Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Measurements

NOTE 11. Fair Value Measurements

ASC Topic 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

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

Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company utilizes the market approach to measure fair value for its non-qualified deferred compensation assets and the income approach for the interest rate swap agreements, foreign currency contracts and commodity contracts. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities and for the income approach the Company uses significant other observable inputs such as quotations from third parties, to value its derivative instruments used to hedge interest rate volatility and foreign currency and commodity transactions (see Note 10 for additional details). Assets and liabilities measured at fair value on a recurring basis as of September 30, 2012 and December 31, 2011, are summarized below (in thousands):

	Fair Value Measurements as of September 30, 2012
	Total			Level 1		Level 2			Level 3
Non-qualified deferred compensation assets	$	15,383		$	15,383		—			—
Foreign exchange contracts, net		(1,855	)		—	$	(1,855	)		—
Commodity contracts, net		538			—		538			—
Total	$	14,066		$	15,383	$	(1,317	)		—
	Fair Value Measurements as of December 31, 2011
	Total			Level 1		Level 2			Level 3
Non-qualified deferred compensation assets	$	3,639		$	3,639		—			—
Foreign exchange contracts, net		3,578			—		3,578			—
Commodity contracts, net		(1,337	)		—		(1,337	)		—
Total	$	5,880		$	3,639	$	2,241			—