Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract]

Fair Value Disclosures

FAIR VALUE MEASUREMENTS

Fair value is measured based on an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tiered fair value hierarchy is established, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the 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. We had no Level 3 assets or liabilities at September 30, 2012 and December 31, 2011.

Assets and liabilities measured at fair value are based on a market valuation approach using prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis at September 30, 2012 and December 31, 2011 are in the following table. During the nine months ended September 30, 2012, we recognized a $7 million other than temporary impairment of a European available for sale investment within interest and sundry income (expense).

					Fair Value
	Total Cost Basis				Level 1				Level 2						Total
Millions of dollars	2012		2011		2012		2011		2012			2011			2012			2011
Money market funds (1)	$	—	$	340	$	—	$	340	$	—		$	—		$	—		$	340
Net derivative contracts	—		—		—		—		(36		)	(57		)	(36		)	(57		)
Available for sale investments	15		21		14		15		—			—			14			15

⁽¹⁾  Money market funds are primarily comprised of government obligations.

On July 11, 2012, we announced that we have entered into a Master Agreement on the Restructuring (the "Agreement") of Alno AG, one of Germany's leading kitchen manufacturers and a longstanding Whirlpool customer in Europe. Shareholders approved the Agreement in August 2012, which provides a framework to strengthen Alno's equity base and reduce its long-term debt, through the issuance of 44 million additional shares at a per share price of Euro 1.05, which will be used to retire substantially all of its bank debt. We have agreed to subscribe for all shares for which we are entitled and have also agreed to acquire any additional unsubscribed shares as may be necessary to yield minimum gross proceeds to Alno of Euro 46.2 million. We agreed to retroactively extend payment terms in favor of Alno during the second quarter 2012. As of September 30, 2012, we had $106 million of trade and other receivables outstanding. We expect the restructuring actions contemplated by the Agreement will be completed by the end of the fourth quarter of 2012. On a pre-restructuring basis, Whirlpool owns approximately 18.25% of Alno's ordinary shares. Once the restructuring is completed, we could own, indirectly through one or more subsidiaries, more than 50% of Alno's ordinary share capital.

Other Fair Value Measurements

The fair value of long-term debt (including current maturities) was $2,638 million and $2,670 million at September 30, 2012 and December 31, 2011, respectively, and was estimated using discounted cash flow analysis based on incremental borrowing rates for similar types of borrowing arrangements.