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Derivatives | 6 Months Ended
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Jul. 13, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives | Note 7 – Derivatives Hedging of Interest Rate Risk During the first quarter of 2023, the Company entered into an interest rate swap contract to mitigate its exposure to changes in variable interest rates. The Company's interest rate swap was designated as a cash flow hedge as of the effective date, March 17, 2023, and continues to be designated as a cash flow hedge. The interest rate swap is reflected at its fair value in the condensed consolidated balance sheets. Refer to Note 6 for further information on the fair value of the interest rate swap. Details of the pay-fixed, receive-floating interest rate swap contract are as follows:
Effective Date | Maturity Date | Notional Value (in millions) | Pay Fixed Rate | Receive Floating Rate | Floating Rate Reset Terms
March 17, 2023 | November 17, 2027 | $150 | 3.646% | One-Month CME Term SOFR | Monthly
The Company performed an initial quantitative assessment of hedge effectiveness using the change-in-variable-cash-flows method. Under this method, the Company assessed the effectiveness of the hedging relationship by comparing the present value of the cumulative change in the expected future cash flows on the variable leg of the interest rate swap with the present value of the cumulative change in the expected future interest cash flows on the variable-rate debt. The Company determined the interest rate swap to be highly effective. To assess for continued hedge effectiveness, the Company performs retrospective and prospective qualitative assessments each quarter. The Company also monitors the credit risk of the counterparty on an ongoing basis. The change in the fair value of the interest rate swap is initially reported in "Other comprehensive (loss) income" in the condensed consolidated statements of comprehensive income and subsequently reclassified to earnings in "Interest expense, net" in the condensed consolidated statements of earnings when the hedged transactions affect earnings. The location and the fair value of the interest rate swap in the condensed consolidated balance sheets as of July 13, 2024 and December 30, 2023, respectively, are as follows:
|  | Derivative Fair Value |
(In thousands) | Condensed Consolidated Balance Sheets Location | July 13, 2024 |  |  | December 30, 2023 |
Cash Flow Hedge: |  |  |  |  |  |  |  |
Interest rate swap | Prepaid expenses and other current assets | $ |  | 1,718 |  |  | $ |  | 1,721 |
Interest rate swap | Other long-term liabilities |  |  | 291 |  |  |  |  | 1,914 |
Interest rate swap | Accumulated other comprehensive income |  |  | 1,005 |  |  |  |  | (316 | )
The location and amount of gains recognized in the condensed consolidated statements of earnings for the interest rate swap, presented on a pre-tax basis, are as follows:
| Interest expense, net |
| 12 Weeks Ended |  |  | 28 Weeks Ended |
(In thousands) | July 13, 2024 |  |  | July 15, 2023 |  |  | July 13, 2024 |  |  | July 15, 2023 |
Total amounts of expense line items presented in the condensed consolidated statements of earnings in which the effects of cash flow hedges are recorded | $ |  | 10,541 |  |  | $ |  | 9,349 |  |  | $ |  | 24,028 |  |  | $ |  | 20,938 |
Gain on cash flow hedging relationships: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gain reclassified from comprehensive income into earnings |  |  | 588 |  |  |  |  | 494 |  |  |  |  | 1,377 |  |  |  |  | 669 |

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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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