XML 32 R19.htm IDEA: XBRL DOCUMENT
v3.22.2.2

Financial Instruments | 6 Months Ended
--- | ---
Oct. 01, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments | Financial Instruments Derivative Financial Instruments The Company is exposed to changes in foreign currency exchange rates, primarily relating to certain anticipated cash flows and the value of the reported net assets of its international operations, as well as changes in the fair value of its fixed-rate debt obligations attributed to changes in benchmark interest rates. Accordingly, based on its assessment thereof, the Company may use derivative financial instruments to manage and mitigate such risks. The Company does not use derivatives for speculative or trading purposes. The following table summarizes the Company's outstanding derivative instruments recorded on its consolidated balance sheets as of October 1, 2022 and April 2, 2022:
|  | Notional Amounts |  | Derivative Assets |  | Derivative Liabilities
Derivative Instrument(a) |  | October 1, 2022 |  | April 2, 2022 |  | October 1, 2022 |  | April 2, 2022 |  | October 1, 2022 |  | April 2, 2022
|  |  |  |  |  | Balance Sheet Line(b) |  | Fair Value |  | Balance Sheet Line(b) |  | Fair Value |  | Balance Sheet Line(b) |  | Fair Value |  | Balance Sheet Line(b) |  | Fair Value
|  | (millions)
Designated Hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FC — Cash flow hedges |  | $ | 178.5 |  |  | $ | 236.5 |  |  | (e) |  | $ | 22.4 |  |  | PP |  | $ | 6.6 |  |  |  |  | $ | — |  |  |  |  | $ | — |
Net investment hedges(c) |  | 700.0 |  |  | 700.0 |  |  | ONCA |  | 92.7 |  |  | ONCA |  | 23.7 |  |  |  |  | — |  |  | ONCL |  | 18.1 |
Total Designated Hedges |  | 878.5 |  |  | 936.5 |  |  |  |  | 115.1 |  |  |  |  | 30.3 |  |  |  |  | — |  |  |  |  | 18.1 |
Undesignated Hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FC — Undesignated hedges(d) |  | 208.0 |  |  | 225.0 |  |  | PP |  | 0.7 |  |  | PP |  | 2.1 |  |  | AE |  | 3.0 |  |  | AE |  | 0.2 |
Total Hedges |  | $ | 1,086.5 |  |  | $ | 1,161.5 |  |  |  |  | $ | 115.8 |  |  |  |  | $ | 32.4 |  |  |  |  | $ | 3.0 |  |  |  |  | $ | 18.3 |
(a)FC = Forward foreign currency exchange contracts. (b)PP = Prepaid expenses and other current assets; AE = Accrued expenses and other current liabilities; ONCA = Other non-current assets; ONCL = Other non-current liabilities. (c)Includes cross-currency swaps designated as hedges of the Company's net investment in certain foreign operations. (d)Relates to third-party and intercompany foreign currency-denominated exposures and balances. (e)$22.0 million included within prepaid expenses and other current assets and $0.4 million included within other non-current assets. The Company presents the fair values of its derivative assets and liabilities recorded on its consolidated balance sheets on a gross basis, even when they are subject to master netting arrangements. However, if the Company were to offset and record the asset and liability balances of all of its derivative instruments on a net basis in accordance with the terms of each of its master netting arrangements, spread across nine separate counterparties, the amounts presented in the consolidated balance sheets as of October 1, 2022 and April 2, 2022 would be adjusted from the current gross presentation as detailed in the following table:
|  | October 1, 2022 |  | April 2, 2022
|  | Gross Amounts Presented in the Balance Sheet |  | Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Agreements |  | Net Amount |  | Gross Amounts Presented in the Balance Sheet |  | Gross Amounts Not Offset in the Balance Sheet that are Subject to Master Netting Agreements |  | Net Amount
|  | (millions)
Derivative assets |  | $ | 115.8 |  |  | $ | (1.9) |  |  | $ | 113.9 |  |  | $ | 32.4 |  |  | $ | (0.2) |  |  | $ | 32.2 |
Derivative liabilities |  | 3.0 |  |  | (1.9) |  |  | 1.1 |  |  | 18.3 |  |  | (0.2) |  |  | 18.1 |
The Company's master netting arrangements do not require cash collateral to be pledged by the Company or its counterparties. See Note 3 for further discussion of the Company's master netting arrangements. The following tables summarize the pretax impact of gains and losses from the Company's designated derivative instruments on its consolidated financial statements for the three-month and six-month periods ended October 1, 2022 and September 25, 2021:
|  | Gains (Losses) Recognized in OCI
|  | Three Months Ended |  | Six Months Ended
|  | October 1, 2022 |  | September 25, 2021 |  | October 1, 2022 |  | September 25, 2021
|  | (millions)
Designated Hedges: |  |  |  |  |  |  |  |
FC — Cash flow hedges |  | $ | 12.2 |  |  | $ | 1.6 |  |  | $ | 28.5 |  |  | $ | 0.2 |
Net investment hedges — effective portion |  | 36.0 |  |  | 14.4 |  |  | 75.7 |  |  | 5.2 |
Net investment hedges — portion excluded from assessment of hedge effectiveness |  | (0.4) |  |  | 1.2 |  |  | 11.4 |  |  | 11.8 |
Total Designated Hedges |  | $ | 47.8 |  |  | $ | 17.2 |  |  | $ | 115.6 |  |  | $ | 17.2 |
