v3.26.1
Long-Term Debt
 6 Months Ended
Jul. 04, 2026
Debt Disclosure [Abstract]  
Long-Term Debt Long-Term Debt
Resideo is the obligor of multiple third-party debt instruments, some of which the Company was also jointly and severally liable for prior to the Spin-Off, while other third party debt instruments transferred to the Company upon the completion of the Spin-Off. For the debt instruments that the Company was jointly and severally liable for, a portion of the Parent’s long-term debt and short-term debt was allocated to the Company as of July 4, 2026 and December 31, 2025. The related interest expense and unamortized deferred financing costs on the debt have been allocated to the Company for the periods presented. Given the lack of a contractual agreement for the Company to pay a specified amount to Parent (i.e., its co-obligors), the allocation basis was determined based on what the Company would reasonably expect to pay on behalf of its co-obligors. No payments were made by the Company to third-party creditors, as payments historically were made by Parent in each reporting period.
The outstanding debt of Resideo and the allocations of debt to ADI as of July 4, 2026 and December 31, 2025 were as follows:
July 4, 2026December 31, 2025
(in millions)Allocation to
ADI 		Total
Resideo 		Allocation to
ADI 		Total
Resideo
4.000% Senior Notes due 2029 (1)
$56 $300 $112 $300 
6.500% Senior Notes due 2032 (1)
112 600 224 600 
7.125% Senior Notes due 2034 (2)
400 400 – – 
Variable rate A&R Term B Facility (1)
432 2,322 871 2,331 
Gross debt$1,000 $3,622 $1,207 $3,231 
Less: current portion of long-term debt (3)
(3)(18)(7)(18)
Less: unamortized deferred financing costs(9)(44)(15)(46)
Total long-term debt$988 $3,560 $1,185 $3,167 
(1)These outstanding debt obligations associated with this instrument did not transfer to ADI in connection with the Spin-Off; however, the historical debt balances were allocated to the Company in a manner intended to approximate the indebtedness incurred by the Company upon completion of the Spin-Off.
(2)Proceeds are included in Restricted cash as recorded on the Unaudited Condensed Combined Balance Sheet.
(3)Included within Accrued liabilities on the Unaudited Condensed Combined Balance Sheets.
Senior Unsecured Notes of ADI

On June 30, 2026, ADI Escrow Issuer LLC (the “Escrow Issuer”), a direct, wholly-owned subsidiary of ADI and an indirect, wholly-owned subsidiary of our Parent, completed an offering of $400 million aggregate principal of the Escrow Issuer’s 7.125% Senior Notes due 2034 (“Senior Notes due 2034”). The Senior Notes due 2034 were issued pursuant to an Indenture, dated June 30, 2026 (the “Indenture”), between the Escrow Issuer and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The proceeds from the offering of the Senior Notes due 2034 were used as part of the financing for the Spin-Off. Pending the consummation of the Spin-Off, the proceeds from the offering were deposited into a segregated escrow account until satisfaction of the conditions precedent to the Spin-Off. The proceeds are included in Restricted cash on the Unaudited Condensed Combined Balance Sheet.
The Senior Notes due 2034 mature on July 15, 2034 and bear interest at an annual rate of 7.125%, payable semi-annually on January 15 and July 15 of each year, commencing January 15, 2027. The Senior Notes due 2034 are redeemable prior to July 15, 2029 at a make-whole redemption price (with a limited equity-funded redemption option for up to 40% of the principal at 107.125%), and become callable at specified redemption prices thereafter in accordance with the Indenture. Following escrow release, the Indenture will limit ADI's ability and the ability of its restricted subsidiaries to incur or guarantee additional indebtedness; pay dividends or distributions on, or redeem or repurchase capital stock and make other restricted payments; make investments; consummate certain asset sales; engage in certain transactions with affiliates; grant or assume certain liens; and consolidate, merge, or transfer all or substantially all of ADI's assets. Additionally, after the escrow release date and upon certain events constituting a change of control, the holders of the Senior Notes due 2034 will have the right to have their Senior Notes due 2034 repurchased at a purchase price equal to 101% of their principal amount plus accrued and unpaid interest, to (but not including) the date of purchase.

The Indenture provides for customary events of default, which, if any of them occurs, may cause the principal and accrued interest on the Senior Notes due 2034 to become, or to be declared, due and payable on an accelerated basis.

In connection with the completion of the Spin-Off on August 3, 2026 and with the satisfaction of the Escrow Release Conditions (as defined in the Indenture), the Escrow Issuer merged with and into ADI Global Distribution Funding LLC (“ADI Funding”), a direct wholly-owned subsidiary of ADI, and the Company assumed the obligations of the Escrow Issuer under the Indenture and the Senior Notes due 2034. Therefore, the Company has recognized all of the $400 million less debt issuance costs as well as all of the corresponding interest expense within the Unaudited Condensed Combined Financial Statements. Refer to Note 15. Subsequent Events, of the Notes to the Unaudited Condensed Combined Financial Statements for additional information.

As of July 4, 2026, the fair value of the Senior Notes due 2034 was $407 million. The fair value was determined using quoted market prices in inactive markets or discounted cash flows based on current observable market interest rates and therefore was classified as a Level 2 measurement in the fair value hierarchy.

