Investments of Insurance Subsidiaries

9 Months Ended

Sep. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Investments of Insurance Subsidiaries

NOTE 5 — INVESTMENTS OF INSURANCE SUBSIDIARIES

A summary of our insurance subsidiaries’ investments at September 30, 2014 and December 31, 2013 follows (dollars in millions):

	September 30, 2014
	Amortized Cost		Unrealized Amounts					Fair Value
			Gains		Losses
Debt securities:
States and municipalities	$	449	$	19	$	(1	)	$	467
Money market funds		37		—		—			37
		486		19		(1	)		504
Equity securities		1		2		—			3
	$	487	$	21	$	(1	)		507
Amounts classified as current assets									(66	)
Investment carrying value								$	441

	December 31, 2013
	Amortized Cost		Unrealized Amounts					Fair Value
			Gains		Losses
Debt securities:
States and municipalities	$	404	$	11	$	(3	)	$	412
Money market funds		94		—		—			94
		498		11		(3	)		506
Equity securities		2		2		—			4
	$	500	$	13	$	(3	)		510
Amounts classified as current assets									(62	)
Investment carrying value								$	448

At September 30, 2014 and December 31, 2013, the investments of our insurance subsidiaries were classified as “available-for-sale.” Changes in temporary unrealized gains and losses are recorded as adjustments to other comprehensive income (loss).

Scheduled maturities of investments in debt securities at September 30, 2014 were as follows (dollars in millions):

	Amortized Cost		Fair Value
Due in one year or less	$	59	$	60
Due after one year through five years		207		212
Due after five years through ten years		97		104
Due after ten years		123		128
	$	486	$	504

The average expected maturity of the investments in debt securities at September 30, 2014 was 4.1 years, compared to the average scheduled maturity of 6.1 years. Expected and scheduled maturities may differ because the issuers of certain securities have the right to call, prepay or otherwise redeem such obligations prior to their scheduled maturity date.