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Fair Value Of Financial Assets And Liabilities
9 Months Ended
Dec. 31, 2011
Fair Value Disclosures [Abstract]  
Fair Value Of Financial Assets And Liabilities
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
Fair value is defined 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. Assets and liabilities recorded at fair value are classified based upon the level of judgment associated with the inputs used to measure their fair value. The hierarchical levels related to the subjectivity of the valuation inputs are defined as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities at the measurement date.
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable, directly or indirectly through corroboration with observable market data at the measurement date.
Level 3 inputs are unobservable inputs that reflect management’s best estimate of the assumptions (including assumptions about risk) that market participants would use in pricing the asset or liability at the measurement date.
The carrying value of cash, trade receivables, other current receivables, trade payables and other current liabilities (e.g., deposit liabilities, cash overdrafts, etc.) approximates fair value.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets and liabilities measured at fair value on a recurring basis at December 31, 2011 and March 31, 2011 are categorized in the tables below based on the lowest level of significant input to the valuation.

 
Balance at
 
Quoted prices in
active markets
Level 1
 
Significant other
observable inputs
Level 2
 
Significant
unobservable inputs
Level 3
(In thousands)
December 31, 2011
 
 
 
Assets:
 
 
 
 
 
 
 
Deferred compensation plan assets
$
10,537

 
$
10,537

 
$

 
$

Derivative assets - variable interest rate swap agreements
7,037

 

 
7,037

 

Total assets measured at fair value on a recurring basis
$
17,574

 
$
10,537

 
$
7,037

 
$

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Deferred compensation plan liabilities
$
10,537

 
$
10,537

 
$

 
$

Contingent consideration liability
2,450

 

 

 
2,450

Total liabilities measured at fair value on a recurring basis
$
12,987

 
$
10,537

 
$

 
$
2,450


 
Balance at
 
Quoted prices in
active markets
Level 1
 
Significant other
observable inputs
Level 2
 
Significant
unobservable inputs
Level 3
(In thousands)
March 31, 2011
 
 
 
Assets:
 
 
 
 
 
 
 
Deferred compensation plan assets
$
9,160

 
$
9,160

 
$

 
$

Derivative assets - variable interest rate swap agreements
5,086

 

 
5,086

 

Total assets measured at fair value on a recurring basis
$
14,246

 
$
9,160

 
$
5,086

 
$

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Deferred compensation plan liabilities
$
9,160

 
$
9,160

 
$

 
$

Total liabilities measured at fair value on a recurring basis
$
9,160

 
$
9,160

 
$

 
$



The following is a general description of the valuation methodologies used for financial assets and liabilities measured at fair value:
Deferred compensation plan assets and corresponding liabilities — The Company’s deferred compensation plan assets consist of open-ended mutual funds (Level 1) and are included within other non-current assets on the Consolidated Balance Sheets. The Company’s deferred compensation plan liabilities are equal to the plan’s assets and are included within other non-current liabilities on the Consolidated Balance Sheets. Gains or losses on the deferred compensation plan assets are recognized as other income (expense), net, while gains or losses on the deferred compensation plan liabilities are recognized as compensation expense in the Consolidated Statement of Earnings.
Derivative assets — interest rate swap agreements — The Company’s variable interest rate swap agreements are with highly rated counterparties, are designated as fair value hedges and effectively convert the Company’s fixed rate 2013 Notes to variable rate debt. The swap agreements are valued using an income approach that relies on observable market inputs such as interest rate yield curves and treasury spreads (Level 2). Expected future cash flows are converted to a present value amount based upon market expectations of the changes in these interest rate yield curves. The fair values of the Company’s interest rate swap agreements are included within other non-current assets on the Consolidated Balance Sheets. See Note 8 for additional derivatives disclosures.
Contingent consideration liability — As part of the consideration for an acquisition, the Company has an arrangement in place whereby future consideration in the form of cash may be transferred to the seller contingent upon the achievement of certain earnings targets. The fair value of the contingent consideration arrangement was estimated using the income approach with inputs that are not observable in the market. Key assumptions include a discount rate commensurate with the level of risk of achievement, time horizon and other risk factors, and probability adjusted earnings growth, all of which the Company believes are appropriate and representative of market participant assumptions. The liability for the contingent consideration arrangement is included within accrued expenses and other current liabilities on the Consolidated Balance Sheets. There was no effect on the Company's earnings as a result of the contingent consideration arrangement for the three months ended December 31, 2011.

Changes in the fair value of recurring fair value measurements using significant unobservable inputs (Level 3) for the nine months ended December 31, 2011 were as follows (in thousands):

Balance at March 31, 2011
$

Contingent consideration liability recorded
2,450

Balance at December 31, 2011
$
2,450


Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis in periods subsequent to initial recognition. During the nine months ended December 31, 2011, the Company performed an evaluation of the recoverability of the fixed assets related to one of its liquid carbon dioxide plants. This evaluation was based upon the receipt of notice that a supplier's hydrogen plant, which generates carbon dioxide as a by-product that serves as the feedstock for the Company's co-located liquid carbon dioxide plant, will cease operations in calendar year 2013. See Note 18 for additional details.

As a result of the analysis, the Company remeasured the assets of the plant and recognized an impairment charge of $2.5 million which was reflected in the “Restructuring and other special charges” line item of the Company's Consolidated Statement of Earnings. The remeasured plant assets totaled $8.8 million and were included within plant and equipment on the Company's Consolidated Balance Sheets. The Company used an income approach to estimate the fair value of the plant assets based on significant unobservable inputs (Level 3). Factors such as expected future revenues and margins, the likelihood of asset redeployment and the length of the remaining operating term were considered in determining the future cash flows of the plant assets. The asset group will not be remeasured at fair value on a recurring basis; however, it is still subject to fair value measurements to test for recoverability of the carrying amount should future conditions warrant an evaluation.
Fair Value of Debt

The carrying value of debt, which is reported on the Company’s Consolidated Balance Sheets, generally reflects the cash proceeds received upon its issuance, net of subsequent repayments, plus the impact of the Company’s fair value hedges. The fair value of the Company’s variable interest rate revolving credit borrowings disclosed in the table below was estimated based on observable forward yield curves and unobservable credit spreads management believes a market participant would assume for these facilities under market conditions as of the balance sheet date. The fair values of the fixed rate notes disclosed below were determined based on quoted prices from the broker/dealer market, observable market inputs for similarly termed treasury notes adjusted for the Company’s credit spread and unobservable inputs management believes a market participant would use in determining imputed interest for obligations without a stated interest rate. The fair value of the securitized receivables approximates its carrying value.

 
Carrying Value at
 
Fair Value at
 
Carrying Value at
 
Fair Value at
(In thousands)
December 31, 2011
 
December 31, 2011
 
March 31, 2011
 
March 31, 2011
Commercial paper
$
406,861

 
$
406,861

 
$

 
$

Revolving credit borrowings
47,499

 
47,499

 
378,209

 
381,235

2013 Notes
306,550

 
311,798

 
305,019

 
308,716

2014 Notes
399,736

 
423,412

 
399,664

 
419,899

2015 Notes
249,717

 
256,534

 
249,660

 
249,430

2016 Notes
249,691

 
256,987

 

 

2018 Notes
215,446

 
229,450

 
215,446

 
235,105

Trade receivables securitization
295,000

 
295,000

 
295,000

 
295,000

Acquisition and other notes
7,169

 
7,411

 
9,864

 
10,146

Total debt
$
2,177,669

 
$
2,234,952

 
$
1,852,862

 
$
1,899,531