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Fair Value Measurements and Fair Value of Financial Instruments
 6 Months Ended
Jun. 27, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Fair Value of Financial Instruments Fair Value Measurements and Fair Value of Financial Instruments

Fair value measurement is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

•
Level 1—Quoted prices in active markets for identical assets or liabilities.
•
Level 2—Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.
•
Level 3—Unobservable inputs based on the Company's own assumptions.

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis:
 
 
Fair Value as of June 27, 2020
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
 
Money market funds and time deposits
 
$
8,712

 
$
—

 
$
—

 
$
8,712

Banker's acceptance drafts (a)
 
$
—

 
$
3,224

 
$
—

 
$
3,224

Forward currency-exchange contracts
 
$
—

 
$
54

 
$
—

 
$
54

Liabilities:
 
 

 
 

 
 

 
 

2018 Swap Agreement
 
$
—

 
$
1,286

 
$
—

 
$
1,286

Forward currency-exchange contracts
 
$
—

 
$
52

 
$
—

 
$
52


 
 
Fair Value as of December 28, 2019
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
 
Money market funds and time deposits
 
$
9,920

 
$
—

 
$
—

 
$
9,920

Banker's acceptance drafts (a)
 
$
—

 
$
5,230

 
$
—

 
$
5,230

2015 Swap Agreement
 
$
—

 
$
11

 
$
—

 
$
11

Forward currency-exchange contracts
 
$
—

 
$
3

 
$
—

 
$
3

 
 
 
 
 
 
 
 
 
Liabilities:
 
 

 
 

 
 

 
 

2018 Swap Agreement
 
$
—

 
$
770

 
$
—

 
$
770

Forward currency-exchange contracts
 
$
—

 
$
118

 
$
—

 
$
118


(a)
Included in accounts receivable in the accompanying condensed consolidated balance sheet.
The Company uses the market approach technique to value its financial assets and liabilities, and there were no changes in valuation techniques during the first six months of 2020. Banker's acceptance drafts are carried at face value which approximates their fair value due to the short-term nature of the negotiable instrument. The fair values of forward currency-exchange contracts are based on quoted forward foreign exchange rates at the reporting date. The fair values of interest rate swap agreements are based on LIBOR yield curves at the reporting date. The forward currency-exchange contracts and interest rate swap agreements are hedges of either recorded assets or liabilities or anticipated transactions and represent the estimated amount the Company would receive or pay upon liquidation of the contracts. Changes in values of the underlying hedged assets and liabilities or anticipated transactions are not reflected in the table above.    
The carrying value and fair value of debt obligations, excluding lease obligations and other borrowings, are as follows:
 
 
June 27, 2020
 
December 28, 2019
 
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
(In thousands)
 
 
 
 
Debt Obligations:
 
 
 
 
 
 
 
 
Revolving credit facility
 
$
248,743

 
$
248,743

 
$
265,419

 
$
265,419

Commercial real estate loan
 
18,900

 
19,124

 
19,425

 
20,541

Senior promissory notes
 
10,000

 
10,595

 
10,000

 
10,803

 
 
$
277,643

 
$
278,462

 
$
294,844

 
$
296,763



The carrying value of the Company's revolving credit facility approximates the fair value as the obligation bears variable rates of interest, which adjust frequently, based on prevailing market rates. The fair values of the commercial real estate loan and senior promissory notes are primarily calculated based on quoted market rates plus an applicable margin available to the Company at the respective period ends, which represent Level 2 measurements. The fair value of the commercial real estate loan includes a prepayment penalty of $189,000 which was paid in connection with the prepayment of the loan in July 2020.