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FAIR VALUE MEASUREMENTS | 12 Months Ended
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Jan. 03, 2016
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We are required to consider and reflect the assumptions of market participants in fair value calculations. These factors include nonperformance risk (the risk that an obligation will not be fulfilled) and credit risk, both of the reporting entity (for liabilities) and of the counterparty (for assets). We use, as appropriate, a market approach (generally, data from market transactions), an income approach (generally, present value techniques), and/or a cost approach (generally, replacement cost) to measure the fair value of an asset or liability. These valuation approaches incorporate inputs such as observable, independent market data that we believe are predicated on the assumptions market participants would use to price an asset or liability. These inputs may incorporate, as applicable, certain risks such as nonperformance risk, which includes credit risk. The FASB has established a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The fair value hierarchy gives the highest priority to quoted market prices (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of inputs used to measure fair value are as follows:
▪ | Level 1—quoted prices in active markets for identical assets or liabilities accessible by the reporting entity.
▪ | Level 2—observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
▪ | Level 3—unobservable for an asset or liability. Unobservable inputs should only be used to the extent observable inputs are not available.
We have classified assets and liabilities measured at fair value based on the lowest level of input that is significant to the fair value measurement. For the periods presented, we had no transfers of assets or liabilities between levels within the fair value hierarchy. The timing of any such transfers would be determined at the end of each reporting period. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables set forth, by level within the fair value hierarchy, our financial assets and liabilities, including assets held in a rabbi trust used to fund the Supplemental Plan, that were measured at fair value on a recurring basis as of January 3, 2016 and December 28, 2014:
|  | January 3, 2016 |  | December 28, 2014
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
|  | (in millions) |  | (in millions)
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commodity contracts |  | $ | 10.8 |  |  | $ | — |  |  | $ | — |  |  | $ | 10.8 |  |  | $ | 57.8 |  |  | $ | 0.1 |  |  | $ | — |  |  | $ | 57.9 |
Foreign exchange contracts |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 0.4 |  |  | — |  |  | 0.4 |
Bond securities |  | — |  |  | — |  |  | — |  |  | — |  |  | 15.9 |  |  | — |  |  | — |  |  | 15.9 |
Insurance contracts |  | — |  |  | 70.0 |  |  | — |  |  | 70.0 |  |  | — |  |  | 70.0 |  |  | — |  |  | 70.0 |
Total |  | $ | 10.8 |  |  | $ | 70.0 |  |  | $ | — |  |  | $ | 80.8 |  |  | $ | 73.7 |  |  | $ | 70.5 |  |  | $ | — |  |  | $ | 144.2 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commodity contracts |  | 18.6 |  |  | 17.1 |  |  | — |  |  | 35.7 |  |  | 18.0 |  |  | 19.4 |  |  | — |  |  | 37.4 |
Interest rate swaps |  | — |  |  | 0.2 |  |  | — |  |  | 0.2 |  |  | — |  |  | 0.1 |  |  | — |  |  | 0.1 |
Foreign exchange contracts |  | — |  |  | 1.1 |  |  | — |  |  | 1.1 |  |  | — |  |  | — |  |  | — |  |  | — |
Total |  | $ | 18.6 |  |  | $ | 18.4 |  |  | $ | — |  |  | $ | 37.0 |  |  | $ | 18.0 |  |  | $ | 19.5 |  |  | $ | — |  |  | $ | 37.5 |
The following are descriptions of the valuation methodologies and key inputs used to measure financial assets and liabilities recorded at fair value on a recurring basis:
▪ | Derivatives—Derivatives classified within Level 1 are valued using quoted market prices. In some cases where quoted market prices are not available, we value the derivatives using market based pricing models that utilize the net present value of estimated future cash flows to calculate fair value, in which case the measurements are classified within Level 2. These valuation models make use of market-based observable inputs, including exchange traded prices and rates, yield curves, credit curves, and measures of volatility.
▪ | Bond securities—Bond securities are valued at quoted market prices and are classified within Level 1.
▪ | Insurance contracts—Insurance contracts are valued at their cash surrender value using the daily asset unit value (AUV) which is based on the quoted market price of the underlying securities and classified within Level 2.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition; that is, the assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, for example, when there is evidence of impairment. We had no significant assets or liabilities that were measured and recorded at fair value on a nonrecurring basis during 2015 nor 2014, except for the allocation of the total purchase consideration to the estimated fair values of our assets acquired and liabilities assumed by WH Group as part of the Merger. We finalized the allocation in the third quarter of 2014 with no material adjustments. See Note 2—Merger and Acquisitions for further information on the Merger. Pension Plan Assets The following table summarizes our qualified pension plan assets measured at fair value on a recurring basis (at least annually) as of January 3, 2016 and December 28, 2014:
|  | January 3, 2016 |  | December 28, 2014
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
|  | (in millions) |  | (in millions)
Cash and cash equivalents |  | $ | 86.7 |  |  | $ | — |  |  | $ | — |  |  | $ | 86.7 |  |  | $ | 95.0 |  |  | $ | — |  |  | $ | — |  |  | $ | 95.0 |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. common stock: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Health care |  | 34.8 |  |  | — |  |  | — |  |  | 34.8 |  |  | 30.7 |  |  | — |  |  | — |  |  | 30.7 |
Financial services |  | 42.8 |  |  | — |  |  | — |  |  | 42.8 |  |  | 44.5 |  |  | — |  |  | — |  |  | 44.5 |
Retail and consumer products |  | 29.5 |  |  | — |  |  | — |  |  | 29.5 |  |  | 36.5 |  |  | — |  |  | — |  |  | 36.5 |
Energy |  | 15.4 |  |  | — |  |  | — |  |  | 15.4 |  |  | 9.4 |  |  | — |  |  | — |  |  | 9.4 |
Information technology |  | 50.8 |  |  | — |  |  | — |  |  | 50.8 |  |  | 75.3 |  |  | — |  |  | — |  |  | 75.3 |
Manufacturing and industrials |  | 29.2 |  |  | — |  |  | — |  |  | 29.2 |  |  | 26.0 |  |  | — |  |  | — |  |  | 26.0 |
Telecommunications |  | 9.1 |  |  | — |  |  | — |  |  | 9.1 |  |  | 4.7 |  |  | — |  |  | — |  |  | 4.7 |
International common stock |  | 132.7 |  |  | — |  |  | — |  |  | 132.7 |  |  | 131.8 |  |  | — |  |  | — |  |  | 131.8 |
Commingled funds: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
International (1) |  | — |  |  | — |  |  | — |  |  | 142.5 |  |  | — |  |  | — |  |  | — |  |  | 75.0 |
Domestic small cap (1) |  | — |  |  | — |  |  | — |  |  | 15.2 |  |  | — |  |  | — |  |  | — |  |  | 25.5 |
Asset-backed securities (1) |  | — |  |  | — |  |  | — |  |  | 7.3 |  |  | — |  |  | — |  |  | — |  |  | 17.4 |
Emerging markets securities (1) |  | — |  |  | — |  |  | — |  |  | 19.8 |  |  | — |  |  | — |  |  | — |  |  | 22.6 |
Cash (1) |  | — |  |  | — |  |  | — |  |  | 11.4 |  |  | — |  |  | — |  |  | — |  |  | 14.0 |
Corporate debt securities (1) |  | — |  |  | — |  |  | — |  |  | 352.5 |  |  | — |  |  | — |  |  | — |  |  | 297.2 |
Government debt securities (1) |  | — |  |  | — |  |  | — |  |  | 179.4 |  |  | — |  |  | — |  |  | — |  |  | 204.2 |
Fixed Income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities |  | 0.8 |  |  | 28.2 |  |  | — |  |  | 29.0 |  |  | — |  |  | — |  |  | — |  |  | — |
Government debt securities |  | 28.5 |  |  | — |  |  | — |  |  | 28.5 |  |  | — |  |  | — |  |  | — |  |  | — |
Alternative investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diversified investment funds (1) |  | — |  |  | — |  |  | — |  |  | 55.9 |  |  | — |  |  | — |  |  | — |  |  | 59.5 |
Limited partnerships (1) |  | — |  |  | — |  |  | — |  |  | 41.1 |  |  | — |  |  | — |  |  | — |  |  | 36.4 |
Insurance contracts |  | — |  |  | — |  |  | 1.0 |  |  | 1.0 |  |  | — |  |  | — |  |  | 0.9 |  |  | 0.9 |
Total fair value |  | $ | 460.3 |  |  | $ | 28.2 |  |  | $ | 1.0 |  |  | 1,314.6 |  |  | $ | 453.9 |  |  | $ | — |  |  | $ | 0.9 |  |  | 1,206.6 |
Unsettled transactions, net |  |  |  |  |  |  |  | 8.0 |  |  |  |  |  |  |  |  | 8.1 |
Total plan assets |  |  |  |  |  |  |  | $ | 1,322.6 |  |  |  |  |  |  |  |  | $ | 1,214.7 |
—————————————— (1) Assets that are measured at fair value using net asset value per share as a practical expedient and have not been categorized in the fair value hierarchy. The following are descriptions of the valuation methodologies and key inputs used to measure pension plan assets recorded at fair value:
▪ | Cash and cash equivalents—Cash equivalents include highly liquid investments with original maturities of three months or less. Due to their short-term nature, the carrying amount of these instruments approximates the estimated fair value. Actively traded money market funds are classified as Level 1 and included in cash and cash equivalents.
