Fair Value Measurements | 9 Months Ended |
Sep. 30, 2013 |
Fair Value Measurements [Abstract] | ' |
Fair Value Measurements | ' |
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11. Fair Value Measurements |
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Recurring |
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The following table presents the Company's assets and liabilities that were measured at fair value on a recurring basis at: |
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| 30-Sep-13 | 31-Dec-12 |
(In thousands) | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 |
Assets | | | | | | | | | | | | | | | | |
Deferred compensation | $ | 5,989 | $ | 5,989 | $ | - | $ | - | $ | 4,540 | $ | 4,540 | $ | - | $ | - |
Derivative instruments | | - | | - | | - | | - | | 223 | | - | | 223 | | - |
Total assets | $ | 5,989 | $ | 5,989 | $ | - | $ | - | $ | 4,763 | $ | 4,540 | $ | 223 | $ | - |
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Liabilities | | | | | | | | | | | | | | | | |
Contingent consideration | $ | 8,482 | $ | - | $ | - | $ | 8,482 | $ | 11,519 | $ | - | $ | - | $ | 11,519 |
Deferred compensation | | 9,110 | | 9,110 | | - | | - | | 7,015 | | 7,015 | | - | | - |
Derivative instruments | | 31 | | - | | 31 | | - | | - | | - | | - | | - |
Total liabilities | $ | 17,623 | $ | 9,110 | $ | 31 | $ | 8,482 | $ | 18,534 | $ | 7,015 | $ | - | $ | 11,519 |
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Deferred Compensation |
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The Company has an Executive Non-Qualified Deferred Compensation Plan (the "Plan"). The amounts deferred under this Plan are credited with earnings or losses based upon changes in values of the notional investments elected by the Plan participants. The Company invests 65 percent of the amounts deferred by the Plan participants in life insurance contracts, matching the investments elected by the Plan participants. Deferred compensation assets and liabilities were valued using a market approach based on the quoted market prices of identical instruments. |
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Contingent Consideration Related to Acquisitions |
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Liabilities for contingent consideration related to acquisitions were valued using management's projections for long-term sales forecasts, including assumptions regarding market share gains and future industry-specific economic and market conditions, and a market participant's weighted average cost of capital. Over the next four years, the Company's long-term sales growth forecasts for these products average approximately 20 percent per year. For further information on the inputs used in determining the fair value, and a roll-forward of the contingent consideration liability, see Note 9 of the Notes to Condensed Consolidated Financial Statements. |
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Changes in either of the inputs in isolation would result in a change in the fair value measurement. A change in the assumptions used for sales forecasts would result in a directionally similar change in the fair value liability, while a change in the weighted average cost of capital would result in a directionally opposite change in the fair value liability. If there is an increase in the fair value liability, the Company would record a charge to selling, general and administrative expenses, and if there is a decrease in the fair value liability, the Company would record a benefit in selling, general and administrative expenses. |
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Derivative Instruments |
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At September 30, 2013, the Company had no derivative instruments outstanding. While outstanding, these derivative instruments were considered to be economic hedges of the underlying movement in the price of aluminum, but were not designated or accounted for as a hedge. These derivative instruments were valued at fair value using a market approach based on the quoted market prices of similar instruments at the end of each reporting period, and the resulting net gain or loss was recorded in cost of sales in the Condensed Consolidated Statements of Income. At September 30, 2013, the corresponding liability for the expired derivative instruments was less than $0.1 million and was recorded in accrued expenses and other current liabilities, and at December 31, 2012, the $0.2 million corresponding asset was recorded in prepaid expenses and other current assets, both as reflected in the Condensed Consolidated Balance Sheets. During the first nine months of 2013, derivative instruments for 4.7 million pounds of aluminum were settled at a loss of $0.3 million, which was recorded in cost of sales in the Condensed Consolidated Statements of Income. |
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Non-recurring |
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The following table presents the carrying value on the measurement date of any assets and liabilities which were measured at fair value and recorded at the lower of cost or fair value, on a non-recurring basis, using significant unobservable inputs (Level 3), and the corresponding non-recurring losses or (gains) recognized during the nine months ended September 30: |
