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Financial Instruments | 6 Months Ended
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Jun. 29, 2024
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 12 in the Notes to Consolidated Financial Statements in the 2023 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. 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 deferred within Accumulated other comprehensive loss and recognized upon termination of the respective investment. During the second quarter of 2024, the Company entered into $50.0 million of cross-currency swap contracts. Additionally, the Company previously entered into $250.0 million of cross-currency swap contr acts during the fourth quarter of 2023. As of June 29, 2024 and December 31, 2023, the notional value of cross-currency swap contracts outstanding was $300.0 million and $250.0 million, respectively. There were no cross-currency swaps outstanding as of July 1, 2023. Commodity Price. The Company uses commodity swaps to hedge anticipated purchases of aluminum and copper. As of June 29, 2024, December 31, 2023 and July 1, 2023, the notional value of commodity swap contracts outstanding was $39.9 million, $31.8 million and $25.2 million, respectively, and the contracts mature through 2026. 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 earni ngs. As of June 29, 2024, the Company estimates that, during the next 12 months, it will reclassify approximately $0.9 million in net gains (based on current prices) from Accumulated other comprehensive loss to Cost of sales. Foreign Currency Derivatives. The Company enters into forward contracts to manage foreign exchange exposure related to forecasted transactions and assets and liabilities that are subject to risk from foreign currency exchange rate changes. Forward exchange contracts outstanding as of June 29, 2024, December 31, 2023 and July 1, 2023 had notiona l contract values of $575.8 million, $694.6 million and $561.1 million, respectively. The forward contracts outstanding as of June 29, 2024 mature through 2026 and mainly relate to the Euro, Australian dollar, Norwegian krone and Mexican peso. As of June 29, 2024, the Company estimates that during the next 12 months, it will r eclassify approximately $0.9 million of net gains (based on current rates) from Accumulated other comprehensive loss to Cost of sales. Interest-Rate Derivatives. The Company had net deferred gains associated with previously settled forward-starting interest-rate swaps and treasury-lock swaps of $3.2 million, $3.3 million, and $3.4 million as of June 29, 2024, December 31, 2023, and July 1, 2023, respectively. These instruments were designated as cash flow hedges with gains and losses included in Accumulated other comprehensive loss. As of June 29, 2024, 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 June 29, 2024, December 31, 2023 and July 1, 2023, the fair values of the Company’s derivative instruments were:
(in millions) |  | Fair Value
Asset Derivatives |  | June 29, 2024 |  | December 31, 2023 |  | July 1, 2023
Derivatives Designated as Cash Flow Hedges |  |  |  |  |  |
Foreign exchange contracts |  | $ | 4.6 |  |  | $ | 4.1 |  |  | $ | 10.5 |
Commodity contracts |  | 1.3 |  |  | 0.9 |  |  | — |
Total |  | $ | 5.9 |  |  | $ | 5.0 |  |  | $ | 10.5 |
Derivatives Designated as Net Investment Hedges |  |  |  |  |  |
Cross-currency swaps |  | $ | 1.8 |  |  | $ | — |  |  | $ | — |
Other Hedging Activity |  |  |  |  |  |
Foreign exchange contracts |  | $ | 0.7 |  |  | $ | 0.2 |  |  | $ | 0.4 |
Liability Derivatives |  |  |  |  |  |
Derivatives Designated as Cash Flow Hedges |  |  |  |  |  |
Foreign exchange contracts |  | $ | 6.1 |  |  | $ | 6.1 |  |  | $ | 7.2 |
Commodity contracts |  | 0.2 |  |  | 0.8 |  |  | 3.0 |
Total |  | $ | 6.3 |  |  | $ | 6.9 |  |  | $ | 10.2 |
Derivatives Designated as Net Investment Hedges |  |  |  |  |  |
Cross-currency swaps |  | $ | — |  |  | $ | 5.0 |  |  | $ | — |
Other Hedging Activity |  |  |  |  |  |
Foreign exchange contracts |  | $ | 3.0 |  |  | $ | 1.8 |  |  | $ | 0.8 |
As of June 29, 2024, December 31, 2023 and July 1, 2023, 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 six months ended June 29, 2024 and July 1, 2023 is 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 |  | Six Months Ended
Derivatives Designated as Cash Flow Hedging Instruments | June 29, 2024 |  | July 1, 2023 |  | June 29, 2024 |  | July 1, 2023
Foreign exchange contracts | $ | (5.7) |  |  | $ | (0.2) |  |  | $ | 5.1 |  |  | $ | 3.1 |
Commodity contracts | 1.6 |  |  | (3.0) |  |  | 0.5 |  |  | (3.2) |
Total | $ | (4.1) |  |  | $ | (3.2) |  |  | $ | 5.6 |  |  | $ | (0.1) |
Derivatives Designated as Net Investment Hedging Instruments |  |  |  |  |  |  |
Cross-currency swaps | $ | 2.8 |  |  | $ | — |  |  | $ | 6.8 |  |  | $ | — |
The amount of gain (loss) reclassified from Accumulated other comprehensive loss into earnings was as follows:
(in millions) |  |  |  |  |  |  |  | Three Months Ended |  | Six Months Ended |  |  |  |
Derivatives Designated as Cash Flow Hedging Instruments |  | Location of Gain (Loss) |  |  |  |  |  | June 29, 2024 |  | July 1, 2023 |  | June 29, 2024 |  | July 1, 2023 |  |  |  |
Interest-rate contracts |  | Interest expense |  |  |  |  |  | $ | 0.1 |  |  | $ | — |  |  | $ | 0.1 |  |  | $ | (0.1) |  |  |  |  |
Foreign exchange contracts |  | Cost of sales |  |  |  |  |  | 2.5 |  |  | 4.1 |  |  | 4.4 |  |  | 11.6 |  |  |  |  |
Commodity contracts |  | Cost of sales |  |  |  |  |  | (0.2) |  |  | (0.5) |  |  | (1.0) |  |  | (1.1) |  |  |  |  |
Total |  |  |  |  |  |  |  | $ | 2.4 |  |  | $ | 3.6 |  |  | $ | 3.5 |  |  | $ | 10.4 |  |  |  |  |
The amount of gain (loss) on derivatives recognized directly into earnings was as follows:
(in millions) |  |  |  |  |  |  |  | Three Months Ended |  | Six Months Ended |  |  |  |
Derivatives Designated as Fair Value Hedging Instruments |  | Location of Gain (Loss) |  |  |  |  |  | June 29, 2024 |  | July 1, 2023 |  | June 29, 2024 |  | July 1, 2023 |  |  |  |
Interest-rate contracts |  | Interest expense |  |  |  |  |  | $ | — |  |  | $ | 0.1 |  |  | $ | — |  |  | $ | 0.3 |  |  |  |  |
Other Hedging Activity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Cost of sales |  |  |  |  |  | $ | 1.5 |  |  | $ | (1.5) |  |  | $ | 3.5 |  |  | $ | (2.2) |  |  |  |  |
Foreign exchange contracts |  | Other (expense) income, net |  |  |  |  |  | (2.2) |  |  | (0.4) |  |  | (4.9) |  |  | (0.5) |  |  |  |  |
Total |  |  |  |  |  |  |  | $ | (0.7) |  |  | $ | (1.9) |  |  | $ | (1.4) |  |  | $ | (2.7) |  |  |  |  |
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 June 29, 2024, December 31, 2023 and July 1, 2023, the fair value of the Company’s long-term debt, including current maturities, and short-term debt was approximately $2,640.5 million, $2,228.2 million and $2,267.3 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 2023 Form 10-K. The carrying value of long-term debt, including current maturities, and short-term debt was $2,858.3 million, $2,458.7 million and $2,540.5 million as of June 29, 2024, December 31, 2023 and July 1, 2023, 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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