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Fair Value Measurements
 12 Months Ended
Mar. 31, 2014
Fair Value Measurements [Abstract]  
Fair Value Measurements
Note 4:  Fair Value Measurements

Fair value is defined as the price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.  Fair value measurements are classified under the following hierarchy:

·Level 1 – Quoted prices for identical instruments in active markets.
·Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.
·Level 3 – Model-derived valuations in which one or more significant inputs are not observable.

When available, the Company uses quoted market prices to determine fair value and classifies such measurements within Level 1.  In some cases, where market prices are not available, the Company uses observable market-based inputs to calculate fair value, in which case the measurements are classified within Level 2.  If quoted or observable market prices are not available, fair value is based upon valuation models that use, where possible, market-based data such as interest rates, yield curves or currency rates.  These measurements are classified within Level 3.

Trading securities:  Trading securities held by the Company, which are included within other noncurrent assets, are investments maintained in a deferred compensation trust to fund obligations under Modine’s non-qualified deferred compensation plan.  The securities’ fair values are determined based on quoted prices from active markets and are classified within Level 1 of the valuation hierarchy.

Derivative financial instruments: As part of the Company’s risk management strategy, Modine enters into derivative transactions to mitigate certain identified exposures.  The derivative instruments include foreign currency exchange contracts and commodity derivatives.  These instruments are not exchange traded and are customized over-the-counter derivative transactions.  These derivative instruments are with counterparties that have long-term credit ratings of BBB– or better. The Company measures fair value assuming that the unit of account is an individual derivative transaction and those derivatives are sold or transferred on a stand-alone basis.  The Company estimates the fair value of these derivative instruments based on dealer quotes.  These derivative instruments are classified within Level 2 of the valuation hierarchy.

Deferred compensation obligations:  The fair values of the Company’s deferred compensation obligations are recorded at the fair value of the investments held by the deferred compensation trust.  As described above, the fair values of the related trading securities are determined based on quoted prices from active markets and are classified within Level 1 of the valuation hierarchy.

The carrying values of cash and cash equivalents, trade accounts receivable, and accounts payable approximate fair value due to the short-term nature of these instruments. We disclose the fair value of the Company’s debt in Note 16.
At March 31, 2014, assets and liabilities recorded at fair value on a recurring basis were as follows:

 
 
Level 1
  
Level 2
  
Level 3
  
Total
 
Assets:
 
  
  
  
 
Trading securities
 
$
2.6
  
$
-
  
$
-
  
$
2.6
 
Total assets
 
$
2.6
  
$
-
  
$
-
  
$
2.6
 
 
                
Liabilities:
                
Derivative financial instruments
 
$
-
  
$
0.4
  
$
-
  
$
0.4
 
Deferred compensation obligations
  
2.6
   
-
   
-
   
2.6
 
Total liabilities
 
$
2.6
  
$
0.4
  
$
-
  
$
3.0
 

At March 31, 2013, assets and liabilities recorded at fair value on a recurring basis were as follows:

 
 
Level 1
  
Level 2
  
Level 3
  
Total
 
Assets:
 
  
  
  
 
Trading securities
 
$
2.3
  
$
-
  
$
-
  
$
2.3
 
Total assets
 
$
2.3
  
$
-
  
$
-
  
$
2.3
 
 
                
Liabilities:
                
Derivative financial instruments
 
$
-
  
$
1.4
  
$
-
  
$
1.4
 
Deferred compensation obligations
  
2.3
   
-
   
-
   
2.3
 
Total liabilities
 
$
2.3
  
$
1.4
  
$
-
  
$
3.7
 

At March 31, 2014, the U.S. pension plan assets were classified as follows:

 
 
Level 1
  
Level 2
  
Level 3
  
Total
 
 
 
  
  
  
 
Money market investments
 
$
-
  
$
11.3
  
$
-
  
$
11.3
 
Common stocks
  
40.1
   
2.1
   
-
   
42.2
 
Corporate bonds
  
-
   
21.3
   
-
   
21.3
 
Pooled equity funds
  
68.9
   
11.9
   
-
   
80.8
 
Pooled fixed income funds
  
14.1
   
-
   
-
   
14.1
 
U.S. government and agency securities
  
-
   
37.0
   
-
   
37.0
 
Other
  
1.6
   
5.4
   
-
   
7.0
 
Total
 
$
124.7
  
$
89.0
  
$
-
  
$
213.7
 

At March 31, 2013, the U.S. pension plan assets were classified as follows:

 
 
Level 1
  
Level 2
  
Level 3
  
Total
 
 
 
  
  
  
 
Money market investments
 
$
-
  
$
7.3
  
$
-
  
$
7.3
 
Common stocks
  
35.9
   
0.1
   
-
   
36.0
 
Corporate bonds
  
-
   
19.1
   
-
   
19.1
 
Pooled equity funds
  
68.8
   
14.1
   
-
   
82.9
 
Pooled fixed income funds
  
17.6
   
-
   
-
   
17.6
 
U.S. government and agency securities
  
-
   
32.1
   
-
   
32.1
 
Other
  
1.0
   
4.6
   
-
   
5.6
 
Total
 
$
123.3
  
$
77.3
  
$
-
  
$
200.6
 

We have determined the fair value of money market investments to approximate their net asset values, with no discounts for credit quality or liquidity restrictions, and they are classified within Level 2 of the valuation hierarchy.  We determined the fair value of common stocks, pooled equity funds and pooled fixed-income funds based on quoted prices from active markets and classify them within Level 1 of the valuation hierarchy.  We determined the fair value of certain common stocks, corporate bonds, pooled equity funds and U.S. government and agency securities based upon recent bid prices or the average of recent bid and asking prices when available and, if not available, we valued them through matrix pricing models developed by sources considered by management to be reliable.  We classify these assets within Level 2 of the valuation hierarchy.
 
Assets held for sale:  We have valued assets held for sale based on Level 3 market-based valuation inputs.  The carrying value of assets held for sale totaled $11.6 million and $11.4 million at March 31, 2014 and March 31, 2013, respectively.  See Note 6 for further discussion.