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Fair Value Disclosure
 6 Months Ended
Jun. 30, 2013
Fair Value Disclosures [Abstract]  
Fair Value Disclosure
Fair Value Disclosure
The following tables show our assets and liabilities that are measured at fair value on a recurring basis (in millions):
 
June 30
2013
 
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Interest rate derivatives (a)
$
8.1

 
$
—

 
$
8.1

 
$
—

Foreign exchange rate derivatives (b)
0.3

 
—

 
0.3

 
—

Available-for-sale equity securities
3.8

 
3.8

 
—

 
—

Liabilities
 
 
 
 
 
 
 
Interest rate derivatives (a)
0.1

 
—

 
0.1

 
—

Interest rate derivatives (b)
0.3

 
—

 
0.3

 
—

 
December 31 2012
 
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Interest rate derivatives (a)
$
10.2

 
$
—

 
$
10.2

 
$
—

Available-for-sale equity securities
3.3

 
3.3

 
—

 
—

Liabilities
 
 
 
 
 
 
 
Interest rate derivatives (a)
1.0

 
—

 
1.0

 
—

Interest rate derivatives (b)
0.3

 
—

 
0.3

 
—

Foreign exchange rate derivatives (b)
2.1

 
—

 
2.1

 
—

________________
(a)
Designated as hedges
(b)
Not designated as hedges
We base our valuations of available-for-sale equity securities on their quoted prices on an active exchange. We value derivatives using a pricing model with inputs (such as yield curves and credit spreads) that are observable in the market or that can be derived principally from observable market data.
Derivative instruments
Fair Value Hedges — We use interest rate swaps to manage the fixed-to-floating rate mix of our debt obligations by converting fixed rate debt to floating rate debt. For fair value hedges, we recognize changes in the fair value of both the derivative and the hedged item as interest expense. As of June 30, 2013 and December 31, 2012, we had one instrument outstanding with an aggregate notional amount of $100.0 million. This derivative matures in 2015.
Cash Flow Hedges — We use interest rate swaps to convert floating rate debt to fixed rate debt. We also use Treasury rate locks to hedge our exposure to interest rate risk on anticipated transactions. We had 6 instruments outstanding with an aggregate notional amount of $113.3 million as of June 30, 2013, and 12 instruments outstanding with an aggregate notional amount of $129.2 million as of December 31, 2012. These instruments have maturities ranging from 2013–2019. Within the next 12 months, we expect to reclassify $6.5 million ($4.1 million aftertax) of net losses on previously terminated derivatives from accumulated other comprehensive loss. We reclassify these amounts when interest and operating lease expense on the related hedged transactions affect earnings.
Non-designated Derivatives — We do not hold derivative financial instruments for purposes other than hedging, although certain of our derivatives are not designated as accounting hedges. We recognize changes in the fair value of these derivatives in other (income) expense immediately.
Some of our derivative instruments contain credit risk provisions that require us to make immediate payment on net liability positions in the event we default on certain outstanding debt obligations. The aggregate fair value of our derivative instruments with credit risk related contingent features that are in a liability position as of June 30, 2013, was $0.4 million. We are not required to post collateral on our derivative instruments and do not expect the credit risk provisions to be triggered.
In the event that a counterparty fails to meet the terms of an active derivative contract, our exposure is limited to the fair value of the derivative, if in our favor. We manage the credit risk of counterparties by transacting with institutions that we consider financially sound and by avoiding concentrations of risk with a single counterparty. We believe that the risk of non-performance by any of our counterparties is remote.
The following table shows the impacts of our derivative instruments on our statement of comprehensive income (in millions):
Derivative
Designation
 
Location of Gain (Loss) Recognized
 
Three Months Ended June 30
 
Six Months Ended June 30
2013
 
2012
 
2013
 
2012
Fair value hedges (a)
 
Interest expense
 
$
(1.2
)
 
$
(1.5
)
 
$
(2.3
)
 
$
(2.6
)
Cash flow hedges
 
Unrealized gain on derivative instruments (effective portion)
 
0.6

 
0.4

 
0.9

 
0.7

Cash flow hedges
 
Interest expense (effective portion reclassified from accumulated other comprehensive loss)
 
(1.3
)
 
(1.1
)
 
(2.5
)
 
(3.0
)
Cash flow hedges
 
Operating lease expense (effective portion reclassified from accumulated other comprehensive loss)
 
(0.3
)
 
(0.3
)
 
(0.7
)
 
(0.7
)
Non-designated
 
Other income (expense)
 
1.5

 
(1.8
)
 
2.0

 
(1.5
)
__________________
(a)
The fair value adjustments related to the underlying debt equally offsets the amounts recognized in interest expense.
Other Financial Instruments
The carrying amounts of our cash and cash equivalents, restricted cash, rent and other receivables, accounts payable, commercial paper, and bank credit facilities approximate fair value due to the short maturity of those instruments. We base the fair values of investment funds, which are accounted for under the cost method, on the best information available, which may include quoted investment fund values. We estimate the fair values of loans, and fixed and floating rate debt using discounted cash flow analyses based on interest rates currently offered for loans with similar terms to borrowers of similar credit quality. The inputs we use to estimate each of these fair values are classified in Level 2 of the fair value hierarchy because they are directly or indirectly observable inputs.
The following table shows the carrying amounts and fair values of our other financial instruments as of (in millions):
 
June 30, 2013
 
December 31, 2012
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
Assets
 
 
 
 
 
 
 
Investment funds
$
1.9

 
$
5.9

 
$
2.5

 
$
5.8

Loans
24.4

 
24.9

 
27.2

 
27.7

Liabilities
 
 
 
 
 
 
 
Recourse fixed rate debt
$
2,683.5

 
$
2,801.3

 
$
2,343.3

 
$
2,513.4

Recourse floating rate debt
862.9

 
869.1

 
809.1

 
807.9

Nonrecourse debt
103.0

 
106.9

 
130.6

 
138.2