Document
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Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
 
FORM 10-Q
 
 
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 29, 2019
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                     
Commission file number: 001-32891
 
 
 
Hanesbrands Inc.
(Exact name of registrant as specified in its charter)
 
 
 
Maryland
 
20-3552316
(State of incorporation)
 
(I.R.S. employer identification no.)
 
 
 
1000 East Hanes Mill Road
 

Winston-Salem,
North Carolina
 
27105
(Address of principal executive office)
 
(Zip code)
(336) 519-8080
(Registrant’s telephone number including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
 
 
Accelerated filer
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-accelerated filer
 
 
Smaller reporting company
 
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, Par Value $0.01
HBI
New York Stock Exchange
As of July 26, 2019, there were 361,543,268 shares of the registrant’s common stock outstanding.
 


Table of Contents

TABLE OF CONTENTS
 
 
 
Page
 
 
 
 
 
Item 1.
 
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
 
 
PART II
 
 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.



Table of Contents

FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains information that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by the use of words such as “may,” “believe,” “will,” “expect,” “project,” “estimate,” “intend,” “anticipate,” “plan,” “continue” or similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements regarding our intent, belief and current expectations about our strategic direction, prospects and future results are forward-looking statements. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. In particular, statements under the heading “Outlook” and other information appearing under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” include forward-looking statements.
More information on factors that could cause actual results or events to differ materially from those anticipated is included from time to time in our reports filed with the Securities and Exchange Commission (the “SEC”), including this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 29, 2018, under the caption “Risk Factors,” and available on the “Investors” section of our corporate website, www.Hanes.com/investors. The contents of our corporate website are not incorporated by reference in this Quarterly Report on Form 10-Q.

1

Table of Contents

PART I

Item 1.
Financial Statements

HANESBRANDS INC.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)

 
Quarter Ended
 
Six Months Ended
 
June 29,
2019
 
June 30,
2018
 
June 29,
2019
 
June 30,
2018
Net sales
$
1,760,927

 
$
1,715,443

 
$
3,348,951

 
$
3,186,947

Cost of sales
1,086,248

 
1,055,487

 
2,053,396

 
1,948,070

Gross profit
674,679

 
659,956

 
1,295,555

 
1,238,877

Selling, general and administrative expenses
440,662

 
439,893

 
913,500

 
872,756

Operating profit
234,017

 
220,063

 
382,055

 
366,121

Other expenses
8,249

 
6,570

 
15,700

 
12,331

Interest expense, net
46,522

 
48,430

 
94,581

 
94,193

Income before income tax expense
179,246

 
165,063

 
271,774

 
259,597

Income tax expense
25,274

 
24,430

 
38,320

 
39,555

Net income
$
153,972

 
$
140,633

 
$
233,454

 
$
220,042

 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
Basic
$
0.42

 
$
0.39

 
$
0.64

 
$
0.61

Diluted
$
0.42

 
$
0.39

 
$
0.64

 
$
0.61



See accompanying notes to Condensed Consolidated Financial Statements.
2

Table of Contents

HANESBRANDS INC.
Condensed Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)

 
Quarter Ended
 
Six Months Ended
 
June 29,
2019
 
June 30,
2018
 
June 29,
2019
 
June 30,
2018
Net income
$
153,972

 
$
140,633

 
$
233,454

 
$
220,042

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
Translation adjustments
(3,202
)
 
(49,447
)
 
11,259

 
(62,777
)
Net unrealized gain (loss) on qualifying cash flow hedges
(5,158
)
 
23,710

 
(9,077
)
 
23,658

Net unrecognized income from pension and postretirement plans
3,553

 
3,882

 
6,950

 
5,771

Total other comprehensive income (loss), net of tax of $504, ($9,982), $957 and ($11,079), respectively
(4,807
)
 
(21,855
)
 
9,132

 
(33,348
)
Comprehensive income
$
149,165

 
$
118,778

 
$
242,586

 
$
186,694



See accompanying notes to Condensed Consolidated Financial Statements.
3

Table of Contents

HANESBRANDS INC.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(unaudited)

 
June 29,
2019
 
December 29,
2018
 
June 30,
2018
Assets
 
 
 
 
 
Cash and cash equivalents
$
257,941

 
$
433,022

 
$
397,971

Trade accounts receivable, net
1,011,816

 
870,878

 
973,807

Inventories
2,233,760

 
2,054,458

 
2,112,211

Other current assets
152,925

 
159,231

 
132,757

Total current assets
3,656,442

 
3,517,589

 
3,616,746

Property, net
597,444

 
607,688

 
617,302

Right-of-use assets
484,168

 

 

Trademarks and other identifiable intangibles, net
1,541,306

 
1,555,381

 
1,610,567

Goodwill
1,240,853

 
1,241,727

 
1,259,010

Deferred tax assets
264,592

 
249,693

 
218,269

Other noncurrent assets
92,087

 
83,880

 
105,992

Total assets
$
7,876,892

 
$
7,255,958

 
$
7,427,886

 
 
 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
Accounts payable
$
1,026,863

 
$
1,029,933

 
$
935,176

Accrued liabilities
547,306

 
553,901

 
506,360

Lease liabilities
144,453

 

 

Notes payable
4,695

 
5,824

 
14,540

Accounts Receivable Securitization Facility
190,311

 
161,608

 
153,386

Current portion of long-term debt
156,189

 
278,976

 
181,349

Total current liabilities
2,069,817

 
2,030,242

 
1,790,811

Long-term debt
3,671,066

 
3,534,183

 
4,149,201

Lease liabilities - noncurrent
371,964

 

