Fair-Value Measurements

12 Months Ended

Dec. 31, 2011

Fair-Value Measurements [Abstract]

Fair-Value Measurements

4. Fair-Value Measurements

Assets and liabilities reported at fair value are classified in one of the following three levels within the fair-value hierarchy:

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

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data

Level 3: Unobservable inputs that are not corroborated by market data

Financial Assets Measured at Fair Value on a Recurring Basis

The following table summarizes the valuation of financial instruments within the fair-value hierarchy:

	December 31, 2011
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Cash equivalents	$	398,450	$	84,872	$	313,578	$	--
Current marketable securities		13,255		--		13,255		--
Other marketable securities		5,354		--		--		5,354

	December 31, 2010
	Total		Level 1		Level 2		Level 3
Cash equivalents	$	388,053	$	118,763	$	269,290	$	--
Other marketable securities		6,039		--		--		6,039

Cash equivalents consist of short-term interest-bearing instruments (primarily commercial paper, certificates of deposit and money-market funds) with maturities of three months or less at the date of purchase. Current marketable securities consist of variable-rate demand notes.

Money-market funds reflect their published net asset value and are classified as Level 1 instruments. Commercial paper, certificates of deposit and variable-rate demand notes are generally valued using published interest rates for instruments with similar terms and maturities, and accordingly, are classified as Level 2 instruments. At December 31, 2011, the weighted-average remaining maturity of the cash equivalents was less than one month. Based on their short maturities, the carrying amount of the cash equivalents approximates their fair value.

Con-way holds one auction-rate security, which is valued with an income approach that utilizes a discounted cash flow model. The following table summarizes the change in fair values of Con-way's auction-rate security, which was valued using Level 3 inputs:

(Dollars in thousands)	Auction-rate security
Balance at December 31, 2008	$	6,712
Unrealized gain		379
Partial redemption		(400	)
Balance at December 31, 2009	$	6,691
Unrealized gain		48
Partial redemption		(700	)
Balance at December 31, 2010	$	6,039
Unrealized loss		(10	)
Partial redemption		(675	)
Balance at December 31, 2011	$	5,354

For the periods presented, the fair value of Con-way's auction-rate security varied primarily due to changes in interest-rate benchmarks. Con-way has recorded a cumulative $0.4 million decline in the carrying value of the auction-rate security with an equal and offsetting unrealized loss in accumulated other comprehensive loss in shareholders' equity. Con-way has evaluated the unrealized loss and concluded that the decline in fair value is not other-than-temporary.

Non-financial Assets Measured at Fair Value on a Nonrecurring Basis

In 2009 and 2010, Con-way measured the implied fair value of its reporting-unit goodwill as part of goodwill impairment tests. The inputs used to measure the fair value of the reporting units were within Level 3 of the fair-value hierarchy. The fair-value methods applied by Con-way are more fully discussed in Note 2, "Goodwill and Intangible Assets."