ASSETS AND LIABILITIES MEASURED AT FAIR VALUE

12 Months Ended

Dec. 31, 2012

ASSETS AND LIABILITIES MEASURED AT FAIR VALUE

ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

3.     ASSETS AND LIABILITIES MEASURED AT FAIR VALUE

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The asset or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. There have been no changes in the methodologies used at December 31, 2012. There were no transfers between levels during 2012 and 2011.

	Assets at Fair Value as of December 31, 2012
	Total		(Level 1)		(Level 2)		(Level 3)
Recurring Fair Value Measurement:
Contingent consideration (1)	$	7,950	$	-	$	-	$	7,950
Non-recurring Fair Value Measurements:
Intangible assets, net (2)		48,793		-		-		48,793

												2011
												Total
	Assets at Fair Value as of December 31, 2011											Gains
	Total		(Level 1)			(Level 2)			(Level 3)			(Losses)
Recurring Fair Value Measurement:
Money market fund (3)	$	7,503		$	7,503		$	-		$	-			-
Non-recurring Fair Value Measurements:
Intangible assets, net (4)		17,642			-			-			17,642		$	(1,163	)
Contingent consideration (5)		-			-			-			-			1,235
														72

(1) The Monte Carlo simulation was used with a normal probability distribution of the best estimate of EBITDA for 2013 to approximate fair value.

(2) The fair values of intangibles relating to the 2012 acquisitions of TASS and Valent were determined by third parties in connection with the purchase and recorded at those values

(3) Institutional Money Market: Valued at the closing price reported on the active markets on which the individual securities are traded (Level 1); included in cash and cash equivalents at December 31, 2011. The money market fund was fully liquidated at its carrying value during the third quarter of 2012 to fund the TASS acquisition.

(4) During the first quarter of 2011, a triggering event occurred with regard to a certain proprietary technology intangible asset as a result of a failure to conclude a possible sale of a product line. The Company did not have plans to utilize this technology in the near term and believed the current market for the product line to be limited; thus, utilizing the income approach with a level 3 valuation, the Company expected zero cash flows. As such, a full impairment loss of $1,163 was recognized as of March 31, 2011. The impairment loss was recognized in the Aerostructures segment in the selling, general and administrative expenses line of the Consolidated Statements of Income.

(5) Included in accrued liabilities as of December 31, 2010 was $1,235 of contingent consideration, representing the fair value of the amount payable to former Intec shareholders if certain sales targets were achieved by Intec or if proceeds from the sale of certain portions of Intec exceeded a pre-established threshold by March 31, 2011. This amount was calculated utilizing an income approach with a level 3 valuation in which the Company analyzed expected future cash flows of likely scenarios as of December 31, 2010. Neither the sales targets nor the sale of certain portions of Intec occurred by March 31, 2011. As such, the $1,235 of contingent consideration was deemed not to be owed, and a benefit was recorded in the selling, general and administrative expenses line of the Consolidated Statements of Income.