Fair Value Measurements

6 Months Ended

Dec. 30, 2012

Fair Value Measurements

Fair Value Measurements

Note 9-Fair Value Measurements

The Company’s financial assets and liabilities are measured and recorded at fair value, except for the Company’s investments in certain privately-held companies, which are accounted for under the cost method of accounting and are periodically assessed for other-than-temporary impairment, when an event or circumstances indicate that an other-than-temporary decline in value may have occurred. The Company’s non-financial assets, such as goodwill, intangible assets, and property, plant and equipment, are recorded at cost and are assessed for impairment when an event or circumstances indicate that an other-than-temporary decline in value may have occurred.   Goodwill and indefinite lived intangibles are tested for impairment annually, or more frequently if impairment indicators are present, as required under the accounting standards.

Cash and cash equivalents, receivables, accounts payable and accrued expenses are reflected in the consolidated balance sheets at carrying value, which approximates fair value due to the short-term nature of these instruments. Although no trading market exists, the Company believes that the carrying amount of its debt approximates fair value, due to its variable nature.

The authoritative guidance for fair value establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under the guidance are described below:

Level 1	Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
Level 2	Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
Level 3	Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table presents by level, within the fair value hierarchy, assets and liabilities measured at fair value on a recurring basis as of December 30, 2012:

			Fair Value MeasurementsAssets (Liabilities)
	Total		Level 1		Level 2		Level 3
			(in thousands)
Assets:
Cash equivalents (money market accounts)	$	26,856	$	26,856
Trading securities held in a “rabbi trust” (1)	1,332		1,332
Fair value of non-performance promissory note (2)	205						$	205
	$	28,393	$	28,188	$	—	$	205

(1) Trading securities held in a rabbi trust are included in Other assets in the consolidated balance sheets (Note 14 — Employee Retirement Plans, in the Company’s Annual Report on Form 10-K).  The Company established a Non-qualified Deferred Compensation Plan for certain members of senior management in fiscal 2009. Deferred compensation is invested in mutual funds held in a “rabbi trust” and are restricted for payment to participants of the NQDC Plan.

(2) Refer to Note 4. Acquisitions and Dispositions — Sale and Franchise of Fannie May Retail Stores for more detail, including the valuation techniques used to calculate fair value. Included in Other assets on the consolidated balance sheet

The following table presents by level, within the fair value hierarchy, assets and liabilities measured at fair value on a recurring basis as of July 1, 2012:

				Fair Value MeasurementsAssets (Liabilities)
	Total			Level 1		Level 2			Level 3
				(in thousands)
Assets (liabilities):
Cash equivalents (money market accounts)	$	27,276		$	27,276
Trading securities held in a “rabbi trust” (1)	1,143			1,143
Fair value of non-performance promissory note (2)	205								$	205
Interest rate swap (3)	(7		)			$	(7	)
	$	28,617		$	28,419	$	(7	)	$	205

(1) Trading securities held in a rabbi trust are included in Other assets in the consolidated balance sheets (Note 14 — Employee Retirement Plans, in the Company’s Annual Report on Form 10-K).  The Company established a Non-qualified Deferred Compensation Plan for certain members of senior management in fiscal 2009. Deferred compensation is invested in mutual funds held in a “rabbi trust” and is restricted for payment to participants of the NQDC Plan.

(2) Refer to Note 4. Acquisitions and Dispositions — Sale and Franchise of Fannie May Retail Stores. Included in Other assets on the consolidated balance sheet

(3) Included in Other liabilities on the consolidated balance sheet.