v2.4.0.6
Fair Value of Financial Instruments
 12 Months Ended
Mar. 31, 2013
Fair Value of Financial Instruments

11. Fair Value of Financial Instruments

Fair value is defined 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. 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, 2013 and March 31, 2012 and the basis for that measurement:

 

     Total Fair Value
Measurement
March 31, 2013		     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

    $ (654 )    $  —         $ (654 )    $ —    

Lead forward contracts

      (2,832 )      —          (2,832 )      —    

Foreign currency forward contracts

      (11 )      —          (11 )      —    
  

 

 

    

 

 

     

 

 

    

 

 

  

Total derivatives

    $ (3,497 )    $  —        $ (3,497 )    $ —    
  

 

 

    

 

 

     

 

 

    

 

 

  

 

     Total Fair Value
Measurement
March 31, 2012		     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

    $ (3,872 )    $ —        $ (3,872 )    $  —     

Lead forward contracts

      (851 )      —          (851 )      —    

Foreign currency forward contracts

      782        —          782        —    
  

 

 

    

 

 

     

 

 

    

 

 

  

Total derivatives

    $ (3,941 )    $ —        $ (3,941 )    $ —    
  

 

 

    

 

 

     

 

 

    

 

 

  

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

The fair values of the Company’s 2011 Credit Facility, the China Term Loan, the India Term Loan and short-term debt approximate their carrying value, as they are variable rate debt and the terms are comparable to market terms as of the balance sheet dates. The China Term Loan and the India Term Loan were repaid in full as of March 31, 2013.

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, 2013, the Company’s stock price closed at $45.58 per share. The Convertible Notes have a conversion option at $40.60 per share. The fair value of these notes represent the trading values based upon quoted market prices and are classified as Level 2. The Convertible Notes were trading at 126% of face value on March 31, 2013, and 116% of face value on March 31, 2012.

The carrying amounts and estimated fair values of the Company’s derivatives and Convertible Notes at March 31, 2013 and 2012 were as follows:

 

     March 31,
2013		     March 31,
2012		  
     Carrying
Amount		     Fair Value     Carrying
Amount		     Fair Value  

Financial assets:

         

Derivatives(1)

    $ 241      $ 241      $ 812      $ 812   

Financial liabilities:

         

Convertible Notes

    $ 155,273 (2)    $ 217,350 (3)    $ 148,272 (2)    $ 200,100 (3) 

Derivatives(1)

      3,738        3,738        4,753        4,753   

 

(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, 2013 and March 31, 2012).
(2) The carrying amounts of the Convertible Notes at March 31, 2013 and March 31, 2012 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, 2013 and March 31, 2012.