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DERIVATIVE INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)
 3 Months Ended
Apr. 03, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheet on a recurring basis as of April 3, 2016 and December 31, 2015:
 
 
April 3, 2016
 
December 31, 2015
 
 
Assets (1)
 
Liabilities (1)
 
Assets (1)
 
Liabilities (1)
Derivatives designated as cash flow hedging instruments:
 
 
 
 
 
 
 
 
Commodities futures and options (2)
 
$
—

 
$
—

 
$
—

 
$
479

Foreign exchange contracts (3)
 
345

 
4,132

 
367

 
475

Interest rate swap agreements (4)
 
—

 
70,092

 
—

 
40,299

 
 
345

 
74,224

 
367

 
41,253

Derivatives designated as fair value hedging instruments:
 
 
 
 
 
 
 
 
Interest rate swap agreements (4)
 
16,236

 
—

 
4,313

 
—

 
 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
Commodities futures and options (2)
 
—

 
13,678

 
—

 
1,574

Deferred compensation derivatives (5)
 
403

 
—

 
1,198

 
—

Foreign exchange contracts (3)
 
—

 
172

 
69

 
—

 
 
403

 
13,850

 
1,267

 
1,574

Total
 
$
16,984

 
$
88,074

 
$
5,947

 
$
42,827



(1)
Derivatives assets are classified on our balance sheet within prepaid expenses and other as well as other assets. Derivative liabilities are classified on our balance sheet within accrued liabilities and other long-term liabilities.
(2)
The fair value of commodities futures and options contracts is based on quoted market prices and is, therefore, categorized as Level 1 within the fair value hierarchy. As of April 3, 2016, liabilities include the net of assets of $56,866 and liabilities of $68,030 associated with cash transfers receivable or payable on commodities futures contracts reflecting the change in quoted market prices on the last trading day for the period. The comparable amounts reflected on a net basis in liabilities at December 31, 2015 were assets of $54,090 and liabilities of $54,860.
(3)
The fair value of foreign currency forward exchange contracts is the difference between the contract and current market foreign currency exchange rates at the end of the period. We estimate the fair value of foreign currency forward exchange contracts on a quarterly basis by obtaining market quotes of spot and forward rates for contracts with similar terms, adjusted where necessary for maturity differences. These contracts are classified as Level 2 within the fair value hierarchy.
(4)
The fair value of interest rate swap agreements represents the difference in the present value of cash flows calculated at the contracted interest rates and at current market interest rates at the end of the period. We calculate the fair value of interest rate swap agreements quarterly based on the quoted market price for the same or similar financial instruments. Such contracts are categorized as Level 2 within the fair value hierarchy.
(5)
The fair value of deferred compensation derivatives is based on quoted prices for market interest rates and a broad market equity index and is, therefore, categorized as Level 2 within the fair value hierarchy.
Schedule of Carrying Values and Estimated Fair Values of Long-term Debt, Including Current Portion
The fair values and carrying values of long-term debt, including the current portion, was as follows:
 
 
Fair Value
 
Carrying Value
 
 
April 3, 2016
 
December 31, 2015
 
April 3, 2016
 
December 31, 2015
Current portion of long-term debt
 
$
504,835

 
$
509,580

 
$
500,016

 
$
499,923

Long-term debt
 
1,733,643

 
1,668,379

 
1,571,388

 
1,557,091

Total
 
$
2,238,478

 
$
2,177,959

 
$
2,071,404

 
$
2,057,014
Summary of the Effect of Derivative Instruments on the Consolidated Statements of Income
The effect of derivative instruments on the Consolidated Statements of Income for the three months ended April 3, 2016 and April 5, 2015 was as follows:
 
 
Non-designated Hedges
 
Cash Flow Hedges
 
 
 
 
 
Gains (losses) recognized in income (a)
 
Gains (losses) recognized in other comprehensive income (“OCI”) (effective portion)
 
Gains (losses) reclassified from accumulated OCI into income (effective portion) (b)
 
Losses recognized in income (ineffective portion) (c)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
Commodities futures and options
 
$
(38,941
)
 
$
(2,777
)
 
$
—

 
$
(15,098
)
 
$
9,730

 
$
1,200

 
$
—

 
$
(287
)
Foreign exchange contracts
 
(204
)
 
(67
)
 
(4,116
)
 
1,240

 
(261
)
 
341

 
—

 
—

Interest rate swap agreements
 
—

 
—

 
(29,793
)
 
(28,354
)
 
(1,560
)
 
(1,189
)
 
—

 
—

Deferred compensation derivatives
 
403

 
172

 
—

 
—

 
—

 
—

 
—

 
—

Total
 
$
(38,742
)
 
$
(2,672
)
 
$
(33,909
)
 
$
(42,212
)
 
$
7,909

 
$
352

 
$
—

 
$
(287
)

(a)
Gains (losses) recognized in income for non-designated commodities futures and options contracts were included in cost of sales. Gains (losses) recognized in income for non-designated foreign currency forward exchange contracts and deferred compensation derivatives were included in selling, marketing and administrative expenses.
(b)
Gains (losses) reclassified from AOCI into income were included in cost of sales for commodities futures and options contracts and for foreign currency forward exchange contracts designated as hedges of purchases of inventory or other productive assets. Other gains (losses) for foreign currency forward exchange contracts were included in selling, marketing and administrative expenses. Losses reclassified from AOCI into income for interest rate swap agreements were included in interest expense.
(c)
Gains representing hedge ineffectiveness were included in cost of sales for commodities futures and options contracts.