Derivatives |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives | Derivatives The Company utilizes derivative financial instruments primarily to hedge movements in foreign currency exchange rates. All derivative financial instruments are recorded on the balance sheet at their respective fair values. The Company does not use financial instruments or derivatives for any trading or other speculative purposes. Derivatives Designated as Cash Flow Hedges of Interest Rate Risk In July 2022, the Company entered into an interest rate swap, which was designated as a hedge against adverse fluctuations in interest rates by reducing the exposure to variability in cash flows relating to either interest payments or total proceeds on a forecasted issuance of long-term debt. The notional amount of this hedge was $275 million. In October 2022, upon issuance of the 2022-1 Senior Notes, the Company terminated the interest rate swap and recorded the related gain of $11 million in accumulated other comprehensive income. As of December 28, 2024, a net gain of $6 million remained in accumulated other comprehensive income. As of December 27, 2025, no amount remained in accumulated other comprehensive income as a result reclassifying $6 million into interest expense, net on the consolidated statements of operations during the year ended December 27, 2025, primarily relating to the accelerated amortization in connection with the refinancing of the 2022-1 Senior Notes in October 2025. The Company reclassified $2 million into interest expense, net during each of the years ended December 28, 2024 and December 30, 2023. Derivatives Not Designated as Hedges of Exchange Rate Risk To manage exposure to changes with the Company’s foreign currency intercompany transactions, the Company enters into short-term foreign currency forward contracts. In December 2021, the Company entered into a cross-currency swap as an economic hedge against exposure to changes in the Canadian dollar in connection with its Canadian securitization transaction, which is discussed in greater detail in Note 9. As of December 27, 2025, the cross-currency swap had an $88 million notional amount and a settlement date in July 2027. Throughout the term of the swap agreements, the Company pays interest at a fixed rate in Canadian dollars and receives interest at a fixed rate in U.S. dollars. In the first quarter of 2026, in connection with the partial repayment of the 2020-1 Senior Notes, the Company settled $10 million of the cross-currency swap reducing the notional amount to $78 million. In December 2025, the Company entered into a foreign currency derivative contract to mitigate the exposure to the Euro in connection with its agreement to sell ICW. The foreign exchange forward contract had a €400 million notional amount and a long-stop settlement date in October 2026. The Company recorded a loss of $6 million for the year ended December 27, 2025, within foreign currency transaction (gain) loss, net on the consolidated statements of operations. The derivative contract was settled in January 2026 in conjunction with the sale of ICW. The Company recorded an $8 million loss, a $7 million gain, and a less than $1 million loss for the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively, related to the change in fair value of derivatives in foreign currency transaction (gain) loss, net on the . The fair value of the derivative instruments held were as follows:
Counterparty Credit Risk By entering into derivative instrument contracts, the Company exposes itself, from time to time, to counterparty credit risk. Counterparty credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is in an asset position, the counterparty has a liability to the Company, which creates credit risk for the Company. The Company attempts to minimize this risk by selecting counterparties with investment grade credit ratings, limiting its exposure to any single counterparty and regularly monitoring its market position with each counterparty.
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