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Fair Value of Financial Instruments
3 Months Ended
Sep. 29, 2011
Fair Value of Financial Instruments [Abstract] 
Fair Value of Financial Instruments

Note 12 — Fair Value of Financial Instruments

The fair value of the Tranche A portion of our Mortgage Facility as of September 29, 2011, including current maturities, was estimated at approximately $35,000, which exceeds our carrying value of $27,800. The fair value of the fixed rate debt was determined using a market approach based upon Level 2 observable inputs, which estimates fair value based on companies with similar credit quality and size of debt issuances for similar terms.

The fair value of the contingent consideration to be paid under terms of the OVH Purchase Agreement was determined using probability factors for specific earn-out measurements discounted by our incremental short-term borrowing rate. Due to the relatively short timeframe of the earn-out period (which concludes after the 2011 calendar year), the sensitivity of the determination of the fair value of the contingent consideration is almost entirely dependent upon the probability factors. Under the fair value measurement and disclosure provisions of ASC 820 for Level 3 inputs, we are required to re-measure the fair value of the contingent consideration on a quarterly basis and disclose the effect of the measurements on earnings for each quarterly period.

 

The carrying amounts of our other long-term debt, including the Tranche B portion of the Mortgage Facility, industrial development bonds and Selma, Texas financing obligation, are approximately the same as their estimated fair values.