Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2012

Cash Cash Equivalents And Marketable Securities Measured At Adjusted Cost Gross unrealized Gains Gross Unrealized Losses And Fair Value By Significant Investment Categories

The following tables summarize our cash, cash equivalents and marketable securities measured at adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment categories as of December 31, 2011 and December 31, 2012 (in millions):

	As of December 31, 2011
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	4,712	$	0	$	0		$	4,712	$	4,712	$	0
Level 1:
Money market and other funds		3,202		0		0			3,202		3,202		0
U.S. government notes		11,475		104		0			11,579		0		11,579
Marketable equity securities		228		79		0			307		0		307
		14,905		183		0			15,088		3,202		11,886
Level 2:
Time deposits		1,029		0		0			1,029		534		495
Money market and other funds(1)		1,260		0		0			1,260		1,260		0
U.S. government agencies		6,486		15		0			6,501		275		6,226
Foreign government bonds		1,608		32		(11	)		1,629		0		1,629
Municipal securities		1,775		19		0			1,794		0		1,794
Corporate debt securities		6,023		187		(98	)		6,112		0		6,112
Agency residential mortgage-backed securities		6,359		147		(5	)		6,501		0		6,501
		24,540		400		(114	)		24,826		2,069		22,757
Total	$	44,157	$	583	$	(114	)	$	44,626	$	9,983	$	34,643

	As of December 31, 2012
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	8,066	$	0	$	0		$	8,066	$	8,066	$	0
Level 1:
Money market and other funds		5,221		0		0			5,221		5,221		0
U.S. government notes		10,853		77		(1	)		10,929		0		10,929
Marketable equity securities		12		88		0			100		0		100
		16,086		165		(1	)		16,250		5,221		11,029
Level 2:
Time deposits		984		0		0			984		562		422
Money market and other funds(1)		929		0		0			929		929		0
U.S. government agencies		1,882		20		0			1,902		0		1,902
Foreign government bonds		1,996		81		(3	)		2,074		0		2,074
Municipal securities		2,249		23		(6	)		2,266		0		2,266
Corporate debt securities		7,200		414		(14	)		7,600		0		7,600
Agency residential mortgage-backed securities		7,039		136		(6	)		7,169		0		7,169
Asset-backed securities		847		1		0			848		0		848
		23,126		675		(29	)		23,772		1,491		22,281
Total	$	47,278	$	840	$	(30	)	$	48,088	$	14,778	$	33,310

⁽¹⁾  The balances at December 31, 2011 and December 31, 2012 were cash collateral received in connection with our securities lending program, which was invested in reverse repurchase agreements maturing within three months. See below for further discussion on this program.

Investments Classified by Contractual Maturity Date

The following table summarizes the estimated fair value of our investments in marketable securities, excluding marketable equity securities, designated as available-for-sale and classified by the contractual maturity date of the securities (in millions):

	As of December 31, 2012
Due in 1 year	$	4,708
Due in 1 year through 5 years		12,310
Due in 5 years through 10 years		7,296
Due after 10 years		8,896
Total	$	33,210

Schedule of Unrealized Loss on Investments

The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of December 31, 2011 and December 31, 2012, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):

	As of December 31, 2011
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Foreign government bonds	$	302	$	(11	)	$	6	$	0		$	308	$	(11	)
Corporate debt securities		2,160		(97	)		17		(1	)		2,177		(98	)
Agency residential mortgage-backed securities		716		(3	)		19		(2	)		735		(5	)
Total	$	3,178	$	(111	)	$	42	$	(3	)	$	3,220	$	(114	)

	As of December 31, 2012
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government notes	$	842	$	(1	)	$	0	$	0		$	842	$	(1	)
Foreign government bonds		509		(2	)		12		(1	)		521		(3	)
Municipal securities		686		(6	)		9		0			695		(6	)
Corporate debt securities		820		(10	)		81		(4	)		901		(14	)
Agency residential mortgage-backed securities		1,300		(6	)		0		0			1,300		(6	)
Total	$	4,157	$	(25	)	$	102	$	(5	)	$	4,259	$	(30	)

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The fair values of our outstanding derivative instruments were as follows (in millions):

		As of December 31, 2011
	Balance Sheet Location	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
Derivative Assets:
Level 2:
Foreign exchange contracts	Prepaid revenue share, expenses and other assets, current and non-current	$	333	$	4	$	337
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other current liabilities	$	5	$	1	$	6

		As of December 31, 2012
	Balance Sheet Location	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
Derivative Assets:
Level 2:
Foreign exchange contracts	Prepaid revenue share, expenses and other assets, current and non-current	$	164	$	13	$	177
Interest rate contracts	Prepaid revenue share, expenses and other assets, current and non-current		1		0		1
Total		$	165	$	13	$	178
Derivative Liabilities:
Level 2:
Foreign exchange contracts	Accrued expenses and other current liabilities	$	3	$	4	$	7

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The effect of derivative instruments in cash flow hedging relationships on income and other comprehensive income is summarized below (in millions):

	Gains Recognized in OCI on Derivatives Before Tax Effect (Effective  Portion)
	Year Ended December 31,
Derivatives in Cash Flow Hedging Relationship	2010		2011		2012
Foreign exchange contracts	$	331	$	54	$	73
Interest rate contracts		0		0		1
Total	$	331	$	54	$	74

	Gains Reclassified from AOCI into Income (Effective Portion)
		Year Ended December 31,
Derivatives in Cash Flow Hedging Relationship	Location	2010		2011		2012
Foreign exchange contracts	Revenues	$	203	$	43	$	217

	Losses Recognized in Income on Derivatives (Amount Excluded from  Effectiveness Testing and Ineffective Portion)(1)
		Year Ended December 31,
Derivatives in Cash Flow Hedging Relationship	Location	2010			2011			2012
Foreign exchange contracts	Interest and other income, net	$	(320	)	$	(323	)	$	(447	)

⁽¹⁾  Gains (losses) related to the ineffective portion of the hedges were not material in all periods presented.

The effect of derivative instruments in fair value hedging relationships on income is summarized below (in millions):

	Gains (Losses) Recognized in Income on Derivatives(2)
		Year Ended December 31,
Derivatives in Fair Value Hedging Relationship	Location	2010			2011			2012
Foreign exchange contracts	Interest and other income, net	$	(35	)	$	(2	)	$	(31	)
Hedged item	Interest and other income, net		29			(12	)		23
Total		$	(6	)	$	(14	)	$	(8	)

⁽²⁾  Losses related to the amount excluded from effectiveness testing of the hedges were $6 million, $14 million, and $8 million for the years ended December 31, 2010, December 31, 2011, and December 31, 2012.

The effect of derivative instruments not designated as hedging instruments on income is summarized below (in millions):

	Gains (Losses) Recognized in Income on Derivatives
		Year Ended December 31,
Derivatives Not Designated As Hedging Instruments	Location	2010			2011			2012
Foreign exchange contracts	Interest and other income, net	$	(40	)	$	29		$	(67	)
Interest rate contracts	Interest and other income, net		0			(19	)		(6	)
Total		$	(40	)	$	10		$	(73	)