Investments

12 Months Ended

Dec. 31, 2011

5. Investments

The following table summarizes our short-term and long-term investments at December 31, 2011 and 2010 (amounts in millions):

				Amortized		Gross unrealized		Gross unrealized		Fair
At December 31, 2011				cost		gains		losses		Value
Short-term investments:
	Available-for-sale investments:
		U.S. treasuries and government agency
			securities	$	344	$	---	$	---	$	344
	Restricted cash										16
Total short-term investments										$	360
Long-term investments:
	Available-for-sale investments:
	Auction rate securities held through Morgan
		Stanley Smith Barney LLC		$	17	$	---	$	(1)	$	16

				Amortized		Gross unrealized		Gross unrealized		Fair
At December 31, 2010				cost		gains		losses		Value
Short-term investments:
	Available-for-sale investments:
		U.S. treasuries and government agency
			securities	$	672	$	---	$	---	$	672
	Restricted cash										24
Total short-term investments										$	696
Long-term investments:
	Available-for-sale investments:
	Auction rate securities held through Morgan
		Stanley Smith Barney LLC		$	27	$	---	$	(4)	$	23

The following table illustrates the gross unrealized losses on available-for-sale securities, the fair value of those securities, aggregated by investment categories, and the length of time that they have been in a continuous unrealized loss position at December 31, 2011 and 2010 (amounts in millions):

	Less than 12 months				12 months or more				Total
	Unrealized		Fair		Unrealized		Fair		Unrealized		Fair
At December 31, 2011	losses		Value		losses		Value		losses		Value
Taxable auction rate securities	$	---	$	---	$	(1)	$	16	$	(1)	$	16


	Less than 12 months				12 months or more				Total
	Unrealized		Fair		Unrealized		Fair		Unrealized		Fair
At December 31, 2010	losses		Value		losses		Value		losses		Value
Taxable auction rate securities	$	---	$	---	$	(4)	$	23	$	(4)	$	23

The total unrealized loss of $1 million at December 31, 2011 is due to failed auctions of taxable ARS held through Morgan Stanley Smith Barney LLC, which is 51% owned by Morgan Stanley and 49% owned by Citigroup, Inc. The ARS were held directly through a wholly owned subsidiary of Citigroup, Inc. until the Morgan Stanley Smith Barney LLC joint-venture closed in the second quarter 2009. The majority of our investments in ARS are all backed by higher education student loans.

Based upon our analysis of the available-for-sale investments with unrealized losses, we have concluded that the gross unrealized losses of $1 million at December 31, 2011 were temporary in nature. We do not intend to sell the investment securities that are in an unrealized loss position and do not consider that it is more-likely-than-not that we will be required to sell the investment securities before recovery of their amortized cost basis, which may be maturity. We have not identified any issues related to the ultimate repayment of principal as a result of credit concerns on these securities. However, facts and circumstances may change which could result in a decline in fair value considered to be other-than-temporary in the future.

The following table summarizes the contractually stated maturities of our short- and long-term investments classified as available-for-sale at December 31, 2011 (amounts in millions):

	Amortized		Fair
At December 31, 2011	cost		Value
U.S. government agency securities due in 1 year or less	$	344	$	344
Due after ten years		17		16
	$	361	$	360

- Definition

This item represents the entire disclosure related to Investments in Certain Debt and Equity Securities (and certain other trading assets) which include all debt and equity securities (other than those equity securities accounted for under the equity or cost methods of accounting) with readily determinable fair values. Other trading assets include assets that are carried on the balance sheet at fair value and held for trading purposes. A debt security represents a creditor relationship with an enterprise that is in the form of a security. Debt securities include, among other items, US Treasury securities, US government securities, municipal securities, corporate bonds, convertible debt, commercial paper, and all securitized debt instruments. An equity security represents an ownership interest in an enterprise or the right to acquire or dispose of an ownership interest in an enterprise at fixed or determinable prices. Equity securities include, among other things, common stock, certain preferred stock, warrant rights, call options, and put options, but do not include convertible debt. An entity may opt to provide the reader with additional narrative text to better understand the nature of investments in debt and equity securities (and other trading assets).

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