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| 2013 | 2012 | | | | | | | | |
| Carrying | Non-Recurring | Carrying | Non-Recurring | | | | | | | | |
(In thousands) | Value | Losses/(Gains) | Value | Losses/(Gains) | | | | | | | | |
Assets | | | | | | | | | | | | | | | | |
Vacant owned facilities | $ | 3,211 | $ | 145 | $ | 5,794 | $ | 486 | | | | | | | | |
Other intangible assets | | - | | - | | - | | 1,228 | | | | | | | | |
Net assets of acquired | | | | | | | | | | | | | | | | |
businesses | | 1,076 | | - | | 1,345 | | - | | | | | | | | |
Total assets | $ | 4,287 | $ | 145 | $ | 7,139 | $ | 1,714 | | | | | | | | |
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Liabilities | | | | | | | | | | | | | | | | |
Vacant leased facilities | $ | - | $ | - | $ | - | $ | 10 | | | | | | | | |
Total liabilities | $ | - | $ | - | $ | - | $ | 10 | | | | | | | | |
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Vacant Owned Facilities |
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During the first nine months of 2013 and 2012, the Company reviewed the recoverability of the carrying value of six and eight vacant owned facilities, respectively. The determination of fair value was based on the best information available, including internal cash flow estimates, market prices for similar assets, broker quotes and independent appraisals, as appropriate. |
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During the first nine months of 2013, the fair value of two of these vacant owned facilities did not exceed its carrying value; therefore an impairment charge of $0.1 million was recorded in selling, general and administrative expenses in the Condensed Consolidated Statements of Income. A sale agreement has been signed on one facility, with closing scheduled for the fourth quarter of 2013. During the first nine months of 2013, the Company sold one of the facilities previously recorded as a vacant facility and reopened two facilities. At September 30, 2013, the remaining three vacant owned facilities, with an estimated combined fair value of $4.0 million, including the one scheduled for closing in the fourth quarter of 2013, were classified in fixed assets in the Condensed Consolidated Balance Sheets. |
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During the first nine months of 2012, the fair value of three of these vacant owned facilities did not exceed their carrying value, therefore an impairment charge of $0.5 million was recorded in selling, general and administrative expenses in the Condensed Consolidated Statements of Income. During the first nine months of 2012, the Company sold at carrying value two of the facilities previously recorded as a vacant facility and reopened another. At September 30, 2012, the five vacant owned facilities, with an estimated combined fair value of $5.8 million, were classified in fixed assets in the Condensed Consolidated Balance Sheets. |
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Other Intangible Assets |
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During the first nine months of 2012, the Company reviewed the recoverability of amortizable intangible assets associated with an acquired patent. Based on the analyses, the carrying value of these intangible assets exceeded the undiscounted cash flows expected to be generated. As a result, the Company was required to determine the fair value of these intangible assets. Fair value was determined based on the present value of internal cash flow estimates. The resulting fair value of these intangible assets was nominal; therefore the Company recorded a non-cash impairment charge of $1.2 million, of which $1.0 million was recorded in cost of sales in the Condensed Consolidated Statements of Income. |
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Net Assets of Acquired Businesses |
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The Company valued the assets and liabilities associated with the acquisitions of businesses on the respective acquisition dates. Depending upon the type of asset or liability acquired, the Company used different valuation techniques in determining the fair value. Those techniques included comparable market prices, long-term sales, profitability and cash flow forecasts, assumptions regarding future industry-specific economic and market conditions, a market participant's weighted average cost of capital, as well as other techniques as circumstances required. For further information on acquired assets and liabilities, see Note 3 of the Notes to Condensed Consolidated Financial Statements. |
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Vacant Leased Facilities |
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The Company recorded a charge of less than $0.1 million in selling, general and administrative expenses in the Condensed Consolidated Statements of Income in the first nine months of 2012 due to the early termination of leases of vacant facilities. |
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