Fair Value Measurements

3 Months Ended

Mar. 29, 2014

Fair Value Measurements

Fair Value Measurements

Note 4 — Fair Value Measurements

Current accounting guidance defines fair value as the price that would be received in the sale of an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Guidance requires disclosure of the extent to which fair value is used to measure financial assets and liabilities, the inputs utilized in calculating valuation measurements, and the effect of the measurement of significant unobservable inputs on earnings, or changes in net assets, as of the measurement date. Guidance establishes a three-level valuation hierarchy based upon the transparency of inputs utilized in the measurement and valuation of financial assets or liabilities as of the measurement date. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves. Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing the asset or liability. The use of observable and unobservable inputs is reflected in the hierarchy assessment disclosed in the table below.

As of March 29, 2014, December 31, 2013 and March 30, 2013, the Company held certain financial assets and liabilities that are required to be measured at fair value on a recurring basis. These included derivative hedging instruments related to the purchase of certain raw materials and foreign currencies, investments in trading securities and available for sale securities. The Company’s available for sale and trading securities principally consist of municipal bonds and mutual funds that are publicly traded.

The following table presents information about the Company’s financial assets and liabilities measured at fair value as of March 29, 2014, December 31, 2013 and March 30, 2013, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value:

	Estimated Fair Value March 29, 2014
	Total			Input Levels Used
	Fair Value			Level 1		Level 2			Level 3
Cash and cash equivalents	$	51,179		$	51,179	$	—		$	—
Available for sale securities	138,225			—		138,225			—
Foreign currency forward contracts	(1,613		)	—		(1,613		)	—
Commodity futures contracts	388			388		—			—
Trading securities	63,412			63,412		—			—
Total assets measured at fair value	$	251,591		$	114,979	$	136,612		$	—

	Estimated Fair Value December 31, 2013
	Total			Input Levels Used
	Fair Value			Level 1			Level 2			Level 3
Cash and cash equivalents	$	88,283		$	88,283		$	—		$	—
Available for sale securities	118,647			—			118,647			—
Foreign currency forward contracts	(684		)	—			(684		)	—
Commodity futures contracts, net	(130		)	(130		)	—			—
Trading securities	63,215			63,215			—			—
Total assets measured at fair value	$	269,331		$	151,368		$	117,963		$	—

	Estimated Fair Value March 30, 2013
	Total			Input Levels Used
	Fair Value			Level 1			Level 2			Level 3
Cash and cash equivalents	$	50,887		$	50,887		$	—		$	—
Auction rate security	8,808			—			—			8,808
Available for sale securities excluding the auction rate security	116,771			—			116,771			—
Foreign currency forward contracts	(247		)	—			(247		)	—
Commodity futures contracts	(449		)	(449		)	—			—
Trading securities	54,377			54,377			—			—
Total assets measured at fair value	$	230,147		$	104,815		$	116,524		$	8,808

During the fourth quarter 2013, the Company sold its investment in Jefferson County Alabama Sewer Revenue Refunding Warrants for $10,840. This was an auction rate security (ARS) originally purchased for $13,550 in 2008 with an insurance-backed AAA rating. The Company recorded an other-than-temporary pre-tax impairment of $5,140 in 2008 on this ARS investment which resulted in a carrying value of $8,410 at that time. Since recording the initial impairment in 2008, the Company carried this ARS investment at its estimated fair value utilizing a valuation model with Level 3 inputs, as defined by guidance, and resulting changes in the market value since the original impairment charge in 2008 were recorded as changes to accumulated other comprehensive income (loss) each year. The fair value of this instrument at March 30, 2013 was $8,808, with an unrealized loss in other comprehensive earnings of $677 recorded during the first quarter 2013.

The fair value of the Company’s industrial revenue development bonds at March 29, 2014, December 31, 2013 and March 30, 2013 were valued using Level 2 inputs which approximates the carrying value of $7,500 for both periods. Interest rates on these bonds are reset weekly based on current market conditions.