Premiums Receivable, Fair Value Disclosure

  


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| (Dollars in millions) |  | Basis of Fair Value Measurement |
| June 30, 2022 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |
| Assets: |  |  |  |  |  |  |  |  |
| Marketable securities |  | $ | 89  |  |  | $ | 89  |  |  | $ | —  |  |  | $ | —  |  |
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| Interest-rate swap |  | 36  |  |  | —  |  |  | 36  |  |  | —  |  |
| Trading securities |  | $ | 2  |  |  | $ | 2  |  |  | $ | —  |  |  | $ | —  |  |
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| June 30, 2021 |  |  |  |  |  |  |  |  |
| Assets: |  |  |  |  |  |  |  |  |
| Marketable securities |  | $ | 71  |  |  | $ | 71  |  |  | $ | —  |  |  | $ | —  |  |
| Interest-rate swap |  | 2  |  |  | —  |  |  | 2  |  |  | —  |  |
| Trading securities |  | $ | 1  |  |  | $ | 1  |  |  | $ | —  |  |  | $ | —  |  |
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| Liabilities: |  |  |  |  |  |  |  |  |
| Series A Preferred Stock derivative liability |  | $ | 3  |  |  | $ | —  |  |  | $ | —  |  |  | $ | 3  |  |
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The fair value of the interest-rate swap agreement is determined at the end of each reporting period based on valuation models that use interest-rate yield curves and discount rates as inputs. The discount rates are based on U.S. deposit or U.S. Treasury rates. The significant inputs used in the valuation models are readily available in public markets or can be derived from observable market transactions, and the valuation is therefore classified as Level 2 in the fair-value hierarchy.  
The estimated fair value of the derivative associated with the formerly outstanding Series A Preferred Stock was determined using an option pricing methodology, specifically both a Monte Carlo simulation and a binomial lattice model. The methodology incorporated the terms and conditions of the preferred stock arrangement, historical stock price volatility, the risk-free interest rate, a credit spread based on the yield indexes of high-yield bonds, and the trading price of shares of the Common Stock. The calculation of the estimated fair value of the derivative liability was highly sensitive to changes in unobservable inputs, such as the expected volatility and the Company’s credit spread. The estimated fair value of the Series A Preferred Stock derivative liability was classified as Level 3 in the fair-value hierarchy due to the significant management judgment required to make the assumptions underlying the calculation of value.  
The following table sets forth a summary of changes in the estimated fair value of the Series A Preferred Stock derivative liability from June 30, 2021 to June 30, 2022:  


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| (Dollars in millions) | Fair Value Measurement ofSeries A Preferred StockDerivative LiabilityUsing SignificantUnobservable Inputs (Level 3) |
| Balance at June 30, 2021 | $ | 3  |  |
| Change in estimated fair value of Series A Preferred Stock derivative liability | (2) |  |
| Settlement of derivative liability upon Final Conversion | (1) |  |
| Balance at June 30, 2022 | $ | —  |  |

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis  
Long-lived assets, goodwill, and other intangible assets are subject to non-recurring fair value measurement for the evaluation of potential impairment. Other than the fair value estimates disclosed in Note 3, Business Combinations and Divestitures, there was no non-recurring fair value measurement during the fiscal years ended June 30, 2022 and 2021.94
