NOTE 5: FINANCIAL INSTRUMENTS

Cash, Cash Equivalents and Marketable Securities

The following tables show our cash and available-for-sale securities’ amortized cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short and long-term marketable securities as of December 31, 2014 and December 31, 2013 (in millions):

	December 31, 2014
									Cash and		Short-Term		Long-Term
	Amortized		Unrealized		Unrealized		Fair		Cash		Marketable		Marketable
	Cost		Gains		Losses		Value		Equivalents		Securities		Securities
Cash	$	447	$	—	$	—	$	447	$	447	$	—	$	—
Level 1:
Money market funds		8		—		—		8		8		—		—
Level 2:
U.S. agency securities		38		—		—		38		—		35		3
Certificates of deposit		8		—		—		8		—		8		—
Commercial paper		1		—		—		1		—		1		—
Corporate debt securities		92		—		—		92		—		64		28
Subtotal		139		—		—		139		—		108		31
Total	$	594	$	—	$	—	$	594	$	455	$	108	$	31

	December 31, 2013
									Cash and		Short-Term		Long-Term
	Amortized		Unrealized		Unrealized		Fair		Cash		Marketable		Marketable
	Cost		Gains		Losses		Value		Equivalents		Securities		Securities
Cash	$	195	$	—	$	—	$	195	$	195	$	—	$	—
Level 1:
Money market funds		156		—		—		156		156		—		—
Level 2:
U.S. agency securities		37		—		—		37		—		14		23
Certificates of deposit		23		—		—		23		—		16		7
Commercial paper		5		—		—		5		—		5		—
Corporate debt securities		254		—		—		254		—		96		158
Subtotal		319		—		—		319		—		131		188
Total	$	670	$	—	$	—	$	670	$	351	$	131	$	188

Our cash and cash equivalents consist of cash on hand in global financial institutions, money market funds and marketable securities, with maturities of 90 days or less at the date purchased. The remaining maturities of our long-term marketable securities range from one to three years and our short-term marketable securities include maturities that were greater than 90 days at the date purchased and have 12 months or less remaining at December 31, 2014 and 2013, respectively.

We classify our cash equivalents and marketable securities within Level 1 and Level 2 as we value our cash equivalents and marketable securities using quoted market prices (Level 1) or alternative pricing sources (Level 2). The valuation technique we used to measure the fair value of money market funds were derived from quoted prices in active markets for identical assets or liabilities. Fair values for Level 2 investments are considered “Level 2” valuations because they are obtained from independent pricing sources for identical or comparable instruments, rather than direct observations of quoted prices in active markets. Our procedures include controls to ensure that appropriate fair values are recorded, including comparing the fair values obtained from our independent pricing services against fair values obtained from another independent source.

There were no material realized gains or losses related to sales of our marketable securities for the years ended December 31, 2014, 2013 and 2012.

As of December 31, 2014, we have marketable securities with a total fair value of $68 million currently in an unrealized loss position. The gross unrealized loss amount was not material at December 31, 2014. We consider the declines in market value of our marketable securities investment portfolio to be temporary in nature and do not consider any of our investments other-than-temporarily impaired. During the years ended December 31, 2014, 2013 and 2012, we did not recognize any impairment charges. We also did not have any material investments in marketable securities that were in a continuous unrealized loss position for 12 months or greater at December 31, 2014 or 2013.

Derivative Financial Instruments

Our current forward contracts are not designated as hedges and have current maturities of less than 90 days. Consequently, any gain or loss resulting from the change in fair value was recognized in our consolidated statement of operations. All gains and losses recorded to other, net on the consolidated statement of operations for the years ended December 31, 2014, 2013, and 2012 were not material.

The following table shows the notional principal amounts of our outstanding derivative instruments that are not designated as hedging instruments for the periods presented:

December 31,

2014

December 31,

2013

(in millions)

Foreign exchange-forward contracts (1)(2)

(1)	Derivative contracts address foreign exchange fluctuations for the Euro versus the U.S. Dollar.

(2)

The fair value of our derivatives are not material for all periods presented and are reported as liabilities in accrued and other current liabilities on our consolidated balance sheets. We measure the fair value of our outstanding or unsettled derivatives using Level 2 fair value inputs, as we use a pricing model that takes into account the contract terms as well as current foreign currency exchange rates in active markets.

Concentration of Credit Risk

Counterparties to currency exchange derivatives consist of major international financial institutions. We monitor our positions and the credit ratings of the counterparties involved and, by policy limits, the amount of credit exposure to any one party. While we may be exposed to potential losses due to the credit risk of non-performance by these counterparties, losses are not anticipated and any credit risk amounts associated with our outstanding or unsettled derivative instruments are deemed to be not material for any period presented.

Other Financial Instruments

Other financial instruments not measured at fair value on a recurring basis include trade receivables, trade payables, deferred merchant payables, short-term debt, accrued and other current liabilities and long-term debt. With the exception of long-term debt, the carrying amount approximates fair value because of the short maturity of these instruments as reported on the consolidated balance sheets as of December 31, 2014 and December 31, 2013. The carrying value of the long-term borrowings outstanding on our Credit Agreement bears interest at a variable rate and therefore is also considered to approximate fair value.

We did not have any Level 3 assets or liabilities at December 31, 2014 or 2013.