DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

9 Months Ended

Jul. 03, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company measures all derivatives at fair value on the Condensed Consolidated Balance Sheets. The accounting for gains or losses resulting from changes in the fair value of those derivatives depends upon the use of the derivative and whether it qualifies for hedge accounting.

The fair value of derivative instruments reported on the Company's Condensed Consolidated Balance Sheets were as follows:


		July 3, 2020		September 27, 2019
(In millions)	Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Foreign exchange forward contracts	Prepaid expenses and other current assets	$	0.9	$	2.8
Foreign exchange forward contracts	Accrued liabilities	(0.1)		—
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Prepaid expenses and other current assets	0.7		—
Total derivatives		$	1.5	$	2.8

Cash Flow Hedging Activities

The Company had the following outstanding foreign currency forward contracts that were entered into to hedge forecasted revenues and designated as cash flow hedges:


	July 3, 2020		September 27, 2019
(In millions)	Notional Value Sold
Euro	$	23.9	$	76.5
Japanese Yen	18.5		56.7
	$	42.4	$	133.2

The following table presents the amounts, before tax, recognized in accumulated other comprehensive loss on the Condensed Consolidated Balance Sheets:


	Gain (Loss) Recognized in Other Comprehensive Earnings (Loss)
	Three Months Ended						Nine Months Ended
(In millions)	July 3, 2020		June 28, 2019		July 3, 2020		June 28, 2019
Foreign currency forward contracts	$	(1.5)	$	(0.3)	$	1.1	$	(0.3)

As of July 3, 2020, the net unrealized gain on derivatives, before tax, of $0.9 million was included in accumulated other comprehensive loss on the Condensed Consolidated Balance Sheets and is expected to be reclassified into net earnings over the next 12 months.

The effect of cash flow hedge accounting on the Condensed Consolidated Statements of Earnings was as follows:


	Location and Amount Recognized in Earnings on Cash Flow Hedging Relationships
	Three Months Ended		Nine Months Ended
	July 3, 2020		July 3, 2020
(In millions)	Revenues		Revenues
Total amounts of income and expense line items presented in the Condensed Consolidated Statements of Earnings in which the effects of fair value and cash flow hedges are recorded	$	694.3	$	2,317.7
Gain on cash flow hedge relationships:
Foreign currency forward contracts:
Amount of gain reclassified from accumulated other comprehensive loss into net earnings	$	1.1	$	3.0

The Company did not have any gains or losses reclassified from accumulated other comprehensive loss into net earnings in the three and nine months ended June 28, 2019.

Balance Sheet Hedging Activities

The Company also hedges balance sheet exposures from its various subsidiaries and business units where the U.S. Dollar is the functional currency. For derivative instruments not designated as hedging instruments, changes in their fair values are recognized in other income, net in the Condensed Consolidated Statements of Earnings. Changes in the values of these hedging instruments are offset by changes in the values of foreign-currency-denominated assets and liabilities.

The notional amount of the Company's outstanding foreign currency forward contracts relating to balance sheet hedging activities:


(In millions)	July 3, 2020		September 27, 2019
Notional value sold	$	485.7	$	385.0
Notional value purchased	$	113.2	$	52.3

The following table presents the gains recognized in the Condensed Consolidated Statements of Earnings related to the foreign currency forward contracts that are not designated as hedging instruments.


Location of Gain (Loss) Recognized in Net Earnings on Derivative Instruments	Amount of Gain (Loss) Recognized in Net Earnings on Derivative Instruments
	Three Months Ended						Nine Months Ended
(In millions)	July 3, 2020		June 28, 2019		July 3, 2020		June 28, 2019
Other income, net	$	(13.3)	$	(2.2)	$	4.9	$	4.2

The gains (losses) on these derivative instruments were significantly offset by the gains (losses) resulting from the re-measurement of monetary assets and liabilities denominated in currencies other than the U.S. Dollar functional currency.