Fair Value Measurements

12 Months Ended

Dec. 31, 2014



25.	FAIR VALUE MEASUREMENTS

The Company has categorized its assets and liabilities that are measured at fair value on a recurring and non-recurring basis into a three-level fair value hierarchy, based on the reliability of the inputs used to determine fair value as follows:


•	Level 1: refers to fair values determined based on quoted market prices in active markets for identical assets;


•	Level 2: refers to fair values estimated using observable market based inputs or unobservable inputs that are corroborated by market data; and


•	Level 3: includes fair values estimated using unobservable inputs that are not corroborated by market data.

The following methods and assumptions were used by the Company in estimating its fair value disclosure for financial instruments:

Long-term debt (excluding related fair value hedges)-Fair values are based on quoted market values and so classified as Level 1 measurements.

Derivative financial instruments-Market values have been used to determine the fair value of interest rate swaps and forward foreign exchange contracts based on estimated amounts the Company would receive or have to pay to terminate the agreements, taking into account the current interest rate environment or current foreign currency forward rates. Such financial instruments are classified as Level 2 in the fair value hierarchy.

Financial instruments measured at fair value on a recurring basis

The following table presents, for each of the fair-value hierarchy levels, the Company's assets and liabilities that are measured at fair value on a recurring basis.



	December 31, 2014
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant other unobservable inputs
	Level 1		Level 2		Level 3		Total
			(millions)
Assets at fair value:
Derivative financial instruments	—		26		—		26
Total assets	$	—	$	26	$	—	$	26
Liabilities at fair value:
Derivative financial instruments	$	—	$	21	$	—	$	21
Total liabilities	$	—	$	21	$	—	$	21



	December 31, 2013
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant other unobservable inputs
	Level 1		Level 2		Level 3		Total
			(millions)
Assets at fair value:
Derivative financial instruments	—		23		—		23
Total assets	$	—	$	23	$	—	$	23
Liabilities at fair value:
Derivative financial instruments	$	—	$	2	$	—	$	2
Total liabilities	$	—	$	2	$	—	$	2

Fair value information about financial instruments not measured at fair value

The following table presents the carrying values and estimated fair values of the Company's financial instruments not measured at fair value. The fair value amounts shown below are not necessarily indicative of the amounts that the Company would realize upon disposition nor do they indicate the Company’s intent or ability to dispose of the financial instrument.



	December 31,
	2014				2013
	Carrying amount		Fair value		Carrying amount		Fair value
			(millions)
Assets:
Cash and cash equivalents	$	635	$	635	$	796	$	796
Fiduciary funds (included within Fiduciary assets)	$	1,888	$	1,888	$	1,662	$	1,662
Liabilities:
Current portion of long-term debt	$	167	$	169	$	15	$	15
Long-term debt	2,142		2,327		2,311		2,444

Financial instruments measured at fair value on a non-recurring basis

The remeasurement of goodwill is classified as non-recurring level 3 fair value assessment due to the significance of unobservable inputs developed using company-specific information, see Note 12 - Goodwill.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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