Fair Value Measurement

12 Months Ended

Dec. 31, 2013

Text Block [Abstract]

Fair Value Measurement

NOTE 4: FAIR VALUE MEASUREMENT

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes financial liabilities measured at fair value on a recurring basis:

	December 31, 2013							December 31, 2012
(In Thousands)	Level 1		Level 2			Level 3		Level 1		Level 2			Level 3
Deferred Compensation Liability	$	—	$	(12,557	)	$	—	$	—	$	(9,518	)	$	—

The Company maintains a deferred compensation plan as described in Note 14 to these consolidated financial statements. The liability representing benefits accrued for plan participants is valued at the quoted market prices of the participants’ investment elections, which consist of equity and debt “mirror” funds. As such, the Company has classified the deferred compensation liability as a Level 2 liability.

Non-Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The following table summarizes non-financial assets measured at fair value on a nonrecurring basis:

	December 31, 2013						December 31, 2012
(In Thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets Held for Sale	$	—	$	15,840	$	—	$	—	$	11,104	$	—

Assets held for sale includes real estate properties that consist mostly of parcels of land and commercial buildings, as well as the net assets of the RIMCO operating segment (principally consisting of lease merchandise, office furniture and leasehold improvements) in connection with the Company's decision to sell the 27 Company-operated RIMCO stores. The highest and best use of these assets is as real estate land parcels for development or real estate properties for use or lease; however, the Company has chosen not to develop or use these properties. In accordance with ASC Topic 360, Property, Plant and Equipment, assets held for sale are written down to fair value, and the adjustment is recorded in other operating expense (income), net. The Company estimated the fair values of real estate properties using the market values for similar properties. The impairment loss recorded for the RIMCO disposal group was based on our expectations of a sale price as compared to our estimation of the net assets to be sold at closing.

Certain Financial Assets and Liabilities Not Measured at Fair Value

The following table summarizes the fair value of assets (liabilities) that are not measured at fair value in the consolidated balance sheets, but for which the fair value is disclosed:

	December 31, 2013							December 31, 2012
(In Thousands)	Level 1		Level 2			Level 3		Level 1		Level 2			Level 3
Corporate Bonds 1	$	—	$	91,785		$	—	$	—	$	67,470		$	—
Perfect Home Notes 2	—		—			20,661		—		—			18,449
Fixed-Rate Long Term Debt 3	—		(130,687		)	—		—		(127,261		)	—

¹ The fair value of corporate bonds is determined through the use of model-based valuation techniques for which all significant assumptions are observable in the market.

² The Perfect Home notes were initially valued at cost. The Company periodically reviews the valuation utilizing company-specific transactions or changes in Perfect Home's financial performance to determine if fair value adjustments are necessary.

³ The fair value of fixed-rate long term debt is estimated using the present value of underlying cash flows discounted at a current market yield for similar instruments. The carrying value of fixed-rate long term debt was $125.0 million at December 31, 2013 and December 31, 2012.

Held-to-Maturity Securities

The Company classifies its investments in debt securities as held-to-maturity securities based on its intent and ability to hold these securities to maturity. Accordingly, the debt securities, which mature at various dates during 2014 to 2015, are recorded at amortized cost in the consolidated balance sheets. At December 31, 2013 and 2012, investments classified as held-to-maturity securities consisted of the following:

			Gross Unrealized
(In Thousands)	Amortized Cost		Gains		Losses			Fair Value
2013
Corporate Bonds	$	91,730	$	98	$	(43	)	$	91,785
Perfect Home Notes	20,661		—		—			20,661
Total	$	112,391	$	98	$	(43	)	$	112,446
2012
Corporate Bonds	$	67,412	$	99	$	(41	)	$	67,470
Perfect Home Notes	18,449		—		—			18,449
Total	$	85,861	$	99	$	(41	)	$	85,919

The amortized cost and fair value of held-to-maturity securities by contractual maturity as of December 31, 2013 are as follows:

(In Thousands)	Amortized Cost		Fair Value
Due in one year or less	$	55,250	$	55,284
Due in years one through two	57,141		57,162
Total	$	112,391	$	112,446

Information pertaining to held-to-maturity securities with gross unrealized losses is as follows.

	December 31, 2013					December 31, 2012
(In Thousands)	Fair Value		Gross  Unrealized Losses			Fair Value		Gross Unrealized Losses
Corporate Bonds	$	31,453	$	(43	)	$	22,785	$	(41	)

The unrealized losses relate principally to the increases in short-term market interest rates that occurred since the securities were purchased. As of December 31, 2013, 18 of the 48 securities are in an unrealized loss position and at December 31, 2012, 16 of the 38 securities were in an unrealized loss position. The fair value is expected to recover as the securities approach their maturities or if market yields for such investments decline. In analyzing an issuer’s financial condition, management considers whether downgrades by bond rating agencies have occurred. The Company has the intent and ability to hold the investments until their amortized cost basis is recovered on the maturity date. As a result of management’s analysis and review, no declines are deemed to be other than temporary.

The Company has estimated that the carrying value of its Perfect Home notes approximates fair value and, therefore, no impairment is considered to have occurred as of December 31, 2013. While no impairment was noted during 2013, if profitability is delayed as a result of the significant start-up expenses associated with Perfect Home, there could be a change in the valuation of the Perfect Home notes that may result in the recognition of an impairment loss in future periods.