 

Pension and postretirement benefits
351,453

 
378,972

 
388,256

Other noncurrent liabilities
277,742

 
342,278

 
332,427

Total liabilities
6,742,042

 
6,285,675

 
6,660,695

 
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
Preferred stock (50,000,000 authorized shares; $.01 par value)
 
 
 
 
 
Issued and outstanding — None

 

 

Common stock (2,000,000,000 authorized shares; $.01 par value)
 
 
 
 
 
Issued and outstanding — 361,530,648, 361,330,128 and 360,503,574, respectively
3,615

 
3,613

 
3,605

Additional paid-in capital
308,555

 
284,877

 
275,120

Retained earnings
1,395,306

 
1,184,735

 
961,020

Accumulated other comprehensive loss
(572,626
)
 
(502,942
)
 
(472,554
)
Total stockholders’ equity
1,134,850

 
970,283

 
767,191

Total liabilities and stockholders’ equity
$
7,876,892

 
$
7,255,958

 
$
7,427,886




See accompanying notes to Condensed Consolidated Financial Statements.
4

Table of Contents

HANESBRANDS INC.
Condensed Consolidated Statements of Stockholders’ Equity
(dollars and shares in thousands, except per share data)
(unaudited)

 
Common Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total
 
Shares
 
Amount
 
Balances at March 30, 2019
361,471

 
$
3,615

 
$
306,084

 
$
1,296,158

 
$
(567,819
)
 
$
1,038,038

Net income

 

 

 
153,972

 

 
153,972

Dividends ($0.15 per common share)

 

 

 
(54,824
)
 

 
(54,824
)
Other comprehensive loss

 

 

 

 
(4,807
)
 
(4,807
)
Stock-based compensation

 

 
1,982

 

 

 
1,982

Net exercise of stock options, vesting of restricted stock units and other
60

 

 
489

 

 

 
489

Balances at June 29, 2019
361,531

 
$
3,615

 
$
308,555

 
$
1,395,306

 
$
(572,626
)
 
$
1,134,850


 
Common Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total
 
Shares
 
Amount
 
Balances at December 29, 2018
361,330

 
$
3,613

 
$
284,877

 
$
1,184,735

 
$
(502,942
)
 
$
970,283

Net income

 

 

 
233,454

 

 
233,454

Dividends ($0.30 per common share)

 

 

 
(109,676
)
 

 
(109,676
)
Other comprehensive income

 

 

 

 
9,132

 
9,132

Stock-based compensation

 

 
7,039

 

 

 
7,039

Net exercise of stock options, vesting of restricted stock units and other
201

 
2

 
2,265

 

 

 
2,267

Modification of deferred compensation plans

 

 
14,374

 

 

 
14,374

Cumulative effect of change in adoption of leases standard

 

 

 
7,977

 

 
7,977

Stranded tax related to U.S. pension plan

 

 

 
78,816

 
(78,816
)
 

Balances at June 29, 2019
361,531

 
$
3,615

 
$
308,555

 
$
1,395,306

 
$
(572,626
)
 
$
1,134,850





















See accompanying notes to Condensed Consolidated Financial Statements.
5

Table of Contents

HANESBRANDS INC.
Condensed Consolidated Statements of Stockholders’ Equity — (Continued)
(dollars and shares in thousands, except per share data)
(unaudited)

 
Common Stock
 
Additional Paid-In Capital
 
Retained Earnings
 
Accumulated Other Comprehensive Loss
 
Total
 
Shares
 
Amount
 
Balances at March 31, 2018
360,364

 
$
3,604

 
$
277,755

 
$
875,035

 
$
(450,699
)
 
$
705,695

Net income

 

 

 
140,633

 

 
140,633

Dividends ($0.15 per common share)

 

 

 
(54,648
)
 

 
(54,648
)
Other comprehensive loss

 

 

 

 
(21,855
)
 
(21,855
)
Stock-based compensation

 

 
(1,874
)
 

 

 
(1,874
)
Net exercise of stock options, vesting of restricted stock units and other
140

 
1

 
(761
)
 

 

 
(760
)
Balances at June 30, 2018
360,504

 
$
3,605

 
$
275,120

 
$
961,020

 
$
(472,554
)
 
$
767,191


 
Common Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total
 
Shares
 
Amount
 
Balances at December 30, 2017
360,126

 
$
3,601

 
$
271,462

 
$
850,345

 
$
(439,206
)
 
$
686,202

Net income

 

 

 
220,042

 

 
220,042

Dividends ($0.30 per common share)

 

 

 
(109,367
)
 

 
(109,367
)
Other comprehensive loss

 

 

 

 
(33,348
)
 
(33,348
)
Stock-based compensation

 

 
2,869

 

 

 
2,869

Net exercise of stock options, vesting of restricted stock units and other
378

 
4

 
789

 

 

 
793

Balances at June 30, 2018
360,504

 
$
3,605

 
$
275,120

 
$
961,020

 
$
(472,554
)
 
$
767,191





See accompanying notes to Condensed Consolidated Financial Statements.
6

Table of Contents

HANESBRANDS INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

 
Six Months Ended
 
June 29,
2019
 
June 30,
2018
Operating activities:
 
 
 
Net income
$
233,454

 
$
220,042

Adjustments to reconcile net income to net cash from operating activities:
 
 
 
Depreciation and amortization of long-lived assets
64,489

 
65,493

Amortization of debt issuance costs
4,758

 
4,627

Stock compensation expense
7,247

 
3,033

Deferred taxes and other
9,968

 
(6,709
)
Changes in assets and liabilities, net of acquisition of business:
 
