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Financial Instruments | 9 Months Ended
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Sep. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments | Financial Instruments The Company operates globally with manufacturing and sales facilities around the world. Due to the Company’s global operations, the Company engages in activities involving both financial and market risks. The Company utilizes normal operating and financing activities, along with derivative financial instruments, to minimize these risks. See Note 13 in the Notes to Consolidated Financial Statements in the 2022 Form 10-K for further details regarding the Company's financial instruments and hedging policies. Cross-Currency Swaps. The Company enters into cross-currency swaps to hedge Euro currency exposures of the net investment in certain foreign subsidiaries. During 2022, the Company settled $450.0 million of cross-currency swap contracts resulting in a deferred gain of $42.5 million within Accumulated other comprehensive loss. As a result, there were no cross-currency swaps outstanding as of September 30, 2023 and December 31, 2022, respectively. As of October 1, 2022, the notional value of cross-currency swap contracts outstanding was $250.0 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. In the first quarter of 2022, the Company settled $200.0 million of cross-currency swap contracts resulting in a deferred gain of $16.7 million within Accumulated other comprehensive loss. Commodity Price. The Company uses commodity swaps to hedge anticipated purchases of aluminum and copper. As of September 30, 2023, December 31, 2022 and October 1, 2022, the notional value of commodity swap contracts outstanding wa s $28.1 million, $24.1 million and $22.3 million, respectively, and the contracts mature through 2024. 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 September 30, 2023, the Company estimates that, during the next 12 months, it will reclassify approximately $1.2 million in net losses (based on current prices) from Accumulated other comprehensive loss to Cost of sales. Foreign Currency Derivatives. Forward exchange contracts outstanding as of September 30, 2023, December 31, 2022 and October 1, 2022 had notional contract values of $625.6 million, $684.8 million and $544.4 million, respectively. The forward contracts outstanding as of September 30, 2023 mature through 2025 and mainly relate to the Euro, Australian dollar, Norwegian krone and Canadian dollar. As of September 30, 2023, the Company estimates that during the next 12 months, it will reclassify approximately $9.9 million of net gains (based on current rates) from Accumulated other comprehensive loss to Cost of sales. Interest-Rate Derivatives. During the first quarter of 2022, the Company entered into and settled a series of treasury-lock swaps to hedge the interest-rate risk associated with debt issuances, resulting in a net deferred gain of $5.1 million. There were no treasury-lock swaps outstanding as of September 30, 2023, December 31, 2022 or October 1, 2022. The Company had net deferred gains associated with previously settled forward-starting interest-rate swaps and the treasury-lock swaps discussed above of $3.3 million, $3.2 million, and $3.1 million as of September 30, 2023, December 31, 2022, and October 1, 2022, respectively. These instruments were designated as cash flow hedges with gains and losses included in Accumulated other comprehensive loss. As of September 30, 2023, the Company estimates that during the next 12 months, it will reclassify approximately $0.1 million of net gains from Accumulated other comprehensive loss to Interest expense. As of September 30, 2023, December 31, 2022 and October 1, 2022, the fair values of the Company’s derivative instruments were:
