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DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended
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Sep. 26, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS The Company manages interest rate risk, commodity price risk, and foreign currency risk related to foreign currency denominated transactions and investments in foreign subsidiaries. Depending on the circumstances, the Company may manage these risks by utilizing derivative financial instruments. Some derivative financial instruments are marked to market and recorded in the Company's consolidated statements of earnings, while others may be accounted for as fair value, cash flow, or net investment hedges. Derivative financial instruments have credit and market risk. The Company manages these risks of derivative instruments by monitoring limits as to the types and degree of risk that can be taken, and by entering into transactions with counterparties who are recognized, stable multinational banks. Fair value of derivative instruments at September 26, 2020 and December 28, 2019 are as follows:
Derivatives designated as hedging instruments: | Balance sheet location |  | September 26, 2020 |  | December 28, 2019 |  |
Foreign currency forward contracts | Prepaid expenses and other assets |  | $ | 1,021 |  |  | $ | 2,119 |  |  |
Cross currency swap contracts | Prepaid expenses and other assets |  | 2,527 |  |  | 1,128 |  |  |
|  |  | $ | 3,548 |  |  | $ | 3,247 |  |  |
Gains (losses) on derivatives recognized in the condensed consolidated statements of earnings for the thirteen and thirty-nine weeks ended September 26, 2020 and September 28, 2019 are as follows:
|  |  | Thirteen weeks ended |  | Thirty-nine weeks ended |  |
| Statements of earnings location |  | September 26, 2020 |  | September 28, 2019 |  | September 26, 2020 |  | September 28, 2019 |  |
Commodity forward contracts | Product cost of sales |  | $ | — |  |  | $ | (1,329) |  |  | $ | — |  |  | $ | (1,425) |  |  |
Foreign currency forward contracts | Other income |  | 116 |  |  | 123 |  |  | 146 |  |  | 827 |  |  |
Foreign currency forward contracts | Product sales |  | 1,017 |  |  | — |  |  | 1,169 |  |  | — |  |  |
Interest rate hedge amortization | Interest expense |  | (16) |  |  | (16) |  |  | (48) |  |  | (48) |  |  |
Cross currency swap contracts | Interest expense |  | 649 |  |  | 769 |  |  | 2,111 |  |  | 2,096 |  |  |
|  |  | $ | 1,766 |  |  | $ | (453) |  |  | $ | 3,378 |  |  | $ | 1,450 |  |  |
Cash Flow Hedges In 2019, the Company entered into steel hot rolled coil (HRC) forward contracts that qualified as a cash flow hedge of the variability in cash flows attributable to future steel purchases. The forward contracts had a notional amount of $12,128 for the purchase of 3,500 short tons for each month from May 2019 to September 2019. The gain/(loss) realized upon settlement is recorded in product cost of sales in the condensed consolidated statements of earnings over average inventory turns. The forward contracts were closed out in the third quarter of 2019. In May 2020, a Brazilian subsidiary with a Real functional currency entered into foreign currency forward contracts to mitigate foreign currency risk related to a customer order with components purchased in Euros. The forward contract, which qualifies as a cash flow hedge, has a final maturity date of December 2020 and a notional amount to buy 4,500 euros in exchange for a stated amount of Brazilian Real. In March 2020, a subsidiary with a Euro functional currency entered into foreign currency forward contracts to mitigate foreign currency risk related to a large customer order denominated in U.S. dollars. The forward contract, which qualifies as a cash flow hedge, has a final maturity date of June 2021 and a notional amount to sell $27,500 in exchange for a stated amount of Euros. Net Investment Hedges In the second quarter of 2020, the Company early settled their Australian dollar denominated forward currency contracts and received proceeds of $11,983. In the second quarter of 2019, all existing net investment hedges were early settled and the Company received proceeds of $11,184. The proceeds/gain from these settlements will remain in Other Comprehensive Income (OCI) until either the sale or substantially complete liquidation of the related subsidiaries. In the second quarter of 2019, the Company entered into two fixed-for-fixed cross currency swaps (“CCS”), swapping U.S. dollar principal and interest payments on a portion of its 5.00% senior unsecured notes due 2044 for Danish krone (DKK) and Euro denominated payments. The CCS were entered into in order to mitigate foreign currency risk on the Company's Euro and DKK investments and to reduce interest expense. Interest is exchanged twice per year on April 1 and October 1. Key terms of the two CCS are as follows:
Currency | Notional Amount | Termination Date | Swapped Interest Rate | Set Settlement Amount
Danish Krone (DKK) | $ | 50,000 |  | April 1, 2024 | 2.68% | DKK 333,625
Euro | $ | 80,000 |  | April 1, 2024 | 2.825% | €71,550
The Company designated the full notional amount of the two CCS ($130,000) as a hedge of the net investment in certain Danish and European subsidiaries under the spot method, with all changes in the fair value of the CCS that are included in the assessment of effectiveness (changes due to spot foreign exchange rates) are recorded as cumulative foreign currency translation within OCI, and will remain in OCI until either the sale or substantially complete liquidation of the related subsidiaries. Net interest receipts will be recorded as a reduction of interest expense over the life of the CCS.

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- References No definition available. + Details
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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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