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Derivative Instruments and Hedging Activities | 9 Months Ended
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Sep. 29, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Cash Flow Hedges of Interest Rate Risk - On October 24, 2018 and October 25, 2018, the Company entered into variable-to-fixed interest rate swap agreements with 12 counterparties to hedge a portion of the cash flows of the Company’s variable rate debt. The swap agreements have an aggregate notional amount of $550.0 million and mature on November 30, 2022. Under the terms of the swap agreements, the Company pays a weighted-average fixed rate of 3.04% on the notional amount and receives payments from the counterparty based on the one-month LIBOR rate. The Company’s swap agreements have been designated and qualify as cash flow hedges, are recognized on its Consolidated Balance Sheets at fair value and are classified based on the instruments’ maturity dates. The Company estimates $7.7 million will be reclassified to interest expense over the next 12 months. The following table presents the fair value and classification of the Company’s swap agreements, as of the periods indicated:
(dollars in thousands) | SEPTEMBER 29, 2019 |  | DECEMBER 30, 2018 |  | CONSOLIDATED BALANCE SHEET CLASSIFICATION
Interest rate swaps - asset (1) | $ | — |  |  | $ | 765 |  |  | Other current assets, net
Interest rate swaps - liability | $ | 6,860 |  |  | $ | 1,393 |  |  | Accrued and other current liabilities
Interest rate swaps - liability | 21,116 |  |  | 9,723 |  |  | Other long-term liabilities, net
Total fair value of derivative instruments - liabilities (1) | $ | 27,976 |  |  | $ | 11,116 |  |  |
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(1) | See Note 14 - Fair Value Measurements for fair value discussion of the interest rate swaps.
The following table summarizes the effects of the swap agreements on Net income for the periods indicated:
| THIRTEEN WEEKS ENDED |  | THIRTY-NINE WEEKS ENDED
(dollars in thousands) | SEPTEMBER 29, 2019 |  | SEPTEMBER 30, 2018 |  | SEPTEMBER 29, 2019 |  | SEPTEMBER 30, 2018
Interest rate swap (expense) benefit recognized in Interest expense, net | $ | (1,095 | ) |  | $ | 68 |  |  | $ | (779 | ) |  | $ | (442 | )
Income tax benefit (expense) recognized in (Benefit) provision for income taxes | 283 |  |  | (17 | ) |  | 201 |  |  | 114 |
Total effects of the interest rate swaps on Net income | $ | (812 | ) |  | $ | 51 |  |  | $ | (578 | ) |  | $ | (328 | )
By utilizing the interest rate swaps, the Company is exposed to credit-related losses in the event that the counterparty fails to perform under the terms of the derivative contract. To mitigate this risk, the Company enters into derivative contracts with major financial institutions based upon credit ratings and other factors. The Company continually assesses the creditworthiness of its counterparties. As of September 29, 2019, all counterparties to the interest rate swaps had performed in accordance with their contractual obligations. The Company has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if the repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on indebtedness. As of September 29, 2019 and December 30, 2018, the fair value of the Company’s interest rate swaps was in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk, of $28.6 million and $10.5 million, respectively. As of September 29, 2019 and December 30, 2018, the Company has not posted any collateral related to these agreements. If the Company had breached any of these provisions as of September 29, 2019 and December 30, 2018, it could have been required to settle its obligations under the agreements at their termination value of $28.6 million and $10.5 million, 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 + Details
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