(in millions) |  | Fair Value
Asset Derivatives |  | Sep 30, 2023 |  | Dec 31, 2022 |  | Oct 1, 2022
Derivatives Designated as Cash Flow Hedges |  |  |  |  |  |
Foreign exchange contracts |  | $ | 13.8 |  |  | $ | 15.2 |  |  | $ | 37.3 |
Commodity contracts |  | 0.4 |  |  | 0.3 |  |  | — |
Total |  | $ | 14.2 |  |  | $ | 15.5 |  |  | $ | 37.3 |
Derivatives Designated as Net Investment Hedges |  |  |  |  |  |
Cross-currency swaps |  | $ | — |  |  | $ | — |  |  | $ | 26.6 |
Other Hedging Activity |  |  |  |  |  |
Foreign exchange contracts |  | $ | 0.4 |  |  | $ | 0.6 |  |  | $ | 1.3 |
Liability Derivatives |  |  |  |  |  |
Derivatives Designated as Cash Flow Hedges |  |  |  |  |  |
Foreign exchange contracts |  | $ | 3.3 |  |  | $ | 8.0 |  |  | $ | 3.5 |
Commodity contracts |  | 1.5 |  |  | 1.1 |  |  | 4.0 |
Total |  | $ | 4.8 |  |  | $ | 9.1 |  |  | $ | 7.5 |
Other Hedging Activity |  |  |  |  |  |
Foreign exchange contracts |  | $ | 0.6 |  |  | $ | 0.8 |  |  | $ | — |
As of September 30, 2023, December 31, 2022 and October 1, 2022, 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 September 30, 2023 and October 1, 2022 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 |  | Sep 30, 2023 |  | Oct 1, 2022 |  | Sep 30, 2023 |  | Oct 1, 2022
Interest-rate contracts |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 5.3 |
Foreign exchange contracts |  | 10.2 |  |  | 20.7 |  |  | 13.3 |  |  | 48.6 |
Commodity contracts |  | 0.8 |  |  | (3.2) |  |  | (2.4) |  |  | (3.9) |
Total |  | $ | 11.0 |  |  | $ | 17.5 |  |  | $ | 10.9 |  |  | $ | 50.0 |
Derivatives Designated as Net Investment Hedging Instruments |  |  |  |  |  |  |  |
Cross-currency swaps |  | $ | — |  |  | $ | 12.4 |  |  | $ | — |  |  | $ | 29.0 |
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) |  |  |  |  |  | Sep 30, 2023 |  | Oct 1, 2022 |  | Sep 30, 2023 |  | Oct 1, 2022 |  |  |  |
Interest-rate contracts |  | Interest expense |  |  |  |  |  | $ | — |  |  | $ | (0.1) |  |  | $ | (0.1) |  |  | $ | (0.2) |  |  |  |  |
Foreign exchange contracts |  | Cost of sales |  |  |  |  |  | 2.4 |  |  | 7.7 |  |  | 14.0 |  |  | 15.7 |  |  |  |  |
Commodity contracts |  | Cost of sales |  |  |  |  |  | (1.1) |  |  | (0.8) |  |  | (2.2) |  |  | 3.1 |  |  |  |  |
Total |  |  |  |  |  |  |  | $ | 1.3 |  |  | $ | 6.8 |  |  | $ | 11.7 |  |  | $ | 18.6 |  |  |  |  |
Derivatives Designated as Fair Value Hedging Instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-rate contracts |  | Interest expense |  |  |  |  |  | $ | 0.1 |  |  | $ | 0.2 |  |  | $ | 0.4 |  |  | $ | 0.5 |  |  |  |  |
Other Hedging Activity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Cost of sales |  |  |  |  |  | $ | 1.6 |  |  | $ | 0.3 |  |  | $ | (0.6) |  |  | $ | 2.1 |  |  |  |  |
Foreign exchange contracts |  | Other Income (expense), net |  |  |  |  |  | (2.4) |  |  | 0.6 |  |  | (2.9) |  |  | 0.8 |  |  |  |  |
Total |  |  |  |  |  |  |  | $ | (0.8) |  |  | $ | 0.9 |  |  | $ | (3.5) |  |  | $ | 2.9 |  |  |  |  |
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 September 30, 2023, December 31, 2022 and October 1, 2022, the fair value of the Company’s long-term debt, including current maturities, and short-term debt was approximately $2,102.3 million, $2,225.0 million and $2,132.8 million, respectively, and was determined using Level 1 and Level 2 inputs described in Note 6 to the Notes to Consolidated Financial Statements in the 2022 Form 10-K. The carrying value of long-term debt, including current maturities, and short-term debt was $2,460.5 million, $2,540.5 million and $2,536.2 million as of September 30, 2023, December 31, 2022 and October 1, 2022, 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://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
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