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Derivative Instruments and Hedging Activities | 3 Months Ended
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Mar. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company's primary exposure to market risk relates to changes in foreign currency exchange rates and interest rates. The Company’s primary foreign currency risk management objective is to protect the U.S. dollar value of future cash flows and minimize the volatility of reported earnings. During the first quarter ended March 30, 2025, the Company entered into certain derivative contracts to reduce the volatility from translation of the Company’s euro denominated net investments. The Company does not use foreign currency forward contracts for speculative or trading purposes. The Company mitigates exposure to foreign currency exchange rates and interest rates primarily through the following: Designated Hedging Activities The Company utilizes foreign currency forward contracts to reduce the volatility of cash flows primarily related to forecasted revenue and expenses denominated in Canadian dollars for our Canadian companies, and in British pounds for our UK companies. As of March 30, 2025, foreign currency forward contracts in Canadian dollars designated as cash flow hedges have maturities ranging from June 2025 to February 2026. As of March 30, 2025, foreign currency forward contracts in British pounds designated as cash flow hedges have maturities ranging from June 2025 to February 2026. The Company utilizes cross-currency swaps to hedge portions of the Company’s euro denominated net investments against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. In the first quarter of 2025, the Company entered cross-currency swaps designated as net investment hedges with a total notional amount of €300.0 million to hedge portions of the Company’s euro denominated net investments against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. These cross-currency swaps mature between March 2027 and September 2029. The Company converted a U.S. dollar denominated, variable rate debt obligation of a European subsidiary into a euro fixed rate obligation using a receive float, pay fixed cross-currency swap to reduce the variability of interest rates. This cross-currency swap had notional amounts of €156.0 million and $150.0 million and matured in October 2024. Non-Designated Hedging Activities The Company utilizes foreign currency forward contracts to mitigate foreign exchange rate risk associated with foreign currency denominated monetary assets and liabilities, including intercompany receivables and payables. These foreign currency forward contracts are not designated as accounting hedges. The gain or loss resulting from a change in fair value of a derivative instrument that is not designated in accounting hedge is recognized immediately in earnings and intended to, at a minimum, partially offset the transaction gains and losses recognized in earnings. Derivative Instruments The following is a summary of the gain (loss) included in the condensed consolidated statements of income (loss) and comprehensive income (loss) related to the derivative instruments described above (in millions):
| First Quarter |  |
| 2025 |  | 2024 |  |  |  |
Net gain (loss) recognized in AOCI—Foreign Exchange Contracts (a) | $ | 0.8 |  |  | $ | 0.7 |  |  |  |  |
Net gain (loss) recognized in AOCI—Cross-Currency Swap Contracts (a) | $ | (5.5) |  |  | $ | — |  |  |  |  |
Net gain (loss) reclassified from AOCI into revenue/cost of sales—Foreign Exchange Contracts (a) | $ | (0.9) |  |  | $ | 0.7 |  |  |  |  |
Net gain (loss) reclassified from AOCI into other income and expense, net—Foreign Exchange Contracts (b) | $ | — |  |  | $ | 3.7 |  |  |  |  |
Net gain (loss) reclassified from AOCI into interest expense—Foreign Exchange Contracts | $ | — |  |  | $ | 1.9 |  |  |  |  |
Net gain (loss) recognized in other income and expense, net—Foreign Exchange Contracts | $ | 11.4 |  |  | $ | 9.3 |  |  |  |  |
(a) Effective portion, pre-tax (b) Amount reclassified to offset earnings impact of liability hedged by cross-currency swap, used to hedge debt Net deferred losses recorded in AOCI for the forward contracts that will mature in the next 12 months total $1.0 million, net of taxes. These losses are expected to be offset by anticipated gains in the value of the forecasted underlying hedged item. The following is a summary of notional amounts and fair values of the Company’s derivatives recorded in the condensed consolidated balance sheets presented by instrument type and use (in millions):
|  | Notional Amount |  | Fair Value Asset |  | Fair Value (Liability)
|  | March 30, 2025 | December 29, 2024 |  | March 30, 2025 | December 29, 2024 |  | March 30, 2025 | December 29, 2024
Derivatives designated as hedging instruments |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | 99.6 |  | $ | 83.3 |  |  | $ | 0.6 |  | $ | — |  |  | $ | (1.9) |  | $ | (3.0) |
Cross-currency swap agreements |  | 324.0 |  | — |  |  | 2.7 |  | — |  |  | (7.9) |  | — |
Total derivatives designated as hedging instruments |  | $ | 423.6 |  | $ | 83.3 |  |  | $ | 3.3 |  | $ | — |  |  | $ | (9.8) |  | $ | (3.0) |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | 689.3 |  | 974.8 |  |  | 16.7 |  | 1.0 |  |  | (2.7) |  | (13.9) |
Total derivatives |  | $ | 1,112.9 |  | $ | 1,058.1 |  |  | $ | 20.0 |  | $ | 1.0 |  |  | $ | (12.5) |  | $ | (16.9) |
All derivative assets are presented in Other current assets or Other non-current assets. All derivative liabilities are presented in Accrued liabilities or Other non-current liabilities.

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- 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
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