XML 23 R14.htm IDEA: XBRL DOCUMENT
v3.22.2.2

DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended
--- | ---
Sep. 24, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE FINANCIAL INSTRUMENTS | (6) 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. Any gains or losses from net investment hedge activities remain in accumulated other comprehensive income (“AOCI”) until either the sale or substantially complete liquidation of the related subsidiaries. Fair value of derivative instruments at September 24, 2022 and December 25, 2021 are as follows:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | September 24, | ​ | December 25,
Derivatives designated as hedging instruments: |  | Balance sheet location | ​ | 2022 | ​ | 2021
Commodity forward contracts | ​ | Accrued expenses | ​ | $ | (5,938) | ​ | $ | (5,802)
Foreign currency forward contracts |  | Prepaid expenses and other assets | ​ | ​ | 10 |  | ​ | 149
Foreign currency forward contracts |  | Accrued expenses | ​ | ​ | (946) |  | ​ | (118)
Cross currency swap contracts |  | Prepaid expenses and other assets | ​ | ​ | 15,664 |  | ​ | 1,764
Cross currency swap contracts |  | Accrued expenses | ​ | ​ | (100) |  | ​ | —
​ | ​ | ​ | ​ | $ | 8,690 | ​ | $ | (4,007)
​ Gains (losses) on derivatives recognized in the condensed consolidated statements of earnings for the thirteen and thirty-nine weeks ended September 24, 2022 and September 25, 2021 are as follows:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ | Thirteen weeks ended | ​ | Thirty-nine weeks ended
​ | ​ | Statements of earnings | ​ | September 24, | ​ | September 25, | ​ | September 24, | ​ | September 25,
​ | ​ | location | ​ | 2022 |  | 2021 |  | 2022 |  | 2021
Commodity forward contracts | ​ | Product cost of sales | ​ | $ | (1,545) | ​ | $ | 9,870 | ​ | $ | (1,047) | ​ | $ | 10,140
Foreign currency forward contracts | ​ | Other income | ​ | ​ | (94) |  | ​ | 187 | ​ | ​ | (177) |  | ​ | 123
Interest rate hedge amortization | ​ | Interest expense | ​ | ​ | (16) |  | ​ | (16) | ​ | ​ | (48) |  | ​ | (48)
Cross currency swap contracts | ​ | Interest expense | ​ | ​ | 793 |  | ​ | 691 | ​ | ​ | 2,300 |  | ​ | 2,060
​ | ​ | ​ | ​ | $ | (862) | ​ | $ | 10,732 | ​ | $ | 1,028 | ​ | $ | 12,275
​ Cash Flow Hedges During 2021, the Company entered into steel hot rolled coil (“HRC”) commodity forward contracts that qualify as a cash flow hedge of the variability in cash flows attributable to future steel purchases. The forward contracts had a notional amount of $93,498 for the total purchase of 86,100 short tons. During the second quarter of 2022, the Company entered into additional steel HRC forward contracts that qualify as a cash flow hedge of the variability in cash flows attributable to future steel purchases. The forward contracts had a notional amount of $14,010 for the total purchase of 15,000 short tons. As of September 24, 2022, the forward contracts had a notional amount of $27,290 for the total purchase of 28,200 short tons from October 2022 to March 2023. The gain (loss) realized upon settlement will be recorded in product cost of sales in the condensed consolidated statements of earnings over average inventory turns. During the third quarter of 2022, the Company entered into natural gas commodity forward contracts that qualify as a cash flow hedge of the variability in cash flows attributable to future natural gas purchases. The forward contracts had a notional amount of $5,211 for the total purchase of 770,000 mmBtu from October 2022 to October 2023. The gain (loss) realized upon settlement will be recorded in product cost of sales in the condensed consolidated statements of earnings in the period consumed. During the third quarter of 2022, a subsidiary with a Euro functional currency entered into a foreign currency forward contract to mitigate foreign currency risk related to a large customer order denominated in U.S. dollars. The forward contract, which qualifies as a fair value hedge, matures in February 2023 and has a notional amount to sell $1,800 in exchange for a stated amount of Euros. Net Investment Hedges In 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. The Company designated the initial 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 AOCI. Net interest receipts will be recorded as a reduction of interest expense over the life of the CCS. During the third quarter of 2022, the Company partially settled the DKK CCS and received proceeds of $2,243, which will remain in AOCI until either the sale or substantially complete liquidation of the related subsidiaries. Key terms of the remaining two CCS are as follows:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Notional | ​ | ​ | ​ | ​ | Swapped | ​ | Set Settlement
Currency | ​ | Amount | ​ | Termination Date | ​ | Interest Rate | ​ | Amount
Danish Krone | ​ | $ | 20,000 | ​ | ​ | April 1, 2024 |  | 2.68% | ​ | ​ | DKK 133,450
Euro | ​ | $ | 80,000 | ​ | ​ | April 1, 2024 |  | 2.825% | ​ | ​ | € 71,550
​

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration