Fair Value Measurement

12 Months Ended

Dec. 25, 2011

Fair Value Measurement

Fair Value Measurement

Note 10. Fair Value Measurement

The Company adopted Topic 820 as of January 1, 2008, with the exception of the application of the statement to non-recurring nonfinancial assets and nonfinancial liabilities. Non-recurring nonfinancial assets and nonfinancial liabilities for which it has not applied the provisions of Topic 820 include those measured at fair value in goodwill impairment testing, indefinite lived intangible assets measured at fair value for impairment testing, asset retirement obligations initially measured at fair value, and those assets and liabilities initially measured at fair value in a business combination.

Topic 820 establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The only asset or liability carried and measured at fair value on a recurring basis is an interest rate swap agreement not qualified as a hedging instrument carried in other current liabilities on the consolidated balance sheets. Gains and losses resulting from marking to market the interest rate swap are recorded in other income (expense), net in the consolidated statements of operations. The total gain or loss on the interest rate swap as of December 26, 2010 and December 25, 2011, was a gain of $1.0 million and $0.3 million, respectively. The following table provides the fair value measurement of the interest rate swap (in millions):

	Total Carrying Value		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
December 25, 2011	$	—	$	—	$	—	$	—
December 26, 2010	$	0.3	$	—	$	0.3	$	—

The significant Level 2 observable inputs utilized to value the Company’s derivative financial instruments are based upon calculations provided by an investment advisor and are validated with the use of a nationally recognized financial reporting service.

Carrying amounts and the related estimated fair values of the Company’s long-term debt financial instruments not measured at fair value on a recurring basis at December 26, 2010 and December 25, 2011 are presented in Note 5. The carrying value of all other financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and approximated their estimated fair values at December 26, 2010 and December 25, 2011.