v2.3.0.15
Fair Value Measurements
9 Months Ended
Sep. 30, 2011
Fair Value Measurements [Abstract] 
Fair Value Measurements
Note 3 - Fair Value Measurements
 
    The following fair value hierarchy table categorizes information regarding our financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2011 and December 31, 2010 (in millions):
 
 
Quoted Prices in
Active Markets
for
Identical Assets
    (Level 1)    
Significant
Other
Observable
Inputs
    (Level 2)    
 
Significant
Unobservable
Inputs
    (Level 3)    
 
 
 
 
     Total     
   
As of September 30, 2011
                        
Supplemental executive retirement plan assets    $24.2      
$   --   
   
$    --
    $24.2    
Total financial assets
  
$24.2  
    
$   --   
   
$    --
    
$24.2  
  
Derivatives, net   
$    --  
     $ 7.1       
$    --
    $ 7.1    
Total financial liabilities   
$    --  
     $ 7.1       
$    --
    $ 7.1    
 
As of December 31, 2010
                        
Auction rate securities
  
$    --  
    
$    --  
    
$44.5
    
$44.5  
 
Supplemental executive retirement plan assets
  
23.0  
    
    --  
    
--
   
23.0  
  
Derivatives, net 
  
    --  
    
16.4  
    
   --
   
16.4  
  
Total financial assets 
  
$23.0  
   
$16.4  
    
$44.5
   
$83.9  
 
 
 
 
    Auction Rate Securities
 
    As of December 31, 2010, we held long-term debt instruments with variable interest rates that periodically reset through an auction process ("auction rate securities") totaling $50.1 million (par value) and were included in other assets, net, on our condensed consolidated balance sheet. During the quarter ended March 31, 2011, $42.0 million (par value) of our auction rate securities were repurchased at par and $8.1 million (par value) were sold at 90% of par. Our auction rate securities were measured at fair value on a recurring basis using significant Level 3 inputs as of December 31, 2010. The following table summarizes the fair value measurements of our auction rate securities using significant Level 3 inputs, and changes therein, for the three-month and nine-month periods ended September 30, 2011 and 2010 (in millions):
 
 Three Months Ended    
      September 30,         
      Nine Months Ended
            September 30,      
 
  2011 
  2010  
      2011 
        2010  
                   
Beginning balance
  
$ --
  
$45.2  
  
$ 44.5
  
$ 60.5 
  
Sales
  
--
 
(.6) 
  
(49.3
 )
(16.5)
  
Realized losses*   --   --     (0.1 ) --   
Unrealized gains*
  
--
  
.4  
  
4.9
  
1.0 
 
Transfers in and/or out of Level 3
  
--
  
--  
  
--
  
-- 
  
Ending balance
  
$ --
  
$45.0  
  
$     --
  
$ 45.0 
  
 
*Realized losses and unrealized gains were included in other, net, in our condensed consolidated statements of income.
 
    Supplemental Executive Retirement Plan Assets
 
    Our Ensco supplemental executive retirement plans (the "SERP") are non-qualified plans that accord eligible employees an opportunity to defer a portion of their compensation for use after retirement. Assets held in the SERP were marketable securities measured at fair value on a recurring basis using Level 1 inputs and were included in other assets, net, on our condensed consolidated balance sheets as of September 30, 2011 and December 31, 2010. The fair value measurement of assets held in the SERP was based on quoted market prices.
 
    Derivatives
 
    Our derivatives were measured at fair value on a recurring basis using Level 2 inputs as of September 30, 2011 and December 31, 2010. See "Note 6 - Derivative Instruments" for additional information on our derivatives, including a description of our foreign currency hedging activities and related methodologies used to manage foreign currency exchange rate risk. The fair value measurement of our derivatives was based on market prices that are generally observable for similar assets or liabilities at commonly-quoted intervals.
 
   Other Financial Instruments
 
    The carrying values and estimated fair values of our long-term debt instruments as of September 30, 2011 and December 31, 2010 were as follows (in millions):
 
September 30,
                  2011                   
December 31,
                   2010                  
 
 
Carrying
  Value  
Estimated
  Fair
   Value  
Carrying
  Value  
Estimated
  Fair
   Value  
 
 
         
4.70% Senior notes due 2021   $1,471.6          $1,490.3         $     --           $     --          
6.875% Senior notes due 2020   1,059.4          1,045.4         --           --          
3.25% Senior notes due 2016
   993.2          1,021.5          --            --          
8.50% Senior notes due 2019   635.4          612.6          --            --          
7.875% Senior notes due 2040   385.3          372.4          --            --          
7.20% Debentures due 2027           149.0          169.6         148.9          165.0         
4.33% MARAD bonds, including current maturities, due 2016   155.9          156.7          --            --          
6.36% MARAD bonds, including current maturities, due 2015
  
57.0       
  
63.8      
  
63.4       
  
71.9       
  
4.65% MARAD bonds, including current maturities, due 2020
  
42.8       
  
49.1      
  
45.0       
  
50.6       
  
 
 
 
    The estimated fair values of our senior notes and debentures were determined using quoted market prices. The estimated fair values of our MARAD bonds were determined using an income approach valuation model. The estimated fair values of our cash and cash equivalents, receivables, trade payables and other liabilities approximated their carrying values as of September 30, 2011 and December 31, 2010.