Cash and Cash Equivalents

9 Months Ended

Sep. 30, 2012

Cash and Cash Equivalents.

Cash and Cash Equivalents

3. Cash and Cash Equivalents

Cash and cash equivalents include cash balances and all highly liquid investments with initial maturities of three months or less. Short-term investments include certificates of deposit, money market funds and highly liquid debt instruments purchased with initial maturities in excess of three months but less than one year and are carried at amortized cost, which approximates fair value.

The Company is required to hold £77 million of operating funds in the U.K. as required by the Financial Services Authority, which were included in Short-term investments. These operating funds, when translated to U.S. dollars, were $124 million and $120 million at September30, 2012 and December31, 2011, respectively. Cash and cash equivalents included restricted balances of $88 million and $71 million at September30, 2012 and December31, 2011 respectively.