FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2020

We invest a portion of our Cash and cash equivalents in money market mutual funds with original maturities of less than three months. We attempt to manage foreign currency transaction exposures through operational strategies and the use of foreign currency hedging contracts. In accordance with the provisions of ASC Topic 820: Fair Value Measurement, the following tables provide the valuation hierarchy classification of assets and liabilities that are recorded at fair value and measured on a recurring basis in our Unaudited Condensed Consolidated Balance Sheet:


June 30, 2020
(dollars in millions)	Total			Level 1		Level 2		Level 3
Recurring fair value measurement:
Money market mutual funds	$	38	1	$	—	$	38	$	—
Derivative assets	$	3	2	$	—	$	3	$	—
Derivative liabilities	$	(5)	3	$	—	$	(5)	$	—

¹ Included in Cash and cash equivalents on the accompanying Unaudited Condensed Consolidated Balance Sheet

² Included in Other assets, current on the accompanying Unaudited Condensed Consolidated Balance Sheet

³ Included in Accrued liabilities on the accompanying Unaudited Condensed Consolidated Balance Sheet

Valuation Techniques. Our derivative assets and liabilities are measured at fair value using internal models based on observable market inputs, such as forward, interest, contract and discount rates.

The following table provides the carrying amounts and fair values of financial instruments that are not recorded at fair value in our Unaudited Condensed Consolidated Balance Sheet:


	June 30, 2020						December 31, 2019
(dollars in millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value



Current and long-term debt (excluding finance leases)	$	12,023	$	12,116	$	313	$	313

The following tables provide the valuation hierarchy classification of assets and liabilities that are not carried at fair value in our Unaudited Condensed Consolidated Balance Sheet:


June 30, 2020
(dollars in millions)	Total		Level 1		Level 2		Level 3



Current and long-term debt (excluding finance leases)	$	12,116	$	10,004	$	—	$	2,112


December 31, 2019
(dollars in millions)	Total		Level 1		Level 2		Level 3



Current and long-term debt (excluding finance leases)	$	313	$	—	$	—	$	313

Valuation Techniques. Based on the information available as of June 30, 2020, the fair value of the term loan credit facility was estimated on the basis of the present value of the expected future cash flows contractually due in accordance with the terms of the term loan credit agreement, a Level 3 measurement. The cash flows were discounted using the LIBOR rate at the valuation date based on the terms of the term loan credit agreement and adjusted for any change in credit risk premium. At June 30, 2020, the project financing obligations included in Long-term debt approximate their fair value. During the three months ended June 30, 2020 and 2019, there were no transfers in or out of levels 1, 2 or 3.

The following table presents changes during the six months ended June 30, 2020 and 2019 in Level 3 liabilities not measured at fair value on a recurring basis:


	For the Six Months Ended June 30,
(dollars in millions)	2020		2019
Fair value as of January 1	$	313	$	291
Issuances, including interest on project financing obligations	1,835		85
Settlements	(36)		(37)

Fair value as of June 30	$	2,112	$	339

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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