Fair Value Measurements

9 Months Ended

Sep. 27, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

(13) Fair Value Measurements

During the nine months ended September 27, 2013, there were no changes in the fair value level used in the valuation of our financial assets and liabilities measured at fair value on a recurring basis.  We categorize our financial assets and liabilities on our Unaudited Condensed Consolidated Balance Sheets into a three-level fair value hierarchy based on inputs used for valuation, which are categorized as follows:

Level 1  – Financial assets and liabilities whose values are based on quoted prices for identical assets or liabilities in an active public market.

Level 2  – Financial assets and liabilities whose values are based on quoted prices in markets that are not active or a valuation using model inputs that are observable for substantially the full term of the asset or liability.

Level 3  – Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s assumptions and judgments when pricing the asset or liability.

The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis in our Unaudited Condensed Consolidated Balance Sheets as of September 27, 2013 and December 28, 2012 (in millions):

	Fair Value Measurements at September 27, 2013
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3
Assets:
Long-lived assets held for sale	$	--	$	--	$	1.8
Total assets	$	--	$	--	$	1.8

	Fair Value Measurements at December 28, 2012
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3
Assets:
Long-lived assets held for sale	$	--	$	--	$	7.5
Total assets	$	--	$	--	$	7.5
Liabilities:
Warrant liability	$	--	$	--	$	12.2
Total liabilities	$	--	$	--	$	12.2

The warrant liability measured at fair value on a recurring basis was $12.2 million as of December 28, 2012. During the first quarter of 2013, the warrant liability was cancelled. The valuation of the warrant liability was based on an estimated business enterprise value, which includes significant unobservable inputs that makes the warrant liability a Level 3 measurement. Refer to the discussion of the valuation methodology and assumptions in Note 10, Preferred stock.

Long-lived assets held for sale are reported at fair value, if, on an individual basis, the fair value of the asset is less than cost. The fair value of assets held for sale is estimated using Level 3 inputs, such as broker quotes for like-kind assets or other market indications of a potential selling value which approximates fair value.

A reconciliation of the activity for the assets and liabilities measured at fair value based on unobservable measure criteria for the nine months ended September 27, 2013 are as follows (in millions):

	Warrant liability			Assets held for sale
Fair value at December 28, 2012	$	12.2		$	7.5
Change in fair value (included in other expense, net)		2.9			--
Settlement of warrant liability		(15.1	)		--
Long-lived assets sold		--			(5.7	)
Fair value at September 27, 2013	$	--		$	1.8

The majority of our financial instruments and financial assets approximate fair value, as presented on our Unaudited Condensed Consolidated Balance Sheets. As of September 27, 2013, the estimated fair value of our senior convertible notes was approximately $16.7 million, as determined through the use of Level 2 fair value inputs.  As of September 27, 2013, the estimated fair value of our Oaktree term loans was approximately $85.1 million. The fair value of the Oaktree term loans is derived from a model that includes significant unobservable inputs which make the Oaktree term loans a Level 3 measurement. These liabilities are not measured at their fair value in our Unaudited Condensed Consolidated Balance Sheets for any period presented.