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Derivative Financial Instruments | 9 Months Ended
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Sep. 29, 2019
Derivative Instruments And Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | 14.Derivative Financial Instruments The Company is subject to the risk of increased costs arising from adverse changes in certain commodity prices. In the normal course of business, the Company manages these risks through a variety of strategies, including the use of derivative instruments. The Company does not use derivative instruments for trading or speculative purposes. All derivative instruments are recorded at fair value as either assets or liabilities in the Company’s condensed consolidated balance sheets. These derivative instruments are not designated as hedging instruments under GAAP and are used as “economic hedges” to manage certain commodity price risk. Derivative instruments held are marked to market on a monthly basis and recognized in earnings consistent with the expense classification of the underlying hedged item. Settlements of derivative agreements are included in cash flows from operating activities on the Company’s condensed consolidated statements of cash flows. The Company uses several different financial institutions for commodity derivative instruments to minimize the concentration of credit risk. While the Company would be exposed to credit loss in the event of nonperformance by these counterparties, the Company does not anticipate nonperformance by these parties. The following table summarizes pre-tax changes in the fair value of the Company’s commodity derivative financial instruments and the classification of such changes in the condensed consolidated statements of operations.
|  |  |  | Third Quarter |  |  | First Nine Months |
(in thousands) |  | Classification of Gain (Loss) |  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Commodity hedges |  | Cost of sales |  | $ | 487 |  |  | $ | (260 | ) |  | $ | (482 | ) |  | $ | (2,776 | )
Commodity hedges |  | Selling, delivery and administrative expenses |  |  | (74 | ) |  |  | (209 | ) |  |  | 2,575 |  |  |  | (363 | )
Total gain (loss) |  |  |  | $ | 413 |  |  | $ | (469 | ) |  | $ | 2,093 |  |  | $ | (3,139 | )
The following table summarizes the fair values and classification in the condensed consolidated balance sheets of derivative instruments held by the Company:
(in thousands) |  | Balance Sheet Classification |  | September 29, 2019 |  |  | December 30, 2018 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Commodity hedges at fair market value |  | Other accrued liabilities |  | $ | 7,240 |  |  | $ | 10,305 |
Commodity hedges at fair market value |  | Other liabilities |  |  | 972 |  |  |  | - |
Total liabilities |  |  |  | $ | 8,212 |  |  | $ | 10,305 |
The Company has master agreements with the counterparties to its derivative financial agreements that provide for net settlement of derivative transactions. Accordingly, the net amounts of derivative assets are recognized in either prepaid expenses and other current assets or other assets in the Company’s condensed consolidated balance sheets and the net amounts of derivative liabilities are recognized in other accrued liabilities or other liabilities in the condensed consolidated balance sheets. The following table summarizes the Company’s gross derivative assets and gross derivative liabilities in the condensed consolidated balance sheets:
(in thousands) |  | September 29, 2019 |  |  | December 30, 2018 |
Gross derivative assets |  | $ | 9,333 |  |  | $ | 28,305 |
Gross derivative liabilities |  |  | 17,545 |  |  |  | 38,610 |
The following table summarizes the Company’s outstanding commodity derivative agreements:
(in thousands) |  | September 29, 2019 |  |  | December 30, 2018 |
Notional amount of outstanding commodity derivative agreements |  | $ | 138,989 |  |  | $ | 168,388 |
Latest maturity date of outstanding commodity derivative agreements |  | December 2020 |  |  | December 2019 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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