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FAIR VALUE

12 Months Ended

Dec. 26, 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 and liabilities measured at fair value are as follows:


		December 26, 2020												December 28, 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		$	19		$	4,643		$	—		$	4,662		$	162,626		$	562		$	—		$	163,188
Fixed income funds			246			16,224			—			16,470			234			15,495			—			15,729
Equity securities			12,602			—			—			12,602			9,734			—			—			9,734
Alternative investments			—			—			2,040			2,040			—			—			1,941			1,941
Mutual funds:
Domestic stock funds			8,088			—			—			8,088			3,308			—			—			3,308
International stock funds			1,440			—			—			1,440			1,741			—			—			1,741
Target funds			114			—			—			114			281			—			—			281
Bond funds			147			—			—			147			850			—			—			850
Alternative funds			482			—			—			482			1,747			—			—			1,747
Total mutual funds			10,271			—			—			10,271			7,927			—			—			7,927
Total		$	23,138		$	20,867		$	2,040		$	46,045		$	180,521		$	16,057		$	1,941		$	198,519
Assets at fair value		$	23,138		$	20,867		$	2,040		$	46,045		$	180,521		$	16,057		$	1,941		$	198,519

From the assets measured at fair value as of December 26, 2020, listed in the table above, less than $0.1 million of money market funds are held in Cash and Cash Equivalents, $24.2 million of mutual funds, equity securities, and alternative investments are held in Investments, $0.6 million of money market and mutual funds are held in Other Assets for our deferred compensation plan, and $16.5 million of fixed income funds and $4.6 million of money market funds are held in Restricted Investments.

We maintain money market, mutual funds, bonds, and/or stocks in our non-qualified deferred compensation plan and 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.

During 2018, we purchased a private real estate income trust which is valued as a Level 3 asset and is categorized as an “Alternative Investment.”

In accordance with our investment policy, our wholly-owned company, Ardellis Insurance Ltd. ("Ardellis"), maintains an investment portfolio, totaling $40.8 million as of December 26, 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):


		December 26, 2020									December 28, 2019
					Unrealized									Unrealized
		Cost			Gain/(Loss)			Fair Value			Cost			Gain/(Loss)			Fair Value
Fixed Income		$	15,325		$	1,145		$	16,470		$	15,376		$	353		$	15,729
Equity			9,787			2,815			12,602			7,958			1,776			9,734
Mutual Funds			8,235			1,430			9,665			6,568			284			6,852
Alternative Investments			1,904			136			2,040			1,811			130			1,941
Total		$	35,251		$	5,526		$	40,777		$	31,713		$	2,543		$	34,256

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 pre-tax unrealized gain was $5.5 million for the year ended December 26, 2020. Carrying amounts above are recorded in the investments and restricted investments line items within the balance sheet as of December 26, 2020 and December 28, 2019.

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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