|  | Location and Amount of Gains (Losses) from Cash Flow Hedges Reclassified from AOCI to Earnings
|  | Three Months Ended |  | Six Months Ended
|  | October 1, 2022 |  | September 25, 2021 |  | October 1, 2022 |  | September 25, 2021
|  | Cost of goods sold |  | Cost of goods sold |  | Cost of goods sold |  | Cost of goods sold
|  | (millions)
Total amounts presented in the consolidated statements of operations in which the effects of related cash flow hedges are recorded |  | $ | (556.8) |  |  | $ | (488.9) |  |  | $ | (1,046.0) |  |  | $ | (897.1) |
Effects of cash flow hedging: |  |  |  |  |  |  |  |
FC — Cash flow hedges |  | 3.7 |  |  | 0.2 |  |  | 6.5 |  |  | 0.1 |
|  | Gains (Losses) from Net Investment Hedges Recognized in Earnings |  | Location of Gains (Losses) Recognized in Earnings
|  | Three Months Ended |  | Six Months Ended |
|  | October 1, 2022 |  | September 25, 2021 |  | October 1, 2022 |  | September 25, 2021 |
|  | (millions) |  |
Net Investment Hedges |  |  |  |  |  |  |  |  |  |
Net investment hedges — portion excluded from assessment of hedge effectiveness(a) |  | $ | 3.3 |  |  | $ | 2.9 |  |  | $ | 6.5 |  |  | $ | 5.7 |  |  | Interest expense
Total Net Investment Hedges |  | $ | 3.3 |  |  | $ | 2.9 |  |  | $ | 6.5 |  |  | $ | 5.7 |  |  |
(a)Amounts recognized in other comprehensive income (loss) ("OCI") relating to the effective portion of the Company's net investment hedges would be recognized in earnings only upon the sale or liquidation of the hedged net investment. As of October 1, 2022, it is estimated that $31.4 million of pretax net gains on both outstanding and matured derivative instruments designated and qualifying as cash flow hedges deferred in AOCI will be recognized in earnings over the next twelve months. Amounts ultimately recognized in earnings will depend on exchange rates in effect when outstanding derivative instruments are settled. The following table summarizes the pretax impact of gains and losses from the Company's undesignated derivative instruments on its consolidated financial statements for the three-month and six-month periods ended October 1, 2022 and September 25, 2021:
|  | Gains (Losses) Recognized in Earnings |  | Location of Gains (Losses) Recognized in Earnings
|  | Three Months Ended |  | Six Months Ended |
|  | October 1, 2022 |  | September 25, 2021 |  | October 1, 2022 |  | September 25, 2021 |
|  | (millions) |  |
Undesignated Hedges: |  |  |  |  |  |  |  |  |  |
FC — Undesignated hedges |  | $ | 13.1 |  |  | $ | 1.5 |  |  | $ | 24.6 |  |  | $ | 0.5 |  |  | Other income (expense), net
Total Undesignated Hedges |  | $ | 13.1 |  |  | $ | 1.5 |  |  | $ | 24.6 |  |  | $ | 0.5 |  |  |
Risk Management Strategies Forward Foreign Currency Exchange Contracts The Company uses forward foreign currency exchange contracts to mitigate its risk related to exchange rate fluctuations on inventory transactions made in an entity's non-functional currency, the settlement of foreign currency-denominated balances, and the translation of certain foreign operations' net assets into U.S. Dollars. As part of its overall strategy for managing the level of exposure to such exchange rate risk, relating primarily to the Euro, the Japanese Yen, the South Korean Won, the Australian Dollar, the Canadian Dollar, the British Pound Sterling, the Swiss Franc, and the Chinese Renminbi, the Company generally hedges a portion of its related exposures anticipated over the next twelve months using forward foreign currency exchange contracts with maturities of two months to one year to provide continuing coverage over the period of the respective exposure. Cross-Currency Swap Contracts The Company periodically designates pay-fixed rate, receive fixed-rate cross-currency swap contracts as hedges of its net investment in certain of its European subsidiaries. The Company's pay-fixed rate, receive-fixed rate cross-currency swap contracts swap U.S. Dollar-denominated fixed interest rate payments based on the contract's notional amount and the fixed rate of interest payable on certain of the Company's senior notes for Euro-denominated fixed interest rate payments, thereby economically converting a portion of its fixed-rate U.S. Dollar-denominated senior note obligations to fixed-rate Euro-denominated obligations. See Note 3 for further discussion of the Company's accounting policies relating to its derivative financial instruments. Investments The Company's short-term investments as of October 1, 2022 and April 2, 2022 were $309.6 million and $734.6 million, respectively, and consisted of time deposits. No significant realized or unrealized gains or losses on available-for-sale investments or impairment charges were recorded during any of the fiscal periods presented. Refer to Note 3 of the Fiscal 2022 10-K for further discussion of the Company's accounting policies relating to its investments.

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 financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
Name: | us-gaap_FinancialInstrumentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration