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Derivative Financial Instruments and Fair Value Measurements
 6 Months Ended
Jun. 30, 2011
Derivative Financial Instruments and Fair Value Measurements [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
5. DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
The Company manages the volatility of cash flows caused by fluctuations in currency rates by entering into foreign exchange forward contracts and options. These derivative instruments may be designated as cash flow hedges that hedge portions of the Company’s anticipated third-party purchases and forecasted sales denominated in foreign currencies. The Company also enters into foreign exchange contracts that are not intended to qualify for hedge accounting, but are intended to offset the effect on earnings of foreign currency movements on short and long term intercompany transactions. Gains and losses on these derivative instruments are recorded through earnings.
For assets and liabilities measured at fair value on a recurring basis, the Company uses an income approach to value the assets and liabilities for outstanding derivative contracts, which include interest rate swap and foreign currency forward contracts. The income approach consists of a discounted cash flow model that takes into account the present value of future cash flows under the terms of the contracts using current market information as of the reporting date, such as prevailing interest rates and foreign currency spot and forward rates. The following table provides a summary of the fair values of assets and liabilities:
                                 
            Fair Value Measurements at June 30, 2011
            Quoted Prices        
            in Active   Significant    
            Markets for   Other   Significant
            Identical   Observable Inputs   Unobservable Inputs
($ in millions)   Total   Assets (Level 1)   (Level 2)   (Level 3)
Assets
                               
Derivatives
  $   0.4     $   —     $   0.4     $   —  
                                 
            Fair Value Measurements at June 30, 2011
            Quoted Prices        
            in Active   Significant    
            Markets for   Other   Significant
            Identical   Observable Inputs   Unobservable Inputs
    Total   Assets (Level 1)   (Level 2)   (Level 3)
Liabilities                        
Derivatives
  $ 0.1     $ —     $ 0.1     $ —  
                                 
            Fair Value Measurements at December 31, 2010  
            Quoted Prices in              
            Active              
            Markets for     Significant Other     Significant  
            Identical     Observable Inputs     Unobservable Inputs  
    Total     Assets (Level 1)     (Level 2)     (Level 3)  
Assets                          
Derivatives
  $ —     $ —     $ —     $ —  
 
                       
                                 
            Fair Value Measurements at December 31, 2010  
            Quoted Prices in              
            Active              
            Markets for     Significant Other     Significant  
            Identical     Observable Inputs     Unobservable Inputs  
    Total     Assets (Level 1)     (Level 2)     (Level 3)  
Liabilities                          
Derivatives
  $ 0.6     $ —     $ 0.6     $ —  
 
                       
At June 30, 2011 and December 31, 2010, the fair value of the Company’s derivative instruments was recorded as follows:
                                 
    Asset Derivatives     Liability Derivatives  
    June 30, 2011     June 30, 2011  
    Balance Sheet             Balance Sheet        
($ in millions)   Location     Fair Value     Location     Fair Value  
Derivatives designated as hedging instruments:
                               
Foreign exchange
  Other current assets     $ 0.4     Other accrued liabilities     $ —  
 
                           
Total derivatives designated as hedging instruments
            0.4               —  
Derivatives not designated as hedging instruments:
                               
Foreign exchange
  Accounts receivable, net       —     Other accrued liabilities       0.1  
 
                           
Total derivatives not designated as hedging instruments
            —               0.1  
 
                           
Total derivatives
          $ 0.4             $ 0.1  
 
                           
                                 
    Asset Derivatives     Liability Derivatives  
    December 31, 2010     December 31, 2010  
    Balance Sheet             Balance Sheet        
($ in millions)   Location     Fair Value     Location     Fair Value  
Derivatives designated as hedging instruments:
                               
Foreign exchange
  Other current assets       —     Other current Liabilities     $ 0.2  
 
                           
Total derivatives designated as hedging instruments
            —               0.2  
Derivatives not designated as hedging instruments:
                               
                                 
    Asset Derivatives     Liability Derivatives  
    December 31, 2010     December 31, 2010  
    Balance Sheet             Balance Sheet        
($ in millions)   Location     Fair Value     Location     Fair Value  
Foreign exchange
  Accounts receivable, net       —     Other accrued liabilities       0.4  
 
                           
Total derivatives not designated as hedging instruments
            —               0.4  
 
                           
Total derivatives
          $ —             $ 0.6  
 
                           
The effect of derivative instruments on the condensed consolidated statement of operations for the three months ended June 30, 2011 was as follows:
                         
            Location of     Amount of Gain  
    Amount of     Gain/(Loss)     Reclassified  
    Gain/(Loss)     Reclassified from     from Accumulated  
    Recognized in OCI on     Accumulated OCI into     OCI into  
($ in millions)   Derivative     Income (Effective     Income (Effective  
Derivatives in Cash Flow Hedging Relationships   (Effective Portion)     Portion)     Portion)  
Interest rate contracts
  $ —     Interest expense       —  
 
Foreign exchange
    0.3     Net sales       —  
 
                   
Total
  $ 0.3             $ —  
 
                   
                 
Derivatives Not   Location of Gain     Amount of Loss  
Designated as   Recognized in     Recognized in  
Hedging Instruments   Income on Derivative     Income on Derivative  
Foreign exchange
  Other expense     $ (0.2 )
 
             
Total
          $ (0.2 )
 
             
The effect of derivative instruments on the condensed consolidated statement of operations for the six months ended June 30, 2011 was as follows:
                         
            Location of     Amount of Gain  
    Amount of     Gain/(Loss)     Reclassified  
    Gain/(Loss)     Reclassified from     from Accumulated  
($ in millions)   Recognized in OCI on     Accumulated OCI into     OCI into  
Derivatives in Cash   Derivative     Income (Effective     Income (Effective  
Flow Hedging Relationships   (Effective Portion)     Portion)     Portion)  
Interest rate contracts
  $ —     Interest expense     $ —  
Foreign exchange
    0.5     Net sales       0.1  
 
                   
Total
  $ 0.5             $ 0.1  
 
                   
                 
    Location of Gain     Amount of Loss  
Derivatives Not Designated as   Recognized in     Recognized in  
Hedging Instruments   Income on Derivative     Income on Derivative  
Foreign exchange
  Other expense     $ (0.8 )
 
             
Total
          $ (0.8 )
 
             
At June 30, 2011 and December 31, 2010, accumulated other comprehensive gain associated with interest rate swaps and foreign exchange contracts qualifying for hedge accounting treatment was $0.2 million and $0.5 million, net of income tax effects, respectively. The Company expects $0.4 million of pre-tax net gain on cash flow hedges that are reported in accumulated other comprehensive loss as of June 30, 2011 to be reclassified into earnings within the next 12 months as the respective hedged transactions affect earnings.
The following table summarizes the carrying amounts and fair values of the Company’s financial instruments:
                                 
    June 30, 2011   December 31, 2010
    Notional   Fair   Notional   Fair
($ in millions)   Amount   Value   Amount   Value
Short-term debt
  $ 9.5     $ 9.5     $ 1.8     $ 1.8  
Long-term debt (1)
    226.0       223.3       262.1       259.9  
Foreign exchange (2)
    21.7       0.4       28.3       (0.6 )
 
(1)  
Long term debt includes financial service borrowings for all periods presented, which is included in discontinued operations, long term debt above includes current maturities of $191.9 million.
 
(2)  
Foreign exchange contracts are denominated in USD, GBP, and Euro.
The carrying value of short-term debt approximates fair value due to its short maturity. The fair value of long-term debt is based on interest rates that are currently available to us for issuance of debt with similar terms and remaining maturities.