Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The FASB fair value measurement guidance established a fair value hierarchy that prioritizes the inputs used to measure fair value. The three broad levels of the fair value hierarchy are as follows:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly

Level 3 – Unobservable inputs for which little or no market data exists, therefore requiring a company to develop its own assumptions

The following table shows, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis at September 30, 2014 and December 31, 2013 (in millions):

Asset (Liability)		Quoted Prices in Active Markets for Identical Assets (Level 1)		Quoted Prices in Active Markets for Similar Assets (Level 2)		Total
September 30, 2014
Money market funds (a)		$	385.0	$	-	$	385.0
Available for sale investments			36.0		-		36.0
Trading securities			8.7		-		8.7
Deferred compensation plan liabilities			(8.7)		-		(8.7)
Derivatives:
	Forward exchange contracts		-		0.5		0.5
		$	421.0	$	0.5	$	421.5

		Quoted Prices in Active Markets for Identical Assets (Level 1)		Quoted Prices in Active Markets for Similar Assets (Level 2)		Total
December 31, 2013
Money market funds (a)		$	482.2	$	-	$	482.2
Available for sale investments			38.6		-		38.6
Trading securities			7.3		-		7.3
Deferred compensation plan liabilities			(7.3)		-		(7.3)
Derivatives:
	Forward exchange contracts		-		0.4		0.4
		$	520.8	$	0.4	$	521.2
(a) Money market funds are reflected in Cash and cash equivalents in the Condensed Consolidated Balance Sheet.

The methods and assumptions used to estimate the Level 2 fair values were as follows:

Forward exchange contracts – The fair value of forward exchange contracts were based on quoted forward foreign exchange prices at the reporting date.

During the three and nine months ended September 30, 2014 there were no transfers of financial assets or liabilities in or out of Level 1 or Level 2 of the fair value hierarchy. During the nine months ended September 30, 2014 and as of December 31, 2013, the Company did not have any financial assets or liabilities that fell within the Level 3 hierarchy.

At September 30, 2014 and December 31, 2013, the Company had $36.0 million and $38.6 million, respectively, of municipal bonds classified as available-for-sale securities. The Company also had $8.7 million and $7.3 million of trading securities at September 30, 2014 and December 31, 2013, respectively. These investments are carried on the balance sheet at fair value. Unrealized gains and losses associated with available-for-sale securities are reflected in Accumulated other comprehensive loss, net of tax, while unrealized gains and losses associated with trading securities are reflected in the results of operations.

The Company offers certain employees the opportunity to participate in non-qualified deferred compensation plans. A participant's deferrals are invested in a variety of participant-directed debt and equity mutual funds that are classified as trading securities. During the nine months ended September 30, 2014 and 2013, the Company purchased $1.2 million and $0.9 million, respectively, of trading securities related to these deferred compensation plans. As a result of participant distributions, the Company sold $0.2 million of these trading securities during the nine months ended September 30, 2014. There were no participant distributions during the nine months ended September 30, 2013. The unrealized gains and losses associated with these trading securities are directly offset by the changes in the fair value of the underlying deferred compensation plan obligation.

In order to limit financial risk in the management of its assets, liabilities and debt, the Company may use derivative financial instruments such as foreign currency hedges, commodity hedges, interest rate hedges and interest rate swaps. All derivative financial instruments are matched with an existing Company asset, liability or forecasted transaction. Market value gains or losses on the derivative financial instrument are recognized in income when the effects of the related price changes of the underlying asset, liability or forecasted transaction are recognized in income. Derivative assets and derivative liabilities are not offset in the Condensed Consolidated Balance Sheet.

The fair values of derivative instruments in the Condensed Consolidated Balance Sheet are as follows (in millions):

	Asset/(Liability) Derivatives
			Fair Value
Derivatives designated as hedges	Balance Sheet Location	September 30, 2014		December 31, 2013
Forward exchange contracts designated as cash flow hedges	Deferred taxes and other		0.5		0.4
		$	0.5	$	0.4

In 2014 and 2013, the Company entered into a series of forward exchange contracts to purchase U.S. dollars in order to hedge its exposure to fluctuating rates of exchange on anticipated inventory purchases by one of its Canadian subsidiaries. As of September 30, 2014, the Company had 18 individual forward exchange contracts for a notional $1.0 million each, which have various expiration dates through September 2015. These contracts have been designated as cash flow hedges in accordance with the accounting guidance for derivatives.

Prior to the issuance of long-term notes in 2010 and 2008, the Company entered into forward interest rate locks to hedge its exposure to fluctuations in treasury rates. The 2010 interest rate lock resulted in a pretax $1.6 million loss while the 2008 interest rate lock resulted in a pretax $1.2 million gain. These amounts were recorded in Accumulated other comprehensive loss, net of tax, and are being amortized over the life of the respective notes. The amortization associated with these interest rate locks is reclassified from Accumulated other comprehensive loss to Interest expense, net in the Condensed Consolidated Statement of Income. The amortization reclassification for the three and nine months ended September 30, 2014 and 2013 was not material. As of both September 30, 2014 and December 31, 2013 there was $0.4 million of net unamortized losses reflected in Accumulated other comprehensive loss.

The following table summarizes the results of cash flow hedging relationships for the three months ended September 30, 2014 and 2013 (in millions):

	Derivative Gain/(Loss) Recognized in Accumulated Other Comprehensive Loss (net of tax)					Gain/(Loss) Reclassified into Earnings (Effective Portion)
Derivative Instrument		2014		2013	Location of Gain/(Loss) Reclassified into Income (Effective Portion)		2014		2013
Forward exchange contract	$	0.6	$	(0.3)	Cost of goods sold	$	0.1	$	0.1

The following table summarizes the results of cash flow hedging relationships for the nine months ended September 30, 2014 and 2013 (in millions):

	Derivative Gain/(Loss) Recognized in Accumulated Other Comprehensive Loss (net of tax)					Gain/(Loss) Reclassified into Earnings (Effective Portion)
Derivative Instrument		2014		2013	Location of Gain/(Loss) Reclassified into Income (Effective Portion)		2014		2013
Forward exchange contract	$	0.6	$	0.3	Cost of goods sold	$	0.7	$	0.2

There was no hedge ineffectiveness with respect to the forward exchange cash flow hedges during the three and nine months ended September 30, 2014 and 2013.

The total carrying value of long-term debt as of September 30, 2014 and December 31, 2013 was $597.5 million and $597.2 million, respectively, net of unamortized discount. As of September 30, 2014 and December 31, 2013, the estimated fair value of the long-term debt was $643.6 million and $631.0 million, respectively, using quoted market prices in active markets for similar liabilities (Level 2).