FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2012

FAIR VALUE MEASUREMENTS

11.    FAIR VALUE MEASUREMENTS

Assets and liabilities are required to be categorized into three levels of fair value based upon the assumptions used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3, if applicable, generally would require significant management judgment. The three levels for categorizing the fair value measurement of assets and liabilities are as follows:

• Level 1: Fair valuing the asset or liability using observable inputs, such as quoted prices in active markets for identical assets or liabilities;

• Level 2: Fair valuing the asset or liability using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and

• Level 3: Fair valuing the asset or liability using unobservable inputs that reflect the Company’s own assumptions regarding the applicable asset or liability.

As of December 31, 2012, the fair values of the Company’s financial assets and liabilities, namely its FX Contracts are categorized in the table below:

	Total		Level 1		Level 2		Level 3
Assets
Derivatives:
FX Contracts(a)	$	0.1	$	0	$	0.1	$	0
Total assets at fair value	$	0.1	$	0	$	0.1	$	0
Liabilities
Derivatives:
FX Contracts(a)	$	0.4	$	0	$	0.4	$	0
Total liabilities at fair value	$	0.4	$	0	$	0.4	$	0

As of December 31, 2011, the fair values of the Company’s financial assets and liabilities, namely its FX Contracts and the Change of Control Amount (as hereinafter defined) associated with the Preferred Stock, are categorized in the table below:

	Total		Level 1		Level 2		Level 3
Assets
Derivatives:
FX Contracts(a)	$	0.2	$	—	$	0.2	$	—
Total assets at fair value	$	0.2	$	—	$	0.2	$	—
Liabilities
Derivatives:
FX Contracts(a)	$	0.8	$	—	$	0.8	$	—
Redeemable Preferred Stock (Change of Control Amount)(b)		0.2		—		—		0.2
Total liabilities at fair value	$	1.0	$	—	$	0.8	$	0.2

^(a)  The fair value of the Company’s FX Contracts was measured based on observable market transactions of spot and forward rates at December 31, 2012 and 2011. (See Note 12, “Financial Instruments.”)

^(b)  Holders of the Preferred Stock were entitled to receive upon a change of control transaction (as defined in the certificate of designation of the Preferred Stock) through October 8, 2012, a pro rata portion of the equity value received in such transaction, capped at an amount that would provide aggregate cash payments of $12.00 per share over the term of the Preferred Stock (the calculation of such payments being the “Change of Control Amount”). As of December 31, 2011, the fair value of the Change of Control Amount of the Preferred Stock, which was deemed to be a Level 3 liability was based on the Company’s assessment of the likelihood of the occurrence of specified change of control transactions within three years of the consummation of the 2009 Exchange Offer. As of October 8, 2012, holders of the Preferred Stock are no longer entitled to receive the Change of Control Amount as three years have passed without the occurrence of a change of control transaction. Accordingly, the Company reversed the liability for the Change of Control Amount of $0.2 million, which was included as income in miscellaneous, net in the Company’s Consolidated Statements of Income and Comprehensive Income for the year ended December 31, 2012 (see Note 10, “Long-Term Debt and Redeemable Preferred Stock”).

As of December 31, 2012, the fair values and carrying values of the Company’s long-term debt, including the current portion of long-term debt, and Preferred Stock, are categorized in the table below:

	Fair Value								Carrying Value
	Level 1		Level 2		Level 3		Total
Liabilities:
Long-term debt, including current portion	$	—	$	1,196.7	$	—	$	1,196.7	$	1,167.3
Preferred Stock ..		—		49.2		—		49.2		48.4
	$	—	$	1,245.9	$	—	$	1,245.9	$	1,215.7

The fair value of the Company’s long-term debt, including the current portion of long-term debt and Preferred Stock, is based on the quoted market prices for the same issues or on the current rates offered for debt of similar remaining maturities. The estimated fair value of the Company’s debt and Preferred Stock at December 31, 2011 was $1,240.6 million, which was more than the carrying values of such debt and Preferred Stock at December 31, 2011 of $1,221.8 million.

The carrying amounts of cash and cash equivalents, marketable securities, trade receivables, notes receivable, accounts payable and short-term borrowings approximate their fair values.