Long-Term Debt

6 Months Ended

Jun. 29, 2024

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

Long-term debt is comprised of the following:

(in millions)	June 29, 2024		December 31, 2023
4.000% Senior Notes due 2029	$	300	$	300
Variable rate A&R Term B Facility	1,714		1,119
Gross debt	2,014		1,419
Less: current portion of long-term debt	(12)		(12)
Less: unamortized deferred financing costs	(23)		(11)
Total long-term debt	$	1,979	$	1,396

A&R Senior Credit Facilities

On February 12, 2021, we entered into an Amendment and Restatement Agreement with JP Morgan Chase Bank N.A. as administrative agent (the “A&R Credit Agreement”). The A&R Credit Agreement provides for an initial seven-year senior secured term B loan facility in an aggregate principal amount of $950 million. In March 2022, we amended the agreement adding $200 million in additional term loans with a maturity date of February 1, 2028. Additionally, in June 2024 we further amended the agreement adding $600 million of term loans with a maturity date May 14, 2031 to partially finance our acquisition of Snap One (the “A&R Term B Facility”). Included in the A&R Term B Facility is a five-year senior secured revolving credit facility in an aggregate principal amount of $500 million (the “A&R Revolving Credit Facility”

and, together with the A&R Term B Facility, the “A&R Senior Credit Facilities”). In June 2024, we also extended the term of our A&R Revolving Credit Facility for a new five-year term.

In May 2024, the A&R Term B Facility was repriced by (i) reducing the interest rate margin from 2.25% to 2.00%, (ii) eliminating the SOFR credit spread adjustment, and (iii) reducing the SOFR floor from 0.50% to 0%.

During the third quarter of 2024, we issued $600 million in aggregate principal of 6.500% Senior Notes due 2032 (the “Notes”). The issue price of the Notes was equal to 100% of the principal amount. The net proceeds from the Notes were used to repay $596 million principal amount of outstanding indebtedness under the Company’s senior secured Term B loans maturing on February 21, 2028. Refer to Note 19. Subsequent Events.

At June 29, 2024 and December 31, 2023, the weighted average interest rate for the A&R Term B Facility, excluding the effect of the interest rate swaps, was 7.34% and 7.72%, respectively. There were $5 million letters of credit issued under the A&R Revolving Credit Facility with no outstanding borrowings. As of June 29, 2024, we were in compliance with all covenants related to the A&R Senior Credit Facilities.

We entered into certain interest rate swap agreements in March 2021, which were amended in June 2023 to transition from a hedge of LIBOR-based cash flows to a hedge of SOFR-based cash flows. These interest rate swap agreements effectively convert a portion of our variable-rate debt to fixed rate debt. Additionally, we acquired an interest rate cap as part of the Snap One acquisition which caps the interest on a portion of our variable rate debt. Refer to Note 13. Derivative Financial Instruments for further discussion.

Senior Notes due 2029

On August 26, 2021, we issued $300 million in principal amount of 4.00% Senior Notes due 2029 (the “Senior Notes due 2029”). The Senior Notes due 2029 are senior unsecured obligations guaranteed by the Company’s existing and future domestic subsidiaries and rank equally with all senior unsecured debt and senior to all subordinated debt.

Refer to Note 11. Long-Term Debt in our 2023 Annual Report on Form 10-K for further discussion.