Fair Value Measurements

6 Months Ended

Dec. 29, 2012

Fair Value Measurements

4. Fair Value Measurements

Generally accepted accounting principles (GAAP) defines fair value, establishes a framework for measuring fair value and establishes disclosure requirements about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We considered non-performance risk when determining fair value of our derivative financial instruments. The fair value hierarchy prescribed under GAAP contains the following three levels:

Level 1 — unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.

Level 2 — other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:

-quoted prices for similar assets or liabilities in active markets;

-quoted prices for identical or similar assets in non-active markets;

-inputs other than quoted prices that are observable for the asset or liability; and

-inputs that are derived principally from or corroborated by other observable market data.

Level 3 — unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

We do not have any level 3 assets or liabilities and we have not transferred any items between fair value levels during the first two quarters of fiscal years 2012 or 2013.

The following tables summarize the assets and liabilities measured at fair value on a recurring basis as of December 29, 2012 and June 30, 2012:

	As of December 29, 2012
	Fair Value Measurements Using Inputs Considered as
	Level 1		Level 2		Total
Other assets:
Money market mutual funds	$	3.1	$	—	$	3.1
Equity and fixed income mutual funds		21.6		—		21.6
Cash surrender value of life insurance policies		—		13.3		13.3
Derivative financial instruments		—		0.6		0.6
Total assets	$	24.7	$	13.9	$	38.6
Accrued expenses:
Derivative financial instruments	$	—	$	1.6	$	1.6
Total liabilities	$	—	$	1.6	$	1.6

	As of June 30, 2012
	Fair Value Measurements Using Inputs Considered as
	Level 1		Level 2		Total
Other assets:
Money market mutual funds	$	3.2	$	—	$	3.2
Equity and fixed income mutual funds		18.9		—		18.9
Cash surrender value of life insurance policies		—		13.0		13.0
Derivative financial instruments		—		—		—
Total assets	$	22.1	$	13.0	$	35.1
Accrued expenses:
Derivative financial instruments	$	—	$	1.4	$	1.4
Total liabilities	$	—	$	1.4	$	1.4

The cash surrender value of life insurance policies are primarily investments established to fund the obligations of the company’s non-qualified, non-contributory retirement plan. The money market, equity and fixed income mutual funds are investments established to fund the obligations of the company’s non-qualified deferred compensation plan.

The following tables summarize the fair values of assets and liabilities that are recorded at historical cost as of December 29, 2012 and June 30, 2012:

	As of December 29, 2012
	Fair Value Measurements Using Inputs Considered as
	Level 1		Level 2		Total
Cash and cash equivalents	$	23.7	$	—	$	23.7
Total assets	$	23.7	$	—	$	23.7
Current maturities of long-term debt	$	—	$	23.8	$	23.8
Long-term debt, net of current maturities		—		196.5		196.5
Total liabilities	$	—	$	220.3	$	220.3

	As of June 30, 2012
	Fair Value Measurements Using Inputs Considered as
	Level 1		Level 2		Total
Cash and cash equivalents	$	19.6	$	—	$	19.6
Total assets	$	19.6	$	—	$	19.6
Current maturities of long-term debt	$	—	$	0.2	$	0.2
Long-term debt, net of current maturities		—		218.0		218.0
Total liabilities	$	—	$	218.2	$	218.2

The fair value of our long-term debt approximates its book value and is based on the amount that would be paid to transfer the liability to a credit-equivalent market participant at the measurement date.