11. Fair Value Of Financial Instruments

FASB guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This guidance includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing based upon their own market assumptions. The Company uses the following valuation techniques to measure fair value for its financial assets and financial liabilities:


Level 1		Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2		Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.

Level 3		Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

The following tables represent the financial assets and (liabilities), measured at fair value on a recurring basis as of March 31, 2011 and March 31, 2010 and the basis for that measurement:


	Total Fair Value Measurement March 31, 2011			Quoted Price in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Interest rate swap agreements	$	(5,847	)	$	—	$	(5,847	)	$	—
Lead forward contracts		9,575			—		9,575			—
Foreign currency forward contracts		(2,591	)		—		(2,591	)		—

Total derivatives	$	1,137		$	—	$	1,137		$	—


	Total Fair Value Measurement March 31, 2010			Quoted Price in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Interest rate swap agreements	$	(9,710	)	$	—	$	(9,710	)	$	—
Lead forward contracts		62			—		62			—
Foreign currency forward contracts		1,911			—		1,911			—

Total derivatives	$	(7,737	)	$	—	$	(7,737	)	$	—

The fair value of interest rate swap agreements are based on observable prices as quoted for receiving the variable three month LIBOR and paying fixed interest rates and, therefore, were classified as Level 2.

The fair value of lead forward contracts are calculated using observable prices for lead as quoted on the London Metal Exchange ("LME") and, therefore, were classified as Level 2.

The fair value for foreign currency forward contracts are based upon current quoted market prices and are classified as Level 2 based on the nature of the underlying market in which these derivatives are traded.

Financial Instruments

The fair value of the Company's cash and cash equivalents, accounts receivable and accounts payable approximate carrying value due to their short maturities.

The fair value of the Company's 2011 Credit Facility, the China Term Loan and short-term debt approximate their carrying value, as they are variable rate debt and the current terms are comparable to market terms as of the balance sheet dates.

The fair value of the Company's senior secured credit facility approximates its carrying value, as it is variable rate debt. The Convertible Notes, with a face value of $172,500, were issued when the Company's stock price was trading at $30.19 per share. On March 31, 2011, the Company's stock price closed at $39.75 per share. The Convertible Notes have a conversion option at $40.60 per share, and due to current conditions in the financial markets, the Company's Convertible Notes were trading at 125% of face value on March 31, 2011, and 94% of face value on March 31, 2010. As of March 31, 2011 and 2010, the unamortized discount on the Convertible Notes was $30,663 and $36,580, respectively, and was included in the equity component of the Consolidated Balance Sheets in accordance with the accounting guidance (see Note 8 regarding Debt).

The carrying amounts and estimated fair values of the Company's derivatives and Convertible Notes at March 31, 2011 and 2010 were as follows:


	March 31, 2011						March 31, 2010
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Financial assets:
Derivatives⁽¹⁾	$	9,575		$	9,575		$	1,973		$	1,973

Financial liabilities:
Convertible Notes	$	141,837	⁽²⁾	$	215,625	⁽³⁾	$	135,920	⁽²⁾	$	161,978	⁽³⁾
Derivatives⁽¹⁾		8,438			8,438			9,710			9,710

(1)

Represents interest rate swap agreements, lead and foreign currency hedges (see Note 12 for asset and liability positions of the interest rate swap agreements, lead and foreign currency hedges at March 31, 2011 and March 31, 2010).

(2)

The carrying amounts of the Convertible Notes at March 31, 2011 and March 31, 2010 represent the $172,500 principal value, less the unamortized debt discount (see Note 8).

(3)

The fair value amounts of the Convertible Notes represent the trading values of the Convertible Notes with a principal value of $172,500 at March 31, 2011 and March 31, 2010.