XML 39 R27.htm IDEA: XBRL DOCUMENT v3.5.0.2

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Valuation of Financial Instruments that are Marked-to-Market on Recurring Basis

The following table summarizes the valuation of our financial instruments that are marked-to-market on a recurring basis.

		Fair Value Measurements on a Recurring Basis
		June 30, 2016																December 31, 2015
(Dollars in millions)		Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3				Total
Assets
Available-for-sale investments:
Agency residential mortgage-backed securities		$	—			$	1			$	—			$	1			$	—			$	1			$	—			$	1
Other			—				3				—				3				—				4				—				4
Total available-for-sale investments			—				4				—				4				—				5				—				5
Derivative instruments:(1)
Interest rate swaps			—				1,070				28				1,098				—				709				17				726
Cross-currency interest rate swaps			—				—				10				10				—				—				2				2
Other			—				—				1				1				—				—				—				—
Total derivative assets(3)			—				1,070				39				1,109				—				709				19				728
Total		$	—			$	1,074			$	39			$	1,113			$	—			$	714			$	19			$	733
Liabilities(2)
Derivative instruments(1)
Interest rate swaps		$	—			$	(280	)		$	(65	)		$	(345	)		$	—			$	(99	)		$	(61	)		$	(160	)
Floor Income Contracts			—				(406	)			—				(406	)			—				(365	)			—				(365	)
Cross-currency interest rate swaps			—				(41	)			(811	)			(852	)			—				(83	)			(905	)			(988	)
Other			—				—				(8	)			(8	)			—				—				(2	)			(2	)
Total derivative liabilities(3)			—				(727	)			(884	)			(1,611	)			—				(547	)			(968	)			(1,515	)
Total		$	—			$	(727	)		$	(884	)		$	(1,611	)		$	—			$	(547	)		$	(968	)		$	(1,515	)

⁽¹⁾  Fair value of derivative instruments excludes accrued interest and the value of collateral.

⁽²⁾  Borrowings which are the hedged items in a fair value hedge relationship and which are adjusted for changes in value due to benchmark interest rates only are not carried at full fair value and are not reflected in this table.

⁽³⁾  See “Note 4 — Derivative Financial Instruments” for a reconciliation of gross positions without the impact of master netting agreements to the balance sheet classification.

Change in Balance Sheet Carrying Value Associated with Level 3 Financial Instruments Carried at Fair Value on Recurring Basis

The following tables summarize the change in balance sheet carrying value associated with level 3 financial instruments carried at fair value on a recurring basis.

		Three Months Ended June 30,
		2016																2015
		Derivative instruments																Derivative instruments
(Dollars in millions)		Interest Rate Swaps				Cross Currency Interest Rate Swaps				Other				Total Derivative Instruments				Interest Rate Swaps				Cross Currency Interest Rate Swaps				Other				Total Derivative Instruments
Balance, beginning of period		$	(32	)		$	(528	)		$	(4	)		$	(564	)		$	(88	)		$	(958	)		$	(13	)		$	(1,059	)
Total gains/(losses) (realized and unrealized):
Included in earnings(1)			(5	)			(293	)			(4	)			(302	)			5				306				(3	)			308
Included in other comprehensive income			—				—				—				—				—				—				—				—
Settlements			—				20				1				21				1				(2	)			1				—
Transfers in and/or out of level 3			—				—				—				—				—				—				—				—
Balance, end of period		$	(37	)		$	(801	)		$	(7	)		$	(845	)		$	(82	)		$	(654	)		$	(15	)		$	(751	)
Change in unrealized gains/(losses) relating to instruments still held at the reporting date(2)		$	(4	)		$	(273	)		$	(4	)		$	(281	)		$	6			$	304			$	(2	)		$	308

		Six Months Ended June 30,
		2016																2015
		Derivative instruments																Derivative instruments
(Dollars in millions)		Interest Rate Swaps				Cross Currency Interest Rate Swaps				Other				Total Derivative Instruments				Interest Rate Swaps				Cross Currency Interest Rate Swaps				Other				Total Derivative Instruments
Balance, beginning of period		$	(44	)		$	(903	)		$	(2	)		$	(949	)		$	(88	)		$	(117	)		$	(11	)		$	(216	)
Total gains/(losses) (realized and unrealized):
Included in earnings(1)			6				65				(6	)			65				6				(534	)			(6	)			(534	)
Included in other comprehensive income			—				—				—				—				—				—				—				—
Settlements			1				37				1				39				—				(3	)			2				(1	)
Transfers in and/or out of level 3			—				—				—				—				—				—				—				—
Balance, end of period		$	(37	)		$	(801	)		$	(7	)		$	(845	)		$	(82	)		$	(654	)		$	(15	)		$	(751	)
Change in unrealized gains/(losses) relating to instruments still held at the reporting date(2)		$	8			$	102			$	(6	)		$	104			$	6			$	(534	)		$	(4	)		$	(532	)

⁽¹⁾  “Included in earnings” is comprised of the following amounts recorded in the specified line item in the consolidated statements of income:

Included in Earnings

Three Months Ended June 30,								Six Months Ended June 30,
(Dollars in millions)		2016				2015				2016				2015
Gains (losses) on derivative and hedging activities, net		$	(282	)		$	306			$	102			$	(537	)
Interest expense			(20	)			2				(37	)			3
Total		$	(302	)		$	308			$	65			$	(534	)

⁽²⁾  Recorded in “gains (losses) on derivative and hedging activities, net” in the consolidated statements of income.

