summary.txt

Summary of the document:

The document details the Company's use of forward foreign currency exchange contracts, net investment hedges, and interest rate swaps. The Company utilizes forward contracts to mitigate its exposure to fluctuations in foreign currency for certain transactions, such as the acquisition of Versace in 2018. They also use net hedges to minimize their net investment risk in Euro and Japanese Yen-denominated subsidiaries. As for interest rate swaps, the Company has one with an initial notional amount of $500 million, which will decrease to $350 million in April 2022. This swap was designed to alleviate the impact of adverse interest rate fluctuations. The Company meticulously records the impacts of these financial maneuvers on its income, expenses, and overall financial standing.

interest rate swap

As of March 27, 2021, the company had an interest rate swap with an initial notional amount of $500 million that will decrease to $350 million in April 2022. This swap was designed as a cash flow hedge to mitigate the impact of adverse interest rate fluctuations for a portion of the Company’s variable-rate debt equal to the notional amount of the swap. The interest rate swap converts the one-month Adjusted LIBOR interest rate on these borrowings to a fixed interest rate of 0.237% through December 2022. When an interest rate swap agreement qualifies for hedge accounting as a cash flow hedge, the changes in the fair value are recorded in equity as a component of accumulated other comprehensive income (loss) and are reclassified into interest expense in the same period during which the hedged transactions affect earnings. During Fiscal 2021, the company recorded an immaterial amount of interest expense related to this agreement.
in JSON code block
{
  "Forward Foreign Currency Exchange Contracts": {
    "Purpose": "to manage its exposure to fluctuations in foreign currency for certain of its transactions",
    " September 24, 2018": {
      "Contract Details": "entered into forward foreign currency exchange contracts with a total notional amount of €1.680 billion (approximately $2.001 billion)",
      "Reason": "mitigate its foreign currency exchange risk",
      "Settlement Date": "December 21, 2018"
    }
  },
  "Net Investment Hedges": {
    "As of March 27, 2021": {
      "Contract Details": "multiple fixed-to-fixed cross-currency swap agreements with aggregate notional amounts of $3 billion and $194 million",
      "Currency Details": "hedging net investment in Euro-denominated and Japanese Yen-denominated subsidiaries",
      "Contract Termination": "fourth quarter of Fiscal 2020",
      "Money Received": "$296 million",
      "Pre-tax Gain": "$211 million"
    },
    "Interest Reduction": {
      "Fiscal 2021": "$16 million",
      "Fiscal 2020": "$71 million",
      "Fiscal 2019": "$17 million"
    }
  },
  "Interest Rate Swap": {
    "As of March 27, 2021": {
      "Initial Notional Amount": "$500 million",
      "Decreased Notional Amount": "$350 million in April 2022",
      "Purpose": "mitigate the impact of adverse interest rate fluctuations",
      "Fixed Interest Rate": "0.237% through December 2022"
    }
  }
}