XML 34 R19.htm IDEA: XBRL DOCUMENT

Fair Value Measurements

3 Months Ended

Mar. 31, 2020

Fair Value by Fair Value Hierarchy Level Extensible List [Abstract]

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, 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 investments in publicly traded mutual funds, equity securities, corporate debt securities and U.S. government 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.

Level 2 assets and liabilities generally consist of asset-backed securities and long-term debt notes. 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 fair values of the long-term debt notes were based on quoted market prices in an inactive market.

Level 3 assets include certain fixed assets, intangible assets and investments that were impaired or written up in fair value.

Recurring Fair Value Measurements. Financial assets and liabilities recorded at fair value on the consolidated balance sheet as of March 31, 2020 were classified in their entirety based on the lowest level of input that was significant to each asset and liability's fair value measurement. The following table presents financial instruments measured at fair value on a recurring basis:



	March 31, 2020
(in millions)	Level 1		Level 2		Level 3		Total
Assets at Fair Value:
Marketable securities:
Corporate debt securities	$	17.3	$	—	$	—	$	17.3
Mutual funds	59.9		—		—		59.9
Equity securities	0.1		—		—		0.1
Asset-backed securities	—		0.2		—		0.2
Total Marketable Securities	77.3		0.2		—		77.5
Performance bonds and guaranty fund contributions ⁽¹⁾:
U.S. Treasury securities	1,369.9		—		—		1,369.9
U.S. government agency securities	1,838.4		—		—		1,838.4
Total Assets at Fair Value	$	3,285.6	$	0.2	$	—	$	3,285.8

(1) Performance bonds and guaranty fund contributions on the consolidated balance sheet at March 31, 2020 include U.S. Treasury securities and U.S. government agency securities purchased with cash collateral.

Non-Recurring Fair Value Measurements. During the first quarter of 2020, the company recognized impairment charges of $23.1 million related to certain intangible assets and fixed assets of a subsidiary. The combined fair values of net assets were estimated to be zero at March 31, 2020. The company also recognized unrealized gains on certain investments of $2.9 million. The combined fair value of these investments were estimated to be $18.3 million at March 31, 2020. These assessments were based on quantitative and qualitative indications of impairment. The fair value measurements of the intangible assets, fixed assets and investments are considered level 3 and non-recurring.

Fair Values of Long-Term Debt Notes. The following presents the estimated fair values of long-term debt notes, which are carried at amortized cost on the consolidated balance sheets. The fair values below that are classified as level 2 under the fair value hierarchy were estimated using quoted market prices in inactive markets. The fair value of the debt facility that was classified as level 3 under the fair value hierarchy was estimated based on assumptions made by management regarding expectations of future settlement of the debt.

At March 31, 2020, the fair values (in U.S. dollar equivalent) were as follows:



(in millions)	Fair Value		Level
$750.0 million fixed rate notes due September 2022	$	760.7	Level 2
€15.0 million fixed rate notes due May 2023	17.6		Level 2
$750.0 million fixed rate notes due March 2025	774.7		Level 2
$500.0 million fixed rate notes due June 2028	560.2		Level 2
$750.0 million fixed rate notes due September 2043	1,095.1		Level 2
$700.0 million fixed rate notes due June 2048	918.0		Level 2
Commercial paper	100.0		Level 3

- 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.

+ References + Details