Cash, Cash Equivalents, and Marketable Securities

9 Months Ended

Sep. 30, 2011

Cash, Cash Equivalents, and Marketable Securities

Note 2 — Cash, Cash Equivalents, and Marketable Securities

As of September 30, 2011, and December 31, 2010, our cash, cash equivalents, and marketable securities primarily consisted of cash, U.S. and foreign government and agency securities, AAA-rated money market funds, and other investment grade securities. Our marketable fixed-income securities have effective maturities of less than 5 years. Cash equivalents and marketable securities are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

We measure the fair value of money market funds and equity securities based on quoted prices in active markets for identical assets or liabilities. All other financial instruments were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. We did not hold any cash, cash equivalents, or marketable securities categorized as Level 3 as of September 30, 2011, or December 31, 2010.

The following table summarizes, by major security type, our cash, cash equivalents, and marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in millions):

	September 30, 2011										December 31, 2010
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Total Estimated Fair Value			Total Estimated Fair Value
Cash	$	855	$	0	$	0		$	855		$	613
Level 1 securities:
Money market funds		1,873		0		0			1,873			1,882
Equity securities		2		0		(1	)		1			1
Level 2 securities:
Foreign government and agency securities		1,239		12		0			1,251			2,158
U.S. government and agency securities		1,824		3		(2	)		1,825			3,756
Corporate debt securities		589		3		(3	)		589			459
Asset-backed securities		56		0		0			56			33
Other fixed income securities		24		0		0			24			17
	$	6,462	$	18	$	(6	)	$	6,474		$	8,919
Less: Long-term restricted cash, cash equivalents, and marketable securities (1)									(148	)		(157	)
Total cash, cash equivalents, and marketable securities								$	6,326		$	8,762

(1) We are required to pledge or otherwise restrict a portion of our cash, cash equivalents, and marketable securities as collateral for standby letters of credit, guarantees, debt and real estate lease agreements. We classify cash and marketable securities with use restrictions of twelve months or longer as non-current “Other assets” on our consolidated balance sheets. See “Note 3 — Commitments and Contingencies.