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Fair Value Measurements | 3 Months Ended
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Mar. 31, 2018
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements We consider the carrying amounts of cash, cash equivalents and other current assets and current liabilities (not including derivatives and the current portion of long-term debt) to approximate their fair values because of the relatively short period of time between the origination of these instruments and their expected realization or payment. For our financial instruments measured at fair value on a recurring basis, we prioritize the inputs used in measuring fair value according to the three-tier fair value hierarchy. For a description of the methods and assumptions that we use to a) estimate the fair value; and b) determine the classification according to the fair value hierarchy for each financial instrument, see Note 4, “Fair Value Measurements,” in our 2017 Annual Report on Form 10-K. Derivative financial instruments include the 1.125% Call Option derivative asset and the 1.125% Conversion Option derivative liability. These derivatives are not actively traded and are valued based on an option pricing model that uses observable and unobservable market data for inputs. Significant market data inputs used to determine fair value as of March 31, 2018, included the price of our common stock, the time to maturity of the derivative instruments, the risk-free interest rate, and the implied volatility of our common stock. As described further in Note 8, “Derivatives,” the 1.125% Call Option derivative asset and the 1.125% Conversion Option derivative liability were designed such that changes in their fair values would offset, with minimal impact to the consolidated statements of income. Therefore, the sensitivity of changes in the unobservable inputs to the option pricing model for such derivative instruments is mitigated. The net changes in fair value of Level 3 financial instruments were insignificant to our results of operations for the three months ended March 31, 2018. Our financial instruments measured at fair value on a recurring basis at March 31, 2018, were as follows:
| Total |  | Quoted Market Prices (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
| (In millions)
Corporate debt securities | $ | 1,618 |  |  | $ | — |  |  | $ | 1,618 |  |  | $ | — |
U.S. treasury notes | 329 |  |  | 329 |  |  | — |  |  | — |
Government-sponsored enterprise securities (GSEs) | 227 |  |  | 227 |  |  | — |  |  | — |
Municipal securities | 131 |  |  | — |  |  | 131 |  |  | — |
Asset-backed securities | 110 |  |  | — |  |  | 110 |  |  | — |
Certificate of deposit | 27 |  |  | — |  |  | 27 |  |  | — |
Other | 2 |  |  | — |  |  | 2 |  |  | — |
Subtotal - current investments | 2,444 |  |  | 556 |  |  | 1,888 |  |  | — |
Corporate debt securities | 66 |  |  | — |  |  | 66 |  |  | — |
U.S. treasury notes | 11 |  |  | 11 |  |  | — |  |  | — |
Subtotal - current restricted investments | 77 |  |  | 11 |  |  | 66 |  |  | — |
1.125% Call Option derivative asset | 585 |  |  | — |  |  | — |  |  | 585 |
Total assets | $ | 3,106 |  |  | $ | 567 |  |  | $ | 1,954 |  |  | $ | 585 |
1.125% Conversion Option derivative liability | $ | 585 |  |  | $ | — |  |  | $ | — |  |  | $ | 585 |
Total liabilities | $ | 585 |  |  | $ | — |  |  | $ | — |  |  | $ | 585 |
Our financial instruments measured at fair value on a recurring basis at December 31, 2017, were as follows:
| Total |  | Quoted Market Prices (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
| (In millions)
Corporate debt securities | $ | 1,588 |  |  | $ | — |  |  | $ | 1,588 |  |  | $ | — |
U.S. treasury notes | 388 |  |  | 388 |  |  | — |  |  | — |
GSEs | 253 |  |  | 253 |  |  | — |  |  | — |
Municipal securities | 141 |  |  | — |  |  | 141 |  |  | — |
Asset-backed securities | 117 |  |  | — |  |  | 117 |  |  | — |
Certificates of deposit | 37 |  |  | — |  |  | 37 |  |  | — |
Subtotal - current investments | 2,524 |  |  | 641 |  |  | 1,883 |  |  | — |
Corporate debt securities | 101 |  |  | — |  |  | 101 |  |  | — |
U.S. treasury notes | 68 |  |  | 68 |  |  | — |  |  | — |
Subtotal - current restricted investments | 169 |  |  | 68 |  |  | 101 |  |  | — |
1.125% Call Option derivative asset | 522 |  |  | — |  |  | — |  |  | 522 |
Total assets | $ | 3,215 |  |  | $ | 709 |  |  | $ | 1,984 |  |  | $ | 522 |
1.125% Conversion Option derivative liability | $ | 522 |  |  | $ | — |  |  | $ | — |  |  | $ | 522 |
Total liabilities | $ | 522 |  |  | $ | — |  |  | $ | — |  |  | $ | 522 |
Fair Value Measurements – Disclosure Only The carrying amounts and estimated fair values of our senior notes are classified as Level 2 financial instruments. Fair value for these securities is determined using a market approach based on quoted market prices for similar securities in active markets or quoted prices for identical securities in inactive markets. The carrying amount and estimated fair value of the amount due under our Credit Facility is classified as a Level 3 financial instrument, because certain inputs used to determine its fair value are not observable. The carrying amount of the amount due under the Credit Facility approximates its fair value because the Credit Facility’s interest rate is a variable rate that approximates rates currently available to us.
| March 31, 2018 |  | December 31, 2017
| Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value
| (In millions)
5.375% Notes | $ | 693 |  |  | $ | 694 |  |  | $ | 692 |  |  | $ | 730 |
1.125% Convertible Notes | 502 |  |  | 1,111 |  |  | 496 |  |  | 1,052 |
4.875% Notes | 326 |  |  | 307 |  |  | 325 |  |  | 329 |
Credit Facility | 300 |  |  | 300 |  |  | 300 |  |  | 300 |
1.625% Convertible Notes | 63 |  |  | 90 |  |  | 157 |  |  | 220 |
| $ | 1,884 |  |  | $ | 2,502 |  |  | $ | 1,970 |  |  | $ | 2,631 |

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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