The fair value of current financial assets and liabilities, debt service reserves and other deposits approximate their reported carrying amounts. The estimated fair values of the Company’s assets and liabilities have been determined using available market information. Because these amounts are estimates and based on hypothetical transactions to sell assets or transfer liabilities, the use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. For further information on our valuation techniques and policies, see Note 5—Fair Value in Item 8.—Financial Statements and Supplementary Data of our 2019 Form 10-K.

The following table presents, by level within the fair value hierarchy, the Company’s financial assets and liabilities that were measured at fair value on a recurring basis as of the dates indicated (in millions). For the Company’s investments in marketable debt securities, the security classes presented were determined based on the nature and risk of the security and are consistent with how the Company manages, monitors, and measures its marketable securities:


	September 30, 2020								December 31, 2019
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
DEBT SECURITIES:
Available-for-sale:

Certificates of deposit	$	—	$	312	$	—	$	312	$	—	$	326	$	—	$	326


EQUITY SECURITIES:
Mutual funds	25		47		—		72		22		61		—		83


DERIVATIVES:
Interest rate derivatives	—		3		—		3		—		31		—		31

Foreign currency derivatives	—		21		79		100		—		17		93		110
Commodity derivatives	—		20		2		22		—		28		2		30
Total derivatives — assets	—		44		81		125		—		76		95		171
TOTAL ASSETS	$	25	$	403	$	81	$	509	$	22	$	463	$	95	$	580
Liabilities
DERIVATIVES:
Interest rate derivatives	$	—	$	415	$	267	$	682	$	—	$	144	$	184	$	328
Cross-currency derivatives	—		15		12		27		—		10		11		21
Foreign currency derivatives	—		37		—		37		—		44		—		44
Commodity derivatives	—		23		1		24		—		29		2		31
Total derivatives — liabilities	—		490		280		770		—		227		197		424
TOTAL LIABILITIES	$	—	$	490	$	280	$	770	$	—	$	227	$	197	$	424

As of September 30, 2020, all available-for-sale debt securities had stated maturities within one year. There were no other-than-temporary impairments of marketable securities during the three and nine months ended September 30, 2019, and as of January 1, 2020, credit-related impairments are recognized in earnings under ASC 326. See Note 1—Financial Statement Presentation for further information. Gains and losses on the sale of

investments are determined using the specific-identification method. The following table presents gross proceeds from the sale of available-for-sale securities during the periods indicated (in millions):

The following tables present a reconciliation of net derivative assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2020 and 2019 (presented net by type of derivative in millions). Transfers between Level 3 and Level 2 principally result from changes in the significance of unobservable inputs used to calculate the credit valuation adjustment.


Three Months Ended September 30, 2020	Interest Rate		Cross Currency		Foreign Currency		Commodity		Total
Balance at July 1	$	(286)	$	(23)	$	76	$	1	$	(232)
Total realized and unrealized gains (losses):
Included in earnings	—		—		8		1		9
Included in other comprehensive income — derivative activity	(8)		3		3		—		(2)

Included in regulatory (assets) liabilities	—		—		—		(1)		(1)
Settlements	12		9		(9)		1		13
Transfers of assets (liabilities), net into Level 3	—		—		—		—		—
Transfers of (assets)/liabilities, net out of Level 3	13		—		1		—		14
Balance at September 30	$	(269)	$	(11)	$	79	$	2	$	(199)
Total gains for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period	$	—	$	—	$	—	$	1	$	1


Three Months Ended September 30, 2019	Interest Rate		Cross Currency		Foreign Currency		Commodity		Total
Balance at July 1	$	(243)	$	—	$	192	$	4	$	(47)
Total realized and unrealized gains (losses):
Included in earnings	—		—		(54)		(2)		(56)
Included in other comprehensive income — derivative activity	(37)		—		(10)		—		(47)

Included in regulatory (assets) liabilities	—		—		—		(2)		(2)
Settlements	2		—		(15)		(1)		(14)
Transfers of assets (liabilities), net into Level 3	—		(6)		—		—		(6)
Transfers of (assets) liabilities, net out of Level 3	45		—		—		—		45
Balance at September 30	$	(233)	$	(6)	$	113	$	(1)	$	(127)
Total losses for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period	$	—	$	—	$	(62)	$	(2)	$	(64)


Nine Months Ended September 30, 2020	Interest Rate		Cross Currency		Foreign Currency		Commodity		Total
Balance at January 1	$	(184)	$	(11)	$	94	$	(1)	$	(102)
Total realized and unrealized gains (losses):
Included in earnings	2		—		10		2		14
Included in other comprehensive income — derivative activity	(79)		(10)		4		—		(85)

Included in regulatory (assets) liabilities	—		—		—		1		1
Settlements	20		10		(30)		—		—
Transfers of assets (liabilities), net into Level 3	(28)		—		—		—		(28)
Transfers of (assets)/liabilities, net out of Level 3	—		—		1		—		1
Balance at September 30	$	(269)	$	(11)	$	79	$	2	$	(199)
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period	$	—	$	—	$	(13)	$	2	$	(11)


Nine Months Ended September 30, 2019	Interest Rate		Cross Currency		Foreign Currency		Commodity		Total
Balance at January 1	$	(140)	$	—	$	199	$	4	$	63
Total realized and unrealized gains (losses):
Included in earnings	(1)		—		(52)		(2)		(55)
Included in other comprehensive income — derivative activity	(113)		—		(10)		—		(123)

