Investments of Insurance Subsidiaries

9 Months Ended

Sep. 30, 2016

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, 2016 and December 31, 2015 follows (dollars in millions):

	September 30, 2016
	Amortized Cost		Unrealized Amounts					Fair Value
			Gains		Losses
Debt securities:
States and municipalities	$	368		$20		$—		$	388
Money market funds		11		—		—			11
		379		20		—			399
Equity securities		1		3		—			4
	$	380		$23		$—			403
Amounts classified as current assets									(49	)
Investment carrying value								$	354
	December 31, 2015
	Amortized Cost		Unrealized Amounts					Fair Value
			Gains		Losses
Debt securities:
States and municipalities	$	428		$17		$(1	)	$	444
Money market funds		34		—		—			34
		462		17		(1	)		478
Equity securities		—		4		—			4
	$	462		$21		$(1	)		482
Amounts classified as current assets									(50	)
Investment carrying value								$	432

At September 30, 2016 and December 31, 2015, 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, 2016 were as follows (dollars in millions):

	Amortized Cost		Fair Value
Due in one year or less	$	66	$	66
Due after one year through five years		123		127
Due after five years through ten years		140		152
Due after ten years		50		54
	$	379	$	399

The average expected maturity of the investments in debt securities at September 30, 2016 was 3.9 years, compared to the average scheduled maturity of 5.6 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.