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Assets and Liabilities Measured at Fair Value
 6 Months Ended
Jun. 30, 2019
Fair Value Disclosures [Abstract]  
Assets and Liabilities Measured at Fair Value
NOTE 7 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE
Accounting Standards Codification 820,
Fair Value Measurements and Disclosures
(“ASC 820”), emphasizes fair value is a market-based measurement, and fair value measurements should be determined based on the assumptions market participants would use in pricing assets or liabilities. ASC 820 utilizes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves observable at commonly quoted intervals. Level 3 inputs are unobservable
inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment.
Cash Traded Investments
Our cash traded investments are generally classified within Level 1 or Level 2 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.
Derivative Financial Instruments
We have entered into interest rate swap agreements to manage our exposure to fluctuations in interest rates. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. We incorporate credit valuation adjustments to reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements of these instruments.
Although we determined the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. We assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions, and at June 30, 2019 and December 31, 2018, we determined the credit valuation adjustments were not significant to the overall valuation of our derivatives.
The following tables summarize our assets measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018, aggregated by the level in the fair value hierarchy within which those measurements fall (dollars in millions):
                                 
 
June 30, 2019
 
 
   
Fair Value Measurements Using
 
 
Fair Value
   
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
   
Significant Other
Observable Inputs
(Level 2)
   
Significant
Unobservable Inputs
(Level 3)
 
Investments of insurance subsidiaries:
   
     
     
     
 
Debt securities
 
$
351
   
$
—
   
$
351
   
$
—
 
Money market funds and other
   
104
     
104
     
—
     
—
 
                                 
Investments of insurance subsidiaries
   
455
     
104
     
351
     
—
 
Less amounts classified as current assets
   
(113
)
   
(103
)
   
(10
)
   
—
 
                                 
 
$
342
     
1
   
$
341
   
$
—
 
                                 
 
 
 
 
 
 
 
 
 
                                 
 
December 31, 2018
 
 
   
Fair Value Measurements Using
 
 
Fair Value
   
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
   
Significant Other
Observable Inputs
(Level 2)
   
Significant
Unobservable Inputs
(Level 3)
 
Investments of insurance subsidiaries:
   
     
     
     
 
Debt securities
  $
341
    $
—
    $
341
    $
—
 
Money market funds and other
   
68
     
68
     
—
     
—
 
                                 
Investments of insurance subsidiaries
   
409
     
68
     
341
     
—
 
Less amounts classified as current assets
   
(47
 )    
(47
 )    
—
     
—
 
                                 
  $
362
    $
21
    $
341
    $
—
 
                                 
Interest rate swaps (Other)
  $
63
    $
—
    $
63
    $
—
 
 
 
 
 
 
 
 
 
 
The estimated fair value of our long-term debt was $38.773 billion and $32.887 billion at June 30, 2019 and December 31, 2018, respectively, compared to carrying amounts, excluding debt issuance costs
 and discounts
, aggregating $36.445 billion and $32.978 billion, respectively. The estimates of fair value are generally based upon the quoted market prices or quoted market prices for similar issues of long-term debt with the same maturities.