replace the LIBOR benchmark interest rate with Term SOFR, Euribor and SONIA benchmark interest rates. We use the Revolver as a back-up facility for our commercial paper program and for other corporate purposes. In February 2020, we had amended and restated the Revolver, eliminating one of the financial covenants and extending its maturity date to February 13, 2025. The Revolver allowed for a one-year extension of the maturity date under certain circumstances and the option to increase the commitments by up to $400 million, subject to lender approvals and customary requirements.

No balance was outstanding under the Revolver as of December 31, 2022 or January 1, 2022. Commitment fees associated with the Revolver in 2022, 2021 and 2020 were $0.9 million, $0.9 million and $0.8 million, respectively.

In addition to the Revolver, we have short-term lines of credit available in various countries of approximately $341 million in the aggregate at December 31, 2022. These lines may be cancelled at any time by us or the issuing banks. Short-term borrowings outstanding under these lines of credit were $2.4 million and $11.2 million at December 31, 2022 and January 1, 2022, respectively, with weighted average interest rates of 0.64% and 4.97%, respectively.

From time to time, we provide guarantees on certain arrangements with banks. Our exposure to these guarantees is not material.

Long-Term Borrowings

In August 2021, we issued $500 million of senior notes, due February 15, 2032, which bear an interest rate of 2.250%, payable semiannually in arrears. Our net proceeds from this issuance, after deducting underwriting discounts and offering expenses, were $493.7 million. Additionally, in August 2021, we issued $300 million of senior notes, due August 15, 2024, which we can repay without penalty on or after August 15, 2022 and bear an interest rate of 0.850%, payable semiannually in arrears. Our net proceeds from this issuance, after deducting underwriting discounts and offering expenses, were $298 million. We used the net proceeds from these two debt issuances to finance a portion of the Vestcom acquisition.

In March 2020, we issued $500 million of senior notes, due April 2030. These senior notes bear an interest rate of 2.65% per year, payable semiannually in arrears. Our net proceeds from the issuance, after deducting underwriting discounts and offering expenses, were $493.7 million, which we used to repay both existing indebtedness under our commercial paper program used to fund our Smartrac acquisition and our $250 million of senior notes that matured in April 2020.

Our long-term debt, and related interest rates, at year-end 2022 and 2021 is shown below.

(In millions)	2022		2021
Long-term debt
Medium-term notes:
Series 1995 due 2025	$	30.0	$	30.0
Long-term notes:
Senior notes due 2023 at 3.4%	249.7		249.5
Senior notes due 2024 at 0.85%	299.0		298.3
Senior notes due 2025 at 1.25%(1)	531.3		563.3
Senior notes due 2028 at 4.875%	496.0		495.3
Senior notes due 2030 at 2.650%	495.5		494.8
Senior notes due 2032 at 2.25%	494.5		493.9
Senior notes due 2033 at 6.0%	149.1		149.1
Less amount classified as current	(249.7)		—
Total long-term debt(2)	$	2,495.4	$	2,774.2

(1)	These senior notes are euro-denominated. The face value is €500 million.
(2)	Included unamortized debt issuance costs and debt discounts of $10.5 million and $7.1 million, respectively, as of year-end 2022 and $12.9 million and $8.2 million, respectively, as of year-end 2021.

At year-end 2022 and 2021, our medium-term notes had accrued interest at a weighted average fixed rate of 7.5%. In the second quarter of 2020, we repaid $15 million of medium-term notes that matured in June 2020.

We expect maturities of our long-term debt for each of the next five fiscal years and thereafter to be as follows:

Year	(In millions)
2023	$	250.0
2024	300.0
2025	562.6
2026	—
2027	—
2028 and thereafter	1,650.0

Refer to Note 7, “Commitments and Leases,” for information related to finance leases.

Other

The Revolver contains a financial covenant that requires us to maintain a specified ratio of total debt in relation to a certain measure of income. As of December 31, 2022 and January 1, 2022, we were in compliance with our financial covenants.

Our total interest costs in 2022, 2021 and 2020 were $89.8 million, $75.0 million and $73.9 million, respectively, of which $5.7 million, $4.8 million and $3.9 million, respectively, was capitalized as part of the cost of property, plant and equipment and capitalized software.

The estimated fair value of our long-term debt is primarily based on the credit spread above U.S. Treasury securities or euro government bond securities, as applicable, on notes with similar rates, credit ratings and remaining maturities. The fair value of short-term borrowings, which includes commercial paper issuances and short-term lines of credit, approximates their carrying value given their short duration. The fair value of our total debt was $2.85 billion at December 31, 2022 and $3.25 billion at January 1, 2022. Fair value amounts were determined based primarily on Level 2 inputs, which are inputs other than quoted prices in active markets that are either directly or indirectly observable. Refer to Note 1, “Summary of Significant Accounting Policies,” for more information.