Fair Value Measurements

6 Months Ended

Jul. 01, 2011

Fair Value Measurements

Fair Value Measurements

7. Fair Value Measurements

Fair Value Hierarchy

Accounting guidance on fair value measurements and disclosures establishes a hierarchy that prioritizes the inputs (generally, assumptions that market participants would use in pricing an asset or liability) used to measure fair value based on the quality and reliability of the information provided by the inputs, as follows:

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.

The Company recognizes transfers between input levels as of the actual date of the event. There were no transfers between input levels in the six months ended July 1, 2011. The following table summarizes the Company's financial assets and liabilities that are measured at fair value on a recurring basis, all of which were measured based on Level 2 inputs:

	July 1, 2011		December 31, 2010
(In millions)	(Level 2)		(Level 2)
Assets
Equity derivatives	$	1.7	$	0.4
Diesel fuel contracts		0.3		0.6
Total	$	2.0	$	1.0
Liabilities
Foreign exchange contracts	$	1.8	$	1.0
Total	$	1.8	$	1.0

The fair value of the foreign exchange contracts is based on observable forward rates in commonly quoted intervals for the full term of the contract.

The fair value of the equity derivatives is based on the quoted market prices of Company stock at the end of each reporting period.

The fair value of the diesel fuel contracts is based on home heating oil futures prices for the duration of the contract.

Fair Values of Other Financial Instruments

The following table presents the carrying amounts and estimated fair values of the Company's other financial instruments at July 1, 2011 and December 31, 2010.

	July 1, 2011				December 31, 2010
(In millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial Assets:
Current portion of note receivable	$	0.6	$	0.6	$	1.6	$	1.6
Long-term note receivable		0.4		0.6		0.8		0.8
Financial Liabilities:
Short-term borrowings		0.0		0.0		90.0		90.0
3.35% Senior notes		249.7		257.0		249.7		250.2

The following methods and assumptions were used to estimate the fair value of each class of financial instruments reflected in the consolidated balance sheets:

Note Receivable: The fair value of the note receivable reflects what management believes is the appropriate interest factor at July 1, 2011 and December 31, 2010, respectively, based on similar risks in the market.

Short-term Borrowings: The carrying amounts of the Company's unsecured lines of credit and accounts receivable securitization equal fair value because of short maturities and variable interest rates.

Senior Notes: The Company determines fair value of its senior note based upon its quoted market value.