Fair Value

12 Months Ended

Jul. 31, 2013

Fair Value [Abstract]

Fair Value

NOTE G  Fair Value

Fair Value of Financial Instruments At July 31, 2013 and 2012, the Company’s financial instruments included cash and cash equivalents, accounts receivable, accounts payable, short-term investments, short-term borrowings, long-term debt, and derivative contracts.  The fair values of cash and cash equivalents, accounts receivable, accounts payable, and short-term borrowings approximated carrying values because of the short-term nature of these instruments.  Derivative contracts are reported at their fair values based on third-party quotes.  As of July 31, 2013, the estimated fair value of long-term debt with fixed interest rates was $112.3 million compared to its carrying value of $100.0 million and the estimated fair value of short-term debt with fixed interest rates was $98.2 million compared to the carrying value of $96.8 million.  The fair value is estimated by discounting the projected cash flows using the rate that similar amounts of debt could currently be borrowed, which is classified as Level 2 in the fair value hierarchy.

Derivative contracts are reported at their fair values based on third-party quotes.  The fair values of the Company’s financial assets and liabilities listed below reflect the amounts that would be received to sell the assets or paid to transfer the liabilities in an orderly transaction between market participants at the measurement date (exit price).  The fair values are based on inputs other than quoted prices that are observable for the asset or liability.  These inputs include foreign currency exchange rates and interest rates.  The financial assets and liabilities are primarily valued using standard calculations and models that use as their basis readily observable market parameters.  Industry standard data providers are the primary source for forward and spot rate information for both interest rates and currency rates.

The following summarizes the Company’s fair value of outstanding derivatives at July 31, 2013, and 2012, on the Consolidated Balance Sheets:

	Significant Other Observable Inputs
	(Level 2)*
	At July 31,
	2013		2012
		(thousands of dollars)
Asset derivatives recorded under the caption Prepaids and other current assets
Foreign exchange contracts	$	734	$	526
Liability derivatives recorded under the caption Other current liabilities
Foreign exchange contracts		(845)		(1,424)
Forward exchange contracts - net liablity position	$	(111)	$	(898)

*Inputs to the valuation methodology of level 2 assets include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

The Company holds equity method investments which are classified in other assets in the consolidated balance sheets and held at cost.  The aggregate carrying amount of these investments was $18.8 million and $20.1 million as of July 31, 2013 and 2012, respectively.  These equity method investments are measured at fair value on a nonrecurring basis.  The fair value of the Company’s equity method investments has not been estimated as there have been no identified events or changes in circumstance that would have had an adverse impact on the value of these investments.  In the event that these investments were required to be measured, these investments would fall within Level 3 of the fair value hierarchy, due to the use of significant unobservable inputs to determine fair value, as the investments are privately-held entities or divisions of public companies without quoted market prices.

Goodwill is assessed for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.  As there have been no events or circumstances that have had an adverse impact on the value of these assets, the Company has not been required to record an impairment and therefore these assets are not recorded at fair value.  In the event that an impairment was recognized, the fair value would be classified within Level 3 of the fair value hierarchy.  Refer to Note C for further discussion of the annual goodwill impairment analysis and carrying values of goodwill and other intangible assets.

The Company assesses the impairment of intangible assets and property, plant, and equipment whenever events or changes in circumstances indicate that the carrying amount of intangible assets or property, plant, and equipment assets may not be recoverable.  There were no significant impairment charges recorded in Fiscal 2013 or Fiscal 2012.  Refer to Note C for further discussion of the annual goodwill impairment analysis and carrying values of intangible assets.