Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Financial Assets and Liabilities Carried at Fair Value

The Company had no investments as of December 31, 2015. The following is a summary of investments as of December 31, 2014 (in millions):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
U.S. government and agency securities	$	11	$	—	$	—	$	11
Obligations of government-sponsored enterprises	1		—		—		1
State and municipal bonds	5		—		—		5
Corporate securities	7		—		—		7
Total investments	$	24	$	—	$	—	$	24

Financial assets and liabilities carried at fair value as of December 31, 2015, are classified below (in millions):

	Level 1		Level 2		Level 3		Total
Assets:
Forward contracts (2)	$	6	$	1	$	—	$	7
Money market investments related to the deferred compensation plan	9		—		—		9
Total Assets at fair value	$	15	$	1	$	—	$	16
Liabilities:
Forward interest rate swap contracts (3)	$	—	$	26	$	—	$	26
Liabilities related to the deferred compensation plan	9		—		—		9
Total Liabilities at fair value	$	9	$	26	$	—	$	35

Financial assets and liabilities carried at fair value as of December 31, 2014, are classified below (in millions):

	Level 1		Level 2		Level 3		Total
Assets:
U.S. government and agency securities	$	11	$	—	$	—	$	11
Obligations of government-sponsored enterprises (1)	—		1		—		1
State and municipal bonds	—		5		—		5
Corporate securities	—		7		—		7
Investments subtotal	11		13		—		24
Forward contracts (2)	2		7		—		9
Money market investments related to the deferred compensation plan	6		—		—		6
Total Assets at fair value	$	19	$	20	$	—	$	39
Liabilities:
Forward interest rate swap contracts (3)	$	—	$	17	$	—	$	17
Liabilities related to the deferred compensation plan	6		—		—		6
Total Liabilities at fair value	$	6	$	17	$	—	$	23

(1) Includes investments in notes issued by the Federal Home Loan Mortgage Corporation and the Federal Home Loan Bank.

(2) The fair value of forward contracts is calculated as follows:

a. Fair value of a collar or put option contract associated with forecasted sales hedges is calculated using bid and ask rates for similar contracts.

b. Fair value of regular forward contracts associated with forecasted sales hedges is calculated using the period-end exchange rate adjusted for current forward points.

c. Fair value of hedges against net assets is calculated at the period end exchange rate adjusted for current forward points unless the hedge has been traded but not settled at period end (Level 2). If this is the case, the fair value is calculated at the rate at which the hedge is being settled (Level 1). As a result, transfers from Level 2 to Level 1 of the fair value hierarchy totaled $6 million and $2 million as of December 31, 2015 and 2014, respectively.

(3) The fair value of forward interest rate swap is based upon a valuation model that uses relevant observable market inputs at the quoted intervals, such as forward yield curves, and is adjusted for the Company's own credit risk and the interest rate swap terms. See gross balance reporting in Note 14 Derivative Instruments.

Assets Measured at Fair Value on Recurring Basis

The following table presents the Company’s activity for assets measured at fair value on a recurring basis using significant unobservable inputs, Level 3 as defined in ASC 820 for the year ended December 31, 2014 (in millions): There was no activity for 2015.

	December 31, 2014
Balance at beginning of the year	$	3
Transfers to Level 3	—
Total losses (realized or unrealized):
Included in earnings	(1		)
Included in other comprehensive income (loss)	—
Purchases and settlements (net)	(2		)
Balance at end of year	$	—
Total gains (losses) for the period included in earnings attributable to the change in unrealized losses relating to assets still held at end of 2014	$	—