Available-for-sale investments

9 Months Ended

Sep. 30, 2013

Investments, Debt and Equity Securities [Abstract]

Available-for-sale investments

Available-for-sale investments

The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security were as follows (in millions):

Type of security as of September 30, 2013	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
U.S. Treasury securities	$	6,172	$	5	$	(4	)	$	6,173
Other government-related debt securities:
U.S.	1,130		—		(8		)	1,122
Foreign and other	1,234		12		(38		)	1,208
Corporate debt securities:
Financial	3,455		30		(25		)	3,460
Industrial	3,457		29		(28		)	3,458
Other	335		4		(2		)	337
Residential mortgage-backed securities	1,410		3		(16		)	1,397
Other mortgage- and asset-backed securities	1,491		—		(39		)	1,452
Money market mutual funds	6,907		—		—			6,907
Total interest-bearing securities	25,591		83		(160		)	25,514
Equity securities	72		19		—			91
Total available-for-sale investments	$	25,663	$	102	$	(160	)	$	25,605

Type of security as of December 31, 2012	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
U.S. Treasury securities	$	4,443	$	15	$	—		$	4,458
Other government-related debt securities:
U.S.	1,018		12		—			1,030
Foreign and other	1,549		60		(1		)	1,608
Corporate debt securities:
Financial	3,266		96		(1		)	3,361
Industrial	4,283		100		(3		)	4,380
Other	441		11		—			452
Residential mortgage-backed securities	1,828		9		(8		)	1,829
Other mortgage- and asset-backed securities	1,769		7		(9		)	1,767
Money market mutual funds	2,620		—		—			2,620
Other short-term interest-bearing securities	2,186		—		—			2,186
Total interest-bearing securities	23,403		310		(22		)	23,691
Equity securities	52		2		—			54
Total available-for-sale investments	$	23,455	$	312	$	(22	)	$	23,745

The fair values of available-for-sale investments by classification in the Condensed Consolidated Balance Sheets were as follows (in millions):

Classification in the Condensed Consolidated Balance Sheets	September 30, 2013		December 31, 2012
Cash and cash equivalents	$	7,830	$	2,887
Marketable securities	14,277		20,804
Other assets — noncurrent	91		54
Restricted investments	3,407		—
Total available-for-sale investments	$	25,605	$	23,745

Cash and cash equivalents in the table above excludes cash of $451 million and $370 million as of September 30, 2013, and December 31, 2012, respectively. Restricted investments in the table above excludes $4 million of interest receivable related to ATL Holdings as of September 30, 2013.

The fair values of available-for-sale interest-bearing security investments by contractual maturity, except for mortgage- and asset- backed securities that do not have a single maturity date, were as follows (in millions):

Contractual maturity	September 30, 2013		December 31, 2012
Maturing in one year or less	$	10,820	$	7,175
Maturing after one year through three years	4,671		5,014
Maturing after three years through five years	5,742		6,286
Maturing after five years through ten years	1,432		1,620
Mortgage- and asset-backed securities	2,849		3,596
Total interest-bearing securities	$	25,514	$	23,691

For the three months ended September 30, 2013 and 2012, realized gains totaled $24 million and $31 million, respectively, and realized losses totaled $26 million and $11 million, respectively. For the nine months endedSeptember 30, 2013 and 2012, realized gains totaled $142 million and $147 million, respectively, and realized losses totaled $70 million and $41 million, respectively. The cost of securities sold is based on the specific identification method. Substantially all of our available-for-sale investments that were in an unrealized loss position, which totaled $160 million as of September 30, 2013, have been in a continuous unrealized loss position for less than 12 months. These investments had an aggregate fair value of $8.5 billion as of September 30, 2013.

The primary objective of our investment portfolio is to enhance overall returns in an efficient manner while maintaining safety of principal, prudent levels of liquidity and acceptable levels of risk. Our investment policy limits interest-bearing security investments to certain types of debt and money market instruments issued by institutions with primarily investment grade credit ratings and places restrictions on maturities and concentration by asset class and issuer.

We review our available-for-sale investments for other-than-temporary declines in fair value below our cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. This evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below our cost basis and adverse conditions related specifically to the security, including any changes to the credit rating of the security. As of September 30, 2013, and December 31, 2012, we believe the cost bases for our available-for-sale investments were recoverable in all material respects.