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Fair Value | 3 Months Ended
--- | ---
Mar. 28, 2015
Fair Value Disclosures [Abstract] |
FAIR VALUE | FAIR VALUE The Company has certain financial assets and liabilities recorded at fair value which have been classified as Level 1, 2, or 3 within the fair value hierarchy:
• | Level 1 - Fair values are determined utilizing quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access;
• | Level 2 - Fair values are determined by utilizing quoted prices for identical or similar assets and liabilities in active markets or other market observable inputs such as interest rates, yield curves, and foreign currency spot rates;
• | Level 3 - Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
The fair value hierarchy level is determined by asset and liability class based on the lowest level of significant input. The observability of inputs may change for certain assets or liabilities. This condition could cause an asset or liability to be reclassified between levels. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. During the three months ended March 28, 2015 and March 29, 2014, there were no transfers between levels. Valuation methodologies used for assets and liabilities measured or disclosed at fair value are as follows:
• | Cash equivalents - Valued at quoted market prices determined through third-party pricing services.
• | Mutual funds - Valued at the unadjusted quoted net asset value of shares held by the Company.
• | Investments in life insurance policies - Valued at cash surrender value based on fair value of underlying investments.
• | Redeemable noncontrolling interest - Valued primarily using the income approach based on estimated future cash flows of the underlying business based on the Company’s projected financial data discounted by a weighted average cost of capital.
• | Contingent consideration- Valued based on a probability weighting of the future cash flows associated with the potential outcomes.
Assets and liabilities measured at fair value on a recurring basis are summarized below:
| March 28, 2015
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (in thousands)
Cash equivalents | $ | — |  |  | $ | 103 |  |  | $ | — |  |  | $ | 103 |
Marketable securities | 4,666 |  |  | — |  |  | — |  |  | 4,666 |
Life insurance policies | — |  |  | 20,827 |  |  | — |  |  | 20,827 |
Total assets measured at fair value | $ | 4,666 |  |  | $ | 20,930 |  |  | $ | — |  |  | $ | 25,596 |
Redeemable noncontrolling interest | $ | — |  |  | $ | — |  |  | $ | 29,453 |  |  | $ | 29,453 |
Contingent consideration | — |  |  | — |  |  | 2,786 |  |  | 2,786 |
Total liabilities measured at fair value | $ | — |  |  | $ | — |  |  | $ | 32,239 |  |  | $ | 32,239 |
| December 27, 2014
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (in thousands)
Cash equivalents | $ | — |  |  | $ | 1,934 |  |  | $ | — |  |  | $ | 1,934 |
Life insurance policies | — |  |  | 20,520 |  |  | — |  |  | 20,520 |
Total assets measured at fair value | $ | — |  |  | $ | 22,454 |  |  | $ | — |  |  | $ | 22,454 |
Redeemable noncontrolling interest | — |  |  | — |  |  | 28,419 |  |  | 28,419 |
Contingent consideration | — |  |  | — |  |  | 2,828 |  |  | 2,828 |
Total liabilities measured at fair value | $ | — |  |  | $ | — |  |  | $ | 31,247 |  |  | $ | 31,247 |
Redeemable Noncontrolling Interest The Company’s redeemable noncontrolling interest resulted from the acquisition of a 75% ownership interest in Vital River. Concurrent with the acquisition, the Company entered into a joint venture agreement with the noncontrolling interest holders that provides the Company with the right to purchase the remaining 25% of the entity for cash at its then appraised value beginning in January 2016. Additionally, the noncontrolling interest holders were granted the right to require the Company to purchase the remaining 25% of the entity at its then appraised value beginning in January 2016 for cash. These rights are accelerated in certain events. As the noncontrolling interest holders can require the Company purchase the remaining 25% interest, the noncontrolling interest is classified in the mezzanine section of the consolidated balance sheet, which is above the equity section and below liabilities. The following table provides a rollforward of the fair value of the Company’s redeemable noncontrolling interest:
| Three Months Ended
| March 28, 2015 |  | March 29, 2014
| (in thousands)
Beginning balance | $ | 28,419 |  |  | $ | 20,581 |
Additions | — |  |  | — |
Total gains or losses (realized/unrealized): |  |  |
Net income (loss) attributable to noncontrolling interest | (130 | ) |  | 1 |
Foreign currency translation | 78 |  |  | (476 | )
Change in fair value, included in additional paid-in capital | 1,086 |  |  | 1,473 |
Ending balance | $ | 29,453 |  |  | $ | 21,579 |
The significant unobservable inputs used in the fair value measurement of the Company’s redeemable noncontrolling interest are the estimated future cash flows based on projected financial data and a discount rate of 18.5%. Significant changes in the timing or amounts of the estimated future cash flows would result in a significantly higher or lower fair value measurement. Significant increases or decreases in the discount rate would result in a significantly lower or higher fair value measurement, respectively. Contingent Consideration The following table provides a rollforward of the contingent consideration related to the acquisitions of Argenta, BioFocus, VivoPath and ChanTest. See Note 2, “Business Acquisitions.”
| Three Months Ended
| March 28, 2015
| (in thousands)
Beginning balance | $ | 2,828 |
Additions | 675 |
Total gains or losses (realized/unrealized): |
Reversal of previously recorded contingent liability and change in fair value | (717 | )
Ending balance | $ | 2,786 |
The significant unobservable inputs used in the fair value measurement of the Company’s contingent consideration are the probabilities of successful achievement of certain financial targets and a discount rate. Significant increases or decreases in any of the probabilities of success would result in a significantly higher or lower fair value measurement, respectively. Significant increases or decreases in the discount rate would result in a significantly lower or higher fair value measurement, respectively. Debt Instruments The book value of the Company’s term and revolving loans, which are variable rate loans carried at amortized cost, approximates their fair value based on current market pricing of similar debt. As the fair value is based on significant other observable inputs, including current interest and foreign currency exchange rates, it is deemed to be Level 2.

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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 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13537-108611 Reference 2: 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=35750535&loc=d3e13433-108611 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 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 5: 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 6: 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=35750535&loc=d3e13504-108611 + Details
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