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DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended
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Sep. 27, 2025
DERIVATIVE FINANCIAL INSTRUMENTS |
DERIVATIVE FINANCIAL INSTRUMENTS | (7) DERIVATIVE FINANCIAL INSTRUMENTS The Company manages risks related to interest rates, commodity prices, and foreign currency, particularly those arising from foreign currency denominated transactions and investments in foreign subsidiaries. To address these risks, the Company may use derivative financial instruments. Depending on their classification, some derivatives are marked to market and recorded in the Company’s Condensed Consolidated Statements of Earnings, while others are accounted for as fair value, cash flow, or net investment hedges. Derivative financial instruments inherently carry credit and market risks, which the Company mitigates by monitoring exposure limits and transacting with recognized, stable multinational banks as counterparties. Gains or losses from net investment hedge activities remain in AOCI until the related subsidiaries are sold or substantially liquidated. The fair value of derivative instruments as of September 27, 2025 and December 28, 2024 was as follows:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Condensed Consolidated | ​ | September 27, | ​ | December 28,
Derivatives designated as hedging instruments: |  | Balance Sheets location | ​ | 2025 | ​ | 2024
Commodity contracts | ​ | Prepaid expenses and other current assets | ​ | $ | 1,485 | ​ | $ | 617
Commodity contracts | ​ | Other accrued expenses | ​ | ​ | (98) | ​ | ​ | (371)
Cross-currency swap contracts |  | Prepaid expenses and other current assets | ​ | ​ | 651 |  | ​ | 1,074
Cross-currency swap contracts |  | Other accrued expenses | ​ | ​ | (7,118) |  | ​ | —
​ | ​ | ​ | ​ | $ | (5,080) | ​ | $ | 1,320
​ Gains (losses) on derivatives recognized in the Condensed Consolidated Statements of Earnings for the thirteen and thirty-nine weeks ended September 27, 2025 and September 28, 2024 were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Condensed Consolidated | ​ | Thirteen weeks ended | ​ | Thirty-nine weeks ended
Derivatives designated | ​ | Statements of | ​ | September 27, | ​ | September 28, | ​ | September 27, | ​ | September 28,
as hedging instruments: | ​ | Earnings location | ​ | 2025 |  | 2024 |  | 2025 |  | 2024
Commodity contracts | ​ | Product cost of sales | ​ | $ | 632 | ​ | $ | (1,552) | ​ | $ | 236 | ​ | $ | (993)
Interest rate hedge amortization | ​ | Interest expense | ​ | ​ | (16) |  | ​ | (16) | ​ | ​ | (48) |  | ​ | (48)
Cross-currency swap contracts | ​ | Interest expense | ​ | ​ | 444 |  | ​ | 248 | ​ | ​ | 1,017 |  | ​ | 934
​ | ​ | ​ | ​ | $ | 1,060 | ​ | $ | (1,320) | ​ | $ | 1,205 | ​ | $ | (107)
​ Cash Flow Hedges The Company enters into commodity forward, swap, and option contracts to hedge variability in cash flows related to future purchases. Gains (losses) realized upon settlement are recorded in “Product cost of sales” in the Condensed Consolidated Statements of Earnings in the period in which the hedged items are consumed. As of September 27, 2025, the details of these contracts were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Notional | ​ | Total | ​ | ​
Commodity Type | ​ | Amount | ​ | Purchase Quantity | ​ | Maturity Dates
Hot-rolled coil steel | ​ | $ | 11,055 | ​ | 13,250 short tons |  | September 2025 to December 2025
Natural gas | ​ | ​ | 787 | ​ | 205,000 MMBtu | ​ | October 2025 to December 2026
Ultra-low-sulfur diesel fuel | ​ | ​ | 10,490 | ​ | 4,788,000 gallons | ​ | September 2025 to June 2027
Zinc | ​ | ​ | 7,791 | ​ | 2,880 metric tons | ​ | January 2026 to December 2027
​ Net Investment Hedges To manage foreign currency risk associated with its foreign currency investments and reduce interest expenses, the Company uses fixed-for-fixed cross-currency swaps (“CCS”). These swaps convert U.S. dollar-denominated principal and interest payments on a portion of its 5.00% senior unsecured notes due in 2044 into foreign-currency‑denominated payments. Interest payments are exchanged biannually on April 1 and October 1. The Company designated the full notional amounts of its CCS as net investment hedges for certain subsidiaries under the spot method. Changes in fair value of the CCS attributable to spot exchange rates are recorded as cumulative foreign currency translation within AOCI, while net interest receipts reduce interest expense over the life of the CCS. Key terms as of September 27, 2025 were as follows:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Notional | ​ | ​ | ​ | Swapped | ​ | Settlement
Currency | ​ | Amount | ​ | Termination Date | ​ | Interest Rate | ​ | Amount
Canadian dollar | ​ | $ | 40,000 | ​ | October 1, 2028 |  | 4.0900% | ​ | C$ | 54,776
Chinese yuan | ​ | $ | 30,000 | ​ | October 1, 2032 | ​ | 3.1125% | ​ | ¥ | 215,640
Euro | ​ | $ | 80,000 | ​ | April 1, 2029 |  | 3.4610% | ​ | € | 74,509
In the first quarter of fiscal 2024, the Company early settled a euro net investment hedge entered in fiscal 2019, receiving proceeds of $2,711. These proceeds will remain in AOCI until the related subsidiaries are sold or substantially liquidated.

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