Unobservable Data Used in Recurring Valuations of Level 3

The following table presents the significant inputs that are unobservable or from inactive markets used in the recurring valuations of the level 3 financial instruments detailed above.

(Dollars in millions)		Fair Value at June 30, 2016				Valuation Technique		Input		Range (Weighted Average)
Derivatives
Consumer Price Index/ LIBOR basis swaps		$	10			Discounted cash flow		Bid/ask adjustment to discount rate		.02% — .05% (.05%)
Prime/LIBOR basis swaps			(47	)		Discounted cash flow		Constant prepayment rate		4.9%
								Bid/ask adjustment to discount rate		.03% — .05% (.05%)
Cross-currency interest rate swaps			(801	)		Discounted cash flow		Constant prepayment rate		2.8%
Other			(7	)
Total		$	(845	)

Fair Values of Financial Assets and Liabilities, Including Derivative Financial Instruments

The following table summarizes the fair values of our financial assets and liabilities, including derivative financial instruments.

		June 30, 2016												December 31, 2015
(Dollars in millions)		Fair Value				Carrying Value				Difference				Fair Value				Carrying Value				Difference
Earning assets
FFELP Loans		$	90,723			$	92,618			$	(1,895	)		$	94,377			$	96,498			$	(2,121	)
Private Education Loans			24,126				24,741				(615	)			25,772				26,394				(622	)
Cash and investments(1)			5,535				5,535				—				5,833				5,833				—
Total earning assets			120,384				122,894				(2,510	)			125,982				128,725				(2,743	)
Interest-bearing liabilities
Short-term borrowings			2,376				2,370				(6	)			2,569				2,570				1
Long-term borrowings			113,665				119,637				5,972				118,471				124,833				6,362
Total interest-bearing liabilities			116,041				122,007				5,966				121,040				127,403				6,363
Derivative financial instruments
Floor Income Contracts			(406	)			(406	)			—				(365	)			(365	)			—
Interest rate swaps			753				753				—				566				566				—
Cross-currency interest rate swaps			(842	)			(842	)			—				(986	)			(986	)			—
Other			(7	)			(7	)			—				(2	)			(2	)			—
Excess of net asset fair value over carrying value										$	3,456											$	3,620

⁽¹⁾  “Cash and investments” includes available-for-sale investments that consist of investments that are primarily agency securities whose cost basis is $4 million and $4 million at June 30, 2016 and December 31, 2015, respectively, versus a fair value of $4 million and $5 million at June 30, 2016 and December 31, 2015, respectively.

X

- Definition

Tabular disclosure of the amount of gains or losses for the period included in earnings or resulted in a change to net assets, have arisen from the use of significant unobservable inputs (level 3) to measure the fair value of assets, liabilities, and financial instruments classified in shareholders' equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19207-110258

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (c)(1)
-URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19207-110258

+ Details

Name:	us-gaap_FairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisGainLossIncludedInEarningsTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=73719730&loc=d3e13476-108611

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19207-110258

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=73719730&loc=d3e13467-108611

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=73719730&loc=d3e13433-108611

+ Details

Name:	us-gaap_FairValueByBalanceSheetGroupingTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- References

No definition available.

+ Details

Name:	us-gaap_FairValueDisclosuresAbstract
Namespace Prefix:	us-gaap_
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of quantitative information about the inputs used in the fair value measurement of financial instruments classified in shareholders' equity. This disclosure may include, but is not limited to, the fair value of the financial instrument classified in shareholders' equity, valuation technique used to measure fair value, the inputs used to measure fair value, the ranges of the inputs, and the weighted averages of the inputs.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (bbb)
-URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19207-110258

+ Details

Name:	us-gaap_FairValueInputsInstrumentsClassifiedInShareholdersEquityQuantitativeInformationTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of the fair value measurement of financial instruments classified in shareholders' equity using significant unobservable inputs (level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of level 3 (for example, transfers due to changes in the observability of significant inputs) by class of equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19279-110258

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19207-110258

+ Details

Name:	us-gaap_FairValueInstrumentsClassifiedInShareholdersEquityMeasuredOnRecurringBasisUnobservableInputReconciliationTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19190-110258

+ Details

Name:	us-gaap_ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration