XML 38 R20.htm IDEA: XBRL DOCUMENT
v3.20.4

Financial Instruments and Risk Management | 12 Months Ended
--- | ---
Jan. 02, 2021
Investments, All Other Investments [Abstract] |
Financial Instruments and Risk Management | DERIVATIVE FINANCIAL INSTRUMENTS The Company follows ASC 815, which requires that all derivative instruments be recorded on the consolidated balance sheets at fair value by establishing criteria for designation and effectiveness of hedging relationships. The Company does not hold or issue financial instruments for trading purposes. The Company utilizes foreign currency forward exchange contracts designated as cash flow hedges to manage the volatility associated primarily with U.S. dollar inventory purchases made by non-U.S. wholesale operations in the normal course of business. These foreign currency forward exchange hedge contracts extended out to a maximum of 538 days and 545 days as of January 2, 2021 and December 28, 2019, respectively. When foreign exchange contracts are determined not to be highly effective or are terminated before their contractual termination dates, the Company would remove the hedge designation from those contracts and reclassify into earnings the unrealized gains or losses that would otherwise be included in accumulated other comprehensive income (loss) within stockholders’ equity. During fiscal 2020 and 2019, the Company reclassified $0.6 million and $1.2 million respectively, to other income for foreign currency derivatives that were no longer deemed highly effective. The Company also utilizes foreign currency forward exchange contracts that are not designated as hedging instruments to manage foreign currency transaction exposure. Foreign currency derivatives not designated as hedging instruments are offset by foreign exchange gains or losses resulting from the underlying exposures of foreign currency denominated assets and liabilities. The Company had an interest rate swap arrangement to mitigate interest volatility with regard to variable rate borrowings under the Amended Senior Credit Facility. The interest rate swap exchanged floating rate for fixed rate interest payments without the exchange of the underlying notional amounts, and had been designated as cash flow hedge of the underlying debt. The arrangement was terminated, effective December 29, 2020, in association with the repayment of the Incremental Term Loan. The fair value of the swap at the termination date of $7.3 million was required to be paid in full. Consequently, unrealized losses of $4.9 million in accumulated other comprehensive income that were associated with variable rate debt interest payments that were no longer probable were reclassified to “Debt extinguishment, interest rate swap termination, and other costs“ in the accompanying consolidated statement of operations. The Company has a cross currency swap to minimize the impact of exchange rate fluctuations. The hedging instrument, which, unless otherwise terminated, will mature on September 1, 2021, has been designated as a hedge of a net investment in a foreign operation. The Company will pay 2.75% on the euro-denominated notional amount and receive 5.00% on the U.S. dollar notional amount, with an exchange of principal at maturity. Changes in fair value related to movements in the foreign currency exchange spot rate are recorded in accumulated other comprehensive income, offsetting the currency translation adjustment related to the underlying net investment that is also recorded in accumulated other comprehensive income. All other changes in fair value are recorded in interest expense. In accordance with ASC 815, the Company has formally documented the relationship between the cross-currency swap and the Company’s investment in its euro-denominated subsidiary, as well as its risk management objective and strategy for undertaking the hedge transaction. This process included linking the derivative to its net investment on the balance sheet. The Company also assessed at the hedge’s inception, and continues to assess on an ongoing basis, whether the derivative used in the hedging transaction is highly effective in offsetting changes in the net investment in the foreign operations. The notional amounts of the Company’s derivative instruments are as follows:
(Dollars in millions) | January 2, 2021 |  | December 28, 2019
Foreign exchange contracts: |  |  |
Hedge contracts | $ | 250.7 |  |  | $ | 246.3 |
Non-hedge contracts | — |  |  | 7.3 |
Interest rate swap | — |  |  | 355.8 |
Cross currency swap | 79.8 |  |  | 79.8 |
The recorded fair values of the Company’s derivative instruments are as follows:
(In millions) | January 2, 2021 |  | December 28, 2019
Financial assets: |  |  |
Foreign exchange contracts - hedge | $ | — |  |  | $ | 2.3 |
Financial liabilities: |  |  |
Foreign exchange contracts - hedge | $ | (8.8) |  |  | $ | (1.8) |
Interest rate swap | — |  |  | (1.8) |
Cross currency swap | (10.8) |  |  | (3.0) |

X
- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
Name: | us-gaap_FinancialInstrumentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsAllOtherInvestmentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration