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FAIR VALUE | 6 Months Ended
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Jun. 27, 2015
FAIR VALUE |
FAIR VALUE | (15)FAIR VALUE Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy:
| · |  | Level 1 — Quoted prices for identical instruments in active markets.
| · |  | Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
| · |  | Level 3 — Significant inputs to the valuation model are unobservable.
There were no changes during the periods presented to the valuation techniques we use to measure asset and liability fair values on a recurring basis. There were no transfers between the three levels of the fair value hierarchy during the six months ended June 27, 2015 and June 28, 2014. The following section describes the valuation methodologies we use to measure different financial instruments at fair value on a recurring basis. Derivative Financial Instruments Our derivative financial assets and liabilities include FX forward contracts, FX embedded derivatives and commodity contracts, valued using valuation models based on observable market inputs such as forward rates, interest rates, our own credit risk and the credit risk of our counterparties, which comprise investment-grade financial institutions. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. We have not made any adjustments to the inputs obtained from the independent sources. Based on our continued ability to enter into forward contracts, we consider the markets for our fair value instruments active. We primarily use the income approach, which uses valuation techniques to convert future amounts to a single present amount. As of June 27, 2015, there has been no significant impact to the fair value of our derivative liabilities due to our own credit risk, as the related instruments are collateralized under our senior credit facilities. Similarly, there has been no significant impact to the fair value of our derivative assets based on our evaluation of our counterparties’ credit risks. Investments in Equity Securities Certain of our investments in equity securities that are not readily marketable are accounted for under the fair value option and are classified as Level 3 assets in the fair value hierarchy, with such values determined by multidimensional pricing models. These models consider market activity based on modeling of securities with similar credit quality, duration, yield and structure. A variety of inputs are used, including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spread and reference data including market research publications. Market indicators, industry and economic events are also considered. We have not made any adjustments to the inputs obtained from the independent sources. At June 27, 2015 and December 31, 2014, these assets had a fair value of $10.3 and $7.4, respectively. Assets and liabilities measured at fair value on a recurring basis included the following as of June 27, 2015:
|  | Fair Value Measurements Using |
|  | Level 1 |  | Level 2 |  | Level 3 |
Other current assets — FX embedded derivatives and FX forward contracts |  | $ | — |  | $ | 6.5 |  | $ | — |
Other assets — FX embedded derivatives and investment in equity securities |  | — |  | 6.6 |  | 10.3 |
Accrued expenses — FX embedded derivatives, FX forward contracts and commodity contracts |  | — |  | 7.8 |  | — |
Other long-term liabilities — FX embedded derivatives and FX forward contracts |  | — |  | 2.7 |  | — |
Assets and liabilities measured at fair value on a recurring basis included the following as of December 31, 2014:
|  | Fair Value Measurements Using |
|  | Level 1 |  | Level 2 |  | Level 3 |
Other current assets — FX embedded derivatives |  | $ | — |  | $ | 5.1 |  | $ | — |
Other assets — FX embedded derivatives and investment in equity securities |  | — |  | 1.2 |  | 7.4 |
Accrued expenses — FX forward contracts, FX embedded derivatives and commodity contracts |  | — |  | 10.6 |  | — |
Other long-term liabilities — FX embedded derivatives and FX forward contracts |  | — |  | 1.0 |  | — |
The table below presents a reconciliation of our investment in equity securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 27, 2015 and June 28, 2014, including net unrealized gains recorded to “Other income (expense), net”:
|  |  |  | Six months ended |
|  |  |  | June 27, 2015 |  | June 28, 2014 |
Balance at beginning of year |  |  |  | $ | 7.4 |  | $ | 1.4 |
Unrealized gains recorded to earnings |  |  |  | 2.9 |  | 2.2 |
Balance at end of period |  |  |  | $ | 10.3 |  | $ | 3.6 |
Goodwill, Indefinite-Lived Intangible and Other Long-Lived Assets Certain of our non-financial assets are subject to impairment analysis, including long-lived assets, indefinite-lived intangible assets and goodwill. We review the carrying amounts of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable or at least annually for indefinite-lived intangible assets and goodwill. Any resulting asset impairment would require that the instrument be recorded at its fair value. As of June 27, 2015 and December 31, 2014, we did not have any significant non-financial assets or liabilities that were required to be measured at fair value on a recurring or non-recurring basis. Indebtedness and Other The estimated fair values of other financial liabilities (excluding capital leases) not measured at fair value on a recurring basis as of June 27, 2015 and December 31, 2014 were as follows:
|  | June 27, 2015 |  | December 31, 2014 |
|  | Carrying |  |  |  | Carrying |  |  |
|  | Amount |  | Fair Value |  | Amount |  | Fair Value |
Senior notes |  | $ | 600.0 |  | $ | 653.4 |  | $ | 600.0 |  | $ | 665.3 |
Term loan |  | 567.8 |  | 567.8 |  | 575.0 |  | 575.0 |
Other indebtedness |  | 294.1 |  | 294.1 |  | 181.1 |  | 181.1 |
The following methods and assumptions were used in estimating the fair value of these financial instruments:
| · |  | The fair values of the senior notes and term loan were determined using Level 2 inputs within the fair value hierarchy and were based on quoted market prices for the same or similar instruments or on current rates offered to us for debt with similar maturities, subordination and credit default expectations.
| · |  | The fair value of our other indebtedness approximated carrying value due primarily to the short-term nature of these instruments.
The carrying amounts of cash and equivalents and receivables reported in our condensed consolidated balance sheets approximate fair value due to the short maturity of those instruments.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13433-108611 + Details
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