Fair value measurements

9 Months Ended

Sep. 30, 2011

Fair value measurements [Abstract]

Fair value measurements

Note 2 — Fair value measurements

          Accounting guidance regarding fair value measurement establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices for similar assets and liabilities in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

          Financial assets accounted for at fair value on a recurring basis include cash equivalents of $933.6 million and $426.3 million, restricted cash and investments of $19.9 million and $16.3 million, and trading securities (included in other assets) of $13.4 million and $13.5 million at September 30, 2011 and December 31, 2010, respectively. These assets are carried at fair value based on quoted prices in active markets for identical securities (Level 1 inputs). Cash equivalents include investments in AAA-rated money market mutual funds with maturities of less than 90 days.

          The carrying value of cash and cash equivalents, accounts receivable, claims and rebates payable, and accounts payable approximated fair values due to the short-term maturities of these instruments. The fair value, which approximates the carrying value, of our bank credit facility was estimated using either quoted market prices or the current rates offered to us for debt with similar maturity. The carrying values and the fair values of our senior notes are shown in the following table:

	September 30, 2011				December 31, 2010
	Carrying		Fair		Carrying		Fair
(in millions)	Amount		Value		Amount		Value
3.125% senior notes due 2016, net of unamortized discount	$	1,494.4	$	1,492.1	$	—	$	—
5.25% senior notes due 2012, net of unamortized discount		999.8		1,027.5		999.6		1,056.0
6.25% senior notes due 2014, net of unamortized discount		997.6		1,095.2		996.9		1,116.0
7.25% senior notes due 2019, net of unamortized discount		497.2		607.6		497.1		586.3
Total	$	3,989.0	$	4,222.4	$	2,493.6	$	2,758.3

          The fair values of our senior notes were estimated based on quoted prices in active markets for identical securities (Level 1 inputs). In determining the fair value of liabilities, we took into consideration the risk of nonperformance. Nonperformance risk refers to the risk that the obligation will not be fulfilled and affects the value at which the liability would be transferred to a market participant. This risk did not have a material impact on the fair value of our liabilities.