Fair Value Measurements (Tables)

6 Months Ended

Jul. 04, 2021

Fair Value Disclosures [Abstract]

Summary of Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis

The following table summarizes our assets and liabilities measured and recorded at fair value on a recurring basis as of July 4, 2021 and January 3, 2021:

	July 4, 2021								January 3, 2021
(In thousands)	Total Fair Value		Level 3		Level 2		Level 1		Total Fair Value		Level 3		Level 2		Level 1
Assets
Other long-term assets:
Equity investments with fair value option ("FVO")	$	8,374	$	8,374	$	—	$	—	$	9,924	$	9,924	$	—	$	—
Equity investments with readily determinable fair value	652,438		—		—		652,438		614,148		—		—		614,148
Total assets	$	660,812	$	8,374	$	—	$	652,438	$	624,072	$	9,924	$	—	$	614,148
Liabilities
Other long-term liabilities:
Interest rate swap contracts1	$	—	$	—	$	—	$	—	$	600	$	—	$	600	$	—
Total liabilities	$	—	$	—	$	—	$	—	$	600	$	—	$	600	$	—

1 Our interest rate swap contracts were related to our PNC Energy Capital loan and were terminated during the quarter (see Note 10. Debt and Credit Sources for details).

Equity Method Investment Movements

The following table summarizes movements in equity investments for the six months ended July 4, 2021. There were no internal movements between Level 1 or Level 2 fair value measurements to or from Level 3 fair value measurements for the six months ended July 4, 2021.

(In thousands)	Beginning balance as of January 3, 2021	Equity Distribution 1	Additional Investment	Other adjustment 2		Ending balance as of July 4, 2021
Equity investments with FVO	$9,924	$(2,276)	$—	$	726	$	8,374

1 During the three months ended July 4, 2021, we received $2.3 million in cash proceeds from SunStrong Partners. The distribution reduced our equity investment balance in SunStrong Partners classified in "other long-term assets" on our unaudited condensed consolidated balance sheet.

2 During the three months ended July 4, 2021, we recognized $0.7 million gain on change in valuation of equity investments within "other, net" in our unaudited condensed consolidated statement of operations. The gain was primarily due to change in forecasted cash flows of SunStrong, resulting from the sale of certain commercial projects (Refer to Note 5. Business Divestitures).

Level 3 Significant Unobservable Input Sensitivity

The following table summarizes the significant unobservable inputs used in Level 3 valuation of our investments carried at fair value as of July 4, 2021. Included in the table are the inputs or range of possible inputs that have an effect on the overall valuation of the financial instruments.

2021
Assets:	Fair value		Valuation Technique	Unobservable input	Range (Weighted Average)
Other long-term assets:
Equity investments	$	8,374	Discounted cash flows	Discount rate Residual value	12.5%-13% 1 7.5% 1
Total assets	$	8,374

1 The primary unobservable inputs used in the fair value measurement of our equity investments, when using a discounted cash flow model, are the discount rate and residual value. Significant increases (decreases) in the discount rate in isolation would result in a significantly lower (higher) fair value measurement. We estimate the discount rate based on risk appropriate projected cost of equity. We estimate the residual value based on the contracted systems in place in the years being projected. Significant increases (decreases) in the residual value in isolation would result in a significantly higher (lower) fair value measurement.