Fair value is defined as the price that would be received to sell an asset or
paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
The fair value hierarchy distinguishes between
(1) market participant assumptions developed based on market data obtained
from independent sources (observable
inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best
information available in the circumstances (unobservable inputs).
The fair value hierarchy consists of three broad levels, which gives the
highest priority to unadjusted quoted prices
in active markets for identical assets or liabilities (Level 1) and the lowest priority
to unobservable inputs (Level 3).
The three levels of the fair value hierarchy are described as follows:
•
Level 1— Unadjusted quoted prices in active markets for identical assets
or liabilities that are accessible at the
measurement date.
•
Level 2— Inputs other than quoted prices included within Level 1 that are observable
for the asset or liability,
either directly or indirectly.
Level 2 inputs include: quoted prices for similar assets or liabilities
in active markets;
quoted prices for identical or similar assets or liabilities in markets that are
not active; inputs other than quoted
prices that are observable for the asset or liability; and inputs that are
derived principally from or corroborated by
observable market data by correlation or other means.
•
Level 3— Inputs that are unobservable for the asset or liability.
The following section describes the fair values of our financial instruments
and the methodologies that we used to
measure their fair values.
Investments and notes receivable
There are no quoted market prices available for investments in unconsolidated
affiliates and notes
receivable;receivable.however, weCertain of our notes receivable contain variable interest rates.We believe the carrying amounts are a reasonable
estimate of fair value based on the interest
rates in the
Debt
The fair value of our debt (including bank credit
lines)lines, current maturitiesof long-term debt and long-term debt) is
classified as
Level 3 within the fair value hierarchy, and
as of March 26, 2022April 1, 2023 and December 25, 202131, 2022 was estimated
at $
8661,312
8731,149
Factors that we considered when estimating the fair value
of
our debt
included include market conditions, such as interest
rates and credit spreads.
Derivative contracts
Derivative contracts are valued using quoted market prices and
significant other observable inputs.
We use
derivative instruments to minimize our exposure to fluctuations in foreign
currency exchange rates.
Our derivative
instruments primarily include foreign currency forward agreements related
to certain intercompany loans, certain
forecasted inventory purchase commitments with foreign suppliers,
foreign currency forward contracts to hedge a
portion of our euro-denominated foreign operations which are designated
as net investment hedges and a total
return swap for the purpose of economically hedging our unfunded
non-qualified
non-qualified supplemental executive retirement
plan and our deferred compensation plan.