The carrying values of the Notes vary from their fair values. The fair values of the Notes were determined by reference to the quoted market prices of these securities (Level 2 input based on the GAAP fair value hierarchy). The carrying value of the Company’s Term Loan Facility approximates its fair value (Level 3 input based on the GAAP fair value hierarchy).

The estimated fair value, as well as the carrying value, of the Company's debt instruments are shown below (in millions):

The Company has on deposit, cash that is legally restricted as to use or withdrawal.

A reconciliation of cash, cash equivalents and restricted cash reported on the accompanying condensed consolidated balance sheets to cash, cash equivalents and restricted cash reported on the accompanying condensed consolidated statements of cash flows is shown below (in millions):

	October 3, 2020		September 28, 2019
Balance sheet - cash and cash equivalents	$	1,250.4	$	1,300.9
Restricted cash included in other current assets		5.1		15.6
Restricted cash included in other long-term assets		2.7		6.8
Statement of cash flows - cash, cash equivalents and restricted cash	$	1,258.2	$	1,323.3

On January 1, 2020, the Company adopted Accounting Standards Update ("ASU") 2016-13, "Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments," using a modified retrospective approach. The standard amends several aspects of the measurement of credit losses related to certain financial instruments, including the replacement of the existing incurred credit loss model and other models with the current expected credit losses ("CECL") model. The cumulative effect of adoption resulted in an increase of $0.8 million in the allowance for credit loss and a corresponding decrease in retained earnings as of January 1, 2020.

The Company’s allowance for credit losses on financial assets measured at amortized cost, primarily accounts receivable, reflects management’s estimate of credit losses over the remaining expected life of such assets, measured primarily using historical experience, as well as current conditions and forecasts that affect the collectability of the reported amount. Expected credit losses for newly recognized financial assets, as well as changes to expected credit losses during the period, are recognized in earnings. The Company also considers geographic and segment specific risk factors in the development of expected credit losses. As of October 3, 2020 and December 31, 2019, accounts receivable are reflected net of reserves of $34.4 million and $36.0 million, respectively. Changes in expected credit losses were not significant in the first nine months of 2020.

During the second quarter of 2020, the Company entered into an uncommitted factoring arrangement which provides for aggregate purchases of specified customer accounts in North America. The factoring arrangement results in true sales of the factored receivables, which are excluded from amounts reported in the consolidated balance sheets when the receivables are factored in accordance with ASC 860, "Transfers and Servicing." There were no receivables factored during the second or third quarters of 2020. The Company cannot provide any assurances that the factoring arrangement will be available or utilized in the future.

Marketable equity securities, which the Company accounts for under the fair value option, are included in the accompanying condensed consolidated balance sheets as shown below (in millions):

Unrealized gains and losses arising from changes in the fair value of the marketable equity securities are recognized in the condensed consolidated statements of comprehensive income (loss) as a component of other expense, net. The fair value of the marketable equity securities is determined by reference to quoted market prices in active markets (Level 1 input based on the GAAP fair value hierarchy).

As of October 3, 2020 and December 31, 2019, investments in equity securities without readily determinable fair values of $15.2 million are included in other long-term assets in the accompanying condensed consolidated balance sheets. Such investments are valued at cost, less any impairment, and adjusted for changes resulting from observable, orderly transactions for identical or similar securities.

The Company has used derivative financial instruments, including forwards, futures, options, swaps and other derivative contracts to reduce the effects of fluctuations in foreign exchange rates and interest rates and the resulting variability of the Company’s operating results. The Company is not a party to leveraged derivatives. The Company’s derivative financial instruments are subject to master netting arrangements that provide for the net settlement of contracts, by counterparty, in the event of default or termination. On the date that a derivative contract for a hedging instrument is entered into, the Company designates the derivative as either (1) a hedge of the exposure to changes in the fair value of a recognized asset or liability or of an unrecognized firm commitment (a fair value hedge), (2) a hedge of the exposure of a forecasted transaction or of the variability in the cash flows of a recognized asset or liability (a cash flow hedge), (3) a hedge of a net investment in a foreign operation (a net investment hedge) or (4) a contract not designated as a hedging instrument.

