FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments

We use an independent pricing source to determine the fair value of our AFS. The independent pricing source utilizes various pricing models for each asset class; including the market approach. The inputs and assumptions for the pricing models are market observable inputs including trades of comparable securities, dealer quotes, credit spreads, yield curves and other market-related data.

We have not adjusted the prices obtained from the independent pricing service and we believe the prices received from the independent pricing service are representative of the prices that would be received to sell the assets at the measurement date (exit price).

The carrying value of the Company's cash equivalents and restricted cash equivalents approximate their fair values due to their short-term maturities. The Company's restricted investments are valued using quoted market prices and multiple dealer quotes.

We did not have any Level 3 financial instruments recognized in our balance sheet as of March 31, 2019 and December 31, 2018. There were no transfers between levels for the three months ended March 31, 2019 and 2018.

Fair Value Measurements on a Recurring Basis

The following table summarizes our financial instruments by significant categories and fair value measurement on a recurring basis as of March 31, 2019 and December 31, 2018.



(in millions)	Level 1		Level 2		Total
March 31, 2019
Cash equivalents:
Money market mutual funds	$	74	$	—	74
U.S. treasuries	—		3		3
Total cash equivalents	74		3		77
Investments:
Asset-backed securities	—		35		35
Corporate bonds	—		100		100
U.S. government agencies and government-sponsored agencies	—		6		6
U.S. treasuries	—		42		42
Other debt securities	—		6		6
Total investments	—		189		189
Restricted cash equivalents:
Money market mutual funds	42		—		42
Commercial paper	19		—		19
Total restricted cash equivalents	61		—		61
Restricted investments:
U.S. treasuries	—		5		5
Exchange traded fund	1		—		1
Certificate of deposit	—		2		2
Total restricted investments	1		7		8
Total unrestricted and restricted cash equivalents and investments	$	136	$	199	$	335



(in millions)	Level 1		Level 2		Total
December 31, 2018
Cash equivalents
Money market mutual funds	$	4	$	—	$	4
U.S. treasuries	—		1		1
Total cash equivalents	4		1		5
Investments
Asset-backed securities	—		33		33
Corporate bonds	—		99		99
U.S. government agencies and government-sponsored agencies	—		7		7
U.S. treasuries	—		41		41
Other debt securities	—		9		9
Total investments	—		189		189
Restricted cash equivalents:
Money market mutual funds	48		—		48
Commercial paper	20		—		20
Total restricted cash equivalents	68		—		68
Restricted investments:
U.S. treasuries	—		5		5
Exchange traded fund	1		—		1
Certificate of deposit	—		2		2
Total restricted investments	1		7		8
Total unrestricted and restricted cash equivalents and investments	$	73	$	197	$	270

Fair Value of Financial Instruments Disclosure

Long-Term Debt

The carrying value of our long-term debt at March 31, 2019 and December 31, 2018 was $407 million and $414 million, respectively. The estimated fair values of our debt payable at March 31, 2019 and December 31, 2018 were $409 million and $414 million, respectively. The fair value of our debt payable is estimated based on a discounted cash flow, which incorporates credit spreads and market interest rates to estimate the fair value and is considered Level 3 in the hierarchy for fair value measurement.