Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE (Tables)

v2.4.0.8
FAIR VALUE (Tables)
 9 Months Ended
Sep. 30, 2014
FAIR VALUE  
Fair values of financial instruments

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

 
   September 30, 2014   December 31, 2013  
 
   Carrying
Value		   Estimated
Fair Value		   Carrying
Value		   Estimated
Fair Value		  

Non-qualified employee benefit plan investments

   $ 21   $ 21   $ 21   $ 21  

Cross-currency interest rate contracts

     30     30     2     2  

Interest rate contracts

     (7 )   (7 )   (10 )   (10 )

Long-term debt (including current portion)

     (4,026 )   (4,069 )   (3,910 )   (4,010 )
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
  September 30,
2014		   Quoted prices in
active markets for
identical assets
(Level 1)(3)		   Significant other
observable
inputs
(Level 2)(3)		   Significant
unobservable
inputs
(Level 3)(3)		  

Assets:

                          

Available-for sale equity securities:

                          

Equity mutual funds

   $ 21   $ 21   $ —   $ —  

Derivatives:

                          

Cross-currency interest rate contracts(1)          

     30     —     30     —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total assets

   $ 51   $ 21   $ 30   $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Liabilities:

                          

Derivatives:

                          

Interest rate contracts(2)

   $ (7 ) $ —   $ (7 ) $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   


 

 
    
   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)(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 ) $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   
(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. There were no material changes to the valuation methods or assumptions used to determine the fair value during the current period.

(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 nine months ended September 30, 2014 and the year ended December 31, 2013. During the nine months ended September 30, 2014 and 2013, there were no instruments categorized as Level 3 within the fair value hierarchy.