8. DERIVATIVE FINANCIAL INSTRUMENTS

We entered into three interest rate swaps in December 2001 with a total notional value of $112.2 million at June 28, 2006. These fair value hedges change the fixed-rate interest component of an operating lease commitment for certain real estate properties entered into in November 1997 to variable-rate interest. Under the terms of the hedges (which expire in fiscal 2018), we pay monthly a variable rate based on 30-Day LIBOR (5.35% at June 28, 2006) plus 1.26%. We receive monthly the fixed interest rate of 7.156% on the lease. The estimated fair values of these agreements at June 28, 2006 and June 29, 2005 were assets of approximately $857,000 and $13.0 million, respectively.