Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2012

Fair Value of Financial Instruments

Fair Value of Financial Instruments

5.Fair Value of Financial Instruments

The following table sets forth the Company’s financial instruments that are measured at fair value on a recurring basis and presents them within the fair value hierarchy using the lowest level of input that is significant to the fair value measurement at March 31, 2012 (in millions):

	Total		Quoted Prices in Active Markets Available (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	14.4	$	14.4	$	—	$	—
Restricted cash	3.6		3.6		—		—
Foreign exchange contracts	3.3		—		3.3		—
Embedded derivatives in purchase and delivery contracts	0.3		—		0.3		—
Commodity contracts	0.1		—		0.1		—
Long-term restricted cash	3.9		3.9		—		—
Total assets recorded at fair value	$	25.6	$	21.9	$	3.7	$	—
Liabilities:
Interest rate swap contract	$	0.9	$	—	$	0.9	$	—
Foreign exchange contracts	0.3		—		0.3		—
Embedded derivatives in purchase and delivery contracts	0.5		—		0.5		—
Fixed price commodity contracts	0.1		—		0.1		—
Total liabilities recorded at fair value	$	1.8	$	—	$	1.8	$	—

The Company’s financial instruments consist primarily of cash equivalents, restricted cash, derivative instruments consisting of forward foreign exchange contracts, commodity contracts, derivatives embedded in certain purchase and delivery contracts, an interest rate swap, accounts receivable, short-term borrowings, accounts payable and long-term debt. The carrying amounts of the Company’s cash equivalents, short-term investments, restricted cash, accounts receivable, short-term borrowings and accounts payable approximate their fair value due to their short-term nature. Derivative assets and liabilities are measured at fair value on a recurring basis. The Company’s long-term debt consists of a private placement arrangement with various fixed interest rates based on the maturity date.  The carrying value and fair value of the long-term fixed interest rate debt was $240 million and $244 million, respectively, at March 31, 2012. The Company did not elect to record the long-term fixed interest rate debt at fair value. The fair value of the long-term fixed interest rate debt disclosed is based on market and observable sources with similar maturity dates and has been classified as Level 2.

The Company measures eligible assets and liabilities at fair value with changes in fair value recognized in earnings. Fair value treatment may be elected either upon initial recognition of an eligible asset or liability or, for an existing asset or liability, if an event triggers a new basis of accounting. The Company did not elect to remeasure any of its existing financial assets or liabilities, and did not elect the fair value option for any financial assets and liabilities transacted in the three months ended March 31, 2012.