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FINANCIAL INSTRUMENTS | 6 Months Ended
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Mar. 29, 2025
Financial Instruments [Abstract] |
Derivatives and Fair Value [Text Block] | Financial Instruments Reconciliation of cash and cash equivalents to condensed consolidated statements of cash flows is as follows.
| As of
| March 29, 2025 |  | September 28, 2024
| (In thousands)
Cash and cash equivalents | $ | 647,141 |  |  | $ | 625,860 |
Restricted cash equivalents (1) | 39,579 |  |  | — |
Total cash, cash equivalents and restricted cash equivalents | $ | 686,720 |  |  | $ | 625,860 |
(1) Represents money market funds related to deferred compensation plan. Due to the restrictions on the distributions of these funds, the amount is considered restricted and recorded in prepaid expenses and other current assets on the condensed consolidated balance sheets. Fair Value Measurements Fair Value of Financial Instruments The fair values of cash equivalents (represents 33% of cash and cash equivalents), restricted cash equivalents, accounts receivable, accounts payable and short-term debt approximate carrying values due to the short-term duration of these instruments. Additionally, the fair value of variable rate long-term debt approximates carrying value as of March 29, 2025. The Company’s cash equivalents are classified as Level 1 in the fair value hierarchy. Assets and Liabilities Measured at Fair Value on a Recurring Basis Defined benefit plan assets were $18 million as of September 28, 2024 and are measured at fair value using Level 1 input in the fourth quarter of each year only. Deferred compensation plan assets and liabilities were $50 million and $47 million, respectively as of March 29, 2025 and are both measured using Level 1 inputs. Deferred compensation plan assets and liabilities were $47 million as of September 28, 2024. The Company also measures fair value of foreign exchange contracts, interest rate swaps and total return swap on a recurring basis. Interest rate swaps are valued based on a discounted cash flow analysis that incorporates observable market inputs such as interest rate yield curves and credit spreads. The total return swap contract is measured at fair value using quoted prices of the underlying investments. For currency contracts inputs include foreign currency spot and forward rates and interest rates at commonly quoted intervals. Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis Other non-financial assets, such as goodwill and other long-lived assets, are measured at fair value as of the date such assets are acquired or in the period an impairment is recorded. Offsetting Derivative Assets and Liabilities The Company has entered into master netting arrangements with each of its derivative counterparties that allow net settlement of derivative assets and liabilities under certain conditions, such as multiple transactions with the same currency maturing on the same date. The Company presents its derivative assets and derivative liabilities on a gross basis on the condensed consolidated balance sheets. The following table presents the location and fair value of derivative financial instruments included in our condensed consolidated balance sheets as of March 29, 2025.
| Fair Value Measurements Using Level 1, Level 2, or Level 3 |  | Prepaid Expenses and Other Current Assets | Other Assets |  | Accrued Liabilities | Other Liabilities
|  |  | (In thousands)
Derivatives designated as accounting hedges: foreign currency forward contracts | Level 2 |  | $ | 59 |  | $ | — |  |  | $ | 28 |  | $ | — |
Derivatives not designated as accounting hedges: foreign currency forward contracts | Level 2 |  | $ | 2,088 |  | $ | — |  |  | $ | 3,081 |  | $ | — |
Derivatives designated as accounting hedges: interest rate swap | Level 2 |  | $ | 1,979 |  | $ | 866 |  |  | $ | — |  | $ | — |
Derivative not designated as accounting hedge: total return swap | Level 2 |  | $ | — |  | $ | — |  |  | $ | 2,118 |  | $ | — |
The following table presents the location and fair value of derivative financial instruments included in our condensed consolidated balance sheets as of September 28, 2024.
