Fair Value Measurements

3 Months Ended

Dec. 27, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

2. Fair Value Measurements

ASC 820 establishes a single authoritative definition of fair value, a framework for measuring fair value and expands disclosure of fair value measurements. ASC 820 requires financial assets and liabilities to be categorized based on the inputs used to calculate their fair values as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 — Unobservable inputs for the asset or liability, which reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).

The Company’s financial instruments include cash and equivalents, restricted cash used for collateral requirements for stand-alone letter of credit agreements, short term investments consisting of bank certificates of deposit, accounts receivable and payable, derivative instruments, short-term borrowings, and accrued liabilities. The carrying amount of these instruments approximates fair value because of their short-term nature.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of December 27, 2014 (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
Short term investments(a)	$	9,992	$	0	$	0	$	9,992
Total assets	$	9,992	$	0	$	0	$	9,992
Liabilities:
Liability for contingent consideration(b)	$	0	$	0	$	4,414	$	4,414
Total liabilities	$	0	$	0	$	4,414	$	4,414

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of December 28, 2013:

	Level 1		Level 2		Level 3		Total
Assets:
Certificates of deposit(c)	$	0	$	14,220	$	0	$	14,220
Total assets	$	0	$	14,220	$	0	$	14,220
Liabilities:
Liability for contingent consideration(b)	$	0	$	0	$	4,165	$	4,165
Total liabilities	$	0	$	0	$	4,165	$	4,165

The following table presents our financial assets and liabilities at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of September 27, 2014:

	Level 1		Level 2		Level 3		Total
Assets:
Short-term investments(a)	$	9,990	$	0	$	0	$	9,990
Total assets	$	9,990	$	0	$	0	$	9,990
Liabilities:
Liability for contingent consideration(b)	$	0	$	0	$	4,414	$	4,414
Total liabilities	$	0	$	0	$	4,414	$	4,414

(a) The fair value of short-term investments is based on quoted prices in active markets for identical assets.

(b) The liability for contingent consideration relates to an earn-out for B2E, acquired in December 2012. The fair value of the contingent consideration arrangement is determined based on the Company’s evaluation as to the probability and amount of any earn-out that will be achieved based on expected future performance by the acquired entity. This is presented as part of long-term liabilities in our consolidated balance sheets.

(c) The fair value of the Company’s time deposits is based on the most recent observable inputs for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable. These are presented as short term investments in the Company’s consolidated balance sheets.

The following table provides a summary of changes in fair value of our Level 3 financial instruments for the period ended December 27, 2014 and December 28, 2013 (in thousands):

	Amount
Balance as of September 27, 2014	$	4,414
Changes in the fair value of contingent performance-based payments established at the time of acquisition		0
Balance as of December 27, 2014	$	4,414
	Amount
Balance as of September 28, 2013	$	4,165
Changes in the fair value of contingent performance-based payments established at the time of acquisition		0
Balance as of December 28, 2013	$	4,165

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company measures certain non-financial assets and liabilities, including long-lived assets, goodwill and intangible assets, at fair value on a non-recurring basis. Fair value measurements of non-financial assets and non-financial liabilities are used primarily in the impairment analyses of long-lived assets, goodwill and other intangible assets. During the periods ended December 27, 2014 and December 28, 2013, the Company was not required to measure any significant non-financial assets and liabilities at fair value.

Fair Value of Other Financial Instruments

The estimated fair value of the Company’s $450.0 million 8.25% senior subordinated notes due 2018 as of December 27, 2014, December 28, 2013 and September 27, 2014, was $461.9 million, $434.3 million and $459.5 million, respectively, compared to a carrying value of $449.6 million, $449.4 million and $449.5 million, respectively. The estimated fair value is based on quoted market prices for these notes, which are Level 1 inputs within the fair value hierarchy.