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Derivative Instruments and Hedging Activities | 12 Months Ended
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Dec. 31, 2011
Derivative Instruments and Hedging Activities [Abstract] |
Derivative Instruments and Hedging Activities | Note 13 – Derivative Instruments and Hedging Activities Cash Flow Hedges Copper and brass represent the largest component of the Company's variable costs of production. The cost of these materials is subject to global market fluctuations caused by factors beyond the Company's control. The Company occasionally enters into forward fixed-price arrangements with certain customers; the risk of these arrangements is generally managed with commodity futures contracts. The Company accounts for these futures contracts in accordance with ASC 815, Derivatives and Hedging (ASC 815). These futures contracts have been designated as cash flow hedges. The fair value of open futures contracts are recognized as a component of OCI until the position is closed which corresponds to the period when the related hedged transaction is recognized in earnings. Should these contracts no longer meet hedge criteria in accordance with ASC 815, either through lack of effectiveness or because the hedged transaction is no longer probable of occurring, all deferred gains and losses related to the hedge would be immediately reclassified from OCI into earnings as a component of other income. In the next nine months, the Company will reclassify into earnings realized gains or losses of cash flow hedges; at December 31, 2011, the net value included in OCI was approximately a $675 thousand loss. At December 31, 2011, the Company held open futures contracts to purchase approximately $21.1 million of copper over the next nine months related to fixed price sales orders. The fair value of those futures contracts was a $679 thousand loss position, which was determined by obtaining quoted market prices (Level 1 hierarchy as defined by ASC 820). Derivative instruments designated as cash flow hedges under ASC 815 are reflected in the Consolidated Financial Statements as follows:
| December 31, 2011 |
(In thousands) | Location |  | Fair value |
Commodity contracts | Other current assets: | Gain positions |  | $ | 85 |
|  | Loss positions |  |  | (25 | )
| Other current liabilities: | Gain positions |  |  | 339 |
|  | Loss positions |  |  | (1,078 | )
| December 25, 2010 |
(In thousands) | Location |  | Fair value |
Commodity contracts | Other current assets: | Gain positions |  | $ | 891 |
The following tables summarize activities related to the Company's derivative instruments, classified as cash flow hedges in accordance with ASC 815:
|  | Gain (Loss) Recognized in Accumulated OCI (Effective Portion), Net of Tax |
|  |  |  |  |  |  |  | For the Year Ended |
(In thousands) |  |  |  |  |  |  |  | December 31, 2011 |  |  | December 25, 2010 |
Commodity contracts |  |  |  |  |  |  |  |  |  | $ | (427 | ) |  | $ | 1,684 |
|  | (Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion), Net of Tax |
|  |  |  |  |  |  |  | For the Year Ended |
(In thousands) |  | Location |  |  | December 31, 2011 |  |  | December 25, 2010 |
Commodity contracts |  | Cost of goods sold |  |  | $ | (561 | ) |  | $ | (1,308 | )
The Company enters into futures contracts that closely match the terms of the underlying transactions. As a result, the ineffective portion of the hedge contracts is not material to the Consolidated Statements of Income. Fair Value Hedges The Company occasionally enters into futures contracts in order to protect the value of inventory against market fluctuations. The Company accounts for these futures contracts in accordance with ASC 815. These futures contracts have been designated as fair value hedges. For fair value hedges, the changes in value of the hedging derivative, as well as the changes in value of the related hedged item due to the risk being hedged, are reflected in current earnings. Hedge ineffectiveness is reflected in current earnings in the period in which it occurs. At December 31, 2011, the Company held no open contracts designated as fair value hedges. The following tables summarize the gains (losses) on the Company's fair value hedges:
| Gains (Losses) on Fair Value Hedges for the Year Ended December 31, 2011 |
| Location |  | Amount |
(In thousands) |  |  |  |
Gain on the derivatives in designated and qualifying fair value hedges: |  |  |  |
Commodity Contracts | Cost of goods sold |  | $ | 4,509 |
(Loss) on the hedged item in designated and qualifying fair value hedges: |  |  |  |  |
Inventory | Cost of goods sold |  | $ | (4,344 | )
The Company enters into futures contracts that closely match the terms of the underlying transactions. As a result, the ineffective portion of the open cash flow and fair value hedge contracts through December 31, 2011, was not material to the Condensed Consolidated Statements of Income. The Company does not offset fair value of amounts for derivative instruments and fair value amounts recognized for the right to reclaim cash collateral. At December 31, 2011, the Company had recorded restricted cash of $1.9 million related to open futures contracts.

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- Definition The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. 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