Fair Value Measurements

6 Months Ended

Jun. 25, 2013

Fair value measurements enable the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories:

Level 1: Unadjusted quoted prices available in active markets for identical assets or liabilities.

Level 2: Pricing inputs, other than Level 1 quoted prices, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. These inputs are frequently utilized in pricing models, discounted cash flow techniques and other widely accepted valuation methodologies.

Level 3: Unobservable inputs that are not corroborated by market data, which requires the Company to develop its own assumptions.

The following tables summarize the carrying amounts and fair values of certain assets at June 25, 2013 and December 25, 2012, (in thousands):



	June 25, 2013
			Fair Value Estimated Using
	Carrying Amount		Total		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Equities⁽¹⁾	$	7,965	$	7,965	$	4,973	$	2,992	$	—
Fixed income⁽¹⁾	4,705		4,705		1,328		3,377		—
Money market fund⁽²⁾	64,586		64,586		—		64,586		—


	December 25, 2012
			Fair Value Estimated Using
	Carrying Amount		Total		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Equities⁽¹⁾	$	5,833	$	5,833	$	3,144	$	2,689	$	—
Fixed income⁽¹⁾	4,344		4,344		369		3,975		—
Money market fund⁽²⁾	17,619		17,619		—		17,619		—


⁽¹⁾	These investments relate to the Deferred Compensation Plan and the POWR Plan and are located in the other assets line item on the Consolidated Balance Sheets. The investments categorized as Level 2 in the fair value hierarchy are valued by using available market information which includes quoted market prices for identical or similar assets in non-active markets.

⁽²⁾

At June 25, 2013 and December 25, 2012, $0.3 million related to the Deferred Compensation Plan and the POWR Plan is located in the other assets line item on the Consolidated Balance Sheets. At June 25, 2013 and December 25, 2012 the remaining $64.3 million and $17.3 million, respectively were short-term in nature and were classified in cash and cash equivalents on the Consolidated Balance Sheets. Money market funds are valued at amortized cost which reflects the market-based fair value.

The estimated fair value of the Company’s outstanding borrowings was as follows (in thousands):



	June 25, 2013		December 25, 2012
Term Loan	$	369,045	$	369,966
Senior Notes	214,700		218,500
	$	583,745	$	588,466
Carrying value	$	558,125	$	558,125

The Company measures the fair value of its debt facilities under a Level 2 observable input which consists of quotes from non-active markets. However, the fair value estimates presented herein are not necessarily indicative of the amount that the Company’s debtholders could realize in a current market exchange.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

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