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Financial Instruments
 6 Months Ended
Jun. 30, 2012
Financial instruments [Abstract]  
Financial instruments

Note 12 – Financial instruments:

The following table summarizes the valuation of our financial instruments recorded on a fair value basis as of December 31, 2011 and June 30, 2012:

 

                                 
    Fair Value Measurements  
    Total     Quoted
Prices in
Active
Markets
(Level 1)		     Significant
Other
Observable
Inputs
(Level 2)		     Significant
Unobservable
Inputs
(Level 3) 		 
    (In millions)  

Asset (liability)

                                

December 31, 2011

                                

Currency forward contracts

   $ (.8 )    $ (.8 )    $ —       $ —    

Current marketable securities (See Note 2)

     20.9       20.9       —         —    

Noncurrent marketable securities (See Note 2)

     98.4       98.4       —         —    
         

June 30, 2012

                                

Currency forward contracts

   $ (.1 )    $ (.1 )    $ —       $ —    

Noncurrent marketable securities (See Note 2)

     69.6       69.6       —         —    

Certain of our sales generated by our non-U.S. operations are denominated in U.S. dollars. We periodically use currency forward contracts to manage a very nominal portion of currency exchange rate risk associated with trade receivables denominated in a currency other than the holder’s functional currency or similar exchange rate risk associated with future sales. We have not entered into these contracts for trading or speculative purposes in the past, nor do we currently anticipate entering into such contracts for trading or speculative purposes in the future. Derivatives used to hedge forecasted transactions and specific cash flows associated with financial assets and liabilities denominated in currencies other than the U.S. dollar and which meet the criteria for hedge accounting are designated as cash flow hedges. Consequently, the effective portion of gains and losses is deferred as a component of accumulated other comprehensive income and is recognized in earnings at the time the hedged item affects earnings. Contracts that do not meet the criteria for hedge accounting are marked-to-market at each balance sheet date with any resulting gain or loss recognized in income currently as part of net currency transactions. The fair value of the currency forward contracts is determined using Level 1 inputs based on the currency spot forward rates quoted by banks or currency dealers.

At June 30, 2012, we had currency forward contracts to exchange:

 

  •  

an aggregate of $24.0 million for an equivalent value of Canadian dollars at exchange rates ranging from Cdn. $1.0 to Cdn. $1.03 per U.S. dollar. These contracts with Wells Fargo Bank, N.A. mature from July 2012 through December 2012 at a rate of $4.0 million per month, subject to early redemption provisions at our option; and

 

  •  

an aggregate $30.0 million for an equivalent value of Norwegian kroner at exchange rates ranging from kroner 5.99 to kroner 6.05 per U.S. dollar. These contracts with DnB Nor Bank ASA mature at a rate of $5.0 million per month in certain months from August 2012 through May 2013.

The estimated fair value of our currency forward contracts at June 30, 2012 was a $.1 million net liability, of which $.2 million is recognized as part of accounts and other receivables and $.3 million is recognized as part of accounts payable and accrued liabilities. There is also a corresponding $.1 million currency transaction loss recognized in our Condensed Consolidated Statement of Income. We are not currently using hedge accounting for our outstanding currency forward contracts at June 30, 2012, and we did not use hedge accounting for any of such contracts we previously held in 2011.

The following table presents the financial instruments that are not carried at fair value but which require fair value disclosure as of December 31, 2011 and June 30, 2012.

 

                                 
    December 31, 2011     June 30, 2012  
  Carrying
Amount		     Fair
Value		     Carrying
Amount		     Fair
Value		  
    (In millions)  

Cash, cash equivalents and restricted cash

   $ 89.8     $ 89.8     $ 100.8     $ 100.8  
         

Notes payable and long-term debt:

                                

Fixed rate with market quotes - 6.5% Senior Secured Notes

     360.6       362.6       —         —    

European credit facility

     —         —         99.5       99.5  

Term loan

     —         —         394.0       394.0  

Common stockholders’ equity

     924.3       2,090.9       1,054.0       1,830.2  

At December 31, 2011, the estimated market price of the 6.5% Notes was approximately €1,004 per €1,000 principal amount. The fair value of our 6.5% Notes was based on quoted market prices at December 31, 2011; however, these quoted market prices represent Level 2 inputs because the markets in which the Notes trade were not active. The fair value of our common stockholders’ equity is based upon quoted market prices at each balance sheet date, which represent Level 1 inputs. The fair values of variable interest rate debt represent Level 2 inputs, and are deemed to approximate book value. Due to their near-term maturities, the carrying amounts of accounts receivable and accounts payable are considered equivalent to fair value.