Registration of securities issued in business combination transactions

FAIR VALUE (Tables)

v2.4.0.8
FAIR VALUE (Tables)
 12 Months Ended
Dec. 31, 2013
FAIR VALUE  
Fair values of financial instruments

The fair values of our financial instruments were as follows (dollars in millions):

 
   December 31,  
 
   2013   2012  
 
   Carrying
Value		   Estimated
Fair Value		   Carrying
Value		   Estimated
Fair Value		  

Non-qualified employee benefit plan investments

   $ 21   $ 21   $ 14   $ 14  

Cross-currency interest rate contacts

     2     2     18     18  

Interest rate contracts

     (10 )   (10 )   (18 )   (18 )

Long-term debt (including current portion)

     (3,910 )   (4,010 )   (3,702 )   (3,869 )
Assets and liabilities are measured at fair value on a recurring basis

The following assets and liabilities are measured at fair value on a recurring basis (dollars in millions):

 
    
   Fair Value Amounts Using  
Description
  December 31,
2013		   Quoted prices
in active
markets for
identical
assets
(Level 1)(3)		   Significant
other
observable
inputs
(Level 2)(3)		   Significant
unobservable
inputs
(Level 3)		  

Assets:

                          

Available-for sale equity securities:

                          

Equity mutual funds

   $ 21   $ 21   $ —   $ —  

Derivatives:

                          

Cross-currency interest rate contracts(1)

     2     —     2     —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total assets

   $ 23   $ 21   $ 2   $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Liabilities:

                          

Derivatives:

                          

Interest rate contracts(2)

   $ (10 ) $ —   $ (10 ) $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

 

 
    
   Fair Value Amounts Using  
Description
  December 31,
2012		   Quoted prices
in active
markets for
identical assets
(Level 1)(3)		   Significant
other
observable
inputs
(Level 2)(3)		   Significant
unobservable
inputs
(Level 3)		  

Assets:

                          

Available-for sale equity securities:

                          

Equity mutual funds

   $ 14   $ 14   $ —   $ —  

Derivatives:

                          

Cross-currency interest rate contracts(1)

     18     —     18     —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total assets

   $ 32   $ 14   $ 18   $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Liabilities:

                          

Derivatives:

                          

Interest rate contracts(2)

   $ (18 ) $ —   $ (18 ) $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   
(1)
The income approach is used to calculate the fair value of these instruments. Fair value represents the present value of estimated future cash flows, calculated using relevant interest rates, exchange rates, and yield curves at stated intervals.

(2)
The income approach is used to calculate the fair value of these instruments. Fair value represents the present value of estimated future cash flows, calculated using relevant interest rates and yield curves at stated intervals. There were no material changes to the valuation methods or assumptions used to determine the fair value during the current period.

(3)
There were no transfers between Levels 1 and 2 within the fair value hierarchy for the years ended December 31, 2013 and 2012. During the year ended December 31, 2013, there were no instruments categorized as Level 3 within the fair value hierarchy.
Reconciliation of beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

The following table shows a reconciliation of beginning and ending balances for the year ended December 31, 2012 for instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (dollars in millions).

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
  Cross-Currency
Interest
Rate Contracts		  

Beginning balance, January 1, 2012

   $ 27  

Transfers into Level 3

     —  

Transfers out of Level 3(1)

     (27 )

Total gains (losses):

        

Included in earnings

     —  

Included in other comprehensive income (loss)

     —  

Purchases, sales, issuances and settlements

     —  
       
​ ​ ​ ​ ​

Ending balance, December 31, 2012

   $ —  
       
​ ​ ​ ​ ​
​ ​ ​ ​ ​
       

The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at December 31, 2012

   $ —  
       
​ ​ ​ ​ ​
​ ​ ​ ​ ​
       
(1)
We are party to cross-currency interest rate contracts that are measured at fair value in our consolidated financial statements. These instruments have historically been categorized by us as Level 3 within the fair value hierarchy due to an unobservable input associated with the credit valuation adjustment, which we deemed to be a significant input to the overall measurement of fair value at inception. During 2012, this credit valuation adjustment has ceased to be a significant input to the entire fair value measurement of these instruments. The remaining inputs which are significant to the fair value measurement of these instruments represent observable market inputs that are inputs other than quoted prices (Level 2 inputs).