Fair Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurement

The following table summarizes, for assets or liabilities measured at fair value, the respective fair value and the classification by level of input within the fair value hierarchy (in millions):  

			Fair Value Measurement at Reporting Date Using
Description	December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	871	$	871	$	—	$	—
Marketable securities:
U.S. government securities	5,165		5,165		—		—
U.S. government agency securities	2,077		2,077		—		—
Total cash equivalents and marketable securities	$	8,113	$	8,113	$	—	$	—
Other current liabilities:
Contingent consideration liability	$	4	$	—	$	—	$	4
Other liabilities:
Derivative financial instrument	$	4	$	—	$	4	$	—

			Fair Value Measurement at Reporting Date Using
Description	December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3
Cash equivalents:
Money market funds	$	892	$	892	—		—
U.S. government securities	60		60		—		—
U.S. government agency securities	50		50		—		—
Total cash equivalents	1,002		1,002		—		—
Marketable securities:
U.S. government securities	1,415		1,415		—		—
U.S. government agency securities	981		981		—		—
Total cash equivalents and marketable securities	$	3,398	$	3,398	$	—	$	—

There was no contingent consideration liability or interest rate swap as of December 31, 2011.

Our Level 2 derivative financial instrument represents our interest rate swap agreement which is valued based on a valuation model using significant inputs derived from or corroborated by observable market data.

We estimate the fair value of our Level 3 contingent consideration liability based on the probability assessment of the earn-out criteria. In developing these estimates, we consider factors not observed in the market and thus this represents a Level 3 measurement. Level 3 instruments are valued based on unobservable inputs that are supported by little or no market activity and reflect our own assumptions in measuring fair value. Our fair value estimate of this liability was $6 million at the date of acquisition. Changes in the fair value of the contingent consideration liability subsequent to the acquisition date, such as changes in the probability assessment and our stock prices, are recognized in earnings in the period when the change in the estimated fair value occurs.