Fair Value Measurements

12 Months Ended

Dec. 30, 2022

Fair Value of Financial Instruments

Our derivative assets or liabilities include foreign exchange and interest rate derivatives that are measured at fair value using observable market inputs such as forward rates, interest rates, and our own credit risk as well as an evaluation of our counterparties’ credit risks. We use an income approach to value our outstanding foreign currency and interest rate hedges, which consists of a discounted cash flow model that takes into account the present value of future cash flows under the terms of the contracts using current market information as of the measurement date such as foreign currency spot rate, forward rates and interest rates. Additionally, we include an element of default risk based on observable inputs into the fair value calculation. Based on these inputs, the derivative assets or liabilities are classified within Level 2 of the valuation hierarchy.

The following table provides a summary of the fair values of our derivative financial instruments measured on a recurring basis (U.S. dollars in millions):


	Fair Value Measurements
	Foreign currency forward contracts, net liability				Interest rate contracts, net asset (liability)
	December 30, 2022		December 31, 2021			December 30, 2022		December 31, 2021
Quoted prices in active markets for identical assets (Level 1)	$	—	$	—		$	—	$	—
Significant other observable inputs (Level 2)	(6.7)		(13.7)			15.8		(29.4)
Significant unobservable inputs (Level 3)	—		—			—		—

Refer to Note 14, “Retirement and Other Employee Benefits” for further fair value disclosures related to pension assets.

In estimating our fair value disclosures for financial instruments, we use the following methods and assumptions:

Cash and cash equivalents: The carrying amount reported in the Consolidated Balance Sheets for these items approximates fair value due to their liquid nature and are classified as Level 1.

Trade accounts receivable and other accounts receivable, net: The carrying value reported in the Consolidated Balance Sheets for these items is net of allowances, which includes a degree of counterparty non-performance risk and are classified as Level 2.

Accounts payable and other current liabilities: The carrying value reported in the Consolidated Balance Sheets for these items approximates their fair value, which is the likely amount for which the liability with short settlement periods would be transferred to a market participant with a similar credit standing as ours and are classified as Level 2.

Long-term debt: The carrying value of our long-term debt reported in the Consolidated Balance Sheets approximates their fair value since they bear interest at variable rates which contain an element of default risk. The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for those or similar instruments. Refer to Note 11, “Debt.”

18. Fair Value Measurements (continued)

Fair Value of Non-Financial Assets

During fiscal 2020, we performed a comprehensive review of our asset portfolio and identified non-strategic and underutilized property, plant, and equipment assets across various of our regions to dispose of while reducing costs and driving further efficiencies in our operations (the "Optimization Program"). Certain of these assets, as well as additional assets identified for sale since the start of the program, met the held for sale criteria as of December 30, 2022, and relate to both our fresh and value-added products and banana segments. Included in the $67.3 million of assets held for sale as of December 30, 2022 were the following: $45.4 million is related to facilities and land in Saudi Arabia, $16.2 million consists of a facility and related assets in the United States, $2.4 million consists of a facility and related assets in Europe, $2.3 million consists of facilities and farm land in South America, and the remaining $1.0 million consists of farm land in Central America. These assets are recognized at the lower of cost or fair value less cost to sell. The fair value measurements of our held for sale assets are generally based on Level 3 inputs, which include information obtained from third-party appraisals.

During 2022, we received proceeds of $7.5 million and recorded a gain on disposal of property, plant and equipment, net of $1.8 million from the sale of assets previously held for sale.

We recorded asset impairment and other charges during the years ended December 30, 2022 and December 31, 2021, that do not fall under the scope of fair value measurement. Refer to Note 3, “Asset Impairment and Other (Credit) Charges, Net”.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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