Cash, Cash Equivalents, and Marketable Securities

9 Months Ended

Sep. 30, 2013

Investments, Debt and Equity Securities [Abstract]

Cash, Cash Equivalents, and Marketable Securities

Cash, Cash Equivalents, and Marketable Securities

As of September 30, 2013, and December 31, 2012, our cash, cash equivalents, and marketable securities primarily consisted of cash, U.S. and foreign government and agency securities, AAA-rated money market funds, and other investment grade securities. Cash equivalents and marketable securities are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

We measure the fair value of money market funds and equity securities based on quoted prices in active markets for identical assets or liabilities. All other financial instruments were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. We did not hold any cash, cash equivalents, or marketable securities categorized as Level 3 as of September 30, 2013 or December 31, 2012.

The following table summarizes, by major security type, our cash, cash equivalents, and marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in millions):

	September 30, 2013										December 31, 2012
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Total Estimated Fair Value			Total Estimated Fair Value
Cash	$	2,392	$	—	$	—		$	2,392		$	2,595
Level 1 securities:
Money market funds	1,760		—		—			1,760			5,561
Equity securities	3		—		—			3			2
Level 2 securities:
Foreign government and agency securities	761		3		(1		)	763			772
U.S. government and agency securities	2,245		2		(2		)	2,245			1,810
Corporate debt securities	708		3		(1		)	710			725
Asset-backed securities	66		—		—			66			49
Other fixed income securities	40		—		—			40			33
	$	7,975	$	8	$	(4	)	$	7,979		$	11,547
Less: Restricted cash, cash equivalents, and marketable securities (1)								(290		)	(99		)
Total cash, cash equivalents, and marketable securities								$	7,689		$	11,448

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(1) We are required to pledge or otherwise restrict a portion of our cash, cash equivalents, and marketable securities as collateral for standby and trade letters of credit, guarantees, debt, and real estate lease agreements. We classify cash and marketable securities with use restrictions of less than twelve months as “Accounts receivable, net and other” and of twelve months or longer as non-current “Other assets” on our consolidated balance sheets. See “Note 3 — Commitments and Contingencies.”

The following table summarizes the contractual maturities of our cash equivalent and marketable fixed-income securities as of September 30, 2013 (in millions):

	Amortized Cost		Estimated Fair Value
Due within one year	$	2,901	$	2,902
Due after one year through five years	2,258		2,262
Due after five years through ten years	151		150
Due after ten years	270		270
	$	5,580	$	5,584

Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions.