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FAIR VALUE MEASUREMENTS: | 12 Months Ended
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Dec. 31, 2012
FAIR VALUE MEASUREMENTS: |
FAIR VALUE MEASUREMENTS: | NOTE 10—FAIR VALUE MEASUREMENTS: Current accounting guidance defines fair value as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Guidance requires disclosure of the extent to which fair value is used to measure financial assets and liabilities, the inputs utilized in calculating valuation measurements, and the effect of the measurement of significant unobservable inputs on earnings, or changes in net assets, as of the measurement date. Guidance establishes a three-level valuation hierarchy based upon the transparency of inputs utilized in the measurement and valuation of financial assets or liabilities as of the measurement date. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves. Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing the asset or liability. The use of observable and unobservable inputs is reflected in the hierarchy assessment disclosed in the table below. As of December 31, 2012 and 2011, the Company held certain financial assets that are required to be measured at fair value on a recurring basis. These included derivative hedging instruments related to the foreign currency forward contracts and purchase of certain raw materials, investments in trading securities and available for sale securities, including an auction rate security (ARS). The Company’s available for sale and trading securities principally consist of municipal bonds and mutual funds that are publicly traded. The following tables present information about the Company’s financial assets and liabilities measured at fair value as of December 31, 2012 and 2011, and indicate the fair value hierarchy and the valuation techniques utilized by the Company to determine such fair value:
|  | Estimated Fair Value December 31, 2012 |
|  | Total |  | Input Levels Used |
|  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3 |
Cash and equivalents |  | $ | 63,862 |  | $ | 63,862 |  | $ | — |  | $ | — |
Auction rate security |  | 9,485 |  | — |  | — |  | 9,485 |
Available for sale securities, excluding the auction rate security |  | 84,568 |  | — |  | 84,568 |  | — |
Commodity futures contracts, net |  | (112 | ) | (112 | ) | — |  | — |
Trading securities |  | 49,378 |  | 49,378 |  | — |  | — |
Total assets measured at fair value |  | $ | 207,181 |  | $ | 113,128 |  | $ | 84,568 |  | $ | 9,485 |
|  | Estimated Fair Value December 31, 2011 |
|  | Total |  | Input Levels Used |
|  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3 |
Cash and equivalents |  | $ | 78,612 |  | $ | 78,612 |  | $ | — |  | $ | — |
Auction rate security |  | 7,453 |  | — |  | — |  | 7,453 |
Available for sale securities, excluding the auction rate security |  | 57,835 |  | — |  | 57,835 |  | — |
Foreign currency forward contracts |  | 205 |  | — |  | 205 |  | — |
Commodity futures contracts |  | 203 |  | 203 |  | — |  | — |
Commodity options contracts |  | — |  | — |  | — |  | — |
Trading securities |  | 41,768 |  | 41,768 |  | — |  | — |
Total assets measured at fair value |  | $ | 186,076 |  | $ | 120,583 |  | $ | 58,040 |  | $ | 7,453 |
Available for sale securities which utilize Level 2 inputs consist primarily of municipal bonds, which are valued based on quoted market prices or alternative pricing sources with reasonable levels of price transparency. A summary of the aggregate fair value, gross unrealized gains, gross unrealized losses, realized losses and amortized cost basis of the Company’s investment portfolio by major security type is as follows:
|  | December 31, 2012 |
|  | Amortized |  | Fair |  | Unrealized |  | Realized |
Available for Sale: |  | Cost |  | Value |  | Gains |  | Losses |  | Losses |
Auction rate security |  | $ | 8,410 |  | $ | 9,485 |  | $ | 1,075 |  | $ | — |  | $ | — |
Municipal bonds |  | 84,199 |  | 84,551 |  | 352 |  | — |  | — |
Mutual funds |  | 20 |  | 17 |  | — |  | (3 | ) | — |
|  | $ | 92,629 |  | $ | 94,053 |  | $ | 1,427 |  | $ | (3 | ) | $ | — |
|  | December 31, 2011 |
|  | Amortized |  | Fair |  | Unrealized |  | Realized |
Available for Sale: |  | Cost |  | Value |  | Gains |  | Losses |  | Losses |
Auction rate security |  | $ | 8,410 |  | $ | 7,453 |  | $ | — |  | $ | (957 | ) | $ | — |
Municipal bonds |  | 57,389 |  | 57,791 |  | 402 |  | — |  | — |
Mutual funds |  | 45 |  | 44 |  | — |  | (1 | ) | — |
|  | $ | 65,844 |  | $ | 65,288 |  | $ | 402 |  | $ | (958 | ) | $ | — |