For a fair value hedge, the change in the fair value of the derivative is recorded in earnings and reflected in the condensed consolidated statements of comprehensive income (loss) on the same line as the gain or loss on the hedged item attributable to the hedged risk. For a cash flow hedge, the change in the fair value of the derivative is recorded in accumulated other comprehensive loss in the condensed consolidated balance sheets. When the underlying hedged transaction is realized, the gain or loss included in accumulated other comprehensive loss is recorded in earnings and reflected in the condensed consolidated statements of comprehensive income (loss) on the same line as the gain or loss on the hedged item attributable to the hedged risk. For a net investment hedge, the change in the fair value of the derivative is recorded in cumulative translation adjustment, which is a component of accumulated other comprehensive loss in the condensed consolidated balance sheets. When the related currency translation adjustment is required to be reclassified, usually upon sale or liquidation of the investment, the gain or loss included in accumulated other comprehensive loss is recorded in

earnings. Changes in the fair value of contracts not designated as hedging instruments are recorded in earnings and reflected in the condensed consolidated statements of comprehensive income (loss) as other expense, net. Cash flows attributable to derivatives used to manage foreign currency risks are classified on the same line as the hedged item attributable to the hedged risk in the condensed consolidated statements of cash flows. Upon settlement, cash flows attributable to derivatives designated as net investment hedges are classified as investing activities in the consolidated statements of cash flows. Cash flows attributable to forward starting interest rate swaps are classified as financing activities in the condensed consolidated statements of cash flows.

The Company formally documents its hedge relationships, including the identification of the hedge instruments and the related hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction. Derivatives are recorded at fair value in other current and long-term assets and other current and long-term liabilities in the consolidated balance sheet. The Company also formally assesses whether a derivative used in a hedge transaction is highly effective in offsetting changes in either the fair value or the cash flows of the hedged item. When it is determined that a hedged transaction is no longer probable to occur, the Company discontinues hedge accounting.

The Company uses forwards, swaps and other derivative contracts to reduce the effects of fluctuations in foreign exchange rates on known foreign currency exposures. Gains and losses on the derivative instruments are intended to offset gains and losses on the hedged transaction in an effort to reduce exposure to fluctuations in foreign exchange rates. The principal currencies hedged by the Company include the Mexican peso, various European currencies, the Thai baht, the Philippine peso, the Japanese yen and the Chinese renminbi.

Foreign currency derivative contracts not designated as hedging instruments consist principally of hedges of cash transactions, intercompany loans and certain other balance sheet exposures.

The Company uses cross-currency interest rate swaps, which are designated as net investment hedges of the foreign currency rate exposure of its investment in certain Euro-denominated subsidiaries. In the first nine months of 2020, interest expense in the accompanying consolidated statement of comprehensive income (loss) was offset by $4.9 million related to contra interest expense on these net investment hedges.

The notional amount, estimated aggregate fair value and related balance sheet classification of the Company's foreign currency derivative contracts and net investment hedges are shown below (in millions, except for maturities):

	October 3, 2020			December 31, 2019
Fair value of foreign currency contracts designated as cash flow hedges:
Other current assets	$	15.0		$	44.0
Other long-term assets		5.8			7.3
Other current liabilities		(21.6	)		(4.5	)
Other long-term liabilities		(3.7	)		(0.2	)
		(4.5	)		46.6
Notional amount	$	1,225.4		$	1,465.8
Outstanding maturities in months, not to exceed		24			24
Fair value of derivatives designated as net investment hedges:
Other long-term liabilities	$	(7.9	)	$	(4.4	)
Notional amount	$	300.0		$	300.0
Outstanding maturities in months, not to exceed		48			57
Fair value of foreign currency contracts not designated as hedging instruments:
Other current assets	$	7.2		$	6.9
Other current liabilities		(5.9	)		(3.2	)
		1.3			3.7
Notional amount	$	1,728.6		$	697.0
Outstanding maturities in months, not to exceed		15			12
Total fair value	$	(11.1	)	$	45.9
Total notional amount	$	3,254.0		$	2,462.8

Pretax amounts related to foreign currency, net investment hedge and interest rate swap contracts that were recognized in and reclassified from accumulated other comprehensive loss are shown below (in millions):

	Three Months Ended						Nine Months Ended
	October 3, 2020			September 28, 2019			October 3, 2020			September 28, 2019
Gains (losses) recognized in accumulated other comprehensive loss:
Foreign currency contracts	$	21.1		$	(5.0	)	$	(60.3	)	$	37.4
Net investment hedge contracts		(13.9	)		1.7			(3.5	)		1.7
Interest rate swap contracts		-			-			-			(9.5	)
		7.2			(3.3	)		(63.8	)		29.6
(Gains) losses reclassified from accumulated other comprehensive loss to:
Net sales		(0.2	)		1.3			(0.7	)		2.3
Cost of sales		3.5			(12.6	)		10.0			(35.5	)
Interest expense		0.6			0.6			1.8			0.9
Other expense, net		0.1			-			(0.1	)		-
		4.0			(10.7	)		11.0			(32.3	)
Comprehensive income (loss)	$	11.2		$	(14.0	)	$	(52.8	)	$	(2.7	)

As of October 3, 2020 and December 31, 2019, pretax net gains (losses) of ($33.4) million and $19.4 million, respectively, related to the Company’s derivative instruments and hedging activities were recorded in accumulated other comprehensive loss.

During the next twelve month period, net losses expected to be reclassified into earnings are shown below (in millions):

Such losses will be reclassified at the time that the underlying hedged transactions are realized.

GAAP provides that fair value is an exit price, defined as a market-based measurement that represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value measurements are based on one or more of the following three valuation techniques:

Further, GAAP prioritizes the inputs and assumptions used in the valuation techniques described above into a three-tier fair value hierarchy as follows:

The Company discloses fair value measurements and the related valuation techniques and fair value hierarchy level for its assets and liabilities that are measured or disclosed at fair value.

Fair value measurements and the related valuation techniques and fair value hierarchy level for the Company’s assets and liabilities measured at fair value on a recurring basis as of October 3, 2020 and December 31, 2019, are shown below (in millions):

	October 3, 2020
	Frequency	Asset (Liability)			Valuation Technique	Level 1		Level 2			Level 3
Foreign currency contracts, net	Recurring	$	(3.2	)	Market/ Income	$	-	$	(3.2	)	$	-
Net investment hedges	Recurring	$	(7.9	)	Market/ Income	$	-	$	(7.9	)	$	-
Marketable equity securities	Recurring	$	50.8		Market	$	50.8	$	-		$	-

	December 31, 2019
	Frequency	Asset (Liability)			Valuation Technique	Level 1		Level 2			Level 3
Foreign currency contracts, net	Recurring	$	50.3		Market/ Income	$	-	$	50.3		$	-
Net investment hedges	Recurring	$	(4.4	)	Market/ Income	$	-	$	(4.4	)	$	-
Marketable equity securities	Recurring	$	59.2		Market	$	59.2	$	-		$	-

The Company determines the fair value of its derivative contracts using quoted market prices to calculate the forward values and then discounts such forward values to the present value. The discount rates used are based on quoted bank deposit or swap interest rates. If a derivative contract is in a net liability position, the Company adjusts these discount rates, if required, by an estimate of the credit spread that would be applied by market participants purchasing these contracts from the Company’s counterparties. If an estimate of the credit spread is required, the Company uses significant assumptions and factors other than quoted market rates, which would result in the classification of its derivative liabilities within Level 3 of the fair value hierarchy. As of October 3, 2020 and December 31, 2019, there were no derivative contracts that were classified within Level 3 of the fair value hierarchy. In addition, there were no transfers in or out of Level 3 of the fair value hierarchy in the first nine months of 2020.

In the third quarter of 2020, the Company revalued certain pension benefit plan assets in conjunction with a settlement (Note 10, "Pension and Other Postretirement Benefit Plans"). As of October 3, 2020, the fair value of these assets was $274.4 million, of which $60.3 million is classified within Level 1 of the fair value hierarchy, $184.2 million is classified within Level 2 of the fair value hierarchy and $29.9 million is valued at net asset value.

The Company measures certain assets and liabilities at fair value on a non-recurring basis, which are not included in the table above. As these non-recurring fair value measurements are generally determined using unobservable inputs, these fair value measurements are classified within Level 3 of the fair value hierarchy.

In the first quarter of 2020, the Company completed a quantitative goodwill impairment assessment for one of its reporting units. The fair value estimate of the reporting unit was based on a third-party valuation and management's estimates, using a combination of the discounted cash flow method and guideline public company method.

As of October 3, 2020, there were no additional significant assets or liabilities measured at fair value on a non-recurring basis.