▪ | Equity securities—The fair value of equity securities are based on quoted prices in active markets and classified as Level 1. Level 1 financial instruments include highly liquid instruments with quoted prices, such as equities and mutual funds traded in active markets.
▪ | Commingled Funds—The fair value of commingled funds are measured using the net asset value per share practical expedient and have not been categorized in the fair value hierarchy. The net asset value per share is based on the fair value of the underlying assets owned by the funds, minus its liabilities then divided by the total number of shares outstanding. Underlying assets of commingled funds primarily consist of liquid equity and fixed income securities with quoted prices in active markets.
▪ | Fixed income—When available, the fair value of fixed income securities are based on quoted prices in active markets and classified as Level 1. Level 1 financial instruments include highly liquid instruments with quoted prices, such as equities and mutual funds traded in active markets.
If quoted prices are not available, fair values of fixed income instruments are obtained from pricing services, broker quotes or other model-based valuation techniques with observable inputs and classified as Level 2. The nature of these fixed income instruments include instruments for which quoted prices are available but traded less frequently, instruments whose fair value has been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data and securities that are valued using other financial instruments, the parameters of which can be directly observed. Level 2 fixed income instruments include corporate debt securities.
• | Alternative Investments—The fair value of alternative investments are measured using the net asset value per share practical expedient and have not been categorized in the fair value hierarchy. The net asset value per share is based on the fair value of the underlying assets owned by the alternative investment funds, minus its liabilities then divided by the total number of shares outstanding.
▪ | Limited partnerships—The fair value of limited partnerships are measured using the net asset value practical expedient and have not been categorized in the fair value hierarchy. The net asset value is based on the fair value of the underlying assets owned by the partnership, minus its liabilities then multiplied by the ownership percentage of the pension plans.
▪ | Insurance contracts—The valuation of these guaranteed annuity insurance contracts is primarily based on quoted prices in active markets with adjustments for unobservable inputs caused by the unique nature of applying investment earnings as part of the participation guarantee. Due to these unobservable inputs and the long-term nature of these investments, the contracts are classified as Level 3.
The following table summarizes the changes in our Level 3 pension plan assets for the twelve months ended January 3, 2016 and December 28, 2014:
|  | Insurance Contracts |
|  | (in millions)
Balance, December 29, 2013 |  | $ | 1.1 |  |
Actual return on plan assets: |  |  |
Related to assets held at the reporting date |  | — |  |
Related to assets sold during the period |  | — |  |
Purchases, sales and settlements, net |  | (0.2 | ) |
Balance, December 28, 2014 |  | 0.9 |  |
Actual return on plan assets: |  |  |
Related to assets held at the reporting date |  | — |  |
Related to assets sold during the period |  | — |  |
Purchases, sales and settlements, net |  | 0.1 |  |
Balance, January 3, 2016 |  | $ | 1.0 |  |
Other Financial Instruments We determine the fair value of public debt using Level 2 inputs based on quoted market prices. The carrying amount of all other debt approximates fair value as those instruments are based on variable interest rates. The following table presents the fair value and carrying value of total debt as of January 3, 2016 and December 28, 2014:
|  | January 3, 2016 |  | December 28, 2014 |
|  | Fair Value |  | Carrying Value |  | Fair Value |  | Carrying Value |
|  | (in millions)
Debt |  | $ | 2,336.8 |  |  | $ | 2,263.7 |  |  | $ | 2,782.0 |  |  | $ | 2,701.7 |  |
The carrying amounts of cash and cash equivalents, accounts receivable, notes payable and accounts payable approximate their fair values because of the relatively short-term maturity of these instruments.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13433-108611 + Details
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