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Fair Value Measurements
12 Months Ended
Dec. 27, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements
14.
FAIR VALUE MEASUREMENTS
Non-Recurring Measurements—Certain assets are measured at fair value on a non-recurring basis.  These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances.  These assets include long-lived assets, intangible assets, cost and equity method investments, notes receivable and borrowings.
Long-Lived Assets, Intangible Assets, Other Investments and Notes Receivable —As described in Note 1—Basis of Presentation and Summary of Significant Accounting Policies, the Company regularly reviews long-lived assets (primarily property, plant and equipment), intangible assets, investments accounted for under the cost or equity method and notes receivable for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable.  When the estimated fair value is determined to be lower than the carrying value of the asset, an impairment charge is recorded to write the asset down to its estimated fair value.
Other investments consisted of the following (in millions):
 
As of
 
December 27, 2018
 
December 28, 2017
Investment in AC JV, LLC (1)
$
0.9

 
$
1.0

Other investments (2)
2.1

 
2.5

Total
$
3.0

 
$
3.5

 
 
(1)
Refer to Note 9—Related Party Transactions.
(2)
The Company received equity securities in privately held companies as consideration for a portion of advertising contracts. The equity securities were accounted for under the cost method and represent an ownership of less than 20%. The Company does not exert significant influence on these companies’ operating or financial activities.
During the years ended December 27, 2018, December 28, 2017 and December 29, 2016, the Company recorded impairment charges of $0.4 million, $3.1 million and $0.7 million, respectively, on certain of its investments due to a significant deterioration in the business prospects of the investee or new information regarding the fair value of the investee, which brought the total remaining value of the respective impaired investments to $0.0 million as of December 27, 2018 and $0.1 million as of December 28, 2017. As of December 27, 2018, no other observable price changes or impairments have been recorded as a result of the Company’s qualitative assessment of identified events or changes in the circumstances of the remaining investments. The investment in AC JV was initially valued using comparative market multiples.  The other investments were recorded based upon the fair value of the services provided in exchange for the investment.  Refer to Note 1—Basis of Presentation and Summary of Significant Accounting Policies for more details.  As the inputs to the determination of fair value are based upon non-identical assets and use significant unobservable inputs, they have been classified as Level 3 in the fair value hierarchy.
As of December 27, 2018 and December 28, 2017, the Company had notes receivable totaling $5.6 million and $8.3 million, respectively, from its founding members related to the sale of Fathom Events, as described in Note 9—Related Party Transactions.   These notes were initially valued using comparative market multiples.  There were no identified events or changes in circumstances that had a significant adverse effect on the fair value of the notes receivable.  The notes are classified as Level 3 in the fair value hierarchy as the inputs to the determination of fair value are based upon non-identical assets and use significant unobservable inputs.
Borrowings— The carrying amount of the revolving credit facility is considered a reasonable estimate of fair value due to its floating-rate terms. The estimated fair values of the Company’s financial instruments where carrying values do not approximate fair value are as follows (in millions):
 
As of December 27, 2018
 
As of December 28, 2017
 
Carrying Value
 
Fair Value (1)
 
Carrying Value
 
Fair Value (1)
Term loans
$
269.4

 
$
261.2

 
$
270.0

 
$
270.8

Senior Notes due 2022
400.0

 
401.8

 
400.0

 
407.3

Senior Notes due 2026
235.0

 
211.0

 
250.0

 
235.0

 
 
(1)
The Company has estimated the fair value on an average of at least two non-binding broker quotes and the Company’s analysis. If the Company were to measure the borrowings in the above table at fair value on the balance sheet they would be classified as Level 2.
Recurring Measurements—The fair values of the Company’s assets and liabilities measured on a recurring basis pursuant to ASC 820-10 Fair Value Measurements and Disclosures are as follows (in millions):
 
 
 
Fair Value Measurements at
Reporting Date Using
 
Fair Value As of
December 27, 2018
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
ASSETS:
 
 
 
 
 
 
 
Cash equivalents (1)
$
18.2

 
$
11.2

 
$
7.0

 
$

Short-term marketable securities (2)
24.0

 

 
24.0

 

Long-term marketable securities (2)
10.2

 

 
10.2

 

Total assets
$
52.4

 
$
11.2

 
$
41.2

 
$

 
 
 
Fair Value Measurements at
Reporting Date Using
 
Fair Value As of
December 28, 2017
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
ASSETS:
 
