Fair Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The fair value hierarchy defines fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. The fair value hierarchy establishes three tiers, which prioritize the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date;

Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Our assessment of goodwill and other intangible assets for impairment includes an assessment using various Level 2 (EBITDA multiples and discount rate) and Level 3 (forecast cash flows) inputs. See Note 1, "Summary of Significant Accounting Policies - Goodwill and Other Non-Amortizing Intangible Assets," for more information on the application of the use of fair value methodology to measure goodwill and other intangible assets.

Entities are permitted to choose to measure certain financial instruments and other items at fair value. We have not elected the fair value measurement option for any of our assets or liabilities that meet the criteria for this option.

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 the date shown:

(In millions)	Balance			Level 1		Level 2			Level 3
December 31, 2012
Assets:
Investments	$	155.2		$	155.2	$	—		$	—
Derivative instruments	*			—		*			—
Liabilities:
Derivative instruments	(306.4		)	—		(306.4		)	—
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 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 Balance Sheets.

The fair values of investments in marketable securities at December 31, 2012 and 2011 are as follows:

(In millions)	2012		2011
Corporate bonds	$	—	$	1.5
Equity	2.8		2.4
Government bonds	111.4		102.5
Other liquid investments	41.0		2.0
Total Investments	$	155.2	$	108.4

Gross unrealized gains and losses on marketable securities as of December 31, 2012 and 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. Derivative instruments are included in either deferred charges and other, or deferred credits and other, in our Consolidated Balance Sheets. 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 9, "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 were required to be measured at fair value as of December 31, 2012 and the total impairment recorded on these assets during the year ended December 31, 2012:

(In millions)	Balance		Level 1		Level 2		Level 3		Total Impairment
Intangible and tangible assets	$	657.4	$	—	$	—	$	657.4	$	(622.3	)

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. 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 1, "Summary of Significant Accounting Policies - Goodwill and Other Non-Amortizing Intangible Assets," for further discussion regarding the valuation of our intangible assets and see Note 1, "Summary of Significant Accounting Policies - Long-Lived Assets," for further discussion regarding the valuation of our tangible 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 December 31, 2012, for debt with similar terms and maturities, and based on market quotes of our publicly traded debt. As of December 31, 2012, the Company’s outstanding debt had a fair value of $20,652.8 million and a carrying value of $21,412.1 million.