Fair Values of Financial Instruments (Tables)

3 Months Ended

Apr. 01, 2022

Fair Value Disclosures [Abstract]

Methods and Assumptions Used in Estimating Fair Value

The below 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 nonqualified 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 values of the securities held within the mutual funds.
Commodity derivative instruments	Level 2	The fair values of the Company’s commodity derivative instruments are based on current settlement values at each balance sheet date, which represent the estimated amounts the Company would have received or paid upon termination of these instruments. The Company’s credit risk related to the commodity derivative instruments is managed by requiring high standards for its counterparties and periodic settlements. The Company considers nonperformance risk in determining the fair values of commodity derivative instruments.
Debt	Level 2	The carrying amounts of the Company’s variable rate debt approximate the fair values due to variable interest rates with short reset periods. The fair values of the Company’s fixed rate debt are based on estimated current market prices.
Acquisition related contingent consideration	Level 3	The fair value of the Company’s acquisition related contingent consideration is based on internal forecasts and the weighted average cost of capital (“WACC”) derived from market data.

Deferred Compensation Plan, Commodity Derivative Instruments, Debt and Acquisition Related Contingent Consideration

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

	April 1, 2022
(in thousands)	Carrying Amount		Total Fair Value		Fair Value Level 1		Fair Value Level 2		Fair Value Level 3
Assets:
Deferred compensation plan assets	$	58,260	$	58,260	$	58,260	$	—	$	—
Commodity derivative instruments	21,433		21,433		—		21,433		—
Liabilities:
Deferred compensation plan liabilities	58,260		58,260		58,260		—		—
Debt	723,574		734,100		—		734,100		—
Acquisition related contingent consideration	527,926		527,926		—		—		527,926

	December 31, 2021
(in thousands)	Carrying Amount		Total Fair Value		Fair Value Level 1		Fair Value Level 2		Fair Value Level 3
Assets:
Deferred compensation plan assets	$	60,461	$	60,461	$	60,461	$	—	$	—
Commodity derivative instruments	7,714		7,714		—		7,714		—
Liabilities:
Deferred compensation plan liabilities	60,461		60,461		60,461		—		—
Debt	723,443		772,600		—		772,600		—
Acquisition related contingent consideration	542,105		542,105		—		—		542,105

Summary of Acquisition Related Contingent Consideration Liability

A summary of the Level 3 activity is as follows:

	First Quarter
(in thousands)	2022		2021
Beginning balance - Level 3 liability	$	542,105	$	434,694
Payments of acquisition related contingent consideration	(9,822)		(10,046)
Reclassification to current payables	1,100		100
Increase (decrease) in fair value	(5,457)		10,998
Ending balance - Level 3 liability	$	527,926	$	435,746