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Derivative Instruments & Hedging Activities | 12 Months Ended
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Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE INSTRUMENTS & HEDGING ACTIVITIES | 9. DERIVATIVE INSTRUMENTS & HEDGING ACTIVITIES The Company addresses certain financial exposures through a controlled program of risk management that includes the use of derivative financial instruments. The Company enters into foreign currency forward contracts to reduce the effects of fluctuating foreign currency exchange rates. In addition, the Company enters into interest rate derivatives to manage the effects of interest rate movements on the Company’s credit facilities. For each derivative contract entered into where the Company looks to obtain hedge accounting treatment, the Company formally and contemporaneously documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking the hedge transaction, the nature of the risk being hedged, how the hedging instruments’ effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively. This process includes linking all derivatives to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the inception of the hedges and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. If it is determined that a derivative is not highly effective, or that it has ceased to be a highly effective hedge, the Company will discontinue hedge accounting with respect to that derivative prospectively. The fair value of the Company’s derivative financial instruments included in the Consolidated Balance Sheets is presented as follows:
| Asset Derivatives |  |  | Liability Derivatives |
| Balance Sheet |  | Fair Value (1) |  |  | Fair Value (1) |  |  | Balance Sheet |  | Fair Value (1) |  |  | Fair Value (1) |
| Location |  | December 31, 2022 |  |  | January 1, 2022 |  |  | Location |  | December 31, 2022 |  |  | January 1, 2022 |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swap contracts | Other assets |  | $ | 11.1 |  |  | $ | 1.5 |  |  | Other non-current liabilities |  | $ | — |  |  | $ | 3.2 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Forward foreign exchange contracts | Other current assets |  |  | 1.0 |  |  |  | 0.9 |  |  | Other current liabilities |  |  | — |  |  |  | 0.1 |
Forward foreign exchange contracts | Other assets |  |  | — |  |  |  | 0.2 |  |  | Other non-current liabilities |  |  | 0.3 |  |  |  | — |
Total derivatives |  |  | $ | 12.1 |  |  | $ | 2.6 |  |  |  |  | $ | 0.3 |  |  | $ | 3.3 |
(1) See Note 4 for information regarding the inputs used in determining the fair value of derivative assets and liabilities. |
G ains and losses related to the Company’s derivative financial instruments for the 2022, 2021 and 2020 years are presented as follows:
|  | Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion) |  |  | Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income |  | Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Earnings (Effective Portion) |
|  | December 31, 2022 |  | January 1, 2022 |  | January 2, 2021 |  |  | into Earnings (Effective Portion) |  | December 31, 2022 |  | January 1, 2022 |  | January 2, 2021 |
Derivatives in cash flow hedging relationships: |  |  |  |  |  |  |  |  |  |
Interest rate swap contracts |  | $ | 12.8 |  | $ | 6.0 |  | $ | (1.9 | ) |  | Interest expense, net |  | $ | (0.2 | ) | $ | (4.2 | ) | $ | (3.7 | )
Interest expense presented in the Consolidated Statements of Operations, in which the effects of cash flow hedges are recorded, total ed $16.7, $16.9 and $13.3 for the years ended December 31, 2022, January 1, 2022 and January 2, 2021, respectively.
|  | Amount of Gain or (Loss) Recognized in Earnings on Derivatives |  |  | Location of Gain or (Loss) Recognized
|  | December 31, 2022 |  | January 1, 2022 |  | January 2, 2021 |  |  | in Earnings on Derivatives
Derivatives not designated as hedging instruments: |  |  |
Forward foreign exchange contracts |  | $ | 4.0 |  | $ | 4.7 |  | $ | (5.5 | ) |  | Foreign currency transaction gain / loss, net
Interest Rate Swap Contracts Helios primarily utilizes variable-rate debt, which exposes the Company to variability in interest payments. The Company enters into various types of derivative instruments to manage fluctuations in cash flows resulting from interest rate risk attributable to changes in the benchmark interest rates. The Company assesses interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. The Company maintains risk management control systems to monitor interest rate cash flow risk attributable to both the Company’s outstanding and forecasted debt obligations as well as the Company’s offsetting hedge positions. The risk management control systems involve the use of analytical techniques to estimate the expected impact of changes in interest rates on the Company’s future cash flows. The Company has entered into interest rate swap transactions to hedge the variable interest rate payments on its credit facilities. In connection with the transactions, the Company pays interest based upon a fixed rate as agreed upon with the respective counterparties and receives variable rate interest payments based on the one-month LIBOR. The interest rate swaps have an aggregate notional amount o f $245.0, with p eriodic decreases, have been designated as hedging instruments and are accounted for as cash flow hedges. The interest rate swaps are scheduled t o expire in April 2023 and October 2025. The contracts are settled with the respective counterparties on a net basis at each settlement date. Assuming LIBOR rates consistent with year-end, the estimated gains included in AOCI at December 31, 2022, that are expected to be reclassified into earnings during the 2023 fiscal year total $5.0. Forward Foreign Exchange Contracts The Company has entered into forward contracts to economically hedge translational and transactional exposure associated with various business units whose local currency differs from the Company’s reporting currency. The Company’s forward contracts are not designated as hedging instruments for accounting purposes. At December 31, 2022, the Company had six forward foreign exchange contracts with an aggregate notional value of €22.0, maturing at various dates through March 2024. Net Investment Hedge The Company util izes foreign currency denominated debt to hedge currency exposure in foreign operations. The Company has designated €90.0 of borrowings on the revolving credit facility as a net investment hedge of a portion of the Company’s European operations. The carrying value of the euro denominated debt totaled $96.3 as of December 31, 2022 and is included in the Revolving line of credit line item in the Consolidated Balance Sheets. The gain on the net investment hedge recorded in AOCI as part of the currency translation adjustment was $4.6, net of tax, for the year ended December 31, 2022.

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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 https://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 https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008 + Details
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