Fair Values of Financial Instruments (Tables)

6 Months Ended

Jun. 28, 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:

	June 28, 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	$	43,904	$	43,904	$	43,904	$	—	$	—
Commodity hedging agreements	823		823		—		823		—
Liabilities:
Deferred compensation plan liabilities	43,904		43,904		43,904		—		—
Commodity hedging agreements	2,918		2,918		—		2,918		—
Nonpublic variable rate debt	247,338		247,500		—		247,500		—
Nonpublic fixed rate debt	374,734		391,700		—		391,700		—
Public debt securities	348,102		385,000		—		385,000		—
Acquisition related contingent consideration	441,113		441,113		—		—		441,113

	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 Liability

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

	Second Quarter				First Half
(in thousands)	2020		2019		2020		2019
Beginning balance - Level 3 liability	$	437,094	$	393,007	$	446,684	$	382,898
Payments of acquisition related contingent consideration	(10,079)		(6,599)		(20,531)		(12,836)
Reclassification to current payables	(450)		(3,180)		(300)		(880)
Increase in fair value	14,548		29,222		15,260		43,268
Ending balance - Level 3 liability	$	441,113	$	412,450	$	441,113	$	412,450