Annual report pursuant to Section 13 and 15(d)

MARKETABLE SECURITIES

v3.6.0.2
MARKETABLE SECURITIES
12 Months Ended
Dec. 31, 2016
Marketable Securities [Abstract]  
MARKETABLE SECURITIES
NOTE 4. MARKETABLE SECURITIES
A summary of marketable securities, all of which are classified as current, was as follows:
 
 
December 31,
 
 
2016
 
2015
In millions
 
Cost
 
Gross unrealized
gains/(losses)
 
Estimated
fair value
 
Cost
 
Gross unrealized
gains/(losses)
 
Estimated
fair value
Available-for-sale (1)
 
 

 
 

 
 

 
 

 
 

 
 

Debt mutual funds
 
$
132

 
$

 
$
132

 
$
88

 
$

 
$
88

Bank debentures
 
114

 

 
114

 

 

 

Equity mutual funds
 
12

 

 
12

 
11

 
(1
)
 
10

Government debt securities
 
2

 

 
2

 
2

 

 
2

Total marketable securities
 
$
260

 
$

 
$
260

 
$
101

 
$
(1
)
 
$
100


______________________________________________________
(1) All marketable securities are classified as Level 2 securities. The fair value of Level 2 securities is estimated using actively quoted prices for similar instruments from brokers and observable inputs where available, including market transactions and third-party pricing services, or net asset values provided to investors. We do not currently have any Level 3 securities and there were no transfers between Level 2 or 3 during 2016 and 2015.  
A description of the valuation techniques and inputs used for our Level 2 fair value measures was as follows:
Debt mutual funds— The fair value measure for these investments is the daily net asset value published on a regulated governmental website. Daily quoted prices are available from the issuing brokerage and are used on a test basis to corroborate this Level 2 input.
Bank debentures— These investments provide us with a contractual rate of return and generally range in maturity from three months to five years. The counterparties to these investments are reputable financial institutions with investment grade credit ratings. Since these instruments are not tradable and must be settled directly by us with the respective financial institution, our fair value measure is the financial institutions’ month-end statement.
Equity mutual funds— The fair value measure for these investments is the net asset value published by the issuing brokerage. Daily quoted prices are available from reputable third party pricing services and are used on a test basis to corroborate this Level 2 input measure.
Government debt securities— The fair value measure for these securities is broker quotes received from reputable firms. These securities are infrequently traded on a national stock exchange and these values are used on a test basis to corroborate our Level 2 input measure.
The proceeds from sales and maturities of marketable securities and gross realized gains from the sale of AFS securities were as follows:
 
 
Years ended December 31,
In millions
 
2016
 
2015
 
2014
Proceeds from sales and maturities of marketable securities
 
$
306

 
$
270

 
$
336

Gross realized gains from the sale of available-for-sale securities(1)
 

 
1

 
14

____________________________________________________
(1) Gross realized losses from the sale of available-for-sale securities were immaterial.
At December 31, 2016, the fair value of AFS investments in debt securities that utilize a Level 2 fair value measure is shown by contractual maturity below:
Maturity date
 
(in millions)
1 year or less
 
$
247

5 - 10 years
 
1

Total
 
$
248