American Home Shield 2009 Annual Report Download - page 123

Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 21. Fair Value of Financial Instruments
The period end carrying amounts of receivables, accounts payable and accrued liabilities approximate fair value because of the short maturity of these
instruments. The period end carrying amounts of long-term notes receivables approximate fair value as the effective interest rates for these instruments are
comparable to market rates at period end. The period end carrying amounts of current and long-term marketable securities also approximate fair value, with
unrealized gains and losses reported net-of-tax as a component of accumulated comprehensive income (loss), or, for certain unrealized losses, reported in
interest and net investment income in the statements of operations if the decline in value is other than temporary. The carrying amount of total debt was
$3,974.9 million and $4,266.1 million and the estimated fair value was $3,716.5 million and $2,165.7 million at December 31, 2009 and December 31, 2008,
respectively. The fair values of the Company's financial instruments reflect the amounts that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date (exit price). The fair value estimates presented in this report are based on
information available to the Company as of December 31, 2009 and 2008.
The Company has estimated the fair value of its financial instruments measured at fair value on a recurring basis using the market and income
approaches. For investments in marketable securities, deferred compensation trust assets and derivative contracts, which are carried at their fair values, the
Company's fair value estimates incorporate quoted market prices, other observable inputs (for example, interest rates) and unobservable inputs (for example,
forward commodity prices) at the balance sheet date.
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