Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements

v3.8.0.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2017
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements
Fair value measurements are made under a three-tier fair value hierarchy, which prioritizes the inputs used in the measuring of fair value:
Level 1:
Observable inputs that reflect unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2:
Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3:
Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The carrying amounts of the Company’s cash and cash equivalents, accounts receivables, and accounts payables approximate fair value due to the short term nature or maturity of the instruments.
The Company maintains a rabbi trust to fund obligations under a deferred compensation plan. See Note 16, Employee Benefit Programs. Amounts in the rabbi trust are invested in mutual funds, which are designated as trading securities and carried at fair value, and are included in Other assets, net in the accompanying consolidated balance sheets. Fair market value of mutual funds is measured using level 1 inputs (quoted prices for identical assets in active markets). The value of the deferred compensation plan liability is dependent upon the fair value of the assets held in the rabbi trust and therefore is not measured at fair value.
The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and December 25, 2016 (in thousands):
 
 
December 31, 2017
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
Investments in rabbi trust
 
$
9,292

 
$
9,292

 
$
—

 
$
—

Total assets measured at fair value
 
$
9,292

 
$
9,292

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
December 25, 2016
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
Investments in rabbi trust
 
$
9,165

 
$
9,165

 
$
—

 
$
—

Total assets measured at fair value
 
$
9,165

 
$
9,165

 
$
—

 
$
—


Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Assets and liabilities recognized or disclosed at fair value on the consolidated financial statements on a nonrecurring basis include items such as property, plant and equipment, goodwill, and other intangible assets. These assets are measured at fair value if determined to be impaired.
Other than as disclosed in Note 3, Other Charges, as of December 31, 2017 and December 25, 2016, the Company had no non-financial assets or liabilities that were measured using level 3 inputs.
Disclosures of Fair Value of Other Assets and Liabilities
The Company’s liabilities under its credit facility and capital leases are carried at historical cost in the accompanying consolidated balance sheets. Both the credit facility and the Company’s capital lease obligations are considered to be Level 2 instruments. The carrying value of the credit facility approximates fair value as the interest rate on this instrument approximates current market rates. For disclosure purposes, the Company estimated the fair value of the capital lease obligations using discounted cash flow analysis based on market rates obtained from independent third parties for similar types of debt.
The following table presents the carrying value and estimated fair value of Company’s capital lease obligations as of December 31, 2017 and December 25, 2016 (in thousands):
 
 
December 31, 2017
 
December 25, 2016
 
 
Carrying Value
 
Estimated Fair Value
 
Carrying Value
 
Estimated Fair Value
Capital lease obligations
 
$
10,938

 
$
11,563

 
$
11,463

 
$
12,917