Financial Instruments

9 Months Ended

Sep. 28, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

Financial Instruments

We enter into foreign currency exchange hedge contracts to reduce the risk from foreign currency exchange rate fluctuations associated with our receivables, payables, loans and firm commitments denominated in certain foreign currencies that arise primarily as a result of our operations outside the U.S. We also enter into futures contracts to hedge certain price fluctuations for a portion of our anticipated domestic purchases of natural gas. The impact of these foreign currency exchange and commodities hedge activities on the unaudited Condensed Consolidated Financial Statements was not material.

Cash Flow Hedges

In March 2020, we entered into U.S. dollar to euro cross-currency swap contracts with a total notional amount of $250 million to have the effect of converting the fixed-rate U.S. dollar-denominated debt to euro-denominated debt, including semiannual interest payments and the payment of principal at maturity. During the term of the contracts, which end on April 30, 2030, we pay fixed-rate interest in euros and receive fixed-rate interest in U.S. dollars. The fair value of these contracts was $4.6 million and $2.3 million as of September 28, 2024 and December 30, 2023, respectively, which was included in "Other Assets" in the unaudited Condensed Consolidated Balance Sheets. Refer to Note 9, “Fair Value Measurements,” to the unaudited Condensed Consolidated Financial Statements for more information.

We recorded no ineffectiveness from our cross-currency swap contracts to earnings during the nine months ended September 28, 2024 or September 30, 2023.

Fair Value Hedges

In the third quarter of 2024, we entered into foreign currency forward contracts to hedge a portion of the principal balance of our €500 million senior notes due in the first quarter of 2025, to offset changes in the fair value of the hedged portion that is subject to foreign currency exchange rate fluctuation. The fair value hedges have an aggregate notional value of €210 million and mature in March 2025.

As of September 28, 2024, the fair value of the forward currency contracts was approximately $2 million, which was included in “Other current assets” in the unaudited Condensed Consolidated Balance Sheets.

Net Investment Hedges

In the third quarter of 2024, we entered into foreign currency forward contracts and zero-cost collars, combining each pair as net investment hedges for accounting purposes, to minimize the effect of foreign currency exchange rates on our net investment in certain foreign operations between the sold put strike and the bought call strike rates of the contracts. The net investment hedges have an aggregate notional value of €210 million and mature in March 2025.

As of September 28, 2024, the fair value of the forward currency contracts and zero-cost collars combined was approximately $1 million, which was included in “Other current liabilities” in the unaudited Condensed Consolidated Balance Sheets.