Supercuts 2012 Annual Report Download - page 117
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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. FAIR VALUE MEASUREMENTS (Continued)
The fair value of cash and cash equivalents, receivables and accounts payable approximated the carrying values as of June 30, 2012 and
2011. At June 30, 2012, the estimated fair values and carrying amounts of debt were $307.5 and $287.7 million, respectively. At June 30, 2011,
the estimated fair values and carrying amounts of debt were $335.4 and $313.4 million, respectively. The estimated fair value of debt was
determined based on internal valuation models, which utilize quoted market prices and interest rates for the same or similar instruments
(Level 2).
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
We measure certain assets, including the Company's equity method investments, tangible fixed assets and goodwill, at fair value on a
nonrecurring basis when they are deemed to be other than temporarily impaired. The fair values of our investments are determined based on
valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash
flow projections.
The following tables present the fair value in our assets measured at fair value on a nonrecurring basis during the twelve months ended
June 30, 2012 and 2011, respectively:
114
June 30,
2012 Level 1 Level 2 Level 3 Total Losses
(Dollars in thousands)
Assets
Goodwill
—
Regis(1)
$
35,083
$
—
$
—
$
35,083
$
(67,684
)
Goodwill—Hair Restoration Centers
(2)
74,376
—
—
74,376
(78,426
)
Investment in affiliates
—
EEG(3)
59,683
—
—
59,683
(19,426
)
Investment in affiliates—
Provalliance(4)
101,304
—
—
101,304
(37,383
)
Total
$
270,446
$
—
$
—
$
270,446
$
(202,919
)
(1) Goodwill of the Regis salon concept with a carrying value of $102.8 million was written down to its implied fair value,
resulting in an impairment charge of $67.7 million, which was recorded during fiscal year 2012. See Note 1 to the
Consolidated Financial Statements for further information.
(2) Goodwill of the Hair Restoration Centers reporting unit with a carrying value of $152.8 million was written down to its
implied fair value of $74.4 million, resulting in an impairment charge of $78.4 million. See Note 1 to the Consolidated
Financial Statements for further information.
(3) The Company's investment in EEG with a carrying value of $79.1 million was written down to its implied fair value of
$59.7 million, resulting in an impairment charge of $19.4 million. See Note 6 to the Consolidated Financial Statements
for further information.