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Derivative Instruments and Hedging Activities
 6 Months Ended
Jun. 29, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES     
Interest Rate Swaps

In April 2022, to economically hedge the interest rate risk of the Senior Secured Credit Facilities (as defined in Note 11), we entered into five variable-to-fixed interest rate swap agreements. Three of the interest rate swaps were designated as cash flow hedges to fix the interest rate on a substantial portion of the Term Loan B Facility (as defined in Note 11). The interest rate swaps cover an interest period ranging from June 1, 2022, through April 1, 2029, on notional balances that decline from $1.0 billion to $812.5 million over the term. The other two interest rate swaps were designated as cash flow hedges to fix the interest rate on a substantial portion of the Term Loan A Facility (as defined in Note 11). The interest rate swaps covered an interest period ranging from June 1, 2022, through April 1, 2027, on notional balances that decline from $487.5 million to $387.5 million over the term.

In November 2023, to economically hedge the interest rate risk of the $300.0 million Term B Loan add-on (as defined in Note 11), we entered into four variable-to-fixed interest rate swap agreements. The interest rate swaps were designated as cash flow hedges to fix the interest rate on a substantial portion of the Term B Loans. The interest rate swaps cover an interest period from November 14, 2023 through April 20, 2029, on notional balances of $300.0 million over the term.

In May 2024, we cash settled the remaining notional of $712.5 million variable-to-fixed interest rate swap agreements at market rates. The termination resulted in cash proceeds of $41.2 million, for which the gain remains deferred in Other Comprehensive Income ("OCI") and will be recognized within Interest expense, net as interest is paid on the Senior Secured Credit Facilities. The proceeds are recognized as cash flows from operating activities within the Statement of Cash Flows for the six months ended June 29, 2024.

Additionally, to economically hedge the interest rate risk of the Term Loan B Facility, we entered into new variable-to-fixed interest rate swap agreements to replace the terminated interest rate swaps. The interest rate swaps were designated as cash flow hedges to fix the interest rate on a substantial portion of the Term Loan B Facility. The interest rate swaps cover an interest period ranging from May 9, 2024, through April 1, 2029, on notional balances of $712.5 million over the term.

As a designated cash flow hedge, gains and losses will be deferred in AOCI and recognized within Interest expense, net when interest is paid on the Senior Secured Credit Facilities.
Cross-currency Swaps

In October 2022, we entered into three fixed-for-fixed cross currency interest rate swaps at market rates and designated the instruments as net investment hedges on our investment in European operations. As a designated net investment hedge, the loss related to the EUR spot exchange rate on the settled swaps was deferred within the Cumulative Translation Adjustment, a component of AOCI, and will not be recognized in the Statement of Operations until the hedged EUR net investment is substantially liquidated. The following are the terms and notional amounts outstanding:

•$152.5 million notional amount outstanding from October 25, 2022 through December 15, 2024;
•$700.0 million notional amount outstanding from October 25, 2022 through March 15, 2026; and
•$100.0 million notional amount outstanding from October 25, 2022 through June 15, 2030.

On November 21, 2023, we entered into fixed-for-fixed cross currency interest rate swaps designated as net investment hedges to hedge the EUR currency exposure of our investment in European operations. The following are the terms and notional amount outstanding:

•$300.0 million notional amount outstanding from November 21, 2023 through April 20, 2027.

In May 2024, we cash settled $547.5 million notional amount outstanding of the original $700.0 million cross currency interest rate swap outstanding from October 25, 2022 through December 15, 2024. The settlement resulted in cash outflows of $41.4 million recognized as part of cash flows for investing activities within the Statement of Cash Flows for the six months ended June 29, 2024. On August 2, 2024 we restructured the $152.5 million remaining notional amount outstanding of the original $700.0 million cross-currency interest rate swap to extend the maturity to April 2027. There was no cash outflow as a result of the restructuring.

