Derivative Financial Instrument

12 Months Ended

Dec. 27, 2016

Derivative [Line Items]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Derivative Financial Instruments

The Company enters into derivative instruments solely for risk management purposes. To the extent the Company's cash-flow hedging instruments are effective in offsetting the variability in the hedged cash flows, and otherwise meet the cash flow hedge accounting criteria, changes in the derivatives' fair value are not included in current earnings but are included in AOCI. These changes in fair value will be reclassified into earnings at the time of the forecasted transaction. By using these instruments, the Company exposes itself, from time to time, to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. The Company minimizes this credit risk by entering into transactions with high-quality counterparties. Market risk is the adverse effect on the value of a financial instrument that results from changes in interest rates. The Company minimizes this market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

On July 16, 2015, the Company entered into two forward-starting interest rate swap agreements with an aggregate initial notional value of $242.5 million to hedge a portion of the cash flows of its term loan borrowings. On January 9, 2017, the Company entered into consecutive forward-starting interest rate swaps agreements with an initial notional value of $200 million to hedge a portion of the cash flows of its term loan borrowings. For each of the swaps, the Company has agreed to exchange with a counterparty the difference between fixed and variable interest amounts calculated by reference to an agreed-upon principal amount.

The following table summarizes the Company's interest rate swaps as of December 27, 2016:

Trade Date	Effective Date	Term (in Years)	Initial Notional Amount (in thousands)		Fixed Rate
July 16, 2015	July 11, 2016	4	$	100,000	1.75	%
July 16, 2015	July 18, 2016	5	142,500		1.97	%

The notional amount for the interest rate swap with an effective date of July 18, 2016 decreases quarterly by $1.9 million over the five-year term of the interest rate swap beginning in September 2016.

The interest rate swaps, which have been designated and qualify as cash flow hedges, are recorded at fair value in the Consolidated Balance Sheets. The following table summarizes the estimated fair value of the Company's interest rate swaps for the periods indicated (in thousands):

Balance Sheet Location	December 27, 2016		December 29, 2015
Accrued expenses	$	2,078	$	—
Other long-term liabilities	138		2,552
Total	$	2,216	$	2,552

Changes in fair value of the interest rate swaps are recorded as a component of AOCI in the Consolidated Balance Sheets. The Company reclassifies the effective gain or loss from AOCI to interest expense in the Consolidated Statements of Income at the time of the forecasted transaction. The following table presents pre-tax gains and losses on the interest rate swaps recognized in other comprehensive income (“OCI”) and reclassified from AOCI to earnings for the periods indicated (in thousands):

	For the fiscal year ended
	December 27, 2016			December 29, 2015			December 30, 2014
Net gains (losses) recognized in OCI before reclassifications	$	(703	)	$	(1,543	)	$	—
Net (gains) losses reclassified from AOCI to earnings	906			—			—

A net of tax loss of approximately $1.3 million is expected to be reclassified from AOCI to earnings within the next twelve months. The Company did not recognize a gain or loss due to hedge ineffectiveness during fiscal 2016, fiscal 2015, or fiscal 2014.

The Company does not hold or use derivative instruments for trading purposes. The Company does not have any derivatives that are not designated as hedging instruments and has not designated any non-derivatives as hedging instruments.