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Fair Value Measurements
12 Months Ended
Dec. 31, 2016
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]  
Fair Value Measurements
FAIR VALUE MEASUREMENTS
The company uses a three-level classification hierarchy of fair value measurements for disclosure purposes.
Level 1 inputs, which are considered the most reliable evidence of fair value, consist of quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 inputs consist of observable market data, other than level 1 inputs, such as quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices that are directly observable.
Level 3 inputs consist of unobservable inputs which are derived and cannot be corroborated by market data or other entity-specific inputs.
Level 1 assets generally include U.S. Treasury securities, U.S. government agency securities, investments in publicly traded mutual funds, equity securities and corporate debt securities with quoted market prices. In general, the company uses quoted prices in active markets for identical assets to determine the fair value of marketable securities and equity investments. If quoted prices are not available to determine fair value, the company uses other inputs that are directly observable.
Assets included in level 2 generally consist of asset-backed securities. Asset-backed securities were measured at fair value based on matrix pricing using prices of similar securities with similar inputs such as maturity dates, interest rates and credit ratings.
The company determined the fair value of its contingent consideration liability, considered a level 3 liability, using a discounted cash flow model to calculate the present value of future payouts. The liability was included in level 3 because management used significant unobservable inputs, including a discount rate of 20% and payout probability of 100%. Significant increases or decreases in any of those inputs in isolation would result in a significantly different fair value.
Financial assets and liabilities recorded in the consolidated balance sheets as of December 31, 2016 and 2015 were classified in their entirety based on the lowest level of input that was significant to each asset or liability's fair value measurement.



Financial Instruments Measured at Fair Value on a Recurring Basis:
 
 
December 31, 2016
(in millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets at Fair Value:
 
 
 
 
 
 
 
 
Marketable securities:
 
 
 
 
 
 
 
 
Corporate debt securities
 
$
20.2

 
$

 
$

 
$
20.2

Mutual funds
 
62.7

 

 

 
62.7

Equity securities
 
0.1

 

 

 
0.1

Asset-backed securities
 

 
0.3

 

 
0.3

Total Marketable Securities
 
83.0

 
0.3

 

 
83.3

Performance bonds and guaranty fund contributions (1):
 
 
 
 
 
 
 
 
       U.S. Treasury securities
 
5,549.0

 

 

 
5,549.0

U.S. government agencies securities
 
1,228.3

 

 

 
1,228.3

Equity investments
 
234.1

 

 

 
234.1

Total Assets at Fair Value
 
$
7,094.4

 
$
0.3

 
$

 
$
7,094.7


 
 
December 31, 2015
(in millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets at Fair Value:
 
 
 
 
 
 
 
 
Marketable securities:
 
 
 
 
 
 
 
 
U.S. Treasury securities
 
$
16.2

 
$

 
$

 
$
16.2

Mutual funds
 
55.9

 

 

 
55.9

Equity securities
 
0.1

 

 

 
0.1

Asset-backed securities
 

 
0.3

 

 
0.3

Total Marketable Securities
 
72.2

 
0.3

 

 
72.5

Performance bonds and guaranty fund contributions (1):
 
 
 
 
 
 
 
 
       U.S. Treasury securities
 
10,973.9

 

 

 
10,973.9

Equity investments
 
214.5

 

 

 
214.5

Total Assets at Fair Value
 
$
11,260.6

 
$
0.3

 
$

 
$
11,260.9

Liabilities at Fair Value:
 
 
 
 
 
 
 
 
Contingent consideration
 

 

 
0.3

 
0.3

Total Liabilities at Fair Value
 
$

 
$

 
$
0.3

 
$
0.3


(1) Performance bonds and guaranty fund contributions on the consolidated balance sheets at December 31, 2016 and 2015 include cash collateral that has been invested in U.S. Treasury securities. Performance bonds and guaranty fund contributions on the consolidated balance sheet at December 31, 2016 also include cash collateral that has been invested in U.S. government agencies securities.
There were no transfers of assets between level 1, level 2 and level 3 during 2016 and 2015. There were no level 3 assets valued at fair value on a recurring basis during 2016 and 2015. The following is a reconciliation of level 3 liabilities valued at fair value on a recurring basis during 2016 and 2015.
(in millions)
Contingent Consideration
Fair value of liability at December 31, 2014
$
17.7

Realized and unrealized gains (losses):
 
Included in other expense
1.3

Settlements
(18.7
)
Fair Value of Liability at December 31, 2015
0.3

Realized and unrealized gains (losses):
 
Included in other expense
(0.3
)
Fair Value of Liability at December 31, 2016
$


In the first quarter of 2016, the company sold a datacenter and leased back a portion of the property. Under generally accepted accounting principles, the transaction has been recognized under the financing method instead of recognized as a sale leaseback arrangement. As a result, the property and equipment legally sold will continue to be recognized on the consolidated balance sheets and was written down to a fair value of $130.0 million at March 31, 2016. During 2016, the company also recorded impairment charges totaling $5.5 million on one of its strategic investments. The fair value of the investment was estimated to be zero at September 30, 2016. Both assessments were based on qualitative indications of impairment and a quantitative analysis of undiscounted cash flows. The fair values of the datacenter and strategic investment are considered level 3 and nonrecurring. There were no other level 3 assets or liabilities valued at fair value on a nonrecurring basis during 2016 and 2015.
The fair values of the fixed-rate notes due 2022, 2025 and 2043, which are classified as level 2 under the fair value hierarchy, were estimated using quoted market prices. At December 31, 2016, the fair values of the fixed-rate notes by maturity date were as follows:
(in millions)
 
Fair Value
$750.0 million fixed rate notes due September 2022, stated rate of 3.00%
 
$
762.8

$750.0 million fixed rate notes due March 2025, stated rate of 3.00% 
 
744.8

$750.0 million fixed rates notes due September 2043, stated rate of 5.30%
 
863.5