FAIR VALUE

We have certain assets and liabilities that are required to be measured and disclosed at fair value in accordance with generally accepted accounting principles (“GAAP”). Fair value is defined as the exchange price that would be received for 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.

The established GAAP fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three levels. Priority is given to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Assets and liabilities measured at fair value are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values, stated below, takes into account the market for our financial assets and liabilities, the associated credit risk and other considerations.

We have classified and disclosed fair value measurements using the following levels of the fair value hierarchy:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Measurement based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable for objective sources (i.e., supported by little or no market activity).

Fair value of Certain Assets and Liabilities

The carrying value of cash and cash equivalents, accounts receivable, accounts payable and short-term notes payable approximate fair value because of their short term maturities.

Fair Value of Financial Instruments

The fair value of financial instruments is determined by using quoted market prices when available. When quoted prices are not available, independent third party services may be used to determine the fair value with reference to observable inputs used.

The following table sets forth the estimated fair value of certain financial instruments at June 30, 2014 and September 30, 2013, which are measured and recorded at fair value on a recurring basis:



		June 30, 2014
		Fair Value Measurements
(In thousands)	Asset/(Liability)	Carrying Amount			Level 1		Level 2			Level 3		Estimated Fair Value
Type of Contract	Balance Sheet Classification
Short-term interest rate swaps	Accrued liabilities	$	(1,126	)	$	—	$	(1,126	)	$	—	$	(1,126	)
Long-term interest rate swaps	Deferred costs and other assets	$	12		—		$	12		—		$	12
Short-term foreign exchange forward currency contracts	Accrued liabilities	$	(173	)	$	—	$	(173	)	$	—	$	(173	)
Long-term foreign exchange forward currency contracts	Other long-term liabilities	$	(129	)	$	—	$	(129	)	$	—	$	(129	)
Total derivative contracts, net		$	(1,416	)	$	—	$	(1,416	)	$	—	$	(1,416	)

		September 30, 2013
		Fair Value Measurements
(In thousands)	Asset/(Liability)	Carrying Amount			Level 1		Level 2			Level 3		Estimated Fair Value
Type of Contract	Balance Sheet Classification
Short-term interest rate swaps	Accrued liabilities	$	(1,586	)	$	—	$	(1,586	)	$	—	$	(1,586	)
Total derivative contracts, net		$	(1,586	)	$	—	$	(1,586	)	$	—	$	(1,586	)

Derivative financial instruments - Our derivative financial instruments consist of our interest rate swap contracts and our foreign currency forward exchange contracts.

The fair values of our interest rate swaps and our foreign currency forward exchange contracts are based upon valuations calculated by an independent third party. The derivatives were valued according to the "Market approach" where possible, and the "Income approach" otherwise. A third party independently valued each instrument using forward price data obtained from reputable data providers (e.g., Bloomberg and Reuters) and reviewed market activity and similarity of pricing terms to determine appropriate reliability level assertions for each instrument. The contribution of the credit valuation adjustment to total fair value is less than 1% for all derivatives and is therefore not significant. Based on valuation inputs for fair value measurement and independent review performed by third party consultants, we have classified our derivative contracts as Level 2 as they were valued based upon observable inputs from dealer markets.

Long-term Debt – Our long-term debt consists of both our 6.5% Senior Notes due 2020 ("Senior Notes") and our revolving credit facility.

Senior Notes – The carrying value of our Senior Notes, net of unamortized premium, is $657.4 million ($650 million principal amount) while the fair value of those Senior Notes is $697.1 million. The fair value is determined by a market approach using quoted period-end bond prices. We have classified this instrument as Level 2 as valuation inputs for fair value measurements are quoted market prices as of June 30, 2014 that can only be obtained from independent third party sources. The fair value amount has been calculated using these quoted prices. However, no assurance can be given that the fair value would be the amount realized in an active market exchange.

Revolving Credit Facility – The carrying amounts of our variable-rate debt approximates fair value because such debt bears short-term, market-based interest rates. We have classified this instrument as Level 2 as valuation inputs for purposes of determining our fair value disclosure are readily available published Eurodollar rates.