(16.) FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Fair value measurement standards apply to certain financial assets and liabilities that are measured at fair value on a recurring basis (each reporting period). For the Company, these financial assets and liabilities include its derivative instruments. The Company does not have any nonfinancial assets or liabilities that are measured at fair value on a recurring basis.

Foreign Currency Contracts

The fair value of foreign currency contracts are determined through the use of cash flow models that utilize observable market data inputs to estimate fair value. These observable market data inputs include foreign exchange rate and credit spread curves. In addition to the above, the Company received fair value estimates from the foreign currency contract counterparty to verify the reasonableness of the Company’s estimates. The Company’s foreign currency contracts are categorized in Level 2 of the fair value hierarchy. The fair value of the Company’s foreign currency contracts will be realized as Sales or Cost of Sales as the inventory, which the contracts are hedging, is sold.

Interest Rate Swap

The fair value of the Company’s interest rate swap outstanding at December 28, 2018 was determined through the use of a cash flow model that utilized observable market data inputs. These observable market data inputs included LIBOR, swap rates, and credit spread curves. In addition to the above, the Company received a fair value estimate from the interest rate swap counterparty to verify the reasonableness of the Company’s estimate. This fair value calculation was categorized in Level 2 of the fair value hierarchy. The fair value of the Company’s interest rate swap will be realized as a component of Interest Expense as interest on the corresponding borrowings is accrued.

The following tables provide information regarding assets and liabilities recorded at fair value on a recurring basis (in thousands):



	Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 28, 2018
Assets: Interest rate swap (Note 8)	$	4,171	$	—	$	4,171	$	—
Liabilities: Foreign currency contracts (Note 13)	732		—		732		—

December 29, 2017
Assets: Interest rate swaps (Note 8)	$	4,279	$	—	$	4,279	$	—
Liabilities: Foreign currency contracts (Note 13)	861		—		861		—

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Fair value standards also apply to certain assets and liabilities that are measured at fair value on a nonrecurring basis. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term nature of these items.

Borrowings under the Company’s Revolving Credit Facility, TLA Facility and TLB Facility accrue interest at a floating rate tied to a standard short-term borrowing index, selected at the Company’s option, plus an applicable margin. The carrying amount of this floating rate debt approximates fair value based upon the respective interest rates adjusting with market rate adjustments.

(16.) FAIR VALUE MEASUREMENTS (Continued)

Equity Investments

Equity investments are comprised of the following (in thousands):



	December 28, 2018		December 29, 2017
Equity method investment	$	15,148	$	13,800
Non-marketable equity securities	7,667		7,008
Total equity investments	$	22,815	$	20,808

The components of (Gain) Loss on Equity Investments, Net for each period were as follows (in thousands):



	2018			2017			2016
Equity method investment income and other⁽¹⁾	$	(5,623	)	$	(3,685	)	$	(737	)
Impairment charges⁽²⁾	—			5,250			1,570
Total (gain) loss on equity investments, net	$	(5,623	)	$	1,565		$	833

^__________


⁽¹⁾	Equity method investment income and other includes the Company’s share of equity method investee gains (losses) and realized gains on sales of non-marketable equity investments.


⁽²⁾	Prior to the adoption of ASU 2016-01, the Company accounted for its non-marketable equity securities under the cost method of accounting. The other than temporary impairment charges during 2017 and 2016 relate to non-marketable equity securities under the cost method of accounting.

There were no observable price adjustments on non-marketable equity securities related to the adoption of ASU 2016-01 in 2018 and this is not applicable in prior periods.

Equity method investments and non-marketable equity securities, as described above, are included within Level 2 of the fair value hierarchy.

The Company’s equity method investment is in a Chinese venture capital fund focused on investing in life sciences companies. As of December 28, 2018, the Company owned 6.7% of this fund.

Pension Plan Assets

The fair value of the Company’s pension plan assets disclosed in Note 9 “Benefit Plans” are determined based upon quoted market prices in inactive markets or valuation models with observable market data inputs to estimate fair value. These observable market data inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. The Company’s pension plan assets are categorized Level 2 of the fair value hierarchy.