The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative instruments are commodity price risk, currency exchange risk, and interest rate risk. Forward contracts on certain commodities are entered into to manage the price risk associated with forecasted purchases of materials used in the Company's manufacturing process. Forward contracts on certain currencies are entered into to manage forecasted cash flows in certain foreign currencies. Interest rate swaps are utilized to manage interest rate risk associated with the Company's floating rate borrowings.

The Company is exposed to credit losses in the event of non-performance by the counterparties to various financial agreements, including its commodity hedging transactions, foreign currency exchange contracts and interest rate swap agreements. Exposure to counterparty credit risk is managed by limiting counterparties to major international banks and financial institutions meeting established credit guidelines and continually monitoring their compliance with the credit guidelines. The Company does not obtain collateral or other security to support financial instruments subject to credit risk. The Company does not anticipate non-performance by its counterparties, but cannot provide assurances.

The Company recognizes all derivative instruments as either assets or liabilities at fair value in the Consolidated Balance Sheets. The Company designates commodity forward contracts as cash flow hedges of forecasted purchases of commodities, currency forward contracts as cash flow hedges of forecasted foreign currency cash flows and interest rate swaps as cash flow

hedges of forecasted LIBOR-based interest payments. There were no significant collateral deposits on derivative financial instruments as of January 2, 2021 or December 28, 2019.

For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of AOCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or changes in market value of derivatives not designated as hedges are recognized in current earnings.

As of January 2, 2021 and December 28, 2019, the Company had $3.7 million and $1.3 million, net of tax, of derivative gains on closed hedge instruments in AOCI that will be realized in earnings when the hedged items impact earnings.

The Company had the following commodity forward contracts outstanding (with maturities extending through March 2022) to hedge forecasted purchases of commodities (notional amounts expressed in terms of the dollar value of the hedged item (in millions):

The Company had the following currency forward contracts outstanding (with maturities extending through December 2022) to hedge forecasted foreign currency cash flows (in millions):


	January 2, 2021		December 28, 2019

Mexican Peso	$	174.6	$	160.2
Chinese Renminbi	188.5		104.6
Indian Rupee	37.8		36.7
Euro	231.7		127.0
Canadian Dollar	2.0		9.4
Australian Dollar	21.2		11.4
Thai Baht	15.3		5.7
Swedish Krona	—		2.4
British Pound	11.7		15.4

As of January 2, 2021, the total notional amount of the Company's receive-variable/pay-fixed interest rate swap was $88.4 million with a maturity of April 12, 2021.

The Company entered into two receive variable/pay-fixed forward starting non-amortizing interest rate swaps in June 2020, with a total notional amount of $250.0 million. These swaps become effective July 2021 and will expire in July 2025.


	January 2, 2021
	Prepaid Expenses and Other Current Assets		Other Noncurrent Assets		Other Accrued Expenses		Other Noncurrent Liabilities
Designated as Hedging Instruments:
Interest Rate Swap Contracts	$	—	$	—	$	0.7	$	1.4
Currency Contracts	16.4		1.6		1.0		0.1
Commodity Contracts	11.3		0.1		—		—
Not Designated as Hedging Instruments:
Currency Contracts	0.2		—		—		—
Commodity Contracts	0.1		—		—		—
Total Derivatives	$	28.0	$	1.7	$	1.7	$	1.5


	December 28, 2019
	Prepaid Expenses and Other Current Assets		Other Noncurrent Assets		Other Accrued Expenses		Other Noncurrent Liabilities
Designated as Hedging Instruments:
Interest Rate Swap Contracts	$	—	$	—	$	—	$	1.0
Currency Contracts	8.8		10.3		3.0		0.2
Commodity Contracts	2.6		0.1		0.2		—
Not Designated as Hedging Instruments:
Currency Contracts	0.1		—		0.1		—
Commodity Contracts	—		—		0.1		—
Total Derivatives	$	11.5	$	10.4	$	3.4	$	1.2

The effect of derivative instruments designated as cash flow hedges on the Consolidated Statements of Income and Consolidated Statements of Comprehensive Income for fiscal years 2020, 2019 and 2018 were (in millions):


	Fiscal 2020
					Interest
	Commodity		Currency		Rate
	Forwards		Forwards		Swaps		Total
Gain (Loss) Recognized in Other Comprehensive Income	$	14.8	$	(3.2)	$	(0.2)	$	11.4
Amounts Reclassified from Other Comprehensive Income (Loss):