As of December 31, 2012, the Company’s long-term investments include $9,485 ($13,550 original cost) of Jefferson County Alabama Sewer Revenue Refunding Warrants, originally purchased with an insurance-backed AAA rating. This is an auction rate security that is classified as an available-for-sale security. Due to adverse events related to Jefferson County and its bond insurance carrier, Financial Guaranty Insurance Company (FGIC), as well as events in the credit markets, the auctions for this auction rate security have failed since 2008. As such, the Company continues to estimate the fair value of this auction rate security utilizing a valuation model with Level 3 inputs, as defined by guidance. The primary input to the valuation model was a limited number of market trades during 2012, ranging from 71% to 76% of the original par value. The other factors considered include the credit risk of the collateral underlying the auction rate security, the credit risk of the bond insurer, interest rates, and the amount and timing of expected future cash flows including assumptions about the market expectation of the next successful auction or possible negotiated settlement between the County and debt holders. The Company continues to receive all contractual interest payments on this auction rate security on a timely basis, there has been no default, it is insured by FGIC and the Company has the intent and ability to hold this auction rate security until recovery of its amortized cost basis. Representatives of Jefferson County and the bondholders were in negotiations to reach a settlement agreeable to the bondholders and the insurers, and since a settlement could not be reached, the County filed for bankruptcy. FGIC is also in bankruptcy. Rulings by the bankruptcy court could have adverse effects to the holders of warrants and other debt, and further reduce the market value of this auction rate security resulting in an additional other-than-temporary impairments and charges to net earnings. The Company is not currently able to determine the outcome of this bankruptcy, or the amount and timing of the ultimate net proceeds that it may recover. See also the Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding Jefferson County auction rate security. The Company classified this auction rate security as non-current and has included it in long-term investments on the Consolidated Statements of Financial Position at December 31, 2012 and 2011 because the Company believes that the current condition of the auction rate security market may take more than twelve months to improve. The following table presents additional information about the Company’s financial instruments (all ARS) measured at fair value on a recurring basis using Level 3 inputs at December 31, 2012 and 2011:
|  | 2012 |  | 2011 |
Balance at January 1 |  | $ | 7,453 |  | $ | 6,775 |
Unrealized gain recognized in accumulated other comprehensive loss |  | 2,032 |  | 678 |
Balance at December 31 |  | $ | 9,485 |  | $ | 7,453 |
The fair value of the Company’s industrial revenue development bonds at December 31, 2012 and 2011 were valued using Level 2 inputs which approximates the carrying value of $7,500 for both periods. Interest rates on these bonds reset weekly based on current market conditions. In addition to assets and liabilities that are recorded at fair value on a recurring basis, guidance requires the Company to record assets and liabilities at fair value on a nonrecurring basis generally as a result of impairment charges. Assets measured at fair value on a nonrecurring basis during 2012 and 2011 are summarized below:
|  | December 31, 2012 |
|  | Fair Value |  | Level Used to Determine Fair Value |
|  | Basis |  | Level 1 |  | Level 2 |  | Level 3 |
Equity method investment |  | $ | 2,127 |  | $ | — |  | $ | — |  | $ | 2,127 |
|  | December 31, 2011 |
|  | Fair Value |  | Level Used to Determine Fair Value |
|  | Basis |  | Level 1 |  | Level 2 |  | Level 3 |
Equity method investment |  | $ | 3,935 |  | $ | — |  | $ | — |  | $ | 3,935 |
As disclosed in Note 1, during the fourth quarter of 2012 the Company recognized an impairment of $850 in an equity method investment. The fair value was determined based on Level 3 inputs.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13504-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 15C, 15D -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. 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Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 159 -Paragraph 17-22, 27, 28 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. 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