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Derivative Instruments and Hedging Activities | 3 Months Ended
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Apr. 01, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities Disclosure | DERIVATIVE INSTRUMENTS The Company is exposed to various market risks, including risks associated with interest rates and foreign currency exchange rates. One objective of the Company's risk management program is to mitigate these risks using derivative instruments. Cash Flow Hedges - Interest Rate Swap Contract In July 2022, the Company entered into a floating-to-fixed swap agreement on its variable rate debt under the Term Loan Facility. The interest rate swap was designated specifically to the Term Loan Facility and qualifies as a cash flow hedge. The notional amount is scheduled to decrease quarterly and will expire on December 30, 2025. As cash flow hedges, unrealized gains are recognized as assets and unrealized losses are recognized as liabilities. Unrealized gains and losses are designated as effective or ineffective based on a comparison of the changes in fair value of the interest rate swaps and changes in fair value of the underlying exposures being hedged. The effective portion is recorded as a component of accumulated other comprehensive income (loss) and will be reflected in earnings during the period the hedged transaction effects earnings, while the ineffective portion is recorded as a component of Interest expense. Foreign Currency Contracts Not Designated as Hedges The Company enters into foreign exchange contracts in an effort to mitigate the risks associated with currency fluctuations on certain foreign currency balance sheet exposures. These foreign exchange contracts do not qualify for hedge accounting. The Company recognizes the change in fair value of its foreign currency forward contracts in the condensed consolidated statement of operations. The notional amounts of our derivative instruments are as follows:
(In thousands) | April 1, 2023 |  | December 31, 2022
Derivatives designated as hedging instruments: |  |  |
Interest rate swap contract - cash flow hedge | $ | 1,950,000 |  |  | $ | 1,950,000 |
Derivatives not designated as hedging instruments: |  |  |
Foreign exchange contracts to purchase U.S. dollars | $ | 4,400 |  |  | $ | 3,995 |
Foreign exchange contracts to sell U.S. dollars | 20,055 |  |  | 26,225 |
The fair values of our derivative instruments included in the condensed consolidated balance sheets are as follows:
(In thousands) | Derivative Assets |  | Derivative Liabilities
Condensed Consolidated Balance Sheet Location | April 1, 2023 |  | December 31, 2022 |  | April 1, 2023 |  | December 31, 2022
Derivatives designated as hedging instruments - Interest rate swap contract -cash flow hedge |  |  |  |  |  |  |
Other current assets | $ | 28,213 |  |  | $ | 32,481 |  |  | $ | — |  |  | $ | — |
Other assets - long-term | 5,518 |  |  | 14,108 |  |  | — |  |  | — |
Derivatives not designated as hedging instruments -Foreign exchange contracts |  |  |  |  |  |  |
Other current assets | $ | 234 |  |  | 726 |  |  | $ | — |  |  | $ | — |
Other accrued liabilities | — |  |  | — |  |  | 71 |  |  | 193 |
The following table summarizes the effects of our derivative instruments on our condensed consolidated statements of operations:
|  | (Gain) Loss Recognized in Condensed Consolidated Statements of Income |  |  |  |
(In thousands) | Condensed Consolidated Statements of Operations Location | Three Months Ended |  |
Derivatives designated as hedging instruments: |  | April 1, 2023 |  | April 2, 2022 |  |  |  |
Interest rate swap contract-cash flow hedge | Interest expense, net | $ | (7,913) |  |  | $ | — |  |  |  |  |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |
Foreign exchange contracts | Other expense, net | $ | 129 |  |  | $ | — |  |  |  |  |
The following table summarizes the effects of our derivative instruments on Accumulated Other Comprehensive Income:
Loss recognized in Other Comprehensive Income |  |  |  |
(In thousands) | Three Months Ended |  |  |  |
Derivatives designated as hedging instruments: | April 1, 2023 |  | April 2, 2022 |  |  |  |
Interest rate swap contract - Cash flow hedge | $ | (9,955) |  |  | $ | — |  |  |  |  |
We expect approximately $28.2 million to be reclassified from accumulated other comprehensive income into interest expense, net during the next twelve months related to our interest rate swap based on projected rates of the SOFR forward curve as of April 1, 2023.

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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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