Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE MEASUREMENTS

v3.19.2
FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 29, 2019
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
Financial assets and financial liabilities measured and reported at fair value are classified in a three-level hierarchy that prioritizes the inputs used in the valuation process. A financial instrument’s categorization within the valuation hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The hierarchy is based on the observability and objectivity of the pricing inputs, as follows:
 
•
Level 1 — Quoted prices in active markets for identical assets or liabilities.
•
Level 2 — Significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable
data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data.
•
Level 3 — Prices or valuation techniques that require significant unobservable data inputs. These inputs would normally be the Company's own data and judgments about assumptions that market participants would use in pricing the asset or liability.

The following table summarizes financial assets and financial liabilities that are measured and recorded in the Company's financial statements at fair value on a recurring basis:
 
 
 
Fair Value Measurement Using
(in thousands)
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
June 2019
 
 
 
 
 
 
 
Financial assets:
 
 
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
 
 
Money market funds
$
5,385

 
$
5,385

 
$
—

 
$
—

Time deposits
3,391

 
3,391

 
—

 
—

Derivative financial instruments
855

 
—

 
855

 
—

Investment securities
61,799

 
58,343

 
3,456

 
—

Financial liabilities:
 
 
 
 
 
 
 
Derivative financial instruments
3,972

 
—

 
3,972

 
—

Deferred compensation
61,799

 
—

 
61,799

 
—

 
 
 
Fair Value Measurement Using
(in thousands)
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
December 2018
 
 
 
 
 
 
 
Financial assets:
 
 
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
 
 
Money market funds
$
21,687

 
$
21,687

 
$
—

 
$
—

Time deposits
2,518

 
2,518

 
—

 
—

Investment securities
46,666

 
46,666

 
—

 
—

Financial liabilities:
 
 
 
 
 
 
 
Deferred compensation
46,666

 
—

 
46,666

 
—

 
The Company's cash equivalents include money market funds and short-term time deposits that approximate fair value based on Level 1 measurements. The fair value of derivative financial instruments, which consist of foreign exchange forward contracts, is determined based on observable market inputs (Level 2). Investment securities are held in the Company's deferred compensation plans as an economic hedge of the related deferred compensation liabilities.
These investments are primarily comprised of mutual funds (Level 1) that are valued based on quoted prices in active markets. Liabilities related to the Company's deferred compensation plans are recorded at amounts due to participants, based on the fair value of the participants’ selection of hypothetical investments.
Additionally, at June 2019, the carrying value of the Company's long-term debt, inclusive of the current portion, was $987.2 million compared to a fair value of $990.6 million. The fair value of long-term debt is a Level 2 estimate based on quoted market prices or values of comparable borrowings.

All other financial assets and financial liabilities are recorded in the Company's financial statements at cost. These other financial assets and financial liabilities include cash held as demand deposits, accounts receivable, due from former parent, notes
receivable from former parent, short-term borrowings, accounts payable, due to former parent, notes payable to former parent and accrued liabilities. At June 2019 and December 2018, carrying value approximated fair value for the aforementioned financial assets and liabilities due to the short-term nature of these instruments. The Company did not transfer any assets or liabilities among the levels of the fair value hierarchy during the six months ended June 2019 or the fiscal year ended December 2018.