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(7) The following table presents, for each of the fair value hierarchy levels required under Statement of Financial Accounting Standard (“SFAS”) No. 157, “Fair Value Measurements” (ASC 820-10), the company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2011 and December 31, 2010:
|
|
|
September 30, 2011 |
|
December 31, 2010 |
|
|
|
|
Fair Value Measurements Using |
|
Fair Value Measurements Using |
|
|
(in thousands) |
|
Total |
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1) |
|
Significant
Other
Observable
Inputs
(Level 2) |
|
Significant
Unobservable
Inputs
(Level 3) |
|
Total |
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1) |
|
Significant
Other
Observable
Inputs
(Level 2) |
|
Significant
Unobservable
Inputs
(Level 3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
147,520 |
|
$ |
147,520 |
(1) |
$ |
— |
|
$ |
— |
|
$ |
43,794 |
|
$ |
20,498 |
(1) |
$ |
23,296 |
(2) |
$ |
— |
|
|
Marketable securities, current |
|
58,154 |
|
— |
|
58,154 |
(2) |
— |
|
141,192 |
|
— |
|
141,192 |
(2) |
— |
|
|
Deferred compensation trusts |
|
74,964 |
|
74,964 |
(3) |
— |
|
— |
|
73,916 |
|
73,916 |
(3) |
— |
|
— |
|
|
Marketable securities, noncurrent |
|
293,969 |
|
— |
|
293, 969 |
(4) |
— |
|
279,080 |
|
— |
|
279,080 |
(4) |
— |
|
|
Derivative assets(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity swap forward contracts |
|
3,693 |
|
— |
|
3,693 |
|
— |
|
5,138 |
|
— |
|
5,138 |
|
— |
|
|
Foreign currency contracts |
|
17,173 |
|
— |
|
17,173 |
|
— |
|
731 |
|
— |
|
731 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liabilities(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity swap forward contracts |
|
$ |
65 |
|
$ |
— |
|
$ |
65 |
|
$ |
— |
|
$ |
64 |
|
$ |
— |
|
$ |
64 |
|
$ |
— |
|
|
Foreign currency contracts |
|
8,636 |
|
— |
|
8,636 |
|
— |
|
2,527 |
|
— |
|
2,527 |
|
— |
|
(1) Consists of registered money market funds valued at fair value. These investments represent the net asset value of the shares of such funds as of the close of business at the end of the period.
(2) Consists of investments in U.S. agency securities, U.S. Treasury securities, corporate debt securities, commercial paper and other debt securities which are valued at the last reported sale price on the last business day at the end of the period. Securities not traded on the last business day are valued at the last reported bid price.
(3) Consists of registered money market funds and an equity index fund valued at fair value. These investments represent the net asset value of the shares of such funds as of the close of business at the end of the period.
(4) Consists of investments in U.S. agency securities, U.S. Treasury securities, international government and government-related securities, corporate debt securities and other debt securities with maturities ranging from one to five years which are valued at the last reported sale price on the last business day at the end of the period. Securities not traded on the last business day are valued at the last reported bid price.
(5) See Note 8 for the classification of commodity swap forward contracts and foreign currency contracts on the Condensed Consolidated Balance Sheet. Commodity swap forward contracts are estimated using standard pricing models with market-based inputs, which take into account the present value of estimated future cash flows. Foreign currency contracts are estimated by obtaining quotes from brokers.
All of the company’s financial instruments carried at fair value are included in the table above. All of the above financial instruments are available-for-sale securities except for those held in the deferred compensation trusts and derivative assets and liabilities. The available-for-sale securities are made up of the following security types as of September 30, 2011: money market funds of $148 million, U.S. agency securities of $123 million, U.S. Treasury securities of $51 million, corporate debt securities of $170 million and other securities of $8 million. As of December 31, 2010, available-for-sale securities consisted of money market funds of $20 million, U.S. agency securities of $155 million, U.S. Treasury securities of $59 million, corporate debt securities of $196 million, commercial paper of $26 million and other securities of $8 million. The amortized cost of these available-for-sale securities is not materially different than the fair value. During the three and nine months ended September 30, 2011, proceeds from the sale of available-for-sale securities were $143 million and $372 million, respectively, compared to $103 million and $344 million for the corresponding periods of 2010.
The estimated fair values of the company’s financial instruments that are not measured at fair value on a recurring basis are as follows:
|
|
|
September 30, 2011 |
|
December 31, 2010 |
|
|
(in thousands) |
|
Carrying Value |
|
Fair Value |
|
Carrying Value |
|
Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents(1) |
|
$ |
2,238,769 |
|
$ |
2,238,769 |
|
$ |
2,091,203 |
|
$ |
2,091,203 |
|
|
Marketable securities, current(2) |
|
20,992 |
|
20,992 |
|
52,087 |
|
52,087 |
|
|
Notes receivable, including noncurrent portion |
|
43,512 |
|
43,512 |
|
44,789 |
|
44,789 |
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
3.375% Senior Notes |
|
495,614 |
|
502,175 |
|
— |
|
— |
|
|
1.5% Convertible Senior Notes |
|
23,653 |
|
52,068 |
|
96,692 |
|
230,214 |
|
|
5.625% Municipal Bonds |
|
17,772 |
|
17,899 |
|
17,759 |
|
18,039 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Consists of bank deposits.
(2) Consists of held-to-maturity time deposits.
Fair values were determined as follows:
· The carrying amounts of cash and cash equivalents, marketable securities, current and notes receivable that are current approximate fair value because of the short-term maturity of these instruments. Amortized cost is not materially different from the fair value.
· Notes receivable classified as noncurrent are carried at net realizable value which approximates fair value.
· The fair value of the 3.375 percent Senior Notes, 1.5 percent Convertible Senior Notes and 5.625 percent Municipal Bonds are estimated based on quoted market prices for the same or similar issues or on the current rates offered to the company for debt of the same maturities.
|