| Fair Value Measurements Using Level 1, Level 2, or Level 3 |  | Prepaid Expenses and Other Current Assets | Other Assets |  | Accrued Liabilities | Other Liabilities
|  |  | (In thousands)
Derivatives designated as accounting hedges: foreign currency forward contracts | Level 2 |  | $ | 759 |  | $ | — |  |  | $ | 53 |  | $ | — |
Derivatives not designated as accounting hedges: foreign currency forward contracts | Level 2 |  | $ | 3,229 |  | $ | — |  |  | $ | 2,265 |  | $ | — |
Derivatives designated as accounting hedges: interest rate swap | Level 2 |  | $ | 1,518 |  | $ | 21 |  |  | $ | — |  | $ | 1,771 |
Derivative Instruments The Company had the following outstanding derivative contracts that were entered into to hedge foreign currency, interest rate and deferred compensation plan liability exposures:
| As of
| March 29, 2025 |  | September 28, 2024
| (In thousands, except number of contracts)
Foreign Currency Forward Contracts: |  |  |
Derivatives Designated as Accounting Hedges: |  |  |
Notional amount | $ | 122,158 |  |  | $ | 117,015 |
Number of contracts | 48 |  |  | 47 |
Derivatives Not Designated as Accounting Hedges: |  |  |
Notional amount | $ | 412,066 |  |  | $ | 366,425 |
Number of contracts | 39 |  |  | 38 |
Interest Rate Swap: |  |  |
Derivatives Designated as Accounting Hedges: |  |  |
Notional amount | $ | 300,000 |  |  | $ | 300,000 |
Number of contracts | 6 |  | 6
Total Return Swap: |  |  |
Derivatives Not Designated as Accounting Hedges: |  |  |
Notional amount | $ | 46,853 |  |  | $ | — |
Number of contracts | 1 |  | — |
Foreign Currency Forward Contracts The Company is exposed to certain risks related to its ongoing business operations. The primary risk managed by using derivative instruments is foreign currency exchange risk. Forward contracts on various foreign currencies are used to manage foreign currency risk associated with forecasted foreign currency transactions and certain monetary assets and liabilities denominated in non-functional currencies. The Company’s primary foreign currency cash flows are in India, Mexico and China. The Company utilizes foreign currency forward contracts to hedge certain operational (“cash flow”) exposures resulting from changes in foreign currency exchange rates. Such exposures generally result from (1) forecasted non-functional currency sales and (2) forecasted non-functional currency materials, labor, overhead and other expenses. These contracts are designated as cash flow hedges for accounting purposes and are generally one to two months in duration but, by policy, may be up to twelve months in duration. For derivative instruments that are designated and qualify as cash flow hedges, the Company excludes the change in the fair value of the contract related to the changes in the difference between the spot price and the forward price from its assessment of hedge effectiveness and recognizes these amounts, which are primarily related to time value, in earnings over the life of the derivative instrument. Gains or losses on the derivative not caused by changes in time value are recorded in accumulated other comprehensive income (“AOCI”), a component of equity, and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The amount of gain or loss recognized in other comprehensive income on derivative instruments and the amount of gain or loss reclassified from AOCI into income were not material for any period presented herein and are included as components of cost of sales in the condensed consolidated statements of income. The Company enters into short-term foreign currency forward contracts to hedge currency exposures associated with certain monetary assets and liabilities denominated in non-functional currencies. These contracts have maturities of up to two months and are not designated as accounting hedges. Accordingly, these contracts are marked-to-market at the end of each period with unrealized gains and losses recorded in other income (expense), net in the condensed consolidated statements of income. The amount of gains or losses associated with these forward contracts was not material for any period presented herein. From an economic perspective, the objective of the Company’s hedging program is for gains and losses on forward contracts to substantially offset currency gains and losses on the underlying hedged items. In addition to the contracts disclosed in the table above, the Company has numerous contracts that have been closed from an economic and financial accounting perspective and will settle early in the first month of the following quarter. Since these offsetting contracts do not expose the Company to risk of fluctuations in exchange rates, these contracts have been excluded from the above table. Interest Rate Swap The Company enters into forward interest rate swap agreements with independent counterparties to partially hedge the variability in cash flows due to changes in the Secured Overnight Financing Rate benchmark interest rate (“SOFR”) associated with anticipated variable rate borrowings. These interest rate swaps have a maturity date of September 27, 2027 and effectively convert a portion of the Company’s variable interest rate obligations to fixed interest rate obligations. These swaps are accounted for as cash flow hedges under ASC Topic 815, Derivatives and Hedging. The aggregate effective interest rate of these swaps as of March 29, 2025 was approximately 4.7%. Total Return Swap During the second quarter of fiscal 2025, the Company entered into a total return swap contract (“TRS”) to substantially offset changes in the deferred compensation plan liabilities resulting from changes in the value of investment elections made by participants. The Company elected not to designate the TRS as an accounting hedge and recognized the changes in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in cost of sales, and selling, general and administrative expense in the condensed consolidated statements of income.

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- Definition The entire disclosure for derivatives and fair value of assets and liabilities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 820 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/820/tableOfContent + Details
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