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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of
December 31, 2014:
Level 1 Level 2 Total
Assets:
Available-for-sale securities $ 2.7 $ – $ 2.7
Foreign exchange forward contracts – .6 .6
Total $ 2.7 .6 3.3
Liabilities:
Foreign exchange forward contracts $ – $ 5.0 $ 5.0
Total $ – $ 5.0 $ 5.0
The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of
December 31, 2013:
Level 1 Level 2 Total
Assets:
Money market funds $ .5 $ – $ .5
Available-for-sale securities 2.5 – 2.5
Foreign exchange forward contracts – 3.4 3.4
Total $ 3.0 $ 3.4 $ 6.4
Liabilities:
Foreign exchange forward contracts $ – $ .3 $ .3
Total $ – $ .3 $ .3
The tables above exclude our defined benefit pension and postretirement plan assets. See Note 11, Employee Benefit Plans, for the fair value
hierarchy for our plan assets. The money market funds were held in a Healthcare trust in order to fund future benefit payments for both
active and retiree benefit plans (see Note 11, Employee Benefit Plans). The available-for-sale securities include securities held in a trust in
order to fund future benefit payments for non-qualified retirement plans (see Note 11, Employee Benefit Plans). The foreign exchange
forward contracts are hedges of either recorded assets or liabilities or anticipated transactions. The underlying hedged assets and liabilities or
anticipated transactions are not reflected in the table above (see Note 8, Financial Instruments and Risk Management).
Assets and Liabilities Recorded at Fair Value on a Non-recurring Basis
December 31, 2013 – SMT
In December 2013, we decided to halt further roll-out of our SMT project beyond the pilot program in Canada, in light of the potential risk
of further business disruption. As a result, in the fourth quarter of 2013, we completed an impairment assessment of the SMT asset and
subsequently determined that the SMT asset was impaired. As a result of the non-cash impairment charge of $117.2 before tax ($74.1 after
tax), the remaining carrying amount of the SMT asset is not material.
The fair value of the SMT asset was determined using a risk-adjusted DCF model under the relief-from-royalty method. The impairment
analysis performed for the asset group, which includes the SMT asset, required several estimates, including revenue and cash flow
projections, and royalty and discount rates.
See Note 1, Description of the Business and Summary of Significant Accounting Policies for more information on SMT.