Credit Agreement of ADI

On July 1, 2026, ADI Funding entered into a senior secured Credit Agreement (the “Credit Agreement”) with the lenders and issuing banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent. The Credit Agreement provides for (i) term loans in an aggregate principal amount of $600 million (the “Term Facility”) and (ii) revolving credit commitments in an aggregate initial principal amount of $500 million (the “Revolving Facility” and, together with the Term Facility, the “Credit Facilities”). A borrowing of the full amount of the Term Facility became available in connection with the completion of the Spin-Off and borrowings under the Revolving Facility became available following the completion of the Spin-Off, subject to certain other conditions customary for secured facilities of this type. Borrowings under the Credit Facilities bear an interest rate, at the Company’s option, at either a base rate or the Secured Overnight Financing Rate (“SOFR”), in each case plus an applicable margin. The applicable margin on borrowings under the Revolving Facility varies based on ADI’s consolidated total net leverage ratio.

The Term Facility will mature, and the term loans thereunder will be required to be repaid, seven years after the Spin-Off, subject to certain extension rights in the discretion of each lender. The Revolving Facility will mature, and all borrowings thereunder will be required to be repaid, five years after the Spin-Off, with certain extension rights in the discretion of each lender. Borrowings under the Term Facility may not be re-borrowed once repaid. Voluntary prepayments of borrowings may generally be made without premium or penalty, except for a 1% premium on certain repricing transactions involving the Term Facility in the first six months following the Spin-Off, and certain borrowings may be subject to customary breakage costs. The Credit Agreement also contains customary mandatory prepayment provisions upon the occurrence of specified events, as well as excess cash flow sweep requirements for the Term Facility, beginning with the fiscal year ending on December 31, 2027. The Revolving Facility contains financial covenants, which will initially be tested as of the last day of the third fiscal quarter of 2026, including a consolidated total net leverage ratio that steps down over time and a minimum consolidated interest ratio. The Term Facility requires quarterly amortization payments of 0.25% commencing the first full quarter after the Spin-Off.

As of July 4, 2026, no amounts were drawn under the Credit Agreement. Refer to Note 15. Subsequent Events, of the Notes to the Unaudited Condensed Combined Financial Statements for additional information. Upon consummation of the Spin-Off on August 3, 2026, the borrowings under the Term Facility became obligations of the Company.
A&R Credit Agreement of Resideo

In 2021, Resideo (“Borrower”) entered into a credit agreement with JPMorgan Chase Bank N.A. as administrative agent (the “A&R Credit Agreement”), which was most recently amended on June 4, 2026 (as amended, the “Second A&R Credit Agreement”). The Borrower entered into the Second A&R Credit Agreement in order to facilitate the Spin-Off as well as extend the revolver maturity to 2031. The remaining principal on the Second A&R Credit Agreement includes $518 million of senior secured term loans maturing in February 2028, $588 million of senior secured term loans maturing in June 2031 and $1,216 million of senior secured term loans maturing in August 2032 (together, the “A&R Term B Facility” and with the Second A&R Credit Agreement, the “A&R Revolving Credit Facility”).
As of July 4, 2026 and December 31, 2025, the weighted average interest rate on the A&R Term B Facility, excluding the impact of the interest rate swaps, was 5.74% and 5.76%, respectively.
Under the Second A&R Credit Agreement, the Borrower entered into a new senior secured revolving credit facility, which refinanced in full the existing senior secured revolving credit facility (the “Original Revolver”) and provides for commitments in an aggregate principal amount of $500 million and a five-year term ending in June 2031. There were no outstanding borrowings and no letters of credit issued under the A&R Revolving Credit Facility as of July 4, 2026.
The A&R Revolving Credit Facility includes customary affirmative and negative covenants and reporting requirements, including limitations on indebtedness, liens, investments and other restricted transactions. As of July 4, 2026, the Borrower was in compliance with all covenants.
In connection with the completion of the Spin-Off, ADI and its subsidiaries that were obligors under the A&R Term B Facility and the A&R Revolving Credit Facility were released from their obligations under the Second A&R Credit Agreement.
Senior Unsecured Notes of Resideo
In August 2021, the Borrower issued $300 million in principal amount of 4.000% Senior Notes due 2029 (“Senior Notes due 2029”).

In July 2024, the Borrower issued $600 million in aggregate principal of 6.500% Senior Notes due 2032 (“Senior Notes due 2032”).
The Senior Notes due 2029 and Senior Notes due 2032 are senior unsecured obligations of the Borrower guaranteed by the Borrower's existing and future domestic subsidiaries.
In connection with the completion of the Spin-Off, the obligations of certain of our subsidiaries under the Senior Notes due 2029 and the Senior Notes due 2032 were automatically and unconditionally released.

Interest Expense Allocation

For the three and six months ended July 4, 2026, interest expense in connection with third-party debt was $16 million and $32 million, respectively. For the three and six months ended June 28, 2025, interest expense in connection with third-party debt was $3 million and $9 million, respectively. These amounts were allocated to the Company, and the related cash interest payments were made by Resideo.