Commitments and Contingencies

6 Months Ended

Jan. 01, 2022

Commitments and Contingencies Disclosure [Abstract]

Note 18. Commitments and Contingencies

Legal Proceedings

In June 2016, the Company received a court decision regarding the validity of an amendment to a pension deed of trust related to one of its foreign subsidiaries which the Company contends contained an error requiring the Company to increase the pension plan’s benefit. The Company had subsequently further amended the deed to rectify the error. The court ruled that the amendment increasing the pension plan benefit was valid until the subsequent amendment. The Company estimated the liability to range from (amounts represented as £ denote GBP) £5.7 million to £8.4 million. The Company determined the likelihood of loss to be probable and accrued £5.7 million as of July 2, 2016 in accordance with authoritative guidance on contingencies. The accrual is included in pension and post-employment benefits, which is a component of other non-current liabilities in the Company’s Consolidated Balance Sheets.

The Company pursued an appeal of the court decision. In March 2018, the appellate court affirmed the decision of the lower court. The Company is pursuing a motion for summary judgement on the deed of rectification claim and continues to pursue a claim against the U.K. law firm responsible for the error. As of January 1, 2022, the related accrued pension liability was £7.0 million or $9.5 million.

The Company is subject to a variety of claims and suits that arise from time to time in the ordinary course of its business. While management currently believes that resolving claims against the Company, individually or in aggregate, will not have a material adverse impact on its financial position, results of operations or statement of cash flows, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. Were an unfavorable final outcome to occur, there exists the possibility of a material adverse impact on the Company’s financial position, results of operations or cash flows for the period in which the effect becomes reasonably estimable.

Guarantees

Outstanding Letters of Credit, Performance Bonds and Other Claims

As of January 1, 2022, the Company had standby letters of credit of $9.2 million, performance bonds and other claims of $2.4 million collateralized by restricted cash.

Product Warranties

The following table presents the changes in the Company’s warranty reserve during the three and six months ended January 1, 2022 and January 2, 2021, (in millions):


	Three Months Ended				Six Months Ended
	January 1, 2022		January 2, 2021		January 1, 2022		January 2, 2021
Balance as of beginning of period	$	10.3	$	9.6	$	9.7	$	9.4
Provision for warranty	1.2		1.6		2.6		2.0
Utilization of reserve	(0.7)		(1.2)		(1.1)		(1.4)
Adjustments to pre-existing warranties (includes changes in estimates)	—		(0.3)		(0.4)		(0.3)

Balance as of end of period	$	10.8	$	9.7	$	10.8	$	9.7