Financial Instruments

9 Months Ended

Sep. 25, 2016

Financial Instruments (Thousands of Dollars) [Abstract]

(4) Financial Instruments

The Company's financial instruments include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable and certain accrued liabilities. At September 25, 2016, September 27, 2015 and December 27, 2015, the carrying cost of these instruments approximated their fair value. The Company's financial instruments at September 25, 2016, September 27, 2015 and December 27, 2015 also include certain assets and liabilities measured at fair value (see Notes 6 and 8) as well as long-term borrowings. The carrying costs which are equal to the outstanding principal amounts, and fair values of the Company's long-term borrowings as of September 25, 2016, September 27, 2015 and December 27, 2015 are as follows:

	September 25, 2016				September 27, 2015				December 27, 2015
	Carrying		Fair		Carrying		Fair		Carrying		Fair
	Cost		Value		Cost		Value		Cost		Value
6.35% Notes Due 2040	$	500,000		611,200		500,000		563,400		500,000		556,300
6.30% Notes Due 2017		350,000		366,205		350,000		379,925		350,000		374,045
5.10% Notes Due 2044		300,000		324,450		300,000		291,900		300,000		286,710
3.15% Notes Due 2021		300,000		310,620		300,000		303,990		300,000		300,060
6.60% Debentures Due 2028		109,895		132,786		109,895		123,225		109,895		121,269
Total long-term debt	$	1,559,895		1,745,261		1,559,895		1,662,440		1,559,895		1,638,384
Less: Current portion		350,000		366,205		-		-		-		-
Less: Deferred debt expenses		11,434		-		13,099		-		12,780		-
Long-term debt	$	1,198,461		1,379,056		1,546,796		1,662,440		1,547,115		1,638,384

Current portion of long-term debt of $349,611 as shown on the balance sheet represents the $350,000 principal of 6.30% notes less $389 of deferred debt expenses.

The fair values of the Company's long-term debt are considered Level 3 fair values (see Note 6 for further discussion of the fair value hierarchy) and are measured using the discounted future cash flows method. In addition to the debt terms, the valuation methodology includes an assumption of a discount rate that approximates the current yield on a similar debt security. This assumption is considered an unobservable input in that it reflects the Company's own assumptions about the inputs that market participants would use in pricing the asset or liability. The Company believes that this is the best information available for use in the fair value measurement.

In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest (ASC 835-30), which simplifies the presentation of debt issuance costs. ASU 2015-03 requires debt issuance costs related to long-term debt to be presented in the balance sheet as a reduction to the carrying amount of the related debt liability, consistent with the presentation of discounts. The Company adopted ASU 2015-03 at December 27, 2015 and deferred debt expenses are presented as a reduction of long-term debt. Deferred debt expenses of $13,099 have been reclassified from other assets in the consolidated balance sheet for September 27, 2015, to reflect this change in accounting principle.