XML 48 R16.htm IDEA: XBRL DOCUMENT
v3.19.3

Financial Instruments and Fair Value Measurements | 9 Months Ended
--- | ---
Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract] |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 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 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 September 30, 2019 and December 31, 2018. There were no transfers between levels as of September 30, 2019 and December 31, 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 September 30, 2019 and December 31, 2018.
(in millions) | Level 1 | Level 2 | Total
September 30, 2019 |  |  |
Cash equivalents: |  |  |
Money market mutual funds | $ | 51 |  | $ | — |  | 51 |
U.S. treasuries | — |  | 4 |  | 4 |
Total cash equivalents | 51 |  | 4 |  | 55 |
Investments: |  |  |
Asset-backed securities | — |  | 30 |  | 30 |
Corporate bonds | — |  | 98 |  | 98 |
U.S. government agencies and government-sponsored agencies | — |  | 5 |  | 5 |
U.S. treasuries | — |  | 54 |  | 54 |
Other debt securities | — |  | 7 |  | 7 |
Total investments | — |  | 194 |  | 194 |
Restricted cash equivalents: |  |  |
Money market mutual funds | 43 |  | — |  | 43 |
Commercial paper | 18 |  | — |  | 18 |
Total restricted cash equivalents | 61 |  | — |  | 61 |
Restricted investments: |  |  |
U.S. treasuries | — |  | — |  | — |
Exchange traded fund | 1 |  | — |  | 1 |
Certificate of deposit | — |  | — |  | — |
Total restricted investments | 1 |  | — |  | 1 |
Total unrestricted and restricted cash equivalents and investments | $ | 113 |  | $ | 198 |  | $ | 311 |
(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 Our long-term debt is a floating rate debt and the fair value of our floating rate debt approximates its carrying value (exclusive of issuance costs) at September 30, 2019. The fair value of our floating rate debt 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. Derivative Instruments In June 2019, we entered into an interest rate collar derivative transaction with no upfront premium to mitigate the risk of changes in interest rates on the interest payments on a portion of our floating rate debt. If short-term interest rates increase, we will incur higher interest expense on any future outstanding balances of floating rate debt. We use this derivative as part of our interest rate risk management strategy and designated it as a cash flow hedge. If interest rates rise above the cap strike rate on the contract, we will receive variable-rate amounts and if interest rates fall below the floor strike rate on the contract, we will pay variable-rate amounts. The following table summarizes the fair value of our derivative instruments at September 30, 2019:
| September 30, 2019
|  |  |  | Fair Market Value
(in millions) | Hedge type | Final settlement date | Notional amount | Other current assets | Accounts payable and other current liabilities
Derivatives designated as hedging instruments |  |  |  |  |
Collar - LIBOR | Cash flow | May 2022 | $ | 213 |  | $ | — |  | $ | — |
The pre-tax effect of derivative instruments for the three and nine months ended September 30, 2019 is insignificant and we estimate that an insignificant amount of net derivative gains or losses included in other comprehensive income will be reclassified into earnings within the following 12 months. There were no cash flows associated with the derivative for the three months and nine months ended September 30, 2019. As of September 30, 2019, we do not hold, nor have we posted, any collateral related to the above derivative instrument. The interest rate collar derivative is classified as Level 2 in the fair value hierarchy as its value is determined using observable inputs such as forward LIBOR curves.

X
- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
Name: | us-gaap_FinancialInstrumentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration