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FAIR VALUE
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
FAIR VALUE FAIR VALUE
Assets and liabilities measured at fair value on a recurring basis are summarized below:
 December 31, 2022
 Level 1Level 2Level 3Total
Current assets measured at fair value:(in thousands)
Cash equivalents$— $78 $— $78 
Other assets:
Life insurance policies— 34,527 34,527 
Total assets measured at fair value$— $34,605 $— $34,605 
Accrued liabilities measured at fair value:
Contingent consideration$— $— $13,431 $13,431 
Other long-term liabilities measured at fair value:
Interest rate swap— 1,523 — 1,523 
Total liabilities measured at fair value$— $1,523 $13,431 $14,954 
 December 25, 2021
 Level 1Level 2Level 3Total
Current assets measured at fair value:(in thousands)
Cash equivalents$— $893 $— $893 
Other assets:
Life insurance policies— 42,918 — 42,918 
Total assets measured at fair value$— $43,811 $— $43,811 
Accrued liabilities measured at fair value:
Contingent consideration$— $— $11,794 $11,794 
Other long-term liabilities measured at fair value:
Contingent consideration— — 25,450 25,450 
Total liabilities measured at fair value$— $— $37,244 $37,244 
During fiscal years 2022 and 2021, there were no transfers between fair value levels.
Contingent Consideration
The following table provides a rollforward of the contingent consideration related to the Company’s acquisitions.
Fiscal Year
202220212020
(in thousands)
Beginning balance$37,244 $2,328 $712 
Additions3,838 71,559 2,131 
Payments(11,476)(2,889)(230)
Total gains or losses (realized/unrealized):
Adjustment of previously recorded contingent liability(15,340)(33,386)(468)
Foreign currency translation(835)(368)183 
Ending balance$13,431 $37,244 $2,328 
The Company estimates the fair value of contingent consideration obligations through valuation models, such as probability-weighted and option pricing models, that incorporate probability adjusted assumptions and simulations related to the achievement of the milestones and the likelihood of making related payments. The unobservable inputs used in the fair value measurements include the probabilities of successful achievement of certain financial targets, forecasted results or targets, volatility, and discount rates. The remaining maximum potential payments are approximately $57 million, of which the value accrued as of December 31, 2022 is approximately $13 million. The weighted average probability of achieving the maximum target is approximately 24%. The average volatility and weighted average cost of capital are approximately 40% and 16%, respectively.
Cash Flow Hedge
The Company is exposed to market fluctuations in interest rates as well as variability in foreign exchange rates. In November 2022, the Company entered into an interest rate swap with a notional amount of $500 million to manage interest rate fluctuation related to floating rate borrowings under the Credit Facility, at a fixed rate of 4.700% making the total interest rate 5.825% at our current spread. As of December 31, 2022, the Company assessed the hedging relationship and determined it to be highly effective. As such, the net change in fair values of the derivative instruments was recorded in accumulated other comprehensive income.
Debt Instruments
The book value of the Company’s term and revolving loans, which are variable rate loans carried at amortized cost, approximates the 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 within the fair value hierarchy.
The book value of the Company’s Senior Notes are fixed rate obligations carried at amortized cost. Fair value is based on quoted market prices as well as borrowing rates available to the Company. As the fair value is based on significant other
observable outputs, it is deemed to be Level 2 within the fair value hierarchy. The book value and fair value of the Company’s Senior Notes is summarized below:
December 31, 2022December 25, 2021
Book ValueFair ValueBook ValueFair Value
(in thousands)
4.25% Senior Notes due 2028
$500,000 $460,450 $500,000 $521,250 
3.75% Senior Notes due 2029
500,000 442,200 500,000 506,700 
4.00% Senior Notes due 2031
500,000 432,500 500,000 507,500