Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Hierarchy for Assets Measured at Fair Value on a Recurring Basis

The following tables illustrate the fair value hierarchy for those assets measured at fair value on a recurring basis at December 31, 2014 and 2013. We do not have any material liabilities carried at fair value. There were no transfers between Level 1 and Level 2 for the years ended December 31, 2014 and 2013.



(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)				Significant unobservable inputs (Level 3)
At December 31, 2014			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Fixed maturities, available for sale:
Corporate	$	—	$	5,508	$	18	$	5,526
States, municipalities and political subdivisions	—		3,443		—		3,443
Commercial mortgage-backed	—		259		—		259
Government-sponsored enterprises	—		208		—		208
Foreign government	—		10		—		10
Convertibles and bonds with warrants attached	—		7		—		7
United States government	7		—		—		7
Subtotal	7		9,435		18		9,460
Common equities, available for sale	4,679		—		—		4,679
Nonredeemable preferred equities, available for sale	—		177		2		179
Separate accounts taxable fixed maturities	—		731		—		731
Top Hat Savings Plan - mutual funds and common equities (included in Other assets)	18		—		—		18
Total	$	4,704	$	10,343	$	20	$	15,067

At December 31, 2013
Fixed maturities, available for sale:
Corporate	$	—	$	5,531	$	2	$	5,533
States, municipalities and political subdivisions	—		3,211		—		3,211
Commercial mortgage-backed	—		143		—		143
Government-sponsored enterprises	—		200		—		200
Foreign government	—		10		—		10
Convertibles and bonds with warrants attached	—		17		—		17
United States government	7		—		—		7
Subtotal	7		9,112		2		9,121
Common equities, available for sale	4,213		—		—		4,213
Nonredeemable preferred equities, available for sale	—		160		2		162
Separate accounts taxable fixed maturities	—		682		—		682
Top Hat Savings Plan - mutual funds and common equities (included in Other assets)	14		—		—		14
Total	$	4,234	$	9,954	$	4	$	14,192

Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

The following table provides the change in Level 3 assets during 2014 and 2013:



(Dollars in millions)	Asset fair value measurements using significant unobservable inputs (Level 3)
		Corporate fixed maturities			States, municipalities and political subdivisions fixed maturities			Nonredeemable preferred equities		Total
Beginning balance, January 1, 2014		$	2		$	—		$	2	$	4
Total gains or losses (realized/unrealized):
Included in net income		—			—			—		—
Included in other comprehensive income		—			—			—		—
Purchases		—			—			—		—
Sales		—			—			—		—
Transfers into Level 3		16			—			—		16
Transfers out of Level 3		—			—			—		—
Ending balance, December 31, 2014		$	18		$	—		$	2	$	20

Beginning balance, January 1, 2013		$	3		$	1		$	1	$	5
Total gains or losses (realized/unrealized):
Included in net income		—			—			—		—
Included in other comprehensive income		—			—			—		—
Purchases		—			—			1		1
Sales		—			(1		)	—		(1		)
Transfers into Level 3		—			—			—		—
Transfers out of Level 3		(1		)	—			—		(1		)
Ending balance, December 31, 2013		$	2		$	—		$	2	$	4

Fair Value of Life Policy Loans

The following table shows the fair value of our life policy loans, included in other invested assets:



(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At December 31, 2014			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Life policy loans	$	—	$	—	$	39	$	39

At December 31, 2013
Life policy loans	$	—	$	—	$	45	$	45

Debt

Fair Values of Deferred Annuities, Structured Settlements and Other Items

The following table shows fair values of our note payable and long-term debt:



(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At December 31, 2014			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Note payable	$	—	$	49	$	—	$	49
6.900% senior debentures, due 2028	—		34		—		34
6.920% senior debentures, due 2028	—		496		—		496
6.125% senior notes, due 2034	—		449		—		449
Total	$	—	$	1,028	$	—	$	1,028

At December 31, 2013
Note payable	$	—	$	104	$	—	$	104
6.900% senior debentures, due 2028	—		30		—		30
6.920% senior debentures, due 2028	—		458		—		458
6.125% senior notes, due 2034	—		399		—		399
Total	$	—	$	991	$	—	$	991

Deferred Annuities and Structured Settlements

Fair Values of Deferred Annuities, Structured Settlements and Other Items

The following table shows fair value of our deferred annuities and structured settlements included in life policy and investment contract reserves:



(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At December 31, 2014			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Deferred annuities	$	—	$	—	$	897	$	897
Structured settlements	—		217		—		217
Total	$	—	$	217	$	897	$	1,114

At December 31, 2013
Deferred annuities	$	—	$	—	$	911	$	911
Structured settlements	—		219		—		219
Total	$	—	$	219	$	911	$	1,130

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period 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 asset.

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- Definition

Tabular disclosure of liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring and/or nonrecurring 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). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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