 
 
Accounts receivable
(137,445
)
 
(81,512
)
Inventories
(178,453
)
 
(244,743
)
Other assets
(27,354
)
 
(6,193
)
Accounts payable
7,699

 
68,777

Accrued pension and postretirement benefits
(18,321
)
 
(7,438
)
Accrued liabilities and other
(23,405
)
 
(79,775
)
Net cash from operating activities
(57,363
)
 
(64,398
)
Investing activities:
 
 
 
Capital expenditures
(58,285
)
 
(40,640
)
Proceeds from sales of assets
518

 
1,840

Acquisition of business, net of cash acquired

 
(334,916
)
Net cash from investing activities
(57,767
)
 
(373,716
)
Financing activities:
 
 
 
Borrowings on notes payable
162,592

 
153,901

Repayments on notes payable
(163,703
)
 
(153,772
)
Borrowings on Accounts Receivable Securitization Facility
123,812

 
114,477

Repayments on Accounts Receivable Securitization Facility
(95,110
)
 
(86,300
)
Borrowings on Revolving Loan Facilities
1,602,500

 
2,025,860

Repayments on Revolving Loan Facilities
(1,422,500
)
 
(1,498,000
)
Repayments on Term Loan Facilities
(141,623
)
 
(21,250
)
Borrowings on International Debt
7,141

 

Repayments on International Debt
(27,941
)
 
(1,105
)
Cash dividends paid
(108,449
)
 
(108,115
)
Payment of contingent consideration

 
(3,540
)
Taxes paid related to net shares settlement of equity awards
(1,157
)
 
(4,185
)
Other
217

 
(88
)
Net cash from financing activities
(64,221
)
 
417,883

Effect of changes in foreign exchange rates on cash
4,282

 
20,176

Change in cash, cash equivalents and restricted cash
(175,069
)
 
(55
)
Cash, cash equivalents and restricted cash at beginning of year
455,732

 
421,566

Cash, cash equivalents and restricted cash at end of period
280,663

 
421,511

Less restricted cash at end of period
22,722

 
23,540

Cash and cash equivalents per balance sheet at end of period
$
257,941

 
$
397,971


Capital expenditures included in accounts payable at June 29, 2019 and December 29, 2018, were $7,053 and $20,275, respectively.

See accompanying notes to Condensed Consolidated Financial Statements.
7

Table of Contents
HANESBRANDS INC.
Notes to Condensed Consolidated Financial Statements
(dollars and shares in thousands, except per share data)
(unaudited)



(1)
Basis of Presentation
These statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and, in accordance with those rules and regulations, do not include all information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management believes that the disclosures made are adequate for a fair statement of the results of operations, financial condition and cash flows of Hanesbrands Inc. and its consolidated subsidiaries (the “Company” or “Hanesbrands”). In the opinion of management, the condensed consolidated interim financial statements reflect all adjustments, which consist only of normal recurring adjustments, necessary to state fairly the results of operations, financial condition and cash flows for the interim periods presented herein. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make use of estimates and assumptions that affect the reported amounts and disclosures. Actual results may vary from these estimates. Two subsidiaries of the Company close one day after the Company’s consolidated quarter end. The difference in reporting of financial information for these subsidiaries did not have a material impact on the Company’s financial condition, results of operations or cash flows.
These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2018 Annual Report on Form 10-K. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year.
(2)
Recent Accounting Pronouncements
Lease Accounting
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842),” which requires lessees to recognize a right-of-use asset and a lease liability for all leases that are not short-term in nature. The standard also resulted in enhanced quantitative and qualitative disclosures surrounding leases. The FASB subsequently issued updates to provide clarification on specific topics, including adoption guidance, practical expedients and interim transition disclosure requirements. The new rules were effective for the Company in the first quarter of 2019. The Company adopted the new rules utilizing the modified retrospective method and recognized a $7,977 cumulative effect adjustment in retained earnings at the beginning of the period of adoption. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard which among other things, allowed the Company to carry forward the historical lease classification. The Company did not elect the hindsight practical expedient to determine the lease term for existing leases. Adoption of the new standard resulted in the recording of lease assets and lease liabilities of $507,669 and $535,054, respectively as of December 30, 2018.
Derivatives and Hedging
In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The new rules expand the hedging strategies that qualify for hedge accounting, including contractually-specified price components of a commodity purchase or sale, hedges of the benchmark rate component of the contractual coupon cash flows of fixed-rate assets and liabilities, hedges of the portion of a closed portfolio of prepayable assets and partial-term hedges of fixed-rate assets and liabilities. The new rules also allow additional time to complete hedge effectiveness testing and allow qualitative assessments subsequent to initial quantitative tests if there is a supportable expectation that the hedge will remain highly effective. The new standard was effective for the Company in the first quarter of 2019. The adoption of the new accounting rules did not have a material impact on the Company’s financial condition, results of operations or cash flows.

