| Summary of Methods and Assumptions Used in Estimating Fair Value |
The below methods and assumptions were used by the Company in estimating the fair values of its financial instruments. There were no transfers of assets or liabilities between levels in any period presented.
| | | | | | | | | | | | | | | | Financial Instrument | | Fair Value
Level | | Methods and Assumptions | | Deferred compensation plan assets and liabilities | | Level 1 | | The fair value of the Company’s nonqualified deferred compensation plan for certain executives and other highly compensated employees is based on the fair values of associated assets and liabilities, which are held in mutual funds and are based on the quoted market prices of the securities held within the mutual funds. | | Interest rate swaps | | Level 2 | | The fair values of the Company’s interest rate swaps are determined using standard calculations and valuation models. The significant inputs used in these standard calculations/valuation models are readily available in public markets or can be derived from observable market transactions and, therefore, have been classified as Level 2. Inputs used in these standard calculations/valuation models for derivative instruments include swap rates, interest rates and discount rates. The discount rates are based on the historical U.S. deposit rates, U.S. Treasury rates and/or U.S. swap rates. The Company’s credit risk related to the interest rate swaps is managed by requiring high standards for its counterparties and periodic settlements. | | Commodity derivative instruments | | Level 2 | | The fair values of the Company’s commodity derivative instruments are based on current settlement values at each balance sheet date, which represent the estimated amounts the Company would have received or paid upon termination of those instruments. The Company’s credit risk related to the commodity derivative instruments is managed by requiring high standards for its counterparties and periodic settlements. The Company considers nonperformance risk in determining the fair values of commodity derivative instruments. | | Debt | | Level 2 | | The carrying amounts of the Company’s variable rate debt approximate the fair values due to variable interest rates with short reset periods. The fair values of the Company’s fixed rate debt are based on estimated current market prices. | | Acquisition related contingent consideration | | Level 3 | | The fair value of the Company’s acquisition related contingent consideration is based on internal forecasts and the weighted average cost of capital (“WACC”) derived from market data. |
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| Summary of Deferred Compensation Plan, Commodity Derivative Instruments, Debt and Acquisition Related Contingent Consideration |
The following tables summarize the carrying amounts and the fair values by level of the Company’s deferred compensation plan assets and liabilities, commodity derivative instruments, interest rate swaps, debt and acquisition related contingent consideration:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | April 3, 2026 | | (in thousands) | | Carrying
Amount | | Total
Fair Value | | Fair Value
Level 1 | | Fair Value
Level 2 | | Fair Value
Level 3 | | Assets: | | | | | | | | | | | | Deferred compensation plan assets | | $ | 95,339 | | | $ | 95,339 | | | $ | 95,339 | | | $ | — | | | $ | — | | | Commodity derivative instruments | | 17,195 | | | 17,195 | | | — | | | 17,195 | | | — | | | Interest rate swaps | | 1,521 | | | 1,521 | | | — | | | 1,521 | | | — | | | Liabilities: | | | | | | | | | | | | Deferred compensation plan liabilities | | 95,339 | | | 95,339 | | | 95,339 | | | — | | | — | | | Commodity derivative instruments | | 120 | | | 120 | | | — | | | 120 | | | — | | | Debt | | 2,637,148 | | | 2,691,300 | | | — | | | 2,691,300 | | | — | | | Acquisition related contingent consideration | | 753,029 | | | 753,029 | | | — | | | — | | | 753,029 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2025 | | (in thousands) | | Carrying
Amount | | Total
Fair Value | | Fair Value
Level 1 | | Fair Value
Level 2 | | Fair Value
Level 3 | | Assets: | | | | | | | | | | | | Deferred compensation plan assets | | $ | 95,195 | | | $ | 95,195 | | | $ | 95,195 | | | $ | — | | | $ | — | | | Commodity derivative instruments | | 4,242 | | | 4,242 | | | — | | | 4,242 | | | — | | | Liabilities: | | | | | | | | | | | | Deferred compensation plan liabilities | | 95,195 | | | 95,195 | | | 95,195 | | | — | | | — | | | Debt | | 2,786,009 | | | 2,848,500 | | | — | | | 2,848,500 | | | — | | | Acquisition related contingent consideration | | 717,908 | | | 717,908 | | | — | | | — | | | 717,908 | | | Commodity derivative instruments | | 42 | | | 42 | | | — | | | 42 | | | — | |
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| Summary of Acquisition Related Contingent Consideration Liability |
A summary of the Level 3 activity is as follows: | | | | | | | | | | | | | | | | | | | | | First Quarter | | | | (in thousands) | | 2026 | | 2025 | | | | | | Beginning balance - Level 3 liability | | $ | 717,908 | | | $ | 654,191 | | | | | | | Payments of acquisition related contingent consideration | | (19,070) | | | (19,819) | | | | | | | Reclassification to current payables | | 800 | | | 4,700 | | | | | | | Increase in fair value | | 53,391 | | | 42,728 | | | | | | | Ending balance - Level 3 liability | | $ | 753,029 | | | $ | 681,800 | | | | | |
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