Fair Values of Financial Instruments (Tables)

3 Months Ended

Apr. 01, 2018

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:

	April 1, 2018
	Carrying		Total		Fair Value		Fair Value		Fair Value
(in thousands)	Amount		Fair Value		Level 1		Level 2		Level 3
Assets:
Deferred compensation plan assets	$	32,993	$	32,993	$	32,993	$	-	$	-
Commodity hedging agreements		1,453		1,453		-		1,453		-
Liabilities:
Deferred compensation plan liabilities		32,993		32,993		32,993		-		-
Non-public variable rate debt		479,442		480,000		-		480,000		-
Non-public fixed rate debt		274,660		264,800		-		264,800		-
Public debt securities		457,007		466,200		-		466,200		-
Acquisition related contingent consideration		368,804		368,804		-		-		368,804

	December 31, 2017
	Carrying		Total		Fair Value		Fair Value		Fair Value
(in thousands)	Amount		Fair Value		Level 1		Level 2		Level 3
Assets:
Deferred compensation plan assets	$	33,166	$	33,166	$	33,166	$	-	$	-
Commodity hedging agreements		4,420		4,420		-		4,420		-
Liabilities:
Deferred compensation plan liabilities		33,166		33,166		33,166		-		-
Non-public variable rate debt		506,398		507,000		-		507,000		-
Non-public fixed rate debt		124,829		126,400		-		126,400		-
Public debt securities		456,791		475,100		-		475,100		-
Acquisition related contingent consideration		381,291		381,291		-		-		381,291

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)	2018			2017
Beginning balance - Level 3 liability	$	381,291		$	253,437
Increase due to System Transformation Transactions acquisitions		-			42,316
Measurement period adjustment⁽¹⁾		(1,059	)		-
Payment of acquisition related contingent consideration		(5,882	)		-
Reclassification to current payables		(360	)		(4,047	)
(Favorable)/unfavorable fair value adjustment		(5,186	)		12,246
Ending balance - Level 3 liability	$	368,804		$	303,952

⁽¹⁾ Measurement period adjustments relate to post-closing adjustments made in accordance with the terms and conditions of the April 2017 Distribution APA and the April 2017 Manufacturing APA.