DEBT Debt (Notes)

3 Months Ended

Mar. 30, 2024

Debt Disclosure [Abstract]

Debt [Text Block]

DEBT

The following table summarizes our outstanding debt obligations.

As of the Period Ended	March 30, 2024		December 31, 2023
Commercial paper(a)	$	319.6	$	184.9
Current maturities of long-term debt	2.3		2.3
Short-term loans	0.8		0.5
Total short-term borrowings	322.7		187.7
Non-current maturities of long-term debt(b)	230.5		5.7
Total debt and finance leases	$	553.2	$	193.4

(a)    The associated weighted average interest rates as of March 30, 2024 and December 31, 2023 were 5.63% and 5.61% respectively. Outstanding commercial paper for both periods had maturity terms less than three months from the date of issuance.

(b) Our long-term debt is primarily related to a term loan that we entered into in January, 2024 in connection with the acquisition of Svanehøj. See additional details in section titled, “Term Loan”, below.

Revolving Credit Agreement

On August 5, 2021, we entered into a revolving credit facility agreement with a syndicate of third party lenders including Bank of America, N.A., as administrative agent (the 2021 Revolving Credit Agreement). Upon its effectiveness, this agreement replaced our existing $500 revolving credit facility due November 2022. The 2021 Revolving Credit Agreement matures in August 2026 and provides for an aggregate principal amount of up to $700. The 2021 Revolving Credit Agreement provides for a potential increase of commitments of up to $350 for a possible maximum of $1,050 in aggregate commitments at the request of the Company and with the consent of the institutions providing such increase of commitments.

On May 10, 2023, we entered into the First Amendment (the Amendment) to the Company’s 2021 Revolving Credit Agreement. In connection with the phase out of LIBOR as a reference interest rate, the Amendment replaced LIBOR as a benchmark for United States Dollar revolving borrowings with the term secured overnight financing rate (Term SOFR), and replaced LIBOR as a benchmark for Euro swing line borrowings with the euro overnight short-term rate (ESTR). The Amendment did not have a significant impact on the Company’s consolidated financial statements.

Since the Amendment, the interest rate per annum on the 2021 Revolving Credit Agreement is based on the term SOFR of the currency we borrow in, plus a margin of 1.1%. As of March 30, 2024 and December 31, 2023, we had no outstanding borrowings under the 2021 Revolving Credit Agreement. There is a 0.15% fee per annum applicable to the commitments under the 2021 Revolving Credit Agreement. The margin and fees are subject to adjustment should the Company’s credit ratings change.

As of March 30, 2024 and April 1, 2023, we had no outstanding obligations under the current or former revolving credit facility.

The 2021 Revolving Credit Agreement contains customary affirmative and negative covenants that, among other things, will limit or restrict our ability to: incur additional debt or issue guarantees; create certain liens; merge or consolidate with another person; sell, transfer, lease or otherwise dispose of assets; liquidate or dissolve; and enter into restrictive covenants. Additionally, the 2021 Revolving Credit Agreement requires us not to permit the ratio of consolidated total indebtedness to consolidated earnings before interest, taxes, depreciation, amortization, and other special, extraordinary, unusual, or non-recurring items (adjusted consolidated EBITDA) (leverage ratio) to exceed 3.50 to 1.00, with a qualified acquisition step up immediately following such qualified acquisition of 4.00 to 1.00 for four quarters, 3.75 to 1.00 for two quarters thereafter, and returning to 3.50 to 1.00 thereafter.

As of March 30, 2024, all financial covenants (e.g., leverage ratio) associated with the 2021 Revolving Credit Agreement were within the prescribed thresholds.

Term Loan

On January 12, 2024, ITT Italia S.r.l. (“ITT Italia”), an indirect wholly owned subsidiary of ITT, entered into a facility agreement (the “ITT Italia Credit Agreement”), among the Company, as a guarantor, ITT Italia, as borrower, and BNP Paribas, Italian Branch, as bookrunner, sole underwriter and global coordinator, mandated lead arranger and agent.

The ITT Italia Credit Agreement has an initial maturity of three years (January 2027) and provides for term loan borrowings in an aggregate principal amount of €300 (or $328.9), €275 (or $301.5) of which was used to finance the Company’s acquisition of Svanehøj Group A/S, which closed on January 19, 2024.

The interest rate per annum on the ITT Italia Credit Agreement is based on the EURIBOR rate for Euros, plus a margin of 1.00%. The margin and fees are subject to adjustment should the Company’s credit ratings change.

The ITT Italia Credit Agreement contains customary affirmative and negative covenants, as well as financial covenants (e.g., leverage ratio), that are similar to those contained in our 2021 Revolving Credit Agreement, as described above. As of March 30, 2024, the Company was in compliance with all covenants.

Total outstanding borrowings under the facility were €210, or $226.7, as of March 30, 2024. Debt issuance costs were $1.8 and will be amortized over the term of the debt. The following table provides the future maturities related to the outstanding balance as of March 30, 2024.

2024	$	—
2025	—
2026	—
January 2027	226.7
Total maturities	$	226.7