XML 31 R18.htm IDEA: XBRL DOCUMENT
v3.24.2.u1

Derivatives | 3 Months Ended
--- | ---
Jun. 28, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives | Derivatives Our primary objective in holding derivatives is to reduce the volatility of earnings and cash flow associated with changes in foreign currency exchange rates and interest rates. These hedging contracts reduce, but do not entirely eliminate the impact of adverse foreign exchange rate and interest rate movements. We do not use our derivative instruments for speculative trading purposes. By using derivative financial instruments to hedge exposures to changes in foreign exchange and interest rates, we are exposed to credit risk; however, we mitigate this risk by entering into hedging instruments with highly rated institutions that can be expected to fully perform under the terms of the applicable contracts. Foreign currency exchange forward contracts We conduct business in numerous currencies throughout our worldwide operations, and our entities hold monetary assets or liabilities, earn revenues, or incur costs in currencies other than the entity’s functional currency. As a result, we are exposed to foreign exchange gains or losses, which impacts our operating results. As part of our foreign currency risk mitigation strategy, we have entered into monthly foreign exchange forward contracts to hedge foreign currency balance sheet exposure. These forward contracts are not designated as hedging instruments. We do not hedge our foreign currency exposure in a manner that entirely offsets the effects of the changes in foreign exchange rates. Interest rate swap In March 2023, we entered into interest rate swap agreements to mitigate risks associated with the variable interest rate of our Term A Facility. These pay-fixed, receive-floating rate interest rate swaps have the economic effect of hedging the variability of forecasted interest payments until their maturity on March 31, 2026. Pursuant to the agreements, we have effectively converted $1 billion of our variable rate borrowings under Term A Facility to fixed rates, with $500 million at a fixed rate of 3.762% and $500 million at a fixed rate of 3.55%. These arrangements are designated as cash flow hedges for accounting purposes and as such, we will recognize the changes in the fair value of these interest rate swaps in Accumulated other comprehensive income (loss) (AOCI), and the periodic settlements or accrued settlements of the swap will be recognized within or against interest expense in our Condensed Consolidated Statements of Operations. Cash flows related to these hedges are classified under operating activities in our Condensed Consolidated Statement of Cash Flows. Summary of derivative instruments The following table summarizes our outstanding derivative instruments as of June 28, 2024 and March 29, 2024:
| Notional Amount |  | Fair Value of Derivative Assets |  | Fair Value of Derivative Liabilities
(In millions) | June 28, 2024 |  | March 29, 2024 |  | June 28, 2024 |  | March 29, 2024 |  | June 28, 2024 |  | March 29, 2024
Foreign exchange contracts not designated as hedging instrument (1) | $ | 312 |  |  | $ | 345 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Interest rate swap contracts designated as cash flow hedge | 1,000 |  |  | 1,000 |  |  | 16 |  |  | 16 |  |  | — |  |  | — |
Total | $ | 1,312 |  |  | $ | 1,345 |  |  | $ | 16 |  |  | $ | 16 |  |  | $ | — |  |  | $ | — |
(1) The fair values of the foreign exchange contracts are less than $1 million as of June 28, 2024 and March 29, 2024. The following table summarizes the effect of our cash flow hedges on AOCI during the periods indicated:
| Three Months Ended
(In millions) | June 28, 2024 |  | June 30, 2023
Interest rate swap contracts designated as cash flow hedge | $ | (4) |  |  | $ | (22) |
The related gain (loss) recognized in our Condensed Consolidated Statements of Operations was as follows:
| Three Months Ended |  |  |  | Condensed Consolidated Statements of Operations Classification
(In millions) | June 28, 2024 |  | June 30, 2023 |  |  |  |  |
Foreign exchange contracts not designated as hedging instrument | $ | (3) |  |  | $ | (3) |  |  |  |  |  |  | Other income (expense), net
Interest rate swap contracts designated as cash flow hedge | 4 |  |  | 3 |  |  |  |  |  |  | Interest expense
Total | $ | 1 |  |  | $ | — |  |  |  |  |  |  |
As of June 28, 2024, we estimate that $12 million of net deferred gains related to our interest rate hedges will be recognized in earnings over the next 12 months.

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