Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v3.8.0.1
Fair Value Measurements
9 Months Ended
Sep. 30, 2017
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, 2017, 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
$
4,281

 
$

 
$

 
$
4,281

Investments available for sale:
 

 
 

 
 

 
 

U.S. Treasury securities and obligations of U.S. government corporations and agencies
$
201

 
$

 
$

 
$
201

Corporate securities

 
2,110

 

 
2,110

Municipal securities

 
1,989

 

 
1,989

Asset-backed securities

 
378

 

 
378

Residential mortgage-backed securities

 
306

 

 
306

Commercial mortgage-backed securities

 
236

 

 
236

Total investments
$
201

 
$
5,019

 
$

 
$
5,220

Restricted deposits available for sale:
 

 
 

 
 

 
 

Cash and cash equivalents
$
6

 
$

 
$

 
$
6

Certificates of deposit
4

 

 

 
4

U.S. Treasury securities and obligations of U.S. government corporations and agencies
128

 

 

 
128

Total restricted deposits
$
138

 
$

 
$

 
$
138

Other long-term assets: Interest rate swap agreements
$

 
$
4

 
$

 
$
4

Total assets at fair value
$
4,620

 
$
5,023

 
$

 
$
9,643

Liabilities
 
 
 
 
 
 
 
Other long-term liabilities:
 
 
 
 
 
 
 
Interest rate swap agreements
$

 
$
53

 
$

 
$
53

Total liabilities at fair value
$

 
$
53

 
$

 
$
53


The following table summarizes fair value measurements by level at December 31, 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
$
3,930

 
$

 
$

 
$
3,930

Investments available for sale:
 

 
 

 
 

 
 

U.S. Treasury securities and obligations of U.S. government corporations and agencies
$
221

 
$
15

 
$

 
$
236

Corporate securities

 
1,932

 

 
1,932

Municipal securities

 
1,733

 

 
1,733

Asset-backed securities

 
317

 

 
317

Residential mortgage-backed securities

 
215

 

 
215

Commercial mortgage-backed securities

 
338

 

 
338

Total investments
$
221

 
$
4,550

 
$

 
$
4,771

Restricted deposits available for sale:
 

 
 

 
 

 
 

Cash and cash equivalents
$
6

 
$

 
$

 
$
6

Certificates of deposit
5

 

 

 
5

U.S. Treasury securities and obligations of U.S. government corporations and agencies
127

 

 

 
127

Total restricted deposits
$
138

 
$

 
$

 
$
138

Other long-term assets:
 
 
 
 
 
 
 
Interest rate swap agreements
$

 
$
4

 
$

 
$
4

Total assets at fair value
$
4,289

 
$
4,554

 
$

 
$
8,843

Liabilities
 
 
 
 
 
 
 
Other long-term liabilities:
 
 
 
 
 
 
 
Interest rate swap agreements
$

 
$
62

 
$

 
$
62

Total liabilities at fair value
$

 
$
62

 
$

 
$
62


 
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, 2017, there were no transfers from Level I to Level II and $14 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 $302 million and $279 million as of September 30, 2017 and December 31, 2016, respectively.