Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value of Assets Measured on Recurring Basis

Our financial instruments measured at fair value on a recurring basis at March 31, 2020, were as follows:



	Total		Observable Inputs (Level 1)		Directly or Indirectly Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
	(In millions)
Corporate debt securities	$	1,260	$	—	$	1,260	$	—
Mortgage-backed securities	451		—		451		—
Asset-backed securities	143		—		143		—
Municipal securities	138		—		138		—
Certificates of deposit	7		—		7		—
Government-sponsored enterprise securities (“GSEs”)	6		—		6		—
U.S. Treasury notes	5		—		5		—
Total assets	$	2,010	$	—	$	2,010	$	—

Our financial instruments measured at fair value on a recurring basis at December 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	$	1,178	$	—	$	1,178	$	—
Mortgage-backed securities	420		—		420		—
Asset-backed securities	127		—		127		—
Municipal securities	78		—		78		—
Certificates of deposit	1		—		1		—
GSEs	49		—		49		—
U.S. Treasury notes	86		—		86		—
Foreign securities	7		—		7		—
Subtotal	1,946		—		1,946		—
Call option derivative asset	29		—		—		29
Total assets	$	1,975	$	—	$	1,946	$	29

Conversion option derivative liability	$	29	$	—	$	—	$	29
Total liabilities	$	29	$	—	$	—	$	29

Fair Value, by Balance Sheet Grouping

The following table summarizes the fair values and the presentation of our derivative financial instruments in the accompanying consolidated balance sheets:



	Balance Sheet Location	March 31, 2020		December 31, 2019
		(In millions)
Derivative asset:
Call option	Current assets: Prepaid expenses and other current assets	$	—	$	29
Derivative liability:
Conversion option	Current liabilities: Accounts payable, accrued liabilities and other	$	—	$	29

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 Facility is classified as a Level 3 financial instrument, because certain inputs used to determine its fair value are not observable. As of March 31, 2020, the carrying amount of the Term Loan Facility approximated fair value because its interest rate is a variable rate that approximates rates currently available to us.



	March 31, 2020				December 31, 2019
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
5.375% Notes	$	696	$	701	$	696	$	745
4.875% Notes	326		310		327		340
Term Loan Facility	600		600		220		220
1.125% Convertible Notes ⁽¹⁾	—		—		12		42
Totals	$	1,622	$	1,611	$	1,255	$	1,347

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(1)

For more information on debt repayments, refer to Note 7, “Debt.”