8

Table of Contents
HANESBRANDS INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(dollars and shares in thousands, except per share data)
(unaudited)

Comprehensive Income
In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” The new rules allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The new rules were effective for the Company in the first quarter of 2019. The Company reclassified $78,816 from accumulated other comprehensive loss to retained earnings for stranded tax effects related to the Company’s U.S. pension plan.
The Company uses a portfolio approach to release the income tax effects in accumulated other comprehensive loss related to pension and postretirement benefits. Under this approach, the income tax effects are released from accumulated other comprehensive loss based on the pre-tax adjustments to pension liabilities or assets recognized within other comprehensive income. Any tax effects remaining in accumulated other comprehensive loss are released only when the entire portfolio of the pension and postretirement benefits is liquidated, sold or extinguished.
Codification Improvements
In July 2018, the FASB issued ASU 2018-09, “Codification Improvements.” The new rules clarify guidance around several subtopics by adopting enhanced verbiage to the following subtopics: reporting comprehensive income, debt modifications and extinguishments, distinguishing liabilities from equity, stock compensation, business combinations, derivatives and hedging, fair value measurement and defined contribution pension plans. The standard was effective for the Company in the first quarter of 2019. The adoption of the new accounting rules did not have a material impact on the Company’s financial condition, results of operations or cash flows.
Statements of Stockholders’ Equity
In August 2018, the SEC amended Rule 3-04 of Regulation S-X to extend the annual disclosure requirement for changes in stockholders’ equity and the amount of dividends per share for each class of shares to interim periods. The disclosures can be included either in a note to the financial statements or in a separate financial statement. The disclosures require both year to date information and subtotals for each interim period. The amendment was effective for the Company in the first quarter of 2019. The Company has elected to include condensed consolidated statements of stockholders’ equity, which include disclosure of the dividends per share in each period, as a separate statement in its interim financial statements within all applicable SEC filings.
Financial Instruments - Credit Losses
In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. The new rules eliminate the probable initial recognition threshold and, instead, reflect an entity’s current estimate of all expected credit losses. The new rules will be effective for the Company in the first quarter of 2020. The Company expects the new rules to apply to its trade receivables, but does not expect the adoption of the new accounting rules to have a material impact on the Company’s financial condition, results of operations or cash flows.
Goodwill Impairment
In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The new rules simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. The new rules will be effective for the Company in the first quarter of 2020. The Company does not expect the adoption of the new accounting rules to have a material impact on the Company’s financial condition, results of operations or cash flows.
Fair Value
In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820),” which modifies the disclosure requirements on fair value measurements. The new rules will be effective for the Company in the first quarter of 2020. The Company does not expect the adoption of the new accounting rules to have a material impact on the Company’s financial condition, results of operations or cash flows, however its disclosures will be impacted.

9

Table of Contents
HANESBRANDS INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(dollars and shares in thousands, except per share data)
(unaudited)

Retirement Benefits
In August 2018, the FASB issued ASU 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20).” The new rule expands disclosure requirements for employer sponsored defined benefit pension and other retirement plans. The new rules will be effective for the Company in the first quarter of 2020. The Company does not expect the new accounting rules to have a material impact on the Company’s financial condition, results of operations or cash flows; however, expanded disclosures will be required.
Internal-Use Software
In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 340-40),” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new rules will be effective for the Company in the first quarter of 2020. The Company does not expect the adoption of the new accounting rules to have a material impact on the Company’s financial condition, results of operations or cash flows.
Revenue from Contracts with Customers Recognized as an Assumed Liability in a Business Combination
In February 2019, the FASB issued a proposed Accounting Standards Update, “Business Combinations (Topic 805): Revenue from Contracts with Customers - Recognizing an Assumed Liability.” The proposed rules clarify that a liability from a contract with a customer should be recognized by an acquirer in a business combination if the liability represents an unsatisfied performance obligation, and the acquiree has received consideration (or the amount is due) from the customer. The Company does not expect the proposed rules to have a material impact on the Company’s financial condition, results of operations or cash flows because the rules will apply prospectively to business combinations occurring on or after the effective date.
Income Taxes
In March 2019, the FASB issued a revision to a proposed Accounting Standards Update, “Income Taxes (Topic 740): Disclosure Framework - Changes to the Disclosure Requirements for Income Taxes,” which was originally issued in July 2016. The revision reflects the impact of the Tax Cuts and Jobs Act passed in December 2017, which substantially changed how U.S. businesses are taxed. The proposed rules are intended to improve the relevance of current income tax disclosure requirements to financial statement users by removing disclosures that no longer are considered cost beneficial or relevant and adding disclosure requirements identified as relevant to financial statement users. The Company does not expect the proposed rules to have a material impact on the Company’s financial condition, results of operations or cash flows because the rules address only income tax disclosure requirements and will be applied prospectively.
(3)
Revenue Recognition
Revenue is recognized when obligations under the terms of a contract with a customer are satisfied, which occurs at a point in time, upon either shipment or delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods, which includes estimates for variable consideration. Variable consideration includes trade discounts, rebates, volume-based incentives, cooperative advertising and product returns, which are offered within contracts between the Company and its customers, employing the practical expedient for contract costs. Incidental items that are immaterial to the context of the contract are recognized as expense at the transaction date.
The following table presents the Company’s revenues disaggregated by the customer’s method of purchase:
 
Quarter Ended
 
Six Months Ended
 
June 29,
2019
 
June 30,
2018
 
June 29,
2019
 
June 30,
2018
Third-party brick-and-mortar wholesale
$
1,360,994

 
$
1,345,992

 
$
2,592,417

 
$
2,510,300

Consumer-directed
399,933

 
369,451

 
756,534

 
676,647

Total net sales
$
1,760,927

 
$
1,715,443

 
$
3,348,951

 
$
3,186,947



10

Table of Contents
HANESBRANDS INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(dollars and shares in thousands, except per share data)
(unaudited)

