Panera Bread 2009 Annual Report Download - page 66

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difference between fair value of the consideration paid and the amount by which the noncontrolling interest was
adjusted recognized in equity attributable to the Company.
The following table illustrates the effect on the Company’s equity of its purchase of the remaining 49 percent of
outstanding stock of Paradise on June 2, 2009 (in thousands):
December 29,
2009
December 30,
2008
For the Fiscal Year Ended
Net income attributable to the Company ........................ $86,050 $67,436
Decrease in equity for purchase of noncontrolling interest ........... $(18,799) $ —
Change from net income attributable to the Company and the purchase
of noncontrolling interest ................................. $67,251 $67,436
5. Fair Value Measurements
Effective December 26, 2007, the first day of fiscal 2008, the Company implemented the accounting standard
regarding disclosures for financial assets, financial liabilities, non-financial assets and non-financial liabilities
recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually).
Effective December 31, 2008, the first day of fiscal 2009, the Company also implemented the accounting standard
for non-financial assets and non-financial liabilities reported or disclosed at fair value on a non-recurring basis, the
adoption of which had no impact on fiscal 2009. This standard defines fair value 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. This standard also
establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize
the use of unobservable inputs when measuring fair value. The following describes the three levels of inputs used to
measure fair value:
Level 1 Quoted market prices in active markets for identical assets or liabilities.
Level 2 Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3 Unobservable inputs that are not corroborated by market data.
The Company’s $115.9 million and $76.6 million in cash equivalents at December 29, 2009 and December 30,
2008, respectively, were carried at fair value in the Consolidated Balance Sheets based on quoted market prices for
identical securities (Level 1 inputs).
Historically, the Company invested a portion of its cash balances on hand in a private placement of units of
beneficial interest in the Columbia Strategic Cash Portfolio, or Columbia Portfolio, which was an enhanced cash
fund previously sold as an alternative to traditional money-market funds. Prior to the fourth quarter of fiscal 2007,
the amounts were appropriately classified as trading securities in cash and cash equivalents in the Consolidated
Balance Sheets as the fund was considered both short-term and highly liquid in nature. The Columbia Portfolio
included investments in certain asset backed securities and structured investment vehicles that were collateralized
by sub-prime mortgage securities or related to mortgage securities, among other assets. As a result of adverse
market conditions that unfavorably affected the fair value and liquidity availability of collateral underlying the
Columbia Portfolio, it was overwhelmed with withdrawal requests from investors and the Columbia Portfolio was
closed with a restriction placed upon the cash redemption ability of its holders in the fourth quarter of fiscal 2007.
As such, the Company classified the Columbia Portfolio units in short-term and long-term investments rather than
cash and cash equivalents in the Consolidated Balance Sheets and carried the investments at fair value.
As the Columbia Portfolio units were no longer trading and, therefore, had little or no price transparency, the
Company assessed the fair value of the underlying collateral for the Columbia Portfolio through review of current
investment ratings, as available, coupled with the evaluation of the liquidation value of assets held by each
60
PANERA BREAD COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)