FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

The following table summarizes our financial instruments by significant categories and fair value measurement on a recurring basis as of March 31, 2018 and December 31, 2017.



(in millions)	Level 1		Level 2		Total
March 31, 2018
Restricted cash equivalents:
Money market mutual funds	$	224	$	—	$	224
Commercial paper	20		—		20
Total restricted cash equivalents	244		—		244
Restricted investments:
U.S. Treasuries	23		—		23
Exchange traded fund	1		—		1
Certificate of deposit	—		2		2
Total restricted investments	24		2		26
Total restricted cash equivalents and investments	$	268	$	2	$	270

December 31, 2017
Restricted cash equivalents:
Money market mutual funds	$	199	$	—	$	199
Commercial paper	21		—		21
Total restricted cash equivalents	220		—		220
Restricted investments:
U.S. Treasuries	37		—		37
Exchange traded fund	1		—		1
Certificate of deposit	—		2		2
Total restricted investments	38		2		40
Total restricted cash equivalents and investments	$	258	$	2	$	260

Restricted Cash Equivalents

Our restricted cash equivalents include money market mutual funds and commercial paper. The carrying value of cash equivalents approximate their fair values due to the short-term maturities and are classified as Level 1 in the fair value hierarchy because we use quoted market prices that are readily available in an active market to determine the fair value.

Restricted Investments

Our restricted investments include U.S. Treasuries, an exchange traded fund and a certificate of deposit. The U.S. Treasuries and exchange traded fund are classified as Level 1 securities in the fair value hierarchy as we use active quoted market prices that are readily available in an active market to determine fair value. The certificate of deposit is classified as Level 2 in the fair value hierarchy as we use a market approach that compares the fair values on certificates with similar maturities.

We did not have any Level 3 financial instruments as of March 31, 2018 and December 31, 2017. There were no transfers between levels as of March 31, 2018 and December 31, 2017.

Fair Value of Financial Instruments Disclosures

Notes Payable

The carrying value of our notes payable at March 31, 2018 and December 31, 2017 was $415 million and $425 million, respectively. The estimated fair values of our notes payable at March 31, 2018 and December 31, 2017 were $418 million and $428 million, respectively. These valuations are considered Level 2 in the hierarchy for fair value measurement and are based on quoted market prices.