Fair Value Measurements

3 Months Ended

Mar. 31, 2013

Fair Value Measurements

7. Fair Value Measurements

Fair Value Hierarchy

Accounting guidance on fair value measurements and disclosures establishes a hierarchy that prioritizes the inputs used to measure fair value (generally, assumptions that market participants would use in pricing an asset or liability) based on the quality and reliability of the information provided by the inputs, as follows:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The Company recognizes transfers between input levels as of the actual date of the event. There were no transfers between input levels during the three months ended March 31, 2013.

Fair Values of Other Financial Instruments

The following table presents the carrying amounts and estimated fair values of the Company’s other financial instruments at March 31, 2013 and December 31, 2012.

			March 31, 2013				December 31, 2012
(In millions)	Input Level		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial Assets:
Note receivable		Level 2	$	0.0	$	0.0	$	0.1	$	0.1
Marketable securities		Level 3		19.7		19.7		0.0		0.0
Financial Liabilities:
Short-term borrowings		Level 2		203.9		203.9		253.8		253.8
2.875% Senior notes		Level 2		399.6		397.3		399.6		392.6
3.35% Senior notes		Level 2		249.8		264.4		249.8		264.1

The following methods and assumptions were used to estimate the fair value of each class of financial instruments reflected in the Consolidated Balance Sheets:

Note Receivable: The fair value of the note receivable reflects what management believes is the appropriate interest factor at December 31, 2012 based on similar risks in the market.

Marketable Securities: The fair value of the marketable securities is determined based on quoted market prices or broker quotes, when possible.

Short-Term Borrowings: The carrying amounts of the Company’s unsecured lines of credit and commercial paper issuances approximate fair value because of their short maturities and variable interest rates.

Senior Notes: The Company determines the fair value of its senior notes based upon their quoted market value or broker quotes, when possible. In the absence of observable market quotes, the notes are valued based on using non-binding market consensus prices that we seek to corroborate with observable market data, if available, or non-observable market data.