
4.	FAIR VALUE

The fair value accounting 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.” The definition is based on an exit price rather than an entry price, regardless of whether the entity plans to hold or sell the asset. This guidance also establishes a fair value hierarchy to prioritize inputs used in measuring fair value as follows:


•	Level 1: Observable inputs such as quoted prices in active markets;


•	Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and


•	Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

FINANCIAL INSTRUMENTS The estimated fair values of our financial assets and liabilities that are recognized at fair value on a recurring basis, using available market information and other observable data are as follows:



	December 31, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Input
	(in millions)				(in millions)
Balance Sheet Classification
Cash equivalents	$	35.3	$	35.3	$	6.1	$	6.1	Level 1
Prepaid expenses and other
Currency forward contracts	—		—		0.7		0.7		Level 2
Other accrued expenses
Currency forward contracts	8.3		8.3		0.4		0.4		Level 2
Other long-term liabilities
Currency forward contracts	0.1		0.1		—		—		Level 2

The carrying values of our cash, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short-term maturities of these instruments. The carrying values of our borrowings under the foreign credit facilities approximate their fair values due to the frequent resetting of the interest rates. We estimated the fair value of our outstanding debt using available market information and other observable data to be as follows:



	December 31, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Input
	(in millions)				(in millions)

Revolving Credit Facility	$	—	$	—	$	—	$	—	Level 2
Term Facility	142.5		141.1		150.0		147.8		Level 2
7.75% Notes	200.0		224.0		200.0		227.5		Level 2
6.625% Notes	550.0		583.0		550.0		578.9		Level 2
6.25% Notes	400.0		419.0		400.0		423.0		Level 2
5.125% Notes	200.0		202.6		200.0		206.0		Level 2

Investments in our defined benefit pension plans are stated at fair value. See Note 5 - Employee Benefit Plans for additional fair value disclosures of our pension plan assets.

LONG-LIVED ASSETS In 2012 as part of our impairment analysis, we were required to measure the fair value of certain long-lived assets. We considered the expected future use of certain long-lived assets remaining at our Detroit Manufacturing Complex (DMC). Assets that were not to be redeployed to other AAM facilities were determined to be fully impaired.

The following table summarizes impairments of long-lived assets measured at fair value on a nonrecurring basis subsequent to initial recognition:



Balance Sheet Classification	Fair Value Measurements using Level 3 Inputs		Asset Impairment Recorded in Twelve Months ended December 31, 2012

Property, plant and equipment, net	$	—	$	5.8

In 2012, we reassessed the expected future use of certain assets remaining at DMC that were previously leased assets that had been purchased in 2011 for $18.6 million. As a result, we recorded an impairment charge of $5.8 million related to the assets that we no longer intended to redeploy and use at another AAM facility.