Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2013

Financial Instruments, Owned, at Fair Value [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The following tables set forth the company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2013 and December 31, 2012 by level within the fair value hierarchy.  Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

	Fair Value as of September 30, 2013
(in millions)	Level 1		Level 2		Level 3		Total
Current Assets:
Foreign currency exchange contracts	$	—	$	3.7	$	—	$	3.7
Commodity contracts	—		0.1		—		0.1
Marketable securities	2.7		—		—		2.7
Total current assets at fair value	$	2.7	$	3.8	$	—	$	6.5
Current Liabilities:
Foreign currency exchange contracts	$	—	$	1.7	$	—	$	1.7
Commodity contracts	—		0.9		—		0.9
Total current liabilities at fair value	$	—	$	2.6	$	—	$	2.6
Non-current Liabilities:
Interest rate swap contracts	$	—	$	11.2	$	—	$	11.2
Commodity contracts	$	—	$	0.1	$	—	$	0.1
Total Non-current liabilities at fair value	$	—	$	11.3	$	—	$	11.3

	Fair Value as of December 31, 2012
(in millions)	Level 1		Level 2		Level 3		Total
Current Assets:
Foreign currency exchange contracts	$	—	$	2.9	$	—	$	2.9
Marketable securities	2.7		—		—		2.7
Total current assets at fair value	$	2.7	$	2.9	$	—	$	5.6
Current Liabilities:
Foreign currency exchange contracts	$	—	$	0.9	$	—	$	0.9
Commodity contracts	—		0.8		—		0.8
Interest rate swap contracts	—		0.3		—		0.3
Total current liabilities at fair value	$	—	$	2.0	$	—	$	2.0
Non-current Liabilities:
Interest rate swap contracts	$	—	$	1.1	$	—	$	1.1
Total non-current liabilities at fair value	$	—	$	1.1	$	—	$	1.1

The fair value of the company’s 9.50% Senior Notes due 2018 was approximately $429.1 million and $447.5 million as of September 30, 2013 and December 31, 2012, respectively. The fair value of the company’s 8.50% Senior Notes due 2020 was approximately $667.5 million and $675.0 million as of September 30, 2013 and December 31, 2012, respectively. The fair value of the company’s 5.875% Senior Notes due 2022 was approximately $295.0 million and $307.5 million as of September 30, 2013 and December 31, 2012, respectively. The fair values of the company’s Term Loans under its Senior Credit Facility were as follows as of September 30, 2013 and December 31, 2012, respectively:  Term Loan A — $270.0 million and $296.0 million; and Term Loan B — $75.6 million and $81.4 million.  See Note 8, “Debt,” for a description of the debt instruments and their related carrying values.

ASC Topic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820-10 classifies the inputs used to measure fair value into the following hierarchy:

Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2	Unadjusted quoted prices in active markets for similar assets or liabilities, or
	Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or
	Inputs other than quoted prices that are observable for the asset or liability
Level 3	Unobservable inputs for the asset or liability

The company endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.  The company estimates fair value of its Term Loans and Senior Notes based on quoted market prices of the instruments; though these markets are typically thinly traded, the liabilities are therefore classified as Level 2 within the valuation hierarchy.  The carrying values of cash and cash equivalents, accounts receivable, accounts payable, deferred purchase price notes on receivables sold (See Note 9, “Accounts Receivable Securitization”) and short-term variable debt, including any amounts outstanding under our revolving credit facility, approximate fair value, without being discounted as of September 30, 2013 and December 31, 2012 due to the short-term nature of these instruments.

As a result of its global operating and financing activities, the company is exposed to market risks from changes in interest rates, foreign currency exchange rates, and commodity prices, which may adversely affect the company’s operating results and financial position. When deemed appropriate, the company minimizes these risks through the use of derivative financial instruments. Derivative financial instruments are used to manage risk and are not used for trading or other speculative purposes, and the company does not use leveraged derivative financial instruments. The foreign currency exchange, interest rate, and commodity contracts are valued using broker quotations. As such, these derivative instruments are classified within Level 2.