Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Measurements

Note 11—Fair Value Measurements

Items Measured at Fair Value on a Recurring Basis

The following table shows the fair value of our financial assets and financial liabilities that are required to be measured at fair value as of September 30, 2012 and December 31, 2011:

(In millions)	Balance			Level 1		Level 2			Level 3
September 30, 2012
Assets:
Investments	$	117.8		$	117.0	$	0.8		$	—
Derivative instruments		*			—		*			—
Liabilities:
Derivative instruments		(347.0	)		—		(347.0	)		—
December 31, 2011
Assets:
Investments	$	108.4		$	106.9	$	1.5		$	—
Derivative instruments		*			—		*			—
Liabilities:
Derivative instruments		(336.1	)		—		(336.1	)		—

* Amount rounds to zero

The following section describes the valuation methodologies used to estimate or measure fair value, key inputs, and significant assumptions:

Investments – Investments consist of debt and equity securities with maturity dates greater than 90 days at the date of the security’s acquisition. The majority of these securities are traded in active markets, have readily determined market values, and use Level 1 inputs. Securities for which there are not active markets or the market values are not readily determinable are valued using Level 2 inputs. All of these investments are included in either prepayments and other current assets or deferred charges and other in our consolidated condensed balance sheets.

The fair value of investments in marketable securities were as follows:

(In millions)	September 30, 2012		December 31, 2011
Corporate bonds	$	0.8	$	1.5
Equity securities		2.9		2.4
Government bonds		112.1		102.5
Other liquid investments		2.0		2.0
Total investments	$	117.8	$	108.4

Gross unrealized gains and losses on marketable securities at September 30, 2012 and December 31, 2011 were not material.

Derivative instruments – The estimated fair values of our derivative instruments are derived from market prices obtained from dealer quotes for similar, but not identical, assets or liabilities. Such quotes represent the estimated amounts we would receive or pay to terminate the contracts. Our derivatives are recorded at their fair values, adjusted for the credit rating of the counterparty if the derivative is an asset, or adjusted for the credit rating of the Company if the derivative is a liability. See Note 6, “Derivative Instruments,” for more information.

Items Measured at Fair Value on a Non-recurring Basis

The following table shows the fair value of our assets that are required to be measured at fair value as of September 30, 2012 and the total impairment recorded on these assets during the three months ended September 30, 2012:

(In millions)	Balance		Level 1		Level 2		Level 3		Total Impairment
September 30, 2012
Assets:
Intangible and tangible assets	$	1,647.1	$	—	$	—	$	1,647.1	$	(419.0	)

The following section describes the valuation methodologies used to estimate or measure fair value, key inputs, and significant assumptions:

Intangible and tangible assets – Market and income approaches were used to value the intangible and tangible assets in accordance with the provisions of FASB Codification Subtopic 350, Intangibles — Goodwill and Other, and Subtopic 360, Property, Plant, and Equipment. Inputs included an expected range of market values, probabilities made by management that each value could be achieved, expected cash flows, recent comparable transactions, discounted cash flows, discount rate, royalty rate, growth rate, and tax rate. See Note 4, “Goodwill and Other Intangible Assets,” for further discussion regarding the valuation of our intangible assets.

Items Disclosed at Fair Value

Long-term debt – The fair value of the Company’s debt has been calculated based on the borrowing rates available as of September 30, 2012, for debt with similar terms and maturities, and based on market quotes of our publicly traded debt. As of September 30, 2012, the Company’s outstanding debt had a fair value of $19,672.1 million and a carrying value of $20,758.5 million.