Revenue Sources
Third-Party Brick-and-Mortar Wholesale Revenue
Third-party brick-and-mortar wholesale revenue is primarily generated by sales of the Company’s products to retailers to support their brick-and-mortar operations. Also included within third-party brick-and-mortar wholesale revenue is royalty revenue from licensing agreements. The Company earns royalties through license agreements with manufacturers of other consumer products that incorporate certain of the Company’s brands. The Company accrues revenue earned under these contracts based upon reported sales from the licensees.
Consumer-Directed Revenue
Consumer-directed revenue is primarily generated through sales driven directly by the consumer through company-operated stores and e-commerce platforms, which include both owned sites and the sites of the Company’s retail customers.
(4)
Acquisitions
Bras N Things
On February 12, 2018, the Company acquired 100% of the outstanding equity of BNT Holdco Pty Limited (“Bras N Things”) for a total purchase price of A$498,236 (U.S.$391,572). During 2018, due to the final working capital adjustment, the purchase consideration was reduced by A$3,012 (U.S.$2,367), ultimately resulting in a revised purchase price of A$495,224 (U.S.$389,205), which included a cash payment of A$428,956 (U.S.$337,123), an indemnification escrow of A$31,988 (U.S.$25,140) and debt assumed of A$34,280 (U.S.$26,942). U.S. dollar equivalents are based on acquisition date exchange rates.
The Company funded the acquisition with a combination of short-term borrowings under its existing revolving loan facility (the “Revolving Loan Facility”) and cash on hand. The indemnification escrow is held in a retention account for a period of 18 months after the date of the acquisition to secure indemnification claims or other obligations of the sellers under the purchase agreement. The remaining balance of the indemnification escrow, including interest earned, if any, will be paid to the sellers at the end of the 18 month period. The indemnification escrow, held in one of the Company’s bank accounts, is recognized and classified as restricted cash, with the balance as of June 29, 2019 included in the “Other current assets” line of the Condensed Consolidated Balance Sheet.
The acquired assets and liabilities as of the date of acquisition include the following:
Cash and cash equivalents
$
2,765

Accounts receivable, net
197

Inventories
9,610

Other current assets
1,637

Property, net
11,764

Trademarks and other identifiable intangibles
278,214

Deferred tax assets and other noncurrent assets
2,318

Total assets acquired
306,505

Accounts payable
4,929

Accrued liabilities and other
16,339

Deferred tax liabilities and other noncurrent liabilities
7,864

Total liabilities assumed
29,132

Net assets acquired
277,373

Goodwill
111,832

Total purchase price
$
389,205



11

Table of Contents
HANESBRANDS INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(dollars and shares in thousands, except per share data)
(unaudited)

Total purchase price of the Bras N Things acquisition consisted of the following components:
Cash consideration paid
$
337,123

Indemnification escrow asset
25,140

Debt assumed
26,942

Total purchase price
$
389,205


Since February 12, 2018, goodwill related to the Bras N Things acquisition decreased by $792 as a result of measurement period adjustments, primarily related to working capital adjustments. The purchase price allocation was finalized in the first quarter of 2019.
Unaudited pro forma results of operations for the Company are presented below for the quarter and six months ended June 30, 2018, assuming that the acquisition of Bras N Things had occurred on January 1, 2017.
 
Quarter Ended
 
Six Months Ended
 
June 30,
2018
 
June 30,
2018
Net sales
$
1,715,443

 
$
3,205,007

Net income
141,395

 
223,586

Earnings per share:
 
 
 
Basic
$
0.39

 
$
0.62

Diluted
0.39

 
0.62


(5)
Leases
The Company determines whether an arrangement is a lease at inception. The Company has operating leases for real estate (primarily retail stores and operating facilities) and certain equipment. The Company’s finance leases are not material. Leases with a term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. For lease agreements entered into after adoption of Topic 842, the Company combines lease and nonlease components as a single component for all asset classes.
The Company’s leases have remaining lease terms of one to 38 years, some of which include options to extend the leases for up to 15 years, and some of which include options to terminate the leases within one year. The exercise of lease renewal options is at the Company’s sole discretion. In general, for leased retail real estate, the Company will not include renewal options in the underlying lease term. However, if a situation arises where the lessor has control over the option periods, then the Company will include these periods within the lease term. The depreciable life of assets and leasehold improvements are limited by the expected lease term.
Certain of the Company’s lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Total operating lease costs, which includes short-term leases and variable cost, were $61,203 and $115,761 for the quarter and six months ended June 29, 2019, respectively. For the quarter and six months ended June 29, 2019, variable costs of $16,650 and $29,302 were included in total operating lease costs, respectively. Short-term lease costs were immaterial for the quarter and six months ended June 29, 2019.
The following table presents supplemental cash flow and non-cash information related to leases:
 
Six Months Ended
 
June 29,
2019
Cash paid for amounts included in the measurement of lease liabilities - operating cash flows from leases
$
76,721

Right-of-use assets obtained in exchange for lease obligations - non-cash activity
$
38,840



12

Table of Contents
HANESBRANDS INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(dollars and shares in thousands, except per share data)
(unaudited)

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. For operating leases that commenced prior to December 30, 2018, the Company used the incremental borrowing rate on December 27, 2018.
The following table presents supplemental information related to leases at June 29, 2019:
Weighted average remaining lease term
5.2 years

Weighted average discount rate
5.12
%

The following table presents future minimum rental commitments under noncancelable operating leases as of December 29, 2018:
2019
$
148,218

2020
129,660

2021
110,185

2022
91,411

2023
66,753

Thereafter
115,941

 
$
662,168

The following table presents maturities of operating lease liabilities as of June 29, 2019:
2019
$
75,184