Gain (Loss) Recognized in Cost of Sales	1.2		(2.9)		—		(1.7)
Loss Recognized in Operating Expense	—		(8.3)		—		(8.3)
Gain Recognized in Interest Expense	—		—		0.9		0.9


	Fiscal 2019
					Interest
	Commodity		Currency		Rate
	Forwards		Forwards		Swaps		Total
Gain Recognized in Other Comprehensive Loss	$	1.5	$	16.5	$	1.3	$	19.3
Amounts Reclassified from Other Comprehensive Income (Loss):
Gain Recognized in Net Sales	—		0.3		—		0.3
Gain (Loss) Recognized in Cost of Sales	(7.7)		4.2		—		(3.5)
Gain Recognized in Operating Expense	—		2.5		—		2.5
Gain Recognized in Interest Expense	—		—		2.4		2.4


	Fiscal 2018
					Interest
	Commodity		Currency		Rate
	Forwards		Forwards		Swaps		Total
Gain (Loss) Recognized in Other Comprehensive Loss	$	(17.9)	$	11.0	$	1.7	$	(5.2)
Amounts Reclassified from Other Comprehensive Income (Loss):
Gain Recognized in Net Sales	—		0.2		—		0.2
Gain Recognized in Cost of Sales	5.0		2.9		—		7.9
Gain Recognized in Operating Expense	—		6.1		—		6.1
Gain Recognized in Interest Expense	—		—		1.6		1.6

The effect of derivative instruments not designated as cash flow hedges on the Consolidated Statements of Income for fiscal years 2020, 2019 and 2018 were (in millions):


	Fiscal 2020
	Commodity Forwards		Currency Forwards		Total
Gain Recognized in Cost of Sales	$	0.2	$	—	$	0.2
Loss Recognized in Operating Expenses	—		(8.6)		(8.6)


	Fiscal 2019
	Commodity Forwards		Currency Forwards		Total
Gain Recognized in Cost of Sales	$	0.2	$	—	$	0.2
Loss Recognized in Operating Expenses	—		(1.1)		(1.1)


	Fiscal 2018
	Commodity Forwards		Currency Forwards		Total
Loss Recognized in Cost of Sales	$	(0.5)	$	—	$	(0.5)
Loss Recognized in Operating Expenses	—		(6.8)		(6.8)

The net AOCI balance related to hedging activities of a $23.5 million gain as of January 2, 2021 includes $20.2 million of net deferred gains expected to be reclassified to the Consolidated Statement of Comprehensive Income in the next twelve months. There were no gains or losses reclassified from AOCI to earnings based on the probability that the forecasted transaction would not occur.

The Company's commodity and currency derivative contracts are subject to master netting agreements with the respective counterparties which allow the Company to net settle transactions with a single net amount payable by one party to another party. The Company has elected to present the derivative assets and derivative liabilities on the Consolidated Balance Sheets on a gross basis for the periods ended January 2, 2021 and December 28, 2019.

The following table presents the derivative assets and derivative liabilities presented on a net basis under enforceable master netting agreements (in millions):


	January 2, 2021
	Gross Amounts as Presented in the Consolidated Balance Sheet		Derivative Contract Amounts Subject to Right of Offset		Derivative Contracts as Presented on a Net Basis
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts	$	16.6	$	(1.0)	$	15.6
Derivative Commodity Contracts	11.4		—		11.4
Other Noncurrent Assets:
Derivative Currency Contracts	1.6		—		1.6
Derivative Commodity Contracts	0.1		—		0.1
Other Accrued Expenses:
Derivative Currency Contracts	1.0		(1.0)		—

Other Noncurrent Liabilities:
Derivative Currency Contracts	0.1		—		0.1


	December 28, 2019
	Gross Amounts as Presented in the Consolidated Balance Sheet		Derivative Contract Amounts Subject to Right of Offset		Derivative Contracts as Presented on a Net Basis
Prepaid Expenses and Other Current Assets:
Derivative Currency Contracts	$	8.9	$	(2.5)	$	6.4
Derivative Commodity Contracts	2.6		(0.3)		2.3
Other Noncurrent Assets:
Derivative Currency Contracts	10.3		(0.1)		10.2
Derivative Commodity Contracts	0.1		—		0.1
Other Accrued Expenses:
Derivative Currency Contracts	3.1		(2.5)		0.6
Derivative Commodity Contracts	0.3		(0.3)		—
Other Noncurrent Liabilities:
Derivative Currency Contracts	0.2		(0.1)		0.1