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FAIR VALUE

9 Months Ended

Sep. 25, 2021

B. FAIR VALUE

We apply the provisions of ASC 820, Fair Value Measurements and Disclosures, to assets and liabilities measured at fair value. Assets measured at fair value are as follows (in thousands):


		September 25, 2021												September 26, 2020
		Quoted			Prices with									Quoted			Prices with
		Prices in			Other				Prices with					Prices in			Other				Prices with
		Active			Observable				Unobservable					Active			Observable				Unobservable
		Markets			Inputs				Inputs					Markets			Inputs				Inputs
		(Level 1)			(Level 2)				(Level 3)		Total			(Level 1)			(Level 2)				(Level 3)		Total
Money market funds		$	19		$	2,631		$	—		$	2,650		$	64		$	3,133		$	—		$	3,197
Fixed income funds			962			17,021			—			17,983			248			16,522			—			16,770
Treasury securities			310			—			—			310			—			—			—			—
Equity securities			18,543			—			—			18,543			10,524			—			—			10,524
Alternative investments			—			—			3,536			3,536			—			—			1,926			1,926
Mutual funds:
Domestic stock funds			9,968			—			—			9,968			6,826			—			—			6,826
International stock funds			1,675			—			—			1,675			1,243			—			—			1,243
Target funds			23			—			—			23			260			—			—			260
Bond funds			146			—			—			146			208			—			—			208
Alternative funds			497			—			—			497			433			—			—			433
Total mutual funds			12,309			—			—			12,309			8,970			—			—			8,970
Total		$	32,143		$	19,652		$	3,536		$	55,331		$	19,806		$	19,655		$	1,926		$	41,387
Assets at fair value		$	32,143		$	19,652		$	3,536		$	55,331		$	19,806		$	19,655		$	1,926		$	41,387

From the assets measured at fair value as of September 25, 2021, listed in the table above, $33.6 million of mutual funds, equity securities, and alternative investments are held in Investments, $0.1 million of money market funds are held in Cash and Cash Equivalents, $0.7 million of money market and mutual funds are held in Other Assets for our deferred compensation plan, and $18.3 million of fixed income funds and $2.6 million of money markets funds are held in Restricted Investments.

We maintain money market, mutual funds, bonds, and/or equity securities in our non-qualified deferred compensation plan, our wholly owned licensed captive insurance company, and assets held in financial institutions. These funds are valued at prices quoted in an active exchange market and are included in “Cash and Cash Equivalents”, “Investments”, “Other Assets”, and “Restricted Investments”. We have elected not to apply the fair value option under ASC 825, Financial Instruments, to any of our financial instruments except for those expressly required by U.S. GAAP.

In accordance with our investment policy, our wholly-owned captive, Ardellis Insurance Ltd. (“Ardellis”), maintains an investment portfolio, totaling $52.0 million as of September 25, 2021, which has been included in the aforementioned table of total investments. This portfolio consists of domestic and international equity securities, alternative investments, and fixed income bonds.

Ardellis’ available for sale investment portfolio, including funds held with the State of Michigan, consists of the following (in thousands):


		September 25, 2021									September 26, 2020
					Unrealized									Unrealized
		Cost			Gain			Fair Value			Cost			Gain			Fair Value
Fixed Income		$	17,293		$	690		$	17,983		$	15,750		$	1,020		$	16,770
Treasury Securities			310			—			310			—			—			—
Equity			14,392			4,151			18,543			9,121			1,403			10,524
Mutual Funds			9,210			2,435			11,645			7,228			852			8,080
Alternative Investments			3,370			166			3,536			1,881			45			1,926
Total		$	44,575		$	7,442		$	52,017		$	33,980		$	3,320		$	37,300

Our fixed income investments consist of a blend of US Government and Agency bonds and investment grade corporate bonds with varying maturities. Our equity investments consist of small, mid, and large cap growth and value funds, as well as international equity. Our mutual fund investments consist of domestic and international stock. Our alternative investments consist of a private real estate income trust which is valued as a Level 3 asset. The net unrealized gain of the portfolio was $7.4 million. Carrying amounts above are recorded in the investments and restricted investments line items within the balance sheet as of September 25, 2021 and September 26, 2020.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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