2020
148,759

2021
110,450

2022
79,457

2023
62,878

Thereafter
116,899

Total lease payments
593,627

Less interest
77,210

 
$
516,417


As of June 29, 2019, the Company’s additional operating lease contracts that have not yet commenced are immaterial.
(6)
Stockholders’ Equity
Basic earnings per share (“EPS”) was computed by dividing net income by the number of weighted average shares of common stock outstanding during the period. Diluted EPS was calculated to give effect to all potentially issuable dilutive shares of common stock using the treasury stock method.
The reconciliation of basic to diluted weighted average shares outstanding is as follows:
 
Quarter Ended
 
Six Months Ended
 
June 29,
2019
 
June 30,
2018
 
June 29,
2019
 
June 30,
2018
Basic weighted average shares outstanding
364,637

 
362,011

 
364,603

 
361,944

Effect of potentially dilutive securities:
 
 
 
 
 
 
 
Stock options
480

 
876

 
475

 
968

Restricted stock units
415

 
367

 
335

 
333

Employee stock purchase plan and other
5

 

 
5

 

Diluted weighted average shares outstanding
365,537

 
363,254

 
365,418

 
363,245


For the quarter ended June 29, 2019, there were no anti-dilutive restricted stock units. For the quarter ended June 30, 2018, there were 14 restricted stock units excluded from the diluted earnings per share calculation because their effect would be anti-dilutive. For the six months ended June 29, 2019 and June 30, 2018, there were 2 and 14 restricted stock units excluded

13

Table of Contents
HANESBRANDS INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(dollars and shares in thousands, except per share data)
(unaudited)

from the diluted earnings per share calculation, respectively, because their effect would be anti-dilutive. For the quarters and six months ended June 29, 2019 and June 30, 2018, there were no anti-dilutive stock options to purchase shares of common stock.
On July 23, 2019, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.15 per share on outstanding shares of common stock to be paid on September 4, 2019 to stockholders of record at the close of business on August 13, 2019.
On April 27, 2016, the Company’s Board of Directors approved the current share repurchase program for up to 40,000 shares to be repurchased in open market transactions, subject to market conditions, legal requirements and other factors. The Company did not repurchase any shares during the quarters and six months ended June 29, 2019 and June 30, 2018. At June 29, 2019, the remaining repurchase authorization totaled 20,360 shares. The primary objective of the share repurchase program is to utilize excess cash to generate shareholder value.
(7)
Inventories
Inventories consisted of the following: 
 
June 29,
2019
 
December 29,
2018
 
June 30,
2018
Raw materials
$
107,561

 
$
107,300

 
$
137,205

Work in process
169,509

 
182,966

 
214,679

Finished goods
1,956,690

 
1,764,192

 
1,760,327

 
$
2,233,760

 
$
2,054,458

 
$
2,112,211



(8)
Debt and Notes Payable
Debt and notes payable consisted of the following: 
 
Interest
Rate as of
June 29,
2019
 
Principal Amount
 
Maturity Date
 
June 29,
2019
 
December 29,
2018
 
Senior Secured Credit Facility:
 
 
 
 
 
 
 
Revolving Loan Facility
3.88%
 
$
180,000

 
$

 
December 2022
Term Loan A
3.86%
 
703,125

 
721,875

 
December 2022
Term Loan B
4.19%
 
493,750

 
496,250

 
December 2024
Australian Term A-1
 

 
122,968

 
Australian Revolving Loan Facility
2.62%
 

 
21,118

 
July 2021
4.875% Senior Notes
4.88%
 
900,000

 
900,000

 
May 2026
4.625% Senior Notes
4.63%
 
900,000

 
900,000

 
May 2024
3.5% Senior Notes
3.50%
 
568,505

 
572,213

 
June 2024
European Revolving Loan Facility
1.50%
 
113,701

 
113,520

 
September 2019
Accounts Receivable Securitization Facility
3.15%
 
190,311

 
161,608

 
March 2020
Other International Debt
Various
 

 
1

 
Various
Total debt
 
 
4,049,392

 
4,009,553

 
 
Notes payable
 
 
4,695

 
5,824

 
 
Total debt and notes payable
 
 
4,054,087

 
4,015,377

 
 
Less long-term debt issuance costs
 
 
31,814

 
34,774

 
 
Less notes payable
 
 
4,695

 
5,824

 
 
Less current maturities(1)
 
 
346,512

 
440,596

 
 
Total long-term debt
 
 
$
3,671,066

 
$
3,534,183

 
 

 
 
(1)
Current maturities excludes $12 of short-term debt issuance costs at June 29, 2019 and December 29, 2018.

14

Table of Contents
HANESBRANDS INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(dollars and shares in thousands, except per share data)
(unaudited)

