Letters of credit outstanding

  
restricted subsidiaries. As of September 30, 2022, we had $60 million of letters of credit outstanding under the Revolving Credit Facility, resulting in an available borrowing capacity of $1,690 million.  
Note 6: Fair Value Measurements   
The fair values of certain financial instruments and the hierarchy level we used to estimate the fair values are shown below:  


|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | September 30, 2022 |
|  |  |  | Hierarchy Level |
|  | Carrying Value |  | Level 1 |  | Level 2 |  | Level 3 |
|  | (in millions) |
| Assets: |  |  |  |  |  |  |  |
| Cash equivalents | $ | 499  |  |  | $ | —  |  |  | $ | 499  |  |  | $ | —  |  |
| Interest rate swap(1) | 116  |  |  | —  |  |  | 116  |  |  | —  |  |
| Liabilities: |  |  |  |  |  |  |  |
| Long-term debt(2) | 8,542  |  |  | 5,086  |  |  | —  |  |  | 2,551  |  |

  


|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | December 31, 2021 |
|  |  |  | Hierarchy Level |
|  | Carrying Value |  | Level 1 |  | Level 2 |  | Level 3 |
|  | (in millions) |
| Assets: |  |  |  |  |  |  |  |
| Cash equivalents | $ | 622  |  |  | $ | —  |  |  | $ | 622  |  |  | $ | —  |  |
| Liabilities: |  |  |  |  |  |  |  |
| Long-term debt(2) | 8,532  |  |  | 6,180  |  |  | —  |  |  | 2,599  |  |
| Interest rate swaps(1) | 41  |  |  | —  |  |  | 41  |  |  | —  |  |

\_\_\_\_\_\_\_\_\_\_\_\_(1)Interest rate swaps are included in other non-current assets or other long-term liabilities in our condensed consolidated balance sheets depending on their value to us as of the balance sheet date. During the nine months ended September 30, 2022, one of the interest rate swaps that was outstanding as of December 31, 2021 matured. The remaining interest rate swap outstanding as of September 30, 2022 will mature in March 2026.(2)The carrying values include the deduction for unamortized deferred financing costs and any applicable discounts. The carrying values and fair values exclude finance lease liabilities and other debt of consolidated VIEs.  
We measure our interest rate swaps at fair value, which was determined using a discounted cash flow analysis that reflects the contractual terms of the interest rate swaps, including the period to maturity, and uses observable market-based inputs of similar instruments, including interest rate curves, as applicable.   
The fair values of financial instruments not included in these tables are estimated to be equal to their carrying values as of September 30, 2022 and December 31, 2021.  
Note 7: Income Taxes   
At the end of each quarter, we estimate the effective income tax rate expected to be applied for the full year. The effective income tax rate is determined by the level and composition of income (loss) before income taxes, which is subject to federal, state, local and foreign income taxes.   
In August 2022, the Inflation Reduction Act of 2022 (the "IRA") was signed into law in the U.S. We do not expect the IRA to have a material impact on our consolidated financial statements, including our annual estimated effective tax rate.  
Note 8: Share-Based Compensation   
We recognized share-based compensation expense of $42 million and $52 million during the three months ended September 30, 2022 and 2021, respectively, and $126 million and $144 million during the nine months ended September 30, 2022 and 2021, respectively, which included amounts reimbursed by hotel owners.   
Our share-based compensation primarily consists of awards that we grant to eligible employees under the Hilton 2017 Omnibus Incentive Plan (the "2017 Plan") and includes time-vesting restricted stock units ("RSUs"), nonqualified stock options 9
