Fair Value Measurements

3 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Fair value is defined 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. A three-level valuation hierarchy based upon observable and non-observable inputs is utilized. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy:

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

• Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

• Level 3 - Significant inputs to the valuation model are unobservable.

          The Company's financial assets and liabilities measured at fair value include derivative instruments, securitized beneficial interests and guarantees. The application of the fair value guidance to our non-financial assets and liabilities primarily includes assessments of investments in subsidiaries, goodwill and other intangible assets and long-lived assets for potential impairment.

          Following are descriptions of the valuation methodologies the Company uses to measure different assets or liabilities at fair value.

Debt

The fair value of debt is measured for purpose of disclosure. Debt is shown at historical value in the Condensed Consolidated Balance Sheets. When possible, to measure the fair value of its long-term debt the Company uses quoted market prices of its own debt with approximately the same remaining maturities. When this is not possible, the fair value of long-term debt is calculated using discounted cash flow models with interest rates based upon market based expectations, the Company's credit risk and the contractual terms of the debt instrument. The Company also has portions of its long-term debt with maturities of one year or less. Due to the short-term nature of this debt, the Company believes book value is a reasonable approximation of this debt. The fair value of long-term debt is considered to fall within Level 2 of the fair value hierarchy as significant value drivers such as interest rates are readily observable. The carrying value and estimated fair value of the Company's Long-Term Debt are shown in the table below.

	June 30, 2012		June 30, 2011		March 31, 2012
Carrying value	$	985,327	$	738,033	$	828,503
Estimated fair value	979,247		737,654		841,558

16. FAIR VALUE MEASUREMENTS (continued)

Derivative financial instruments

The Company's derivatives consist of foreign currency contracts. The fair value of the derivatives are determined using a discounted cash flow analysis on the expected future cash flows of each derivative. This analysis utilizes observable market data including forward yield curves and implied volatilities to determine the market's expectation of the future cash flows of the variable component. The fixed and variable components of the derivative are then discounted using calculated discount factors developed based on the LIBOR swap rate and are netted to arrive at a single valuation for the period. The Company also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements. As of June 30, 2012 and 2011 and March 31, 2012 the inputs used to value the Company's derivatives fall within Level 2 of the fair value hierarchy. However, credit valuation adjustments associated with its derivatives could utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. Should the use of such credit valuation adjustment estimates result in a significant impact on the overall valuation, this would require reclassification to Level 3.

Securitized beneficial interests

The fair value of securitized beneficial interests is based upon a valuation model that calculates the present value of future expected cash flows using key assumptions for payment speeds and discount rates. The assumptions for payment speed are based on the Company's historical experience. The discount rates are based upon market trends and anticipated performance relative to the particular assets securitized which have been assumed to be commercial paper rate plus a margin or LIBOR plus a margin. Due to the use of the Company's own assumptions and the uniqueness of these transactions, securitized beneficial interests fall within Level 3 of the fair value hierarchy. Since the discount rate and the payment speed are components of the same equation, a change in either by 10% or 20% would change the value of the recorded beneficial interest at June 30, 2012 by $58 and $99, respectively.

Guarantees

The Company guarantees funds issued to tobacco suppliers by third party lending institutions and also guarantees funds borrowed by a deconsolidated subsidiary. The fair value of guarantees is based upon either the premium the Company would require to issue the same inputs or historical loss rates and as such these guarantees fall into Level 3 of the fair value hierarchy.

Tobacco supplier guarantees - The Company provides guarantees to third parties for indebtedness of certain tobacco suppliers to finance their crops. The fair value of these guarantees is determined using historical loss rates on both guaranteed and non-guaranteed tobacco supplier loans. Should the loss rates change 10% or 20%, the fair value of the guarantee at June 30, 2012 would change by $196 or $392, respectively.

Deconsolidated subsidiary guarantees - The fair value of these guarantees is determined using a discounted cash flow model based on the differential between interest rates available with and without the guarantees. The fair value of these guarantees is most closely tied to the theoretical interest rate differential. Should interest rates used in the model change by 10% or 20%, the fair value of the guarantee, at June 30, 2012 would change by $342 or $409, respectively.

Input Hierarchy of Items Measured at Fair Value on a Recurring Basis

The following table summarizes the items measured at fair value on a recurring basis:

	June 30, 2012						June 30, 2011						March 31, 2012
					Total Assets /						Total Assets /						Total Assets /
					Liabilities						Liabilities						Liabilities
	Level 2		Level 3		at Fair Value		Level 2		Level 3		at Fair Value		Level 2		Level 3		at Fair Value
Assets
Derivative financial instruments	$	624	$	—	$	624	$	940	$	—	$	940	$	312	$	—	$	312
Securitized beneficial interests	—		35,368		35,368		—		13,972		13,972		—		25,864		25,864
Total Assets	$	624	$	35,368	$	35,992	$	940	$	13,972	$	14,912	$	312	$	25,864	$	26,176
Liabilities
Guarantees	$	—	$	5,803	$	5,803	$	—	$	2,950	$	2,950	$	—	$	5,265	$	5,265
Derivative financial instruments	431		—		431		633		—		633		16		—		16
Total liabilities	$	431	$	5,803	$	6,234	$	633	$	2,950	$	3,583	$	16	$	5,265	$	5,281

16. FAIR VALUE MEASUREMENTS (continued)

Reconciliation of Change in Recurring Level 3 Balances

The following tables present the changes in Level 3 instruments measured on a recurring basis.

	Three Months Ended June 30, 2012
	Securitized Beneficial Interests			Guarantees
Beginning Balance March 31, 2012	$	25,864		$	5,265
Issuances of guarantees/sales of receivables	56,338			3,892
Settlements	(46,280		)	(3,354		)
Losses recognized in earnings	(554		)	—
Ending Balance June 30, 2012	$	35,368		$	5,803

	Three Months Ended June 30, 2011
	Securitized Beneficial Interest			Guarantees
Beginning Balance March 31, 2011	$	15,797		$	4,575
Issuances of guarantees/sales of receivables	35,093			1,293
Settlements	(36,274		)	(2,398		)
Changes in anticipated loss rate	—			(520		)
Losses recognized in earnings	(644		)	—
Ending Balance June 30, 2011	$	13,972		$	2,950

The amount of unrealized losses relating to assets still held at the respective dates of June 30, 2012 and 2011 and March 31, 2012 were $516, $381 and $1,373 on securitized beneficial interests.

          Gains and losses included in earnings are reported in Other Income (Expense).

Information About Fair Value Measurements Using Significant Unobservable Inputs

The following table summarizes significant unobservable inputs and the valuation techniques thereof for the period ended June 30, 2012:

	Fair Value at 6/30/2012		Valuation Technique	Unobservable Input	Range (Weighted Average)
Securitized Beneficial Interests	$	35,368	Discounted Cash Flow	Discount Rate	2.58% to 3.91%
				Payment Speed	42 to 64 days
Tobacco Supplier Guarantees	$	1,958	Historical Loss	Historical Loss	6% to 8%
Deconsolidated Subsidiary Guarantees	$	3,845	Discounted Cash Flow	Market Interest Rate	12	%