As of June 29, 2019, the Company had $815,665 of borrowing availability under the $1,000,000 Revolving Loan Facility after taking into account outstanding borrowings and $4,335 of standby and trade letters of credit issued and outstanding under this facility.
The Company entered into an accounts receivable securitization facility (the “Accounts Receivable Securitization Facility”) in November 2007. The Company’s maximum borrowing capacity under the Accounts Receivable Securitization Facility was $225,000 as of June 29, 2019. Borrowings under the Accounts Receivable Securitization Facility are permitted only to the extent that the face of the receivables in the collateral pool, net of applicable reserves and other deductions, exceeds the outstanding loans and also subject to a fluctuating facility limit, not to exceed $300,000.
The Company had $41,911 of borrowing availability under the Australian Revolving Loan Facility, no borrowing availability under the European Revolving Loan Facility and $96,609 of borrowing availability under other international lines of credit after taking into account outstanding borrowings and letters of credit outstanding under the applicable facility.
In March 2019, the Company amended the Accounts Receivable Securitization Facility. This amendment primarily increased the fluctuating facility limit to $300,000 (previously $225,000) and extended the maturity date to March 2020.
In June 2019, the Company paid the outstanding balance and terminated the Australian Term A-1 loan which was to mature in July 2019.
In July 2019, the Company refinanced the European Revolving Loan Facility primarily to extend the maturity date to September 2020.
As of June 29, 2019, the Company was in compliance with all financial covenants under its credit facilities.
(9)
Accumulated Other Comprehensive Loss
The components of accumulated other comprehensive loss (“AOCI”) are as follows:
 
Cumulative Translation Adjustment
 
Hedges
 
Defined Benefit Plans
 
Income Taxes
 
Accumulated Other Comprehensive Loss
Balance at December 29, 2018
$
(157,060
)
 
$
21,814

 
$
(595,307
)
 
$
227,611

 
$
(502,942
)
Amounts reclassified from accumulated other comprehensive loss

 
(14,364
)
 
9,566

 
792

 
(4,006
)
Current-period other comprehensive income activity
11,259

 
1,714

 

 
165

 
13,138

Total other comprehensive income
11,259

 
(12,650
)
 
9,566

 
957

 
9,132

Reclassification of stranded tax related to U.S. pension plan to retained earnings

 

 

 
(78,816
)
 
(78,816
)
 
 
 
 
 
 
 
 
 
 
Balance at June 29, 2019
$
(145,801
)
 
$
9,164

 
$
(585,741
)
 
$
149,752

 
$
(572,626
)


15

Table of Contents
HANESBRANDS INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(dollars and shares in thousands, except per share data)
(unaudited)

The Company had the following reclassifications out of AOCI:
Component of AOCI
 
Location of Reclassification into Income
 
Amount of Reclassification
from AOCI
 
Amount of Reclassification
from AOCI
 
Quarter Ended
 
Six Months Ended
 
June 29,
2019
 
June 30,
2018
 
June 29,
2019
 
June 30,
2018
Gain (loss) on foreign exchange contracts
 
Cost of sales
 
$
8,347

 
$
(5,554
)
 
$
14,364

 
$
(7,219
)

 
Income tax
 
(1,887
)
 
1,113

 
(3,408
)
 
1,415


 
Net of tax
 
6,460

 
(4,441
)
 
10,956

 
(5,804
)
Amortization of deferred actuarial loss and prior service cost
 
Selling, general, and administrative expenses
 
(4,964
)
 
(4,948
)
 
(9,566
)
 
(8,015
)

 
Income tax
 
1,411

 
1,066

 
2,616

 
2,244


 
Net of tax
 
(3,553
)
 
(3,882
)
 
(6,950
)
 
(5,771
)
 
 
 
 
 
 
 
 
 
 
 
Total reclassifications
 
 
 
$
2,907

 
$
(8,323
)
 
$
4,006

 
$
(11,575
)

(10)
Financial Instruments and Risk Management
The Company uses forward foreign exchange contracts to manage its exposures to movements in foreign exchange rates. As of June 29, 2019, the notional U.S. dollar equivalent of the Company’s derivative portfolio was $531,767, consisting of contracts hedging exposures primarily related to the Euro, Australian dollar, Canadian dollar and Mexican peso.
Fair Values of Derivative Instruments
The fair values of derivative financial instruments related to forward foreign exchange contracts recognized in the Condensed Consolidated Balance Sheets of the Company were as follows:
 
Balance Sheet Location
 
Fair Value
 
June 29,
2019
 
December 29,
2018
Hedges
Other current assets
 
$
5,733

 
$
18,381

Non-hedges
Other current assets
 
8,667

 
12,410

Total derivative assets
 
 
14,400

 
30,791

 
 
 
 
 
 
Hedges
Accrued liabilities
 
(1,058
)
 
(286
)
Non-hedges
Accrued liabilities
 
(988
)
 
(114
)
Total derivative liabilities
 
 
(2,046
)
 
(400
)
 
 
 
 
 
 
Net derivative asset
 
 
$
12,354

 
$
30,391


Cash Flow Hedges
The Company uses forward foreign exchange contracts to reduce the effect of fluctuating foreign currencies on short-term foreign currency-denominated transactions, foreign currency-denominated investments and other known foreign currency exposures. Gains and losses on these contracts are intended to offset losses and gains on the hedged transaction in an effort to reduce the earnings volatility resulting from fluctuating foreign currency exchange rates.
The Company expects to reclassify into earnings during the next 12 months a net gain from AOCI of approximately$15,291. The Company is hedging exposure to the variability in future cash flows for forecasted transactions over the next 18 months.
The effect of cash flow hedge derivative instruments on the Condensed Consolidated Statements of Income and AOCI is as follows:

16

Table of Contents
HANESBRANDS INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(dollars and shares in thousands, except per share data)
(unaudited)

 
Amount of Gain
Recognized in AOCI
on Derivative Instruments
 
Amount of Gain
Recognized in AOCI
on Derivative Instruments
 
Quarter Ended
 
Six Months Ended
 
June 29,
2019
 
June 30,
2018
 
June 29,
2019
 
June 30,
2018
Foreign exchange contracts
$
1,274

 
$
26,982

 
$
1,714

 
$
25,274

 
Location of Gain (Loss)
Reclassified from AOCI 
into Income
 
Amount of Gain (Loss)
Reclassified from AOCI
into Income
 
Amount of Gain (Loss)
Reclassified from AOCI
into Income
 
 
Quarter Ended
 
Six Months Ended
 
 
June 29,
2019
 
June 30,
2018
 
June 29,
2019
 
June 30,
2018
Foreign exchange contracts (1)
Cost of sales
 
$
8,347

 
$
(5,554
)
 
$
14,364

 
$
(7,219
)

 
 
(1)
The Company does not exclude amounts from effectiveness testing that would require recognition into earnings based on changes in fair value.
  
