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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 Ìý
Fair values of financial instruments

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

Ìý
 Ìý SeptemberÌý30, 2014 Ìý DecemberÌý31, 2013 Ìý
Ìý
 Ìý Carrying
Value		 Ìý Estimated
Fair Value		 Ìý Carrying
Value		 Ìý Estimated
Fair Value		 Ìý

Non-qualified employee benefit plan investments

 Ìý $ 21 Ìý $ 21 Ìý $ 21 Ìý $ 21 Ìý

Cross-currency interest rate contracts

 Ìý Ìý 30 Ìý Ìý 30 Ìý Ìý 2 Ìý Ìý 2 Ìý

Interest rate contracts

 Ìý Ìý (7 ) Ìý (7 ) Ìý (10 ) Ìý (10 )

Long-term debt (including current portion)

 Ìý Ìý (4,026 ) Ìý (4,069 ) Ìý (3,910 ) Ìý (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):

Ìý
 Ìý Ìý
 Ìý Fair Value Amounts Using Ìý
Description
Ìý SeptemberÌý30,
2014		 Ìý Quoted prices in
active markets for
identical assets
(LevelÌý1)(3)		 Ìý Significant other
observable
inputs
(LevelÌý2)(3)		 Ìý Significant
unobservable
inputs
(LevelÌý3)(3)		 Ìý

Assets:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Available-for sale equity securities:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Equity mutual funds

 Ìý $ 21 Ìý $ 21 Ìý $ â€� Ìý $ â€� Ìý

Derivatives:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Cross-currency interest rate contracts(1)ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý

 Ìý Ìý 30 Ìý Ìý â€� Ìý Ìý 30 Ìý Ìý â€� Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
� � � � � � � � � � � � � �

Total assets

 Ìý $ 51 Ìý $ 21 Ìý $ 30 Ìý $ â€� Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
� � � � � � � � � � � � � �
� � � � � � � � � � � � � �
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Liabilities:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Derivatives:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Interest rate contracts(2)

 Ìý $ (7 ) $ â€� Ìý $ (7 ) $ â€� Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
� � � � � � � � � � � � � �
� � � � � � � � � � � � � �
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý


Ìý

Ìý
 Ìý Ìý
 Ìý Fair Value Amounts Using Ìý
Description
Ìý DecemberÌý31,
2013		 Ìý Quoted prices in
active markets for
identical assets
(LevelÌý1)(3)		 Ìý Significant other
observable
inputs
(LevelÌý2)(3)		 Ìý Significant
unobservable
inputs
(LevelÌý3)(3)		 Ìý

Assets:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Available-for sale equity securities:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Equity mutual funds

 Ìý $ 21 Ìý $ 21 Ìý $ â€� Ìý $ â€� Ìý

Derivatives:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Cross-currency interest rate contracts(1)ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý

 Ìý Ìý 2 Ìý Ìý â€� Ìý Ìý 2 Ìý Ìý â€� Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
� � � � � � � � � � � � � �

Total assets

 Ìý $ 23 Ìý $ 21 Ìý $ 2 Ìý $ â€� Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
� � � � � � � � � � � � � �
� � � � � � � � � � � � � �
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Liabilities:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Derivatives:

 Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý

Interest rate contracts(2)

 Ìý $ (10 ) $ â€� Ìý $ (10 ) $ â€� Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
� � � � � � � � � � � � � �
� � � � � � � � � � � � � �
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
(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 LevelsÌý1 and 2 within the fair value hierarchy for the nine months ended SeptemberÌý30, 2014 and the year ended DecemberÌý31, 2013. During the nine months ended SeptemberÌý30, 2014 and 2013, there were no instruments categorized as LevelÌý3 within the fair value hierarchy.