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Fair Value Measurements
 6 Months Ended
Jun. 30, 2011
Fair Value Measurements  
Fair Value Measurements

Note 8— Fair Value Measurements

 

We have categorized our assets and liabilities recorded at fair value based upon the fair value hierarchy. The levels of fair value hierarchy are as follows:

 

·                  Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access.

·                  Level 2 inputs utilize other-than-quoted prices that are observable, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

·                  Level 3 inputs are unobservable and are typically based on our own assumptions, including situations where there is little, if any, market activity.

 

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, we categorize such assets or liabilities based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset.

 

Both observable and unobservable inputs may be used to determine the fair value of positions that are classified within the Level 3 category. As a result, the unrealized gains and losses for assets within the Level 3 category presented below may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in historical company data) inputs.

 

The major categories of assets and liabilities measured on a recurring basis, at fair value, as of June 30, 2011 and December 31, 2010, are as follows (in millions):

 

 

 

June 30, 2011

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Treasury bills

 

$

149.6

 

$

—

 

$

—

 

$

149.6

 

FDIC insured corporate bonds

 

128.0

 

—

 

—

 

128.0

 

Commercial paper

 

102.9

 

52.5

 

—

 

155.4

 

Money market instruments

 

—

 

2.8

 

—

 

2.8

 

Derivative instrument

 

—

 

—

 

—

 

—

 

Total

 

$

380.5

 

$

55.3

 

$

—

 

$

435.8

 

 

 

 

December 31, 2010

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Treasury bills

 

$

136.2

 

$

79.5

 

$

—

 

$

215.7

 

FDIC insured corporate bonds

 

129.4

 

—

 

—

 

129.4

 

Commercial paper

 

128.6

 

62.8

 

—

 

191.4

 

Money market instruments

 

—

 

0.6

 

—

 

0.6

 

Derivative instrument

 

—

 

0.3

 

—

 

0.3

 

Total

 

$

394.2

 

$

143.2

 

$

—

 

$

537.4

 

 

Commercial paper and treasury bills that are classified as cash equivalents are carried at cost, which approximates market value. Accordingly, no gains or losses (realized/unrealized) have been incurred for cash equivalents. All investments classified as available-for-sale contain quoted prices in active markets.

 

Derivative instruments include foreign currency forward contracts to hedge certain foreign currency transactions. Derivative instruments are valued using standard calculations/models that are primarily based on observable inputs, including foreign currency exchange rates, volatilities and interest rates.

 

The major categories of assets and liabilities measured on a nonrecurring basis, at fair value, as of June 30, 2011 and December 31, 2010, are as follows (in millions):

 

 

 

June 30, 2011

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Property,plant and equipment, net

 

$

—

 

$

—

 

$

62.4

 

$

62.4

 

Goodwill

 

—

 

—

 

67.1

 

67.1

 

Intangible assets, net

 

—

 

—

 

28.4

 

28.4

 

Restructuring liability

 

—

 

—

 

11.6

 

11.6

 

Total

 

$

—

 

$

—

 

$

169.5

 

$

169.5

 

 

 

 

December 31, 2010

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Property,plant and equipment, net

 

$

—

 

$

—

 

$

42.3

 

$

42.3

 

Goodwill

 

—

 

—

 

52.0

 

52.0

 

Intangible assets, net

 

—

 

—

 

16.9

 

16.9

 

Restructuring liability

 

—

 

—

 

(1.0

)

(1.0

)

Total

 

$

—

 

$

—

 

$

110.2

 

$

110.2