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Financial Instruments and Derivative Instruments | 9 Months Ended
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Sep. 27, 2015
Financial Instruments and Derivative Instruments |
Financial Instruments and Derivative Instruments | 4.Financial Instruments and Derivative Instruments The Company measures certain financial assets and liabilities at fair value on a recurring basis, including deferred compensation plan assets and related liability, and contingent consideration. There were no designated cash flow hedges as of September 27, 2015 and December 31, 2014. The fair values of these certain financial assets and liabilities were determined using the following inputs at September 27, 2015 and December 31, 2014:
|  | Fair Value Measurements at September 27, 2015 Using: |
|  |  |  | Quoted Prices in Active Markets for Identical Assets |  | Significant Other Observable Inputs |  | Significant Unobservable Inputs |
|  | Total |  | (Level 1) |  | (Level 2) |  | (Level 3) |
|  | (in millions) |
Assets |  |  |  |  |  |  |  |  |
Plan asset for deferred compensation(1) |  | $ | 3.3 |  | $ | 3.3 |  | $ | — |  | $ | — |
Total assets |  | $ | 3.3 |  | $ | 3.3 |  | $ | — |  | $ | — |
Liabilities |  |  |  |  |  |  |  |  |
Plan liability for deferred compensation(2) |  | $ | 3.3 |  | $ | 3.3 |  | $ | — |  | $ | — |
Total liabilities |  | $ | 3.3 |  | $ | 3.3 |  | $ | — |  | $ | — |
|  | Fair Value Measurements at December 31, 2014 Using: |
|  |  |  | Quoted Prices in Active Markets for Identical Assets |  | Significant Other Observable Inputs |  | Significant Unobservable Inputs |
|  | Total |  | (Level 1) |  | (Level 2) |  | (Level 3) |
|  | (in millions) |
Assets |  |  |  |  |  |  |  |  |
Plan asset for deferred compensation(1) |  | $ | 4.0 |  | $ | 4.0 |  | $ | — |  | $ | — |
Total assets |  | $ | 4.0 |  | $ | 4.0 |  | $ | — |  | $ | — |
Liabilities |  |  |  |  |  |  |  |  |
Plan liability for deferred compensation(2) |  | $ | 4.0 |  | $ | 4.0 |  | $ | — |  | $ | — |
Contingent consideration(3) |  | 2.5 |  | — |  | — |  | 2.5 |
Total liabilities |  | $ | 6.5 |  | $ | 4.0 |  | $ | — |  | $ | 2.5 |
| (1) |  | Included on the Company’s consolidated balance sheet in other assets (other, net).
| (2) |  | Included on the Company’s consolidated balance sheet in accrued compensation and benefits.
| (3) |  | Included on the Company’s consolidated balance sheet in accrued expenses and other liabilities as of December 31, 2014.
Fair Value The carrying amounts of cash and cash equivalents, trade receivables and trade payables approximate fair value because of the short maturity of these financial instruments. Cash equivalents consist of instruments with remaining maturities of three months or less at the date of purchase and consist primarily of certificates of deposit and money market funds, for which the carrying amount is a reasonable estimate of fair value. The fair value of the Company’s 5.85% senior notes due 2016 and 5.05% senior notes due 2020 is based on quoted market prices of similar notes (level 2). The fair value of the Company’s borrowings outstanding under the Credit Agreement and the Company’s variable rate debt approximates its carrying value. The carrying amount and the estimated fair market value of the Company’s long-term debt, including the current portion, are as follows:
|  | September 27, |  | December 31, |
|  | 2015 |  | 2014 |
|  | (in millions) |
Carrying amount |  | $ | 578.0 |  | $ | 579.7 |
Estimated fair value |  | $ | 590.1 |  | $ | 599.3 |
The Company uses financial instruments from time to time to enhance its ability to manage risk, including foreign currency and commodity pricing exposures, which exist as part of its ongoing business operations. The use of derivatives exposes the Company to counterparty credit risk for nonperformance and to market risk related to changes in currency exchange rates and commodity prices. The Company manages its exposure to counterparty credit risk through diversification of counterparties. The Company’s counterparties in derivative transactions are substantial commercial banks with significant experience using such derivative instruments. The impact of market risk on the fair value and cash flows of the Company’s derivative instruments is monitored and the Company restricts the use of derivative financial instruments to hedging activities. The Company does not enter into contracts for trading purposes nor does the Company enter into any contracts for speculative purposes. The use of derivative instruments is approved by senior management under written guidelines. The Company has exposure to a number of foreign currency rates, including the Canadian dollar, the euro, the Chinese yuan and the British pound sterling. To manage this risk, the Company generally uses a layering methodology whereby at the end of any quarter, the Company has generally entered into forward exchange contracts which hedge approximately 50% of the projected intercompany purchase transactions for the next twelve months. The Company presently does not have any open forward exchange contracts.

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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- References No definition available. + Details
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