XML 25 R14.htm IDEA: XBRL DOCUMENT
v3.24.3

Risk Management | 9 Months Ended
--- | ---
Sep. 28, 2024
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 $1.3 billion for each of the periods ended September 28, 2024 and December 31, 2023. 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 September 28, 2024, and the corresponding positions as of December 31, 2023:
| Notional Amount
Net Buy (Sell) by Currency | September 28, 2024 |  | December 31, 2023
Euro | $ | 307 |  |  | $ | 322 |
Australian dollar | (240) |  |  | (140) |
British pound | 206 |  |  | 252 |
Canadian dollar | 74 |  |  | 76 |
Chinese renminbi | (68) |  |  | (66) |
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 September 28, 2024, all of the counterparties had investment grade credit ratings. As of September 28, 2024, the Company had $9 million of exposure to aggregate credit risk with all counterparties. Derivative Financial Instruments 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 September 28, 2024 and December 31, 2023:
| Fair Values of Derivative Instruments
September 28, 2024 | Other Current Assets |  | Accrued Liabilities
Derivatives designated as hedging instruments: |  |  |
Foreign exchange contracts | $ | — |  |  | $ | 5 |
Derivatives not designated as hedging instruments: |  |  |
Foreign exchange contracts | 9 |  |  | 3 |
Total derivatives | $ | 9 |  |  | $ | 8 |
| Fair Values of Derivative Instruments
December 31, 2023 | Other Current Assets |  | Accrued Liabilities
Derivatives designated as hedging instruments: |  |  |
Foreign exchange contracts | $ | 1 |  |  | $ | 3 |
Treasury rate lock | — |  |  | 12 |
Derivatives not designated as hedging instruments: |  |  |
Foreign exchange contracts | 12 |  |  | 1 |
Equity swap contracts | 1 |  |  | — |
Total derivatives | $ | 14 |  |  | $ | 16 |
The following table summarizes the effect of derivatives on the Company's condensed consolidated financial statements for the three and nine months ended September 28, 2024 and September 30, 2023:
| Financial Statement Location | Three Months Ended |  | Nine Months Ended
Foreign Exchange Contracts | September 28, 2024 |  | September 30, 2023 |  | September 28, 2024 |  | September 30, 2023
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Foreign exchange contracts | Accumulated other comprehensive income (loss) | $ | (9) |  |  | $ | 9 |  |  | $ | 3 |  |  | $ | 5 |
Forward points recognized | Other income (expense) | — |  |  | 1 |  |  | 1 |  |  | 2 |
Treasury rate lock | Accumulated other comprehensive income (loss) | — |  |  | — |  |  | 4 |  |  | — |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |
Foreign exchange contracts | Other income (expense) | $ | 22 |  |  | $ | (26) |  |  | $ | 7 |  |  | $ | (9) |
Equity swap contracts | Selling, general and administrative expenses | 1 |  |  | (1) |  |  | 3 |  |  | (1) |
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 September 28, 2024, the Company had €100 million of net investment hedges in certain Euro functional subsidiaries and £50 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 forward points recognized will be amortized on a straight-line basis and recognized through interest expense within Other income (expense) in the Condensed Consolidated Statement of Operations. Equity Swap Contracts The Company uses equity swap contracts which serve as economic hedges against volatility within the equity markets, impacting the Company's deferred compensation plan obligations. These contracts are not designated as hedges for accounting purposes. Unrealized gains and losses on these contracts are included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. The notional amount of these contracts as of September 28, 2024 was $19 million. Treasury Rate Lock In 2023, the Company entered into treasury rate agreements which locked in the interest rate for $200 million in future debt issuances. The treasury rate lock agreements were designated and qualified as cash flow hedges. During the nine months ended September 28, 2024, the Company issued $900 million of 5.4% senior notes due 2034 (the "2034 notes"). The treasury rate lock agreements were terminated upon the issuance of the 2034 notes for a net settlement loss of $8 million. The accumulated loss recorded in Accumulated Other Comprehensive Income (AOCI) will be reclassified to interest expense on a straight-line basis over the 10-year term of the 2034 notes.

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://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration