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Financial Instruments | 9 Months Ended
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Oct. 02, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments | Financial Instruments The Company operates globally with manufacturing and sales facilities around the world, and therefore, is subject to both financial and market risks. The Company utilizes normal operating and financing activities, along with derivative financial instruments, to minimize these risks. See Note 14 in the Notes to Consolidated Financial Statements in the 2020 Form 10-K for further details regarding the Company's financial instruments and hedging policies. Cross-Currency Swaps. During the second quarter of 2021, the Company entered into cross-currency swaps to hedge Euro currency exposures of the net investment in certain foreign subsidiaries. As of October 2, 2021, the notional value of cross-currency swap contracts outstanding was $200.0 million. The cross-currency swaps were designated as net investment hedges, with the amount of gain or loss associated with the change in fair value of these instruments included within Accumulated other comprehensive loss and recognized upon termination of the respective investment. Commodity Price. The Company uses commodity swaps to hedge anticipated purchases of aluminum. As of October 2, 2021, December 31, 2020 and September 26, 2020, the notional values of commodity swap contracts outstanding were $9.6 million, $10.0 million and $5.2 million, respectively, and the contracts mature through 2022. The amount of gain or loss associated with the change in fair value of these instruments is deferred in Accumulated other comprehensive loss and recognized in Cost of sales in the same period or periods during which the hedged transaction affects earnings. As of October 2, 2021, the Company estimates that during the next 12 months it will reclassify approximately $3.5 million in net gains (based on current prices) from Accumulated other comprehensive loss to Cost of sales. Foreign Currency Derivatives. Forward exchange contracts outstanding as of October 2, 2021, December 31, 2020 and September 26, 2020 had notional contract valu es of $454.1 million, $395.9 million and $293.3 million, respectively. There were no option contracts outstanding as of either October 2, 2021 or December 31, 2020. Option contracts outstanding at September 26, 2020 had a notional contract value of $10.4 million. The forward contracts outstanding as of October 2, 2021 mature through 2022 and mainly relate to the Euro, Australian dollar, Canadian dollar, and Japanese yen. As of October 2, 2021, the Company estimates that during the next 12 months, it will reclassify approximately $4.3 million of net gains (based on current rates) from Accumulated other comprehensive loss to Cost of sales. Interest Rate Derivatives. In the second half of 2019, the Company settled fixed-to-floating interest rate swaps that it had previously executed to convert a portion of its long-term debt from fixed to floating rate debt, resulting in a net deferred gain of $2.5 million included within Debt. The Company will reclassify $0.7 million of net deferred gains from Debt to Interest expense during the next 12 mo nths. There were no outstanding fixed-to-floating interest rate swaps as o f October 2, 2021, December 31, 2020, or September 26, 2020. During 2021, the Company entered into forward-starting interest rate swaps to hedge the interest rate risk associated with anticipated debt issuances. On August 4, 2021, the company settled these interest rate swaps, resulting in a net deferred loss of $1.6 million. As a result, there are no outstanding forward-starting interest rate swaps as of October 2, 2021, December 31, 2020, or September 26, 2020. As of October 2, 2021, December 31, 2020, and September 26, 2020, the Company had $2.6 million, $1.4 million, and $1.5 million, respectively, of net deferred losses associated with previously settled forward-starting interest rate swaps. Forward-starting interest rate swaps are designated as cash flow hedges with gains and losses included within Accumulated other comprehensive loss. As of October 2, 2021, the Company estimates that during the next 12 months, it will reclassify approximately $0.9 million of net losses resulting from settled forward-starting interest rate swaps from Accumulated other comprehensive loss to Interest expense. As of October 2, 2021, December 31, 2020, and September 26, 2020, the fair values of the Company's derivative instruments were:
(in millions) |  | Fair Value
Asset Derivatives |  | Oct 2, 2021 |  | Dec 31, 2020 |  | Sep 26, 2020
Derivatives Designated as Cash Flow Hedges |  |  |  |  |  |
Foreign exchange contracts |  | $ | 7.3 |  |  | $ | 1.3 |  |  | $ | 2.1 |
Commodity contracts |  | 2.8 |  |  | 0.9 |  |  | 0.0 |
Total |  | $ | 10.1 |  |  | $ | 2.2 |  |  | $ | 2.1 |
Derivatives Designated as Net Investment Hedges |  |  |  |  |  |
Cross-currency swaps |  | $ | 10.3 |  |  | $ | — |  |  | $ | — |
Other Hedging Activity |  |  |  |  |  |
Foreign exchange contracts |  | $ | 0.2 |  |  | $ | — |  |  | $ | 0.5 |
Liability Derivatives |  |  |  |  |  |
Derivatives Designated as Cash Flow Hedges |  |  |  |  |  |
Foreign exchange contracts |  | $ | 2.2 |  |  | $ | 11.3 |  |  | $ | 3.2 |
Commodity contracts |  | — |  |  | — |  |  | 0.1 |
Total |  | $ | 2.2 |  |  | $ | 11.3 |  |  | $ | 3.3 |
Other Hedging Activity |  |  |  |  |  |
Foreign exchange contracts |  | $ | — |  |  | $ | 0.7 |  |  | $ | 0.4 |
As of October 2, 2021, December 31, 2020 and September 26, 2020, asset derivatives are included within Prepaid expenses and other and Other long-term assets, and liability derivatives are included within Accrued expenses and Other long-term liabilities in the Condensed Consolidated Balance Sheets. The effect of derivative instruments on the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended October 2, 2021 and September 26, 2020 is as shown in the tables below. The amount of gain (loss) on derivatives recognized in Accumulated other comprehensive loss was as follows:
(in millions) |  | Three Months Ended |  | Nine Months Ended
Derivatives Designated as Cash Flow Hedging Instruments |  | Oct 2, 2021 |  | Sep 26, 2020 |  | Oct 2, 2021 |  | Sep 26, 2020
Interest rate contracts |  | $ | (4.4) |  |  | $ | — |  |  | $ | (1.6) |  |  | $ | — |
Foreign exchange contracts |  | 8.1 |  |  | (3.0) |  |  | 8.5 |  |  | 3.6 |
Commodity contracts |  | 1.3 |  |  | — |  |  | 5.6 |  |  | (0.1) |
Total |  | $ | 5.0 |  |  | $ | (3.0) |  |  | $ | 12.5 |  |  | $ | 3.5 |
Derivatives Designated as Net Investment Hedging Instruments |  |  |  |  |  |  |  |
Cross-currency swaps |  | $ | 4.4 |  |  | $ | — |  |  | $ | 10.3 |  |  | $ | — |
The amount of gain (loss) reclassified from Accumulated other comprehensive loss into earnings was as follows:
(in millions) |  |  |  |  |  |  |  | Three Months Ended |  | Nine Months Ended |  |  |  |
Derivatives Designated as Cash Flow Hedging Instruments |  | Location of Gain (Loss) |  |  |  |  |  | Oct 2, 2021 |  | Sep 26, 2020 |  | Oct 2, 2021 |  | Sep 26, 2020 |  |  |  |
Interest rate contracts |  | Interest expense |  |  |  |  |  | $ | (0.2) |  |  | $ | (0.1) |  |  | $ | (0.5) |  |  | $ | (0.4) |  |  |  |  |
Foreign exchange contracts |  | Cost of sales |  |  |  |  |  | (1.7) |  |  | 1.4 |  |  | (8.8) |  |  | 8.1 |  |  |  |  |
Commodity contracts |  | Cost of sales |  |  |  |  |  | 1.6 |  |  | — |  |  | 3.1 |  |  | $ | — |  |  |  |  |
Total |  |  |  |  |  |  |  | $ | (0.3) |  |  | $ | 1.3 |  |  | $ | (6.2) |  |  | $ | 7.7 |  |  |  |  |
Derivatives Designated as Fair Value Hedging Instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | Interest expense |  |  |  |  |  | $ | 0.2 |  |  | $ | 0.2 |  |  | $ | 0.5 |  |  | $ | 0.5 |  |  |  |  |
Other Hedging Activity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Cost of sales |  |  |  |  |  | $ | 1.1 |  |  | $ | (0.5) |  |  | $ | 0.1 |  |  | $ | 2.9 |  |  |  |  |
Foreign exchange contracts |  | Other expense, net |  |  |  |  |  | (1.3) |  |  | (0.1) |  |  | (3.7) |  |  | 1.1 |  |  |  |  |
Total |  |  |  |  |  |  |  | $ | (0.2) |  |  | $ | (0.6) |  |  | $ | (3.6) |  |  | $ | 4.0 |  |  |  |  |
Fair Value of Other Financial Instruments. The carrying values of the Company's short-term financial instruments, including cash and cash equivalents and accounts and notes receivable, approximate their fair values because of the short maturity of these instruments. As of October 2, 2021, December 31, 2020 and September 26, 2020, the fair value of the Company’s long-term debt, including short-term debt and current maturities, was approximately $1,941.1 million, $1,062.3 million and $1,192.4 million, respectively, and was determined using Level 1 and Level 2 inputs described in Note 7 to the Notes to Consolidated Financial Statements in the 2020 Form 10-K. The carrying value of short-term and long-term debt, including current maturities, wa s $1,848.1 million, $972.1 million and $1,082.9 million as of October 2, 2021, December 31, 2020 and September 26, 2020, respectively.

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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 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
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