Fair Value of Financial Instruments

12 Months Ended

Dec. 25, 2011

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

(12)           Fair Value of Financial Instruments

The Company measures certain assets at fair value in accordance with current accounting standards. The fair value hierarchy consists of three levels: Level 1 fair values are valuations based on quoted market prices in active markets for identical assets or liabilities that the entity has the ability to access; Level 2 fair values are those 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; and Level 3 fair values are 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.

Current accounting standards permit entities to choose to measure many financial instruments and certain other items at fair value and establish presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar assets and liabilities. The Company has elected the fair value option for certain investments. At December 25, 2011 and December 26, 2010, these investments totaled $19,657 and $21,767, respectively, and are included in prepaid expenses and other current assets in the consolidated balance sheets. The Company recorded net gains of $61, $1,218 and $1,019 on these investments in other (income) expense, net for the years ended December 25, 2011, December 26, 2010 and December 27, 2009, respectively, relating to the change in fair value of such investments.

At December 25, 2011 and December 26, 2010, the Company had the following assets and liabilities measured at fair value in its consolidated balance sheets:

		Fair Value Measurements Using
	Fair Value	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
	--------	--------	--------	--------
December 25, 2011
Assets:
Available-for-sale securities	$   19,669	12	19,657	-
Derivatives	29,500	-	25,776	3,724
	----------	----------	----------	----------
Total assets	$   49,169	12	45,433	3,724
	======	======	======	======
Liabilities:
Derivatives	$     1,908	-	1,908	-
	======	======	======	======
December 26, 2010
Assets:
Available-for-sale securities	$  21,791	24	21,767	-
Derivatives	38,092	-	28,937	9,155
	----------	----------	----------	----------
Total assets	$  59,883	24	50,704	9,155
	======	======	======	======

For a portion of the Company’s available-for-sale securities, the Company is able to obtain quoted prices from stock exchanges to measure the fair value of these securities. Certain other available-for-sale securities held by the Company are valued at the net asset value which is quoted on a private market that is not active; however, the unit price is predominantly based on underlying investments which are traded on an active market. The Company’s derivatives consist primarily of foreign currency forward contracts. The Company uses current forward rates of the respective foreign currencies to measure the fair value of these contracts. The Company’s derivatives also include interest rate swaps used to adjust the amount of long-term debt subject to fixed interest rates. The fair values of the interest rate swaps are measured based on the present value of future cash flows using the swap curve as of the valuation date. The remaining derivative securities consist of warrants to purchase common stock of an unrelated company. The Company uses the Black-Scholes model to value these warrants. One of the inputs used in the Black-Scholes model, historical volatility, is considered an unobservable input in that it reflects the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability. The Company believes that this is the best information available for use in the fair value measurement. There were no changes in these valuation techniques during 2011.

The following is a reconciliation of the beginning and ending balances of the fair value measurements of the Company’s warrants to purchase common stock that use significant unobservable inputs (Level 3):

	2011	2010
Balance at beginning of year	$  9,155	6,808
(Loss) gain from change in fair value	(5,431)	2,347
	--------	--------
Balance at end of year	$  3,724	9,155
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