Fair Values of Financial Instruments (Tables)

3 Months Ended

Mar. 29, 2020

Fair Value Disclosures [Abstract]

Methods and Assumptions Used in Estimating Fair Value

The following methods and assumptions were used by the Company in estimating the fair values of its financial instruments. There were no transfers of assets or liabilities between levels in any period presented.

Financial Instrument	Fair Value Level	Methods and Assumptions
Deferred compensation plan assets and liabilities	Level 1	The fair value of the Company’s non-qualified deferred compensation plan for certain executives and other highly compensated employees is based on the fair values of associated assets and liabilities, which are held in mutual funds and are based on the quoted market value of the securities held within the mutual funds.
Commodity hedging agreements	Level 2	The fair values of the Company’s commodity hedging agreements are based on current settlement values at each balance sheet date. The fair values of the commodity hedging agreements at each balance sheet date represent the estimated amounts the Company would have received or paid upon termination of these agreements. The Company’s credit risk related to the derivative financial instruments is managed by requiring high standards for its counterparties and periodic settlements. The Company considers nonperformance risk in determining the fair values of derivative financial instruments.
Nonpublic variable rate debt	Level 2	The carrying amounts of the Company’s nonpublic variable rate debt approximate their fair values due to variable interest rates with short reset periods.
Nonpublic fixed rate debt	Level 2	The fair values of the Company’s nonpublic fixed rate debt are based on estimated current market prices.
Public debt securities	Level 2	The fair values of the Company’s public debt securities are based on estimated current market prices.
Acquisition related contingent consideration	Level 3	The fair values of acquisition related contingent consideration are based on internal forecasts and the weighted average cost of capital (“WACC”) derived from market data.

Deferred Compensation Plan Commodity Hedging Agreements and Acquisition Related Contingent Consideration

The following tables summarize, by assets and liabilities, the carrying amounts and fair values by level of the Company’s deferred compensation plan, commodity hedging agreements, debt and acquisition related contingent consideration:

	March 29, 2020
(in thousands)	Carrying Amount		Total Fair Value		Fair Value Level 1		Fair Value Level 2		Fair Value Level 3
Assets:
Deferred compensation plan assets	$	37,135	$	37,135	$	37,135	$	—	$	—
Commodity hedging agreements	240		240		—		240		—
Liabilities:
Deferred compensation plan liabilities	37,135		37,135		37,135		—		—
Commodity hedging agreements	4,272		4,272		—		4,272		—
Nonpublic variable rate debt	359,774		360,000		—		360,000		—
Nonpublic fixed rate debt	374,742		373,700		—		373,700		—
Public debt securities	348,073		357,900		—		357,900		—
Acquisition related contingent consideration	437,094		437,094		—		—		437,094

	December 29, 2019
(in thousands)	Carrying Amount		Total Fair Value		Fair Value Level 1		Fair Value Level 2		Fair Value Level 3
Assets:
Deferred compensation plan assets	$	42,543	$	42,543	$	42,543	$	—	$	—
Commodity hedging agreements	1,007		1,007		—		1,007		—
Liabilities:
Deferred compensation plan liabilities	42,543		42,543		42,543		—		—
Commodity hedging agreements	1,174		1,174		—		1,174		—
Nonpublic variable rate debt	307,250		307,500		—		307,500		—
Nonpublic fixed rate debt	374,723		383,900		—		383,900		—
Public debt securities	347,947		367,300		—		367,300		—
Acquisition related contingent consideration	446,684		446,684		—		—		446,684

Summary of Reconciliation of Acquisition Related Contingent Consideration

The acquisition related contingent consideration is the Company’s only Level 3 asset or liability. A reconciliation of the Level 3 activity is as follows:

	First Quarter
(in thousands)	2020		2019
Beginning balance - Level 3 liability	$	446,684	$	382,898
Payments of acquisition related contingent consideration	(10,452)		(6,237)
Reclassification to current payables	150		2,300
Increase in fair value	712		14,046
Ending balance - Level 3 liability	$	437,094	$	393,007