Debt

3 Months Ended

Oct. 01, 2022

Debt

Debt

4. Debt

Short-term debt consists of the following (carrying balances in thousands):

	October 1,		July 2,		October 1,		July 2,
	2022		2022		2022		2022
	Interest Rate				Carrying Balance
Accounts receivable securitization program (due August 2023)	3.89	%	—		$	450,000	$	—
Other short-term debt	4.39	%	2.09	%		63,000		174,422
Short-term debt					$	513,000	$	174,422

The Company has a trade accounts receivable securitization program (the “Securitization Program”) in the United States with a group of financial institutions. The Securitization Program allows the Company to transfer, on an ongoing revolving basis, an undivided interest in a designated pool of trade accounts receivable, to provide security or collateral for borrowings of up to a maximum of $450 million. The Securitization Program does not qualify for off balance sheet

accounting treatment and any borrowings under the Securitization Program are recorded as debt in the consolidated balance sheets. Under the Securitization Program, the Company legally sells and isolates certain U.S. trade accounts receivable into a wholly owned and consolidated bankruptcy remote special purpose entity. Such receivables, which are recorded within “Receivables” in the consolidated balance sheets, totaled $1.25 billion and $1.12 billion at October 1, 2022, and July 2, 2022, respectively. The Securitization Program contains certain covenants relating to the quality of the receivables sold.

Other short-term debt consists primarily of various committed and uncommitted lines of credit and other forms of bank debt with financial institutions utilized primarily to support the ongoing working capital requirements of the Company, including its foreign operations.

Long-term debt consists of the following (carrying balances in thousands):

	October 1,		July 2,		October 1,		July 2,
	2022		2022		2022		2022
	Interest Rate				Carrying Balance
Revolving credit facilities:
Accounts receivable securitization program (due August 2023)	—		2.55	%	$	—	$	297,800
Credit Facility (due August 2027)	3.45	%	—			685,632		—
Public notes due:
April 2026	4.63	%	4.63	%		550,000		550,000
May 2031	3.00	%	3.00	%		300,000		300,000
June 2032	5.50	%	5.50	%		300,000		300,000
Long-term debt before discount and debt issuance costs						1,835,632		1,447,800
Discount and debt issuance costs – unamortized						(10,118)		(10,400)
Long-term debt					$	1,825,514	$	1,437,400

In August 2022, the Company amended and extended its five-year $1.25 billion revolving credit facility (the “Credit Facility”) with a syndicate of banks, which expires in August 2027. It consists of revolving credit facilities and the issuance of up to $200.0 million of letters of credit and up to $300.0 million of loans in certain approved currencies. As of October 1, 2022, and July 2, 2022, there were $1.1 million and $1.2 million, respectively, in letters of credit issued under the Credit Facility. Subject to certain conditions, the Credit Facility may be increased up to $1.50 billion. Under the Credit Facility, the Company may select from various interest rate options, currencies, and maturities. The Credit Facility contains certain covenants including various limitations on debt incurrence, share repurchases, dividends, investments, and capital expenditures. The Credit Facility also includes financial covenants requiring the Company to maintain minimum leverage ratios, which the Company was in compliance with as of October 1, 2022, and July 2, 2022.

As of October 1, 2022, the carrying value and fair value of the Company’s total debt was $2.34 billion and $2.22 billion, respectively. At July 2, 2022, the carrying value and fair value of the Company’s total debt was $1.61 billion and $1.55 billion, respectively. Fair value for the public notes was estimated based upon quoted market prices and, for other forms of debt, fair value approximates carrying value due to the market based variable nature of the interest rates on those debt facilities.