Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2019

Fair value of assets measured on recurring basis

Our financial instruments measured at fair value on a recurring basis at March 31, 2019, were as follows:



	Total		Observable Inputs (Level 1)		Directly or Indirectly Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
	(In millions)
Corporate debt securities	$	947	$	—	$	947	$	—
U.S. Treasury notes	168		—		168		—
Government-sponsored enterprise securities (“GSEs”)	166		—		166		—
Municipal securities	112		—		112		—
Asset-backed securities	75		—		75		—
Mortgage-backed securities	23		—		23		—
Certificate of deposit	14		—		14		—
Other	3		—		3		—
Subtotal - current investments	1,508		—		1,508		—
1.125% Call Option derivative asset	516		—		—		516
Total assets	$	2,024	$	—	$	1,508	$	516

1.125% Conversion Option derivative liability	$	516	$	—	$	—	$	516
Total liabilities	$	516	$	—	$	—	$	516

Our financial instruments measured at fair value on a recurring basis at December 31, 2018, were as follows:



	Total		Observable Inputs (Level 1)		Directly or Indirectly Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
	(In millions)
Corporate debt securities	$	1,123	$	—	$	1,123	$	—
U.S. Treasury notes	181		—		181		—
GSEs	163		—		163		—
Municipal securities	114		—		114		—
Asset-backed securities	82		—		82		—
Certificates of deposit	14		—		14		—
Other	4		—		4		—
Subtotal - current investments	1,681		—		1,681		—
1.125% Call Option derivative asset	476		—		—		476
Total assets	$	2,157	$	—	$	1,681	$	476

1.125% Conversion Option derivative liability	$	476	$	—	$	—	$	476
Total liabilities	$	476	$	—	$	—	$	476

Schedule of fair value, asset and liabilities measured on recurring basis - disclosure only

The carrying amounts and estimated fair values of our notes payable 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 Term Loan is classified as a Level 3 financial instrument, because certain inputs used to determine its fair value are not observable. As of March 31, 2019, the carrying amount of the Term Loan approximates fair value because its interest rate is a variable rate that approximates rates currently available to us.



	March 31, 2019				December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
5.375% Notes	$	695	$	725	$	694	$	674
4.875% Notes	326		327		326		301
1.125% Convertible Notes ^(1),(2)	198		716		240		732
Term Loan	100		100		—		—
	$	1,319	$	1,868	$	1,260	$	1,707

______________________


(1)	The fair value of the 1.125% Conversion Option (the embedded cash conversion option), which is reflected in the fair value amounts presented above, amounted to $516 million and $476 million as of March 31, 2019, and December 31, 2018, respectively. See further discussion at Note 7, “Debt,” and Note 8, “Derivatives.”


(2)	For more information on debt repayments in the first quarter of 2019, refer to Note 7, “Debt.”