XML 42 R14.htm IDEA: XBRL DOCUMENT
v3.23.1

Risk Management | 3 Months Ended
--- | ---
Apr. 01, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Risk Management | Risk Management Foreign Currency Risk The Company had outstanding foreign exchange contracts with notional amounts totaling $1.1 billion for both periods ended April 1, 2023 and December 31, 2022. The Company does not believe these financial instruments should subject it to undue risk due to foreign exchange movements because gains and losses on these contracts should generally offset gains and losses on the underlying assets, liabilities and transactions. The following table shows the five largest net notional amounts of the positions to buy or sell foreign currency as of April 1, 2023, and the corresponding positions as of December 31, 2022:
| Notional Amount
Net Buy (Sell) by Currency | April 1, 2023 |  | December 31, 2022
British pound | $ | 255 |  |  | $ | 290 |
Euro | 209 |  |  | 185 |
Australian dollar | (111) |  |  | (130) |
Chinese renminbi | (62) |  |  | (61) |
Brazilian real | (49) |  |  | (44) |
Counterparty Risk The use of derivative financial instruments exposes the Company to counterparty credit risk in the event of non-performance by counterparties. However, the Company’s risk is limited to the fair value of the instruments when the derivative is in an asset position. The Company actively monitors its exposure to credit risk. As of April 1, 2023, all of the counterparties had investment grade credit ratings. As of April 1, 2023, the Company had $8 million of exposure to aggregate credit risk with all counterparties. The following tables summarize the fair values and locations in the Condensed Consolidated Balance Sheets of all derivative financial instruments held by the Company as of April 1, 2023 and December 31, 2022:
| Fair Values of Derivative Instruments
April 1, 2023 | Other Current Assets |  | Accrued Liabilities
Derivatives designated as hedging instruments: |  |  |
Foreign exchange contracts | $ | — |  |  | $ | — |
Derivatives not designated as hedging instruments: |  |  |
Foreign exchange contracts | 8 |  |  | 1 |
Total derivatives | $ | 8 |  |  | $ | 1 |
| Fair Values of Derivative Instruments
December 31, 2022 | Other Current Assets |  | Accrued Liabilities
Derivatives designated as hedging instruments: |  |  |
Foreign exchange contracts | $ | — |  |  | $ | 5 |
Derivatives not designated as hedging instruments: |  |  |
Foreign exchange contracts | 15 |  |  | — |
Total derivatives | $ | 15 |  |  | $ | 5 |
The following table summarizes the effect of derivatives on the Company's condensed consolidated financial statements for the three months ended April 1, 2023 and April 2, 2022:
| Financial Statement Location | Three Months Ended |  |
Foreign Exchange Contracts | April 1, 2023 |  | April 2, 2022 |  |  |  |
Effective portion of derivatives designated | Accumulated other comprehensive gain (loss) | $ | (2) |  |  | $ | 2 |  |  |  |  |
Forward points recognized | Other income (expense) | 1 |  |  | — |  |  |  |  |
Derivatives not designated as hedging instruments | Other income (expense) | 7 |  |  | (23) |  |  |  |  |
Net Investment Hedges The Company uses foreign exchange forward contracts to hedge against the effect of the British pound and the Euro exchange rate fluctuations against the U.S. dollar on a portion of its net investments in certain European operations. The Company recognizes changes in the fair value of the net investment hedges as a component of foreign currency translation adjustments within other comprehensive income to offset a portion of the change in translated value of the net investments being hedged, until the investments are sold or liquidated. As of April 1, 2023, the Company had €100 million of net investment hedges in certain Euro functional subsidiaries and £55 million of net investment hedges in a British pound functional subsidiary. The Company excludes the difference between the spot rate and the forward rate of the forward contract from its assessment of hedge effectiveness. The effect of the excluded components will be amortized on a straight line basis and recognized through interest expense. During the three months ended April 1, 2023, the Company amortized $1 million of income from the excluded components through interest expense.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI https://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration