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Fair Value Measurements | 9 Months Ended
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Sep. 29, 2019
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received for an asset or paid to transfer a liability, or the exit price, in an orderly transaction between market participants on the measurement date. Fair value is categorized into one of the following three levels based on the lowest level of significant input:
Level 1 |  | Unadjusted quoted market prices in active markets for identical assets or liabilities
Level 2 |  | Observable inputs available at measurement date other than quoted prices included in Level 1
Level 3 |  | Unobservable inputs that cannot be corroborated by observable market data
Fair Value Measurements on a Recurring Basis - The following table summarizes the Company’s financial assets and liabilities measured at fair value by hierarchy level on a recurring basis as of the periods indicated:
| SEPTEMBER 29, 2019 |  | DECEMBER 30, 2018
(dollars in thousands) | TOTAL |  | LEVEL 1 |  | LEVEL 2 |  | TOTAL |  | LEVEL 1 |  | LEVEL 2
Assets: |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |
Fixed income funds | $ | 1,521 |  |  | $ | 1,521 |  |  | $ | — |  |  | $ | 627 |  |  | $ | 627 |  |  | $ | — |
Money market funds | 8,617 |  |  | 8,617 |  |  | — |  |  | 17,827 |  |  | 17,827 |  |  | — |
Other current assets, net: |  |  |  |  |  |  |  |  |  |  |
Derivative instruments - interest rate swaps | — |  |  | — |  |  | — |  |  | 765 |  |  | — |  |  | 765 |
Total asset recurring fair value measurements | $ | 10,138 |  |  | $ | 10,138 |  |  | $ | — |  |  | $ | 19,219 |  |  | $ | 18,454 |  |  | $ | 765 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Accrued and other current liabilities: |  |  |  |  |  |  |  |  |  |  |
Derivative instruments - interest rate swaps | $ | 6,860 |  |  | $ | — |  |  | $ | 6,860 |  |  | $ | 1,393 |  |  | $ | — |  |  | $ | 1,393 |
Other long-term liabilities: |  |  |  |  |  |  |  |  |  |  |
Derivative instruments - interest rate swaps | 21,116 |  |  | — |  |  | 21,116 |  |  | 9,723 |  |  | — |  |  | 9,723 |
Total liability recurring fair value measurements | $ | 27,976 |  |  | $ | — |  |  | $ | 27,976 |  |  | $ | 11,116 |  |  | $ | — |  |  | $ | 11,116 |
Fair value of each class of financial instrument is determined based on the following:
FINANCIAL INSTRUMENT |  | METHODS AND ASSUMPTIONS
Fixed income funds and Money market funds |  | Carrying value approximates fair value because maturities are less than three months.
Derivative instruments |  | The Company’s derivative instruments include interest rate swaps. Fair value measurements are based on the contractual terms of the derivatives and use observable market-based inputs. The interest rate swaps are valued using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputs including interest rate curves and credit spreads. The Company also considers its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. As of September 29, 2019 and December 30, 2018, the Company has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.
Fair Value Measurements on a Nonrecurring Basis - Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to property, fixtures and equipment, operating lease right-of-use assets, goodwill and other intangible assets, which are remeasured when carrying value exceeds fair value. The following table summarizes the Company’s assets measured at fair value by hierarchy level on a nonrecurring basis, for the periods indicated:
| THIRTEEN WEEKS ENDED
| SEPTEMBER 29, 2019 |  | SEPTEMBER 30, 2018
(dollars in thousands) | CARRYING VALUE |  | TOTAL IMPAIRMENT |  | CARRYING VALUE (1) |  | TOTAL IMPAIRMENT
Assets held for sale (1) | $ | 900 |  |  | $ | 100 |  |  | $ | 2,030 |  |  | $ | 61 |
Operating lease right-of-use assets (2) | 293 |  |  | 622 |  |  | — |  |  | — |
Property, fixtures and equipment (2) | 395 |  |  | 826 |  |  | 1,995 |  |  | 1,269 |
| $ | 1,588 |  |  | $ | 1,548 |  |  | $ | 4,025 |  |  | $ | 1,330 |
| THIRTY-NINE WEEKS ENDED
| SEPTEMBER 29, 2019 |  | SEPTEMBER 30, 2018
(dollars in thousands) | CARRYING VALUE |  | TOTAL IMPAIRMENT |  | CARRYING VALUE (1) |  | TOTAL IMPAIRMENT
Assets held for sale (1) | $ | 2,049 |  |  | $ | 315 |  |  | $ | 2,080 |  |  | $ | 111 |
Operating lease right-of-use assets (2) | 2,649 |  |  | 2,988 |  |  | — |  |  | — |
Property, fixtures and equipment (2) | 1,351 |  |  | 3,659 |  |  | 3,375 |  |  | 8,211 |
| $ | 6,049 |  |  | $ | 6,962 |  |  | $ | 5,455 |  |  | $ | 8,322 |
____________________
(1) | Carrying value after impairment approximates fair value with all assets measured using third-party market appraisals or executed sales contracts (Level 2).
(2) | Carrying value after impairment approximates fair value. Carrying values for Operating lease right-of-use assets and Property, fixtures and equipment measured using Level 3 inputs to estimate fair value totaled $0.3 million and $0.4 million, respectively, during the thirteen weeks ended September 29, 2019 and $2.4 million and $1.3 million, respectively, during the thirty-nine weeks ended September 29, 2019. Level 2 inputs were used to estimate the fair value for all other assets measured in the periods presented. Third-party market appraisals (Level 2) and discounted cash flow models (Level 3) were used to estimate fair value.
Interim Disclosures about Fair Value of Financial Instruments - The Company’s non-derivative financial instruments consist of cash equivalents, accounts receivable, accounts payable and current and long-term debt. The fair values of cash equivalents, accounts receivable and accounts payable approximate their carrying amounts reported on its Consolidated Balance Sheets due to their short duration. Debt is carried at amortized cost; however, the Company estimates the fair value of debt for disclosure purposes. The following table includes the carrying value and fair value of the Company’s debt by hierarchy level as of the periods indicated:
| SEPTEMBER 29, 2019 |  | DECEMBER 30, 2018
| CARRYING VALUE |  | FAIR VALUE LEVEL 2 |  | CARRYING VALUE |  | FAIR VALUE LEVEL 2
(dollars in thousands) |  |  |
Senior Secured Credit Facility: |  |  |  |  |  |  |
Term loan A | $ | 456,250 |  |  | $ | 456,250 |  |  | $ | 475,000 |  |  | $ | 464,906 |
Revolving credit facility | $ | 663,800 |  |  | $ | 663,800 |  |  | $ | 599,500 |  |  | $ | 590,508 |

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- Definition 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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