Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The information required by this item is incorporated by reference from the 2008 Annual Report under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations." Item 7A. Quantitative and Qualitative Disclosures about Market Risk. We are exposed to market risks related to fluctuations in interest rates on our variable rate debt, which consists of a revolving credit facility and industrial development revenue bonds. We do not currently use interest rate swaps, futures contracts or options on futures, or other types of derivative financial instruments to mitigate this risk.
For fixed rate debt, changes in interest rates generally affect the fair market value, but not earnings or cash flows. Conversely, for variable rate debt, changes in interest rates generally do not influence fair market value, but do affect future earnings and cash flows. We do not have an obligation to prepay fixed rate debt prior to maturity, and as a result, interest rate risk and changes in fair market value should not have a significant impact on such debt until we would be required to refinance it.
On December 27, 2008, the estimated fair value of our long-term debt, including the current portion, was $101.7 million, which was $0.5 million greater than the carrying value. The estimated fair value is based on rates anticipated to be available to us for debt with similar terms and maturities. The estimated fair value of notes payable included in current liabilities and the revolving credit facility approximated the carrying values.
Expected cash flows over the next five years related to debt instruments are as follows:

($US equivalents, in thousands) 2009 2010 2011 2012 2013 Thereafter Total Long-term Debt: Fixed Rate ($US) $ 15,000 $ 40,000 $ 55,000 Average interest rate 5.63 % 6.16 % Variable Rate ($US) $ 490 $ 303 $ 254 $ 30,527 $ 14,600 $ 46,174 Average interest rate(1) 6.2 %

(1) Average of rates at December 27, 2008.

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