Quarter Ended
 
Six Months Ended
  
June 29,
2019
 
June 30,
2018
 
June 29,
2019
 
June 30,
2018
Total cost of sales in which the effects of cash flow hedges are recorded
$
1,086,248

 
$
1,055,487

 
$
2,053,396

 
$
1,948,070


Cross-Currency Swaps
In July 2019, the Company entered into two cross-currency swaps with a total notional amount of 300,000 in order to hedge the currency fluctuation impact of the Company’s net investment in its European businesses. The swaps are contracts to exchange fixed-rate payments in one currency for fixed-rate payments in another currency. These instruments will mature in 2024. The execution of the swaps had no impact on the financial statements for the quarter ended June 29, 2019. As part of the ongoing accounting for these derivative instruments, the Company will determine the fair value and record this amount as an asset or liability each reporting period.  The Company has elected to utilize hedge accounting, which will result in the change in fair value of the derivatives to be recorded as an adjustment to equity. 
Mark to Market Hedges
A derivative used as a hedging instrument whose change in fair value is recognized to act as a hedge against changes in the values of the hedged item is designated as a mark to market hedge. The Company uses foreign exchange derivative contracts as hedges against the impact of foreign exchange fluctuations on existing accounts receivable and payable balances and intercompany lending transactions denominated in foreign currencies. Foreign exchange derivative contracts are recorded as mark to market hedges when the hedged item is a recorded asset or liability that is revalued in each accounting period. These contracts are not designated as hedges under the accounting standards and are recorded at fair value in the Condensed Consolidated Balance Sheets. Any gains or losses resulting from changes in fair value are recognized directly into earnings. Gains or losses on these contracts largely offset the net remeasurement gains or losses on the related assets and liabilities.

17

Table of Contents
HANESBRANDS INC.
Notes to Condensed Consolidated Financial Statements — (Continued)
(dollars and shares in thousands, except per share data)
(unaudited)

The effect of derivative contracts not designated as hedges on the Condensed Consolidated Statements of Income is as follows:
 
Location of Gain (Loss)
Recognized in Income
on Derivatives
 
Amount of Gain (Loss)
Recognized in Income
 
Amount of Gain (Loss)
Recognized in Income
 
Quarter Ended
 
Six Months Ended
 
June 29,
2019
 
June 30,
2018
 
June 29,
2019
 
June 30,
2018
Foreign exchange contracts
Cost of sales
 
$
(9,361
)
 
$
10,011

 
$
(18,758
)
 
$
19,111

Foreign exchange contracts
Selling, general and administrative expenses
 
(262
)
 
472

 
(921
)
 
775

Total
 
 
$
(9,623
)
 
$
10,483

 
$
(19,679
)
 
$
19,886


(11)
Fair Value of Assets and Liabilities
As of June 29, 2019, the Company held certain financial assets and liabilities that are required to be measured at fair value on a recurring basis. These consisted of the Company’s derivative instruments related to foreign exchange rates and deferred compensation plan liabilities. The fair values of foreign exchange rate derivatives are determined using the cash flows of the foreign exchange contract, discount rates to account for the passage of time and current foreign exchange market data which are all based on inputs readily available in public markets and are categorized as Level 2. The fair value of deferred compensation plans is based on readily available current market data and is categorized as Level 2. The Company’s defined benefit pension plan investments are not required to be measured at fair value on a quarterly recurring basis.
There were no changes during the quarter and six months ended June 29, 2019 to the Company’s valuation techniques used to measure asset and liability fair values on a recurring basis. There were no transfers into or out of Level 1, Level 2 or Level 3 during the quarter and six months ended June 29, 2019. As of and during the quarter and six months ended June 29, 2019, the Company did not have any non-financial assets or liabilities that were required to be measured at fair value on a recurring or non-recurring basis.
The following tables set forth by level within the fair value hierarchy the Company’s financial assets and liabilities accounted for at fair value on a recurring basis.
 
Assets (Liabilities) at Fair Value as of
June 29, 2019
 
Total
 
Quoted Prices In
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Foreign exchange derivative contracts - assets
$
14,400

 
$

 
$
14,400

 
$

Foreign exchange derivative contracts - liabilities
(2,046
)
 

 
(2,046
)
 

 
12,354

 

 
12,354

 

Deferred compensation plan liability
(29,906
)
 

 
(29,906
)
 

Total
$
(17,552
)
 
$

 
$
(17,552
)
 
$

 
 
Assets (Liabilities) at Fair Value as of
December 29, 2018
 
Total
 
Quoted Prices In
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Foreign exchange derivative contracts - assets
$
30,791

 
$

 
$
30,791

 
$

Foreign exchange derivative contracts - liabilities
(400
)
 

 
(400
)
 

 
30,391

 

 
30,391

 

Deferred compensation plan liability
(39,542
)
 

 
(39,542
)
 

Total
$
(9,151
)
 
$

 
$
(9,151
)
 
$