Fair Value

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value

FAIR VALUE

The fair value measurement provisions required by the Fair Value Measurements and Disclosures Topic of the Codification establish a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

• Level 1 - Quoted prices in active markets for identical assets or liabilities.

• Level 2 - Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

• Level 3 - Unobservable inputs based on our own assumptions.

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of September 30, 2012:

	Level 1		Level 2		Total
Assets:
Available-for-sale securities	$	1.8	$	—	$	1.8
Interest-rate swap agreements	—		103.7		103.7
Foreign exchange forward contracts	—		4.9		4.9
Total	$	1.8	$	108.6	$	110.4
Liabilities:
Interest-rate swap agreements	$	—	$	2.8	$	2.8
Foreign exchange forward contracts	—		.4		.4
Total	$	—	$	3.2	$	3.2

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2011:

	Level 1		Level 2		Total
Assets:
Available-for-sale securities	$	1.8	$	—	$	1.8
Interest-rate swap agreements	—		153.6		153.6
Foreign exchange forward contracts	—		5.6		5.6
Total	$	1.8	$	159.2	$	161.0
Liabilities:
Interest-rate swap agreements	$	—	$	6.0	$	6.0
Foreign exchange forward contracts	—		10.5		10.5
Total	$	—	$	16.5	$	16.5

Assets and Liabilities Recorded at Fair Value on a Non-recurring Basis

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a non-recurring basis as of September 30, 2012, and indicates the placement in the fair value hierarchy of the valuation techniques utilized to determine such fair value:

	Level 1		Level 2		Level 3		Total
Assets:
China goodwill	$	—	$	—	$	37.3	$	37.3
Total	$	—	$	—	$	37.3	$	37.3

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2011, and indicates the placement in the fair value hierarchy of the valuation techniques utilized to determine such fair value:

	Level 1		Level 2		Level 3		Total
Assets:
Silpada goodwill	$	—	$	—	$	116.7	$	116.7
Silpada indefinite-lived trademark	—		—		85.0		85.0
Total	$	—	$	—	$	201.7	$	201.7

In the third quarter of 2012, we completed an interim impairment assessment of the fair value of goodwill related to China and subsequently determined that the goodwill associated with China was impaired. As a result, the carrying amount of China's

goodwill was reduced from $81.3 to its implied fair value of $37.3, resulting in an impairment charge of $44.0. See Note 9 for further discussion.

In the fourth quarter of 2011, we completed the annual goodwill and indefinite-lived intangible assets impairment assessments and subsequently determined that the goodwill and indefinite-lived trademarks associated with Silpada were impaired. As a result, the carrying amount of Silpada's goodwill was reduced from $314.7 to its implied fair value of $116.7, resulting in an impairment charge of $198.0. In addition, the carrying amount of Silpada's indefinite-lived trademarks was reduced from $150.0 to its implied fair value of $85.0, resulting in an impairment charge of $65.0.

We use a DCF approach to estimate the fair value of a reporting unit, which we believe is the most reliable indicator of fair value of a business, and is most consistent with the approach a market place participant would use. The estimation of fair value utilizing a DCF approach includes numerous uncertainties which require our significant judgment when making assumptions of expected growth rates and the selection of discount rates, as well as assumptions regarding general economic and business conditions, among other factors. Key assumptions used in measuring the fair value of our China reporting unit included the discount rate (based on the weighted-average cost of capital) and revenue growth. Key assumptions used in measuring the fair value of our Silpada reporting unit included the discount rate (based on the weighted-average cost of capital), revenue growth, silver prices, and Representative growth and activity rates. The fair value of the Silpada trademark was determined using a risk-adjusted DCF model under the relief-from-royalty method. The royalty rate used was based on a consideration of market rates.

Fair Value of Financial Instruments

The net asset (liability) amounts recorded in the balance sheet (carrying amount) and the estimated fair values of financial instruments at September 30, 2012 and December 31, 2011, respectively, consisted of the following:

	2012				2011
	Carrying Amount		Fair Value		Carrying Amount			Fair Value
Cash and cash equivalents	$	1,097.5	$	1,097.5	$	1,245.1		$	1,245.1
Available-for-sale securities	1.8		1.8		1.8			1.8
Grantor trust cash and cash equivalents	—		—		.7			.7
Short-term investments	17.8		17.8		18.0			18.0
Cash surrender value of supplemental life insurance	42.2		42.2		41.9			41.9
Healthcare trust assets	34.1		34.1		—			—
Debt maturing within one year	684.5		690.5		849.3			849.3
Long-term debt, net of related discount or premium	2,628.3		2,680.2		2,459.1			2,445.2
Foreign exchange forward contracts, net	4.5		4.5		(4.9		)	(4.9		)
Interest-rate swap agreements, net	100.9		100.9		147.6			147.6

The methods and assumptions used to estimate fair value are as follows:

Cash and cash equivalents, Grantor trust cash and cash equivalents, Short-term investments, and Healthcare trust assets - Given the short-term nature of these financial instruments, the stated cost approximates fair value.

Available-for-sale securities - The fair values of these investments were the quoted market prices for issues listed on securities exchanges.

Cash surrender value of supplemental life insurance - The fair value is equal to the cash surrender value of the life insurance policy.

Debt maturing within one year and long-term debt - The fair values of all debt and other financing were determined using Level 2 inputs based on indicative market prices.

Foreign exchange forward contracts - The fair values of forward contracts were estimated based on quoted forward foreign exchange prices at the reporting date.

Interest-rate swap agreements - The fair values of interest-rate swap agreements were estimated based on LIBOR yield curves at the reporting date.