Quarterly report pursuant to Section 13 or 15(d)

INVESTMENTS AND RESTRICTED CASH (Tables)

v3.5.0.2
INVESTMENTS AND RESTRICTED CASH (Tables)
9 Months Ended
Sep. 30, 2016
Marketable Securities [Abstract]  
Available-for-sale Securities
The following is a summary of marketable securities classified as trading and available-for-sale as of September 30, 2016 and December 31, 2015 (in millions):
 
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Estimated
Fair Value
September 30, 2016:
 
 
 
 
 
 
 
Current trading marketable securities:
 
 
 
 
 
 
 
Corporate debt securities
$
1,156

 
$

 
$

 
$
1,156

Carbon credit investments (1)
433

 

 
(150
)
 
283

Total trading marketable securities
$
1,589

 
$

 
$
(150
)
 
$
1,439

 
 
 
 
 
 
 
 
Current available-for-sale securities:
 
 
 
 
 
 
 
U.S. government and agency debt securities
$
321

 
$
2

 
$

 
$
323

Mortgage and asset-backed debt securities
86

 
1

 

 
87

Corporate debt securities
203

 
2

 

 
205

Equity Securities
2

 

 

 
2

Non-U.S. government debt securities
3

 

 

 
3

Total available-for-sale marketable securities
$
615

 
$
5

 
$

 
$
620

 
 
 
 
 
 
 
 
Total current marketable securities
$
2,204

 
$
5

 
$
(150
)
 
$
2,059

 
 
 
 
 
 
 
 
 
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Estimated
Fair Value
December 31, 2015:
 
 
 
 
 
 
 
Current trading marketable securities:
 
 
 
 
 
 
 
Corporate debt securities
$
715

 
$

 
$

 
$
715

Non-U.S. government debt securities (1)
363

 

 

 
363

Carbon credit investments (1)
347

 
9

 
(5
)
 
351

Total trading marketable securities
$
1,425

 
$
9

 
$
(5
)
 
$
1,429

 
 
 
 
 
 
 
 
Current available-for-sale securities:
 
 
 
 
 
 
 
U.S. government and agency debt securities
$
341

 
$

 
$
(1
)
 
$
340

Mortgage and asset-backed debt securities
74

 
1

 
(1
)
 
74

Corporate debt securities
147

 

 
(1
)
 
146

U.S. state and local municipal debt securities
2

 

 

 
2

Equity securities
2

 

 

 
2

Non-U.S. government debt securities
3

 

 

 
3

Total available-for-sale marketable securities
$
569

 
$
1

 
$
(3
)
 
$
567

 
 
 
 
 
 
 
 
Total current marketable securities
$
1,994

 
$
10

 
$
(8
)
 
$
1,996

(1) These investments are hedged with forward contracts that are not designated in hedging relationships. See Note 14 for offsetting statement of consolidated income impact.
Investments Classified by Contractual Maturity Date
The amortized cost and estimated fair value of marketable securities at September 30, 2016, by contractual maturity, are shown below (in millions). Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.
 
Cost
 
Estimated
Fair Value
Due in one year or less
$
1,227

 
$
1,228

Due after one year through three years
453

 
454

Due after three years through five years
17

 
17

Due after five years
72

 
75

 
1,769

 
1,774

Equity and carbon credit investments
435

 
285

 
$
2,204

 
$
2,059

Fair Value, Assets Measured on Recurring Basis
The following table presents information about our investments measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in millions):
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Balance 
September 30, 2016:
 
 
 
 
 
 
 
Marketable Securities:
 
 
 
 
 
 
 
U.S. government and agency debt securities
$
323

 
$

 
$

 
$
323

Mortgage and asset-backed debt securities

 
87

 

 
87

Corporate debt securities

 
1,361

 

 
1,361

Equity securities

 
2

 

 
2

Non-U.S. government debt securities

 
3

 

 
3

Carbon credit investments
283

 

 

 
283

Total marketable securities
606

 
1,453

 

 
2,059

Other non-current investments
19

 

 
18

 
37

Total
$
625

 
$
1,453

 
$
18

 
$
2,096

December 31, 2015:
 
 
 
 
 
 
 
Marketable Securities:
 
 
 
 
 
 
 
U.S. government and agency debt securities
$
340

 
$

 
$

 
$
340

Mortgage and asset-backed debt securities

 
74

 

 
74

Corporate debt securities

 
861

 

 
861

U.S. state and local municipal debt securities

 
2

 

 
2

Equity securities

 
2

 

 
2

Non-U.S. government debt securities

 
366

 

 
366

Carbon credit investments
351

 

 

 
351

Total marketable securities
691

 
1,305

 

 
1,996

Other non-current investments
19

 

 
32

 
51

Total
$
710

 
$
1,305

 
$
32

 
$
2,047

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation
The following table presents the changes in the above Level 3 instruments measured on a recurring basis for the nine months ended September 30, 2016 and 2015 (in millions):
 
 
 
 
 
 
 
Marketable
Securities
 
Other
Investments
 
Total
Balance on January 1, 2016
$

 
32

 
32

Transfers into (out of) Level 3

 

 

Net realized and unrealized gains (losses):
 
 
 
 
 
Included in earnings (in investment income and other)

 
(14
)
 
(14
)
Included in accumulated other comprehensive income (pre-tax)

 

 

Purchases

 

 

Sales

 

 

Balance on September 30, 2016
$

 
$
18

 
$
18

 
 
 
 
 
 
 
Marketable
Securities
 
Other
Investments
 
Total
Balance on January 1, 2015
$

 
64

 
64

Transfers into (out of) Level 3

 

 

Net realized and unrealized gains (losses):
 
 
 
 
 
Included in earnings (in investment income and other)

 
(24
)
 
(24
)
Included in accumulated other comprehensive income (pre-tax)

 

 

Purchases

 

 

Sales

 

 

Balance on September 30, 2015
$

 
$
40


$
40

The following table presents the changes in the above Level 3 instruments measured on a recurring basis for the three months ended September 30, 2016 and 2015 (in millions):    
 
Marketable
Securities
 
Other
Non-Current
Investments
 
Total
Balance on July 1, 2016
$

 
$
22

 
$
22

Transfers into (out of) Level 3

 

 

Net realized and unrealized gains (losses):
 
 
 
 
 
Included in earnings (in investment income and other)

 
(4
)
 
(4
)
Included in accumulated other comprehensive income (pre-tax)

 

 

Purchases

 

 

Sales

 

 

Balance on September 30, 2016
$

 
$
18

 
$
18

 
 
 
 
 
 
 
 
 
 
 
 
 
Marketable
Securities
 
Other
Non-Current
Investments
 
Total
Balance on July 1, 2015
$

 
$
48

 
$
48

Transfers into (out of) Level 3

 

 

Net realized and unrealized gains (losses):
 
 
 
 
 
Included in earnings (in investment income and other)

 
(8
)
 
(8
)
Included in accumulated other comprehensive income (pre-tax)

 

 

Purchases

 

 

Sales

 

 

Balance on September 30, 2015
$

 
$
40

 
$
40