On May 7, 2024, we entered into new fixed-for-fixed cross currency interest rate swaps designated as net investment hedges to hedge the EUR currency exposure of our investment in European operations. The following are the terms and notional amount outstanding:

•$547.5 million notional amount outstanding from May 7, 2024 through April 20, 2027.

As a designated net investment hedge, gains and losses related to the EUR spot exchange rate will be deferred within the Cumulative Translation Adjustment, a component of AOCI, and recognized in the Statement of Operations when the hedged EUR net investment is substantially liquidated. Gains and losses on excluded components (e.g., interest differentials) will be recorded in Interest expense, net on a systemic and rational basis.
Foreign Currency Forwards

Notional amounts of foreign currency forward contracts were as follows (in millions):
June 29, 2024December 31, 2023
British Pound (GBP)$123.6 $72.4 
Swedish Krona (SEK)72.2 36.5 
European Euro (EUR)58.8 79.9 
Danish Krone (DKK)51.4 5.9 
United States Dollar (USD)50.9 22.1 
Canadian Dollar (CAD)29.9 7.1 
Chinese Yuan (CNH)22.9 14.1 
Polish Zloty (PLZ)18.8 3.8 
Norwegian Krone (NOK)4.2 4.4 
Hungarian Forint (HUF)3.7 3.9 
Other (1)
3.0 3.5 
Total$439.4 $253.6 
(1) Number consists of various currencies notional amounts, none of which individually exceed $10 million in either period presented.

The maximum term of our forward currency exchange contracts is 60 months.

Effects of Derivatives on the Financial Statements

The below tables indicate the effects of all derivative instruments on the Condensed Consolidated Financial Statements. All amounts exclude income tax effects. The balance sheet location and gross fair value of our derivative instruments were as follows (in millions):
Balance Sheet LocationJune 29, 2024December 31, 2023
Designated derivative assets:
Foreign currency forward contractsPrepaid expenses and other current assets$1.1 $— 
Foreign currency forward contractsOther non-current assets0.3 0.4 
Cross-currency swapOther non-current assets3.3 — 
Interest rate swap agreementsOther non-current assets14.9 30.5 
Total designated derivative assets$19.6 $30.9 
Non-designated derivative assets:
Foreign currency forward contractsPrepaid expenses and other current assets$0.8 $0.2 
Total non-designated derivative assets$0.8 $0.2 
Designated derivative liabilities:
Foreign currency forward contractsOther accrued liabilities$2.1 $— 
Cross-currency swapOther accrued liabilities12.3 75.1 
Cross-currency swapOther non-current liabilities65.2 96.9 
Interest rate swap agreements
Other non-current liabilities11.1 11.7 
Total designated derivative liabilities$90.7 $183.7 
Non-designated derivative liabilities:
Foreign currency forward contractsOther accrued liabilities$0.7 $2.7 
The amounts of (income)/expense recognized in earnings related to our non-designated derivatives on the Consolidated Statements of Operations were as follows (in millions):
Three Months EndedSix Months Ended
Non-Designated DerivativesIncome Statement LocationJune 29, 2024July 1, 2023June 29, 2024July 1, 2023
Foreign currency forward contractsOther expense (income), net$(2.6)$(3.1)$(3.3)$(4.3)
Interest expense, net— — — (0.6)
$(2.6)$(3.1)$(3.3)$(4.9)
The following tables summarize the effect of derivative instruments designated as hedging instruments in AOCI (in millions):
Gain/(Loss)
Reclassified from AOCI into EarningsRelated to Amounts Excluded from Effectiveness Testing
Amount Recorded in OCI(1)
Classification
Amount(2)
ClassificationAmount Recognized in Earnings on Derivatives
Three Months Ended June 29, 2024
Cash flow hedges
Interest rate swap agreements$6.6 Interest expense, net$8.6 Interest expense, net$— 
Foreign currency forward contracts(0.5)Net sales— Net sales(0.2)
Cost of sales0.1 Cost of sales(0.2)
Other (income) expense, net— 
Total Cash flow hedges$6.1 $8.7 $(0.4)
Net investment hedges
Cross-currency swap$17.4 Interest expense, net$6.8 
Six Months Ended June 29, 2024
Cash flow hedges
Interest rate swap agreements$40.1 Interest expense, net$16.3 Interest expense, net$— 
Foreign currency forward contracts(0.4)Net sales(0.1)Net sales(0.5)
Cost of sales0.1 Cost of sales(0.4)
Other (income) expense, net(0.1)
Total Cash flow hedges$39.7 $16.3 $(1.0)
Net investment hedges
Cross-currency swap$66.3 Interest expense, net$14.1 
Three Months Ended July 1, 2023
Cash flow hedges
Interest rate swap agreements$28.9 Interest expense, net$5.5 Interest expense, net$— 
Foreign currency forward contracts(5.8)Net sales(0.2)Net sales0.2 
Cost of sales0.4 Cost of sales0.1 
Other expense (income), net(0.6)
Total Cash flow hedges$23.1 $5.7 $(0.3)
Net investment hedges
Cross-currency swap$(25.0)Interest expense, net$6.4 
Six Months Ended July 1, 2023
Cash flow hedges
Interest rate swap agreements$3.3 Interest expense, net$9.8 Interest expense, net$— 
Foreign currency forward contracts(10.3)Net sales0.2 Net sales0.2 
Cost of sales0.1 Cost of sales0.1 
Other expense (income), net(0.5)
Total Cash flow hedges$(7.0)$10.1 $(0.2)
Net investment hedges
Cross-currency swap$(40.2)Interest expense, net$12.9 
(1) Net income of $13.4 million is expected to be reclassified out of AOCI into earnings during the next 12 months.
(2) For additional details about the effect of the amounts reclassified from AOCI refer to Note 13.
The classification and amount of gain/(loss) recognized in earnings on fair value and hedging relationships were as follows (in millions):
Net SalesCost of SalesInterest Expense, netOther (Income) Expense, net
Three Months Ended June 29, 2024
Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded
$1,065.5 $670.8 $44.1 $3.4 
Gain (loss) on cash flow hedging relationships
Foreign currency forward contracts
Amount of gain or (loss) reclassified from AOCI into earnings$— $0.1 $— $— 
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach$(0.2)$(0.2)$— $— 
Interest rate swap agreements
Amount of gain or (loss) reclassified from AOCI into earnings$— $— $8.6 $— 
Six Months Ended June 29, 2024
Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded$2,147.5 $1,395.1 $87.1 $3.8 
Gain (loss) on cash flow hedging relationships
Foreign currency forward contracts
Amount of gain or (loss) reclassified from AOCI into earnings$(0.1)$0.1 $— $— 
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach$(0.5)$(0.4)$— $(0.1)
Interest rate swap agreements
Amount of gain or (loss) reclassified from AOCI into earnings$— $— $16.3 $— 
Three Months Ended July 1, 2023
Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded
$1,193.1 $765.1 $44.0 $(9.7)
Gain (loss) on cash flow hedging relationships
Foreign currency forward contracts
Amount of gain or (loss) reclassified from AOCI into earnings$(0.2)$0.4 $— $— 
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach$0.2 $0.1 $— $(0.6)
Interest rate swap agreements
Amount of gain or (loss) reclassified from AOCI into earnings$— $— $5.5 $— 
Six Months Ended July 1, 2023
Total amounts of income and expense line items presented on the Condensed Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded$2,374.8 $1,532.9 $87.6 $(9.0)
Gain (loss) on cash flow hedging relationships
Foreign currency forward contracts
Amount of gain or (loss) reclassified from AOCI into earnings$0.2 $0.1 $— $— 
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach$0.2 $0.1 $— $(0.5)
Interest rate swap agreements
Amount of gain or (loss) reclassified from AOCI into earnings$— $— $9.8 $—