Included in regulatory (assets) liabilities	—		—		—		(3)		(3)
Settlements	5		—		(24)		—		(19)
Transfers of assets (liabilities), net into Level 3	(32)		(6)		—		—		(38)
Transfers of (assets) liabilities, net out of Level 3	48		—		—		—		48
Balance at September 30	$	(233)	$	(6)	$	113	$	(1)	$	(127)
Total losses for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period	$	—	$	—	$	(69)	$	(2)	$	(71)


Type of Derivative	Fair Value		Unobservable Input	Amount or Range (Weighted Average)
Interest rate	$	(269)	Subsidiaries’ credit spreads	3.6% - 4.7% (4.6%)
Cross-currency	(11)		Subsidiaries’ credit spreads	3.8	%
Foreign currency:
Argentine peso	79		Argentine peso to U.S. dollar currency exchange rate after one year	79 - 853 (343)

Commodity:
Other	2
Total	$	(199)

For interest rate derivatives and foreign currency derivatives, increases (decreases) in the estimates of the Company’s own credit spreads would decrease (increase) the value of the derivatives in a liability position. For foreign currency derivatives, increases (decreases) in the estimate of the above exchange rate would increase (decrease) the value of the derivative.

The Company measures fair value using the applicable fair value measurement guidance. Impairment expense, shown as pre-tax loss below, is measured by comparing the fair value at the evaluation date to the then-latest available carrying amount and is included in Asset impairment expense or Other non-operating expense, as applicable, on the Condensed Consolidated Statements of Operations. The following table summarizes our major categories of assets measured at fair value on a nonrecurring basis and their level within the fair value hierarchy (in millions):


	Measurement Date	Carrying Amount (1)		Fair Value						Pre-tax Loss
Nine Months Ended September 30, 2020				Level 1		Level 2		Level 3


Equity method investments:
OPGC (2)	03/31/2020	$	195	$	—	$	—	$	152	$	43
OPGC (3)	06/30/2020	272		—		104		—		158
Long-lived assets held and used
AES Gener	08/01/2020	1,087		—		—		306		781
Hawaii	08/31/2020	114		—		—		76		38
Estrella del Mar I	09/30/2020	44		—		—		14		30


	Measurement Date	Carrying Amount (1)		Fair Value						Pre-tax Loss
Nine Months Ended September 30, 2019				Level 1		Level 2		Level 3


Dispositions and held-for-sale businesses: (4)
Kilroot and Ballylumford	04/12/2019	$	232	$	—	$	118	$	—	$	115

(3)Includes $114 million of cumulative translation adjustment (debit balance) in the carrying value. Pre-tax loss is limited to the carrying value of the equity method investment excluding CTA.

(4)Per the Company’s policy, pre-tax loss is limited to the impairment of long-lived assets. Any additional losses are recognized on completion of the sale. See Note 18—Held-for-Sale and Dispositions for further information.

The following table summarizes the significant unobservable inputs used in the Level 3 measurement of long-lived assets held and used measured on a nonrecurring basis during the nine months ended September 30, 2020 (in millions, except range amounts):

Fair Value

Valuation Technique

Unobservable Input

Range (Weighted Average)

Equity method investments:

OPGC (1)

152

Expected present value

Annual dividend growth

(25)% to 40% (2%)

Weighted-average cost of equity

Long-lived assets held and used:

AES Gener

306

Discounted cash flow

Annual revenue growth

(90)% to 10% (-2%)

Variable margin

(94)% to 24% (-3%)

Weighted-average cost of capital

7% to 10%

Hawaii

Discounted cash flow

Monthly revenue growth

(12)% to 13% (0%)

Pre-tax operating margin

24% to 35% (29%)

Weighted-average cost of capital

10% to 13%

Estrella del Mar I

Comparable market transactions

Sale price per kilowatt (USD)

$160 to $520 ($315)

Age of unit when sold (years)

15 to 25 (18)

Total

548

(1)Fair value measurement performed as of March 31, 2020, which included the Level 3 inputs shown above. The fair value measurement performed at June 30, 2020 included only Level 2 inputs; therefore, it is not included in this table.

The following table presents (in millions) the carrying amount, fair value, and fair value hierarchy of the Company’s financial assets and liabilities that are not measured at fair value in the Condensed Consolidated Balance Sheets as of the periods indicated, but for which fair value is disclosed:


		September 30, 2020
		Carrying Amount		Fair Value
				Total		Level 1		Level 2		Level 3
Assets:	Accounts receivable — noncurrent (1)	$	183	$	296	$	—	$	—	$	296
Liabilities:	Non-recourse debt	17,377		18,987		—		16,053		2,934
	Recourse debt	3,969		2,461		—		2,461		—


		December 31, 2019
		Carrying Amount		Fair Value
				Total		Level 1		Level 2		Level 3
Assets:	Accounts receivable — noncurrent (1)	$	98	$	145	$	—	$	—	$	145
Liabilities:	Non-recourse debt	16,712		16,579		—		15,804		775
	Recourse debt	3,396		3,529		—		3,529		—

(1)These amounts primarily relate to amounts due from CAMMESA, the administrator of the wholesale electricity market in Argentina, and amounts impacted by the Stabilization Fund enacted by the Chilean government, and are included in Other noncurrent assets in the accompanying Condensed Consolidated Balance Sheets. The fair value and carrying amount of these receivables exclude VAT of $9 million and $11 million as of September 30, 2020 and December 31, 2019, respectively.