Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v3.2.0.727
Fair Value Measurements
6 Months Ended
Jun. 30, 2015
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 June 30, 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
$
1,967

 
$

 
$

 
$
1,967

Investments available for sale:
 

 
 

 
 

 
 

U.S. Treasury securities and obligations of U.S. government corporations and agencies
$
433

 
$
3

 
$

 
$
436

Corporate securities

 
632

 

 
632

Municipal securities:
 

 
 

 
 

 
 
General obligation

 
96

 

 
96

Pre-refunded

 
4

 

 
4

Revenue

 
161

 

 
161

Variable rate demand notes

 
28

 

 
28

Asset backed securities

 
162

 

 
162

Mortgage backed securities

 
78

 

 
78

Total investments
$
433

 
$
1,164

 
$

 
$
1,597

Restricted deposits available for sale:
 

 
 

 
 

 
 

Cash and cash equivalents
$
80

 
$

 
$

 
$
80

Certificates of deposit
6

 

 

 
6

U.S. Treasury securities and obligations of U.S. government corporations and agencies
15

 

 

 
15

Total restricted deposits
$
101

 
$

 
$

 
$
101

Other long term assets: Interest rate swap agreements
$

 
$
10

 
$

 
$
10

Total assets at fair value
$
2,501

 
$
1,174

 
$

 
$
3,675

Liabilities
 
 
 
 
 
 
 
Other long term liabilities:
      Interest rate swap agreements
$

 
$
5

 
$

 
$
5

Total liabilities at fair value
$

 
$
5

 
$

 
$
5


The following table summarizes fair value measurements by level at December 31, 2014, 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
$
1,610

 
$

 
$

 
$
1,610

Investments available for sale:
 

 
 

 
 

 
 

U.S. Treasury securities and obligations of U.S. government corporations and agencies
$
360

 
$
17

 
$

 
$
377

Corporate securities

 
556

 

 
556

Municipal securities:
 

 
 

 
 

 
 
General obligation

 
54

 

 
54

Pre-refunded

 
5

 

 
5

Revenue

 
102

 

 
102

Variable rate demand notes

 
14

 

 
14

Asset backed securities

 
180

 

 
180

Mortgage backed securities

 
85

 

 
85

Total investments
$
360

 
$
1,013

 
$

 
$
1,373

Restricted deposits available for sale:
 

 
 

 
 

 
 

Cash and cash equivalents
$
79

 
$

 
$

 
$
79

Certificates of deposit
6

 

 

 
6

U.S. Treasury securities and obligations of U.S. government corporations and agencies
15

 

 

 
15

Total restricted deposits
$
100

 
$

 
$

 
$
100

Other long term assets: Interest rate swap agreements
$

 
$
11

 
$

 
$
11

Total assets at fair value
$
2,070

 
$
1,024

 
$

 
$
3,094


 
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 June 30, 2015, there were less than $1 million of 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 $84 million and $84 million as of June 30, 2015 and December 31, 2014, respectively.