Contingent payments

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)September 24, 2022, driven by the decrease in the fair value of publicly-held investments offset by increases from private investments, and net losses of $15.6 million for the nine months ended September 25, 2021, which were driven by publicly-held and private investments.The Company also invests, with minority positions, directly in equity of privately-held companies. Strategic equity investments were $158.6 million and $51.7 million as of September 24, 2022 and December 25, 2021, respectively. In April 2022, the Company acquired a 49% equity interest in a supplier supporting the DSA reportable segment (the Investee) for $90.0 million up front and an additional future contingent payment of up to $5.0 million based upon the Investee’s future performance. The total allocable basis of the investment exceeds the proportional interest in the Investee’s underlying net assets by $86.7 million, which has been allocated primarily to goodwill, intangible assets (client relationships and backlog), and deferred tax liabilities in the amount of $26.2 million, $71.2 million, and $10.7 million. respectively. The Company recognizes its proportional share of the Investee’s earnings, adjusted for the amortization of the intangible assets over their useful lives and any intra-entity eliminations, under the equity method of accounting on a three-month lag within other income (expense), net in the accompanying consolidated statements of income. Summarized financial information for this equity method Investee is not presented as such information is not material to the Company’s financial statements. The Company purchased additional strategic equity investments of $33.0 million during the nine months ended September 24, 2022 and recognized insignificant gains and losses for the three and nine months ended September 24, 2022 and September 25, 2021. Additionally, in October 2022 the Company purchased an additional interest in an existing strategic equity investment for $25 million.7. FAIR VALUEThe Company has certain financial assets and liabilities recorded at fair value, which have been classified as Level 1, 2, or 3 within the fair value hierarchy. Assets and liabilities measured at fair value on a recurring basis are summarized below:

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|   | September 24, 2022 |
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total |
| Current assets measured at fair value: | (in thousands) |
| Cash equivalents | $ | —  |  |  | $ | 77  |  |  | $ | —  |  |  | $ | 77  |  |
| Other assets: |  |  |  |  |  |  |  |
| Life insurance policies | —  |  |  | 32,738  |  |  | —  |  |  | 32,738  |  |
| Total assets measured at fair value | $ | —  |  |  | $ | 32,815  |  |  | $ | —  |  |  | $ | 32,815  |  |
|  |  |  |  |  |  |  |  |
| Accrued liabilities measured at fair value: |  |  |  |  |  |  |  |
| Contingent consideration | $ | —  |  |  | $ | —  |  |  | $ | 8,661  |  |  | $ | 8,661  |  |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
| Total liabilities measured at fair value | $ | —  |  |  | $ | —  |  |  | $ | 8,661  |  |  | $ | 8,661  |  |

The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. During the nine months ended September 24, 2022, there were no transfers between levels.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   | December 25, 2021 |
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total |
| Current assets measured at fair value: | (in thousands) |
| Cash equivalents | $ | —  |  |  | $ | 893  |  |  | $ | —  |  |  | $ | 893  |  |
| Other assets: |  |  |  |  |  |  |  |
| Life insurance policies | —  |  |  | 42,918  |  |  | —  |  |  | 42,918  |  |
| Total assets measured at fair value | $ | —  |  |  | $ | 43,811  |  |  | $ | —  |  |  | $ | 43,811  |  |
|  |  |  |  |  |  |  |  |
| Accrued liabilities measured at fair value: |  |  |  |  |  |  |  |
| Contingent consideration | $ | —  |  |  | $ | —  |  |  | $ | 11,794  |  |  | $ | 11,794  |  |
| Other long-term liabilities measured at fair value: |  |  |  |  |  |  |  |
| Contingent consideration | —  |  |  | —  |  |  | 25,450  |  |  | 25,450  |  |
| Total liabilities measured at fair value | $ | —  |  |  | $ | —  |  |  | $ | 37,244  |  |  | $ | 37,244  |  |

During the year ended December 25, 2021, there were no transfers between levels.20
