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FAIR VALUE
 12 Months Ended
Dec. 30, 2023
Fair Value Disclosures [Abstract]  
FAIR VALUE FAIR VALUE
Assets and liabilities measured at fair value on a recurring basis are summarized below:
 December 30, 2023
 Level 1Level 2Level 3Total
Current assets measured at fair value:(in thousands)
Cash equivalents$— $29 $— $29 
Other assets:
Life insurance policies— 40,912 40,912 
Interest rate swap— 966 — 966 
Total assets measured at fair value$— $41,907 $— $41,907 
Other long-term liabilities measured at fair value:
Contingent consideration— — 33,265 33,265 
Interest rate swap— — — — 
Total liabilities measured at fair value$— $— $33,265 $33,265 
 December 31, 2022
 Level 1Level 2Level 3Total
Current assets measured at fair value:(in thousands)
Cash equivalents$— $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 $13,431 
Other long-term liabilities measured at fair value:
Contingent consideration— — — — 
Interest rate swap— 1,523 — 1,523 
Total liabilities measured at fair value$— $1,523 $13,431 $14,954 
During fiscal years 2023 and 2022, 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
202320222021
(in thousands)
Beginning balance$13,431 $37,244 $2,328 
Additions33,265 3,838 71,559 
Payments(15,130)(11,476)(2,889)
Total gains or losses (realized/unrealized):
Adjustment of previously recorded contingent liability1,810 (15,340)(33,386)
Foreign currency translation(111)(835)(368)
Ending balance$33,265 $13,431 $37,244 
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 $98 million, of which the value accrued as of December 30, 2023 is approximately $33 million. The weighted average probability of achieving the maximum target is approximately 34%. The average volatility and weighted average cost of capital are approximately 30% and 12%, 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%.
In March 2023 and in conjunction with an amendment of the Credit Agreement (Second Amendment), the Company modified the variable rate on its interest rate swap from 1-month LIBOR to 1-month adjusted term SOFR. Effective with the modification, the Company will pay a fixed rate of 4.65% on its swap maturing November 2, 2024. The Company elected to apply the optional expedient in ASC 848, Reference Rate Reform, in connection with modifying its interest rate swap from LIBOR to SOFR that enabled it to consider the modification a continuation of the existing contract. As a result, the transition did not have an impact on the Company’s hedge accounting or a material impact to the Company’s financial statements.
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 30, 2023December 31, 2022
Book ValueFair ValueBook ValueFair Value
(in thousands)
4.25% Senior Notes due 2028
$500,000 $478,100 $500,000 $460,450 
3.75% Senior Notes due 2029
500,000 458,100 500,000 442,200 
4.00% Senior Notes due 2031
500,000 449,350 500,000 432,500