FAIR VALUE

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

FAIR VALUE

FAIR VALUE

Fair value measurements are established using a three level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following categories:

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

• Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. Short-term investments in this category are valued using discounted cash flow techniques with all significant inputs derived from or corroborated by observable market data. Derivative assets and liabilities in this category are valued using models that consider various assumptions and information from market-corroborated sources. The models used are primarily industry-standard models that consider items such as quoted prices, market interest rate curves applicable to the instruments being valued as of the end of each period, discounted cash flows, volatility factors, current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

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

Items measured at fair value on a recurring basis

	As of September 30, 2013
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Bank time deposits with original maturities of three months or less	$	—	$	163.0	$	—	$	163.0
Derivative assets	—		1.2		—		1.2
Diversified investments associated with the Executive Stock Unit Program (ESUP)	11.9		—		—		11.9
Total assets	$	11.9	$	164.2	$	—	$	176.1
Liabilities:
Derivative liabilities	$	.1	$	.2	$	—	$	.3
Liabilities associated with the ESUP	11.8		—		—		11.8
Total liabilities	$	11.9	$	.2	$	—	$	12.1

	As of December 31, 2012
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Bank time deposits with original maturities of three months or less	$	—	$	125.6	$	—	$	125.6
Derivative assets	—		1.2		—		1.2
Diversified investments associated with the ESUP	7.0		—		—		7.0
Total assets	$	7.0	$	126.8	$	—	$	133.8
Liabilities:
Derivative liabilities	$	.5	$	1.3	$	—	$	1.8
Liabilities associated with the ESUP	7.1		—		—		7.1
Total liabilities	$	7.6	$	1.3	$	—	$	8.9

There were no transfers between Level 1 and Level 2 for any of the periods presented.

The fair value for fixed rate debt (Level 2) was greater than its $830 carrying value by $6 at September 30, 2013 and $46 greater than its $1,030 carrying value at December 31, 2012. We value this debt using discounted cash flow and secondary market rates provided by Bloomberg.

Items measured at fair value on a non-recurring basis

The primary areas in which we use fair value measurements of non-financial assets and liabilities are allocating purchase price to the assets and liabilities of acquired companies and evaluating long-term assets for potential impairment.

Determination of fair values of acquired assets and assumed liabilities requires significant judgment and are calculated utilizing a variety of methods.  In general, long lived assets (primarily buildings and machinery) are valued at an estimated replacement cost for an asset of comparable age and condition.  Market pricing of comparable assets are used to estimate replacement cost where available. The most common identified intangible assets acquired are Customer Relationships and Tradenames.  Customer relationships are valued using an excess earnings method, using various inputs such as the estimated customer attrition rate, future earnings forecast,  the amount of contributory asset charges, and a discount rate.   Tradenames are valued  using a relief from royalty method, which is based upon  comparable market royalty rates for Tradenames of similar value. Fair values determined using these models utilize significant Level 3 inputs, which cannot be readily verified by independent comparable data.  Inventory is valued at current replacement cost for raw materials, with a step-up for Work in Process and Finished Goods items that reflects the amount of ultimate profit earned as the date of the acquisition. Other working capital items are generally recorded at face value, unless there are known conditions that would impact the ultimate settlement amount of the particular item.

Goodwill

We perform an annual review for potential goodwill impairment in June of each year and as triggering events occur. The goodwill impairment review performed in June 2013 indicated no goodwill impairments.

The ten reporting units for goodwill purposes are one level below the operating segments, and are the same as the business groups disclosed in Item 1. Business in Form 10-K. Fair market values of the reporting units are estimated using a discounted cash flow model and comparable market values for similar entities using price to earnings ratios. Key assumptions and estimates used in the cash flow model include discount rate, internal sales growth, margins, capital expenditure requirements, and working capital requirements. Recent performance of the reporting unit is an important factor, but not the only factor, in the assessment. If actual results differ from estimates used in these calculations, we could incur future impairment charges.

Reporting units’ fair values in relation to their respective carrying values and significant assumptions used in the June 2013 review are presented in the table below. The 10-25% category below includes information for two reporting units (Store Fixtures and Commercial Vehicle Products). The fair value of each of these units exceeded its book value by 24% and 14%, respectively, at June 30, 2013.

Percentage of fair value in excess of carrying value	September 30, 2013 goodwill value		Sales 10-year compound annual growth rate range				Terminal values long- term growth rate	Discount rate ranges
10-25%	$	185.8	3.3	%	-	4.2%	3%	10.0	%	-	10.5%
25%+	806.4		1.5	%	-	5.0%	3%	8.0	%	-	10.0%
	$	992.2	1.5	%	-	5.0%	3%	8.0	%	-	10.5%

Fixed Assets

We test long-lived assets for recoverability at year-end and whenever events or changes in circumstances indicate the carrying value may not be recoverable. The table below summarizes fixed asset impairment for the periods presented.

	Nine Months Ended September 30,				Three Months Ended September 30,
	2013		2012		2013		2012
Continuing operations	$	.8	$	.1	$	—	$	—
Discontinued operations	1.5		.9		—		—
Total asset impairments	$	2.3	$	1.0	$	—	$	—

Fair value and the resulting impairment charges were based primarily upon offers from potential buyers or third party estimates of fair value less selling costs.