Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v3.5.0.2
Fair Value Measurements
9 Months Ended
Sep. 30, 2016
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements

Assets and liabilities recorded at fair value in the Consolidated Balance Sheets are categorized based upon observable or unobservable inputs used to estimate fair value.  Level inputs are as follows:
 
Level Input:
 
Input Definition:
Level I
 
Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
 
 
 
Level II
 
Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date.
 
 
 
Level III
 
Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.
 
The following table summarizes fair value measurements by level at September 30, 2016, for assets and liabilities measured at fair value on a recurring basis ($ in millions):  
 
Level I
 
Level II
 
Level III
 
Total
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
2,982

 
$

 
$

 
$
2,982

Investments available for sale:
 

 
 

 
 

 
 

U.S. Treasury securities and obligations of U.S. government corporations and agencies
$
215

 
$
14

 
$

 
$
229

Corporate securities

 
1,943

 

 
1,943

Municipal securities

 
1,661

 

 
1,661

Asset-backed securities

 
291

 

 
291

Residential mortgage-backed securities

 
217

 

 
217

Commercial mortgage-backed securities

 
355

 

 
355

Total investments
$
215

 
$
4,481

 
$

 
$
4,696

Restricted deposits available for sale:
 

 
 

 
 

 
 

Cash and cash equivalents
$
70

 
$

 
$

 
$
70

Certificates of deposit
6

 

 

 
6

U.S. Treasury securities and obligations of U.S. government corporations and agencies
61

 

 

 
61

Total restricted deposits
$
137

 
$

 
$

 
$
137

Other long term assets: Interest rate swap agreements
$

 
$
25

 
$

 
$
25

Total assets at fair value
$
3,334

 
$
4,506

 
$

 
$
7,840


The following table summarizes fair value measurements by level at December 31, 2015, for assets and liabilities measured at fair value on a recurring basis ($ in millions): 
 
Level I
 
Level II
 
Level III
 
Total
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,760

 
$

 
$

 
$
1,760

Investments available for sale:
 

 
 

 
 

 
 

U.S. Treasury securities and obligations of U.S. government corporations and agencies
$
325

 
$
72

 
$

 
$
397

Corporate securities

 
853

 

 
853

Municipal securities

 
497

 

 
497

Asset-backed securities

 
162

 

 
162

Residential mortgage-backed securities

 
67

 

 
67

Commercial mortgage-backed securities

 
40

 

 
40

Total investments
$
325

 
$
1,691

 
$

 
$
2,016

Restricted deposits available for sale:
 

 
 

 
 

 
 

Cash and cash equivalents
$
78

 
$

 
$

 
$
78

Certificates of deposit
5

 

 

 
5

U.S. Treasury securities and obligations of U.S. government corporations and agencies
32

 

 

 
32

Total restricted deposits
$
115

 
$

 
$

 
$
115

Other long term assets:
 
 
 
 
 
 
 
Interest rate swap agreements
$

 
$
11

 
$

 
$
11

Total assets at fair value
$
2,200

 
$
1,702

 
$

 
$
3,902

Liabilities
 
 
 
 
 
 
 
Other long term liabilities:
 
 
 
 
 
 
 
Interest rate swap agreements
$

 
$
2

 
$

 
$
2

Total liabilities at fair value
$

 
$
2

 
$

 
$
2


 
The Company periodically transfers U.S. Treasury securities and obligations of U.S. government corporations and agencies between Level I and Level II fair value measurements dependent upon the level of trading activity for the specific securities at the measurement date.  The Company’s policy regarding the timing of transfers between Level I and Level II is to measure and record the transfers at the end of the reporting period.  At September 30, 2016, there were no transfers from Level I to Level II and $46 million of transfers from Level II to Level I.  The Company utilizes matrix pricing services to estimate fair value for securities which are not actively traded on the measurement date.  The Company designates these securities as Level II fair value measurements.  The aggregate carrying amount of the Company’s life insurance contracts and other non-majority owned investments, which approximates fair value, was $278 million and $87 million as of September 30, 2016 and December 31, 2015, respectively.