 
 
 
 
 
 
Cash equivalents (1)
$
12.2

 
$
8.2

 
$
4.0

 
$

Short-term marketable securities (2)
13.1

 

 
13.1

 

Long-term marketable securities (2)
16.2

 

 
16.2

 

Total assets
$
41.5

 
$
8.2

 
$
33.3

 
$

 
 
(1)
Cash Equivalents— The Company’s cash equivalents are carried at estimated fair value. Cash equivalents consist of money market accounts which the Company has classified as Level 1 given the active market for these accounts and commercial paper with original maturities of three months or less, which are classified as Level 2 and are valued as described below.
(2)
Short-Term and Long-Term Marketable Securities— The carrying amount and fair value of the marketable securities are equivalent since the Company accounts for these instruments at fair value. The Company’s government agency bonds, commercial paper and certificates of deposit are valued using third party broker quotes. The value of the Company’s government agency bonds and municipal bonds are derived from quoted market information. The inputs in the valuation are classified as Level 1 if there is an active market for these securities; however, if an active market does not exist, the inputs are recorded at a lower level in the fair value hierarchy. The value of commercial paper and certificates of deposit is derived from pricing models using inputs based upon market information, including contractual terms, market prices and yield curves. The inputs to the valuation pricing models are observable in the market, and as such are generally classified as Level 2 in the fair value hierarchy. For the years ended December 27, 2018 and December 28, 2017, there was an inconsequential amount of net realized gains (losses) recognized in interest income and an inconsequential amount of net unrealized holding gains (losses) included in other comprehensive income. Original cost of short term marketable securities is based on the specific identification method. As of December 27, 2018 and December 28, 2017, there was $0.2 million and $0.2 million, respectively, of gross unrealized losses related to individual securities of $11.8 million and $8.2 million, respectively, that had been in a continuous loss position for 12 months or longer. The Company has not recorded an impairment because it has the intention and ability to hold these securities to maturity.
The amortized cost basis, aggregate fair value and maturities of the marketable securities the Company held as of December 27, 2018 and December 28, 2017 are as follows:
 
As of December 27, 2018
 
Amortized
Cost Basis
(in millions)
 
Aggregate
Fair Value
(in millions)
 
Maturities (1)
(in years)
MARKETABLE SECURITIES:
 

 
 

 
 
Short-term U.S. government agency bonds
$
3.9

 
$
3.9

 
0.5
Short-term U.S. government treasury bonds
0.3

 
0.3

 
0.5
Short-term certificates of deposit
3.6

 
3.6

 
0.6
Short-term municipal bonds
0.5

 
0.5

 
0.1
Short-term commercial paper:
 
 
 
 
 
Financial
3.8

 
3.8

 
0.1
Industrial
12.0

 
11.9

 
0.1
Total short-term marketable securities
24.1

 
24.0

 
 
Long-term municipal bonds
1.2

 
1.3

 
1.5
Long-term U.S. government agency bonds
6.9

 
6.8

 
2.1
Long-term certificates of deposit
2.4

 
2.1

 
2.9
Total long-term marketable securities
10.5

 
10.2

 
 
Total marketable securities
$
34.6

 
$
34.2

 
 
 
As of December 28, 2017
 
Amortized
Cost Basis
(in millions)
 
Aggregate
Fair Value
(in millions)
 
Maturities (1)
(in years)
MARKETABLE SECURITIES:
 

 
 

 
 
Short-term U.S. government agency bonds
$
2.3

 
$
2.2

 
0.9
Short-term commercial paper
0.9

 
0.9

 
0.8
Short-term certificates of deposit:
 
 
 
 
 
Financial
6.0

 
6.0

 
0.3
Industrial
4.0

 
4.0

 
0.3
Total short-term marketable securities
13.2

 
13.1

 
 
Long-term municipal bonds
1.9

 
1.9

 
2.1
Long-term U.S. government agency bonds
10.4

 
10.2

 
2.5
Long-term certificates of deposit
4.1

 
4.1

 
1.8
Total long-term marketable securities
16.4

 
16.2

 
 
Total marketable securities
$
29.6

 
$
29.3

 
 
 
 
(1)
Maturities— Securities available for sale include obligations with various contractual maturity dates some of which are greater than one year. The Company considers the securities to be liquid and convertible to cash within 30 days.