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FAIR VALUE

3 Months Ended

Mar. 28, 2020

B. FAIR VALUE

We apply the provisions of ASC 820, Fair Value Measurements and Disclosures, to assets and liabilities measured at fair value. Assets measured at fair value are as follows:


		March 28, 2020												March 30, 2019
		Quoted			Prices with									Quoted			Prices with
		Prices in			Other				Prices with					Prices in			Other				Prices with
		Active			Observable				Unobservable					Active			Observable				Unobservable
		Markets			Inputs				Inputs					Markets			Inputs				Inputs
(in thousands)		(Level 1)			(Level 2)				(Level 3)		Total			(Level 1)			(Level 2)				(Level 3)		Total
Money market funds		$	29,561		$	837		$	—		$	30,398		$	56		$	549		$	—		$	605
Fixed income funds			237			15,124			—			15,361			3,860			9,763			—			13,623
Equity securities			9,089			—			—			9,089			8,258			—			—			8,258
Alternative investments			—			—			1,960			1,960			—			—			1,782			1,782
Mutual funds:																								—
Domestic stock funds			5,204			—			—			5,204			2,151			—			—			2,151
International stock funds			947			—			—			947			2,085			—			—			2,085
Target funds			242			—			—			242			257			—			—			257
Bond funds			222			—			—			222			799			—			—			799
Alternative funds			921			—			—			921			1,344			—			—			1,344
Total mutual funds			7,536			—			—			7,536			6,636			—			—			6,636
Total		$	46,423		$	15,961		$	1,960		$	64,344		$	18,810		$	10,312		$	1,782		$	30,904
Assets at fair value		$	46,423		$	15,961		$	1,960		$	64,344		$	18,810		$	10,312		$	1,782		$	30,904

From the assets measured at fair value as of March 28, 2020, listed in the table above, $29.5 million of money market funds are held in Cash and Cash Equivalents, $17.7 million of mutual funds, equity securities, and alternative investments are held in Investments, $0.9 million of money market and mutual funds are held in Other Assets for our deferred compensation plan, and $15.4 million of fixed income funds and $0.8 million of money markets funds are held in Restricted Investments.

We maintain money market, mutual funds, bonds, and/or stocks in our non-qualified deferred compensation plan, our wholly owned licensed captive insurance company, and assets held in financial institutions. These funds are valued at prices quoted in an active exchange market and are included in “Cash and Cash Equivalents”, “Investments”, “Other Assets”, and “Restricted Investments”. We have elected not to apply the fair value option under ASC 825, Financial Instruments, to any of our financial instruments except for those expressly required by U.S. GAAP.

In accordance with our investment policy, our wholly-owned captive, Ardellis Insurance Ltd. (“Ardellis”), maintains an investment portfolio, totaling $33.1 million as of March 28, 2020, consisting of domestic and international stocks, alternative investments, and fixed income bonds.

Ardellis’ available for sale investment portfolio, including funds held with the State of Michigan, consists of the following (in thousands):


		March 28, 2020
					Unrealized
		Cost			Gain/(Loss)			Fair Value
Fixed Income		$	1,834		$	126		$	1,960
Equity			15,257			104			15,361
Mutual Funds			9,690			(601)			9,089
Alternative Investments			7,298			(569)			6,729
Total		$	34,079		$	(940)		$	33,139

Our fixed income investments consist of a blend of US Government and Agency bonds and investment grade corporate bonds with varying maturities. Our equity investments consist of small, mid, and large cap growth and value funds, as well as international equity. Our alternative investments consist of the private real estate income trust which is valued as a Level 3 asset. The net unrealized loss was $0.9 million. Carrying amounts above are recorded in the investments and restricted investments line items within the balance sheet as of March 28, 2020.

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.

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