Note 7 - Fair Value Measurement of Assets and Liabilities

12 Months Ended

Dec. 31, 2012

Fair Value Measurement of Assets and Liabilities Disclosure [Abstract]

Fair Value Measurement of Assets and Liabilities

Fair Value Measurement of Assets and Liabilities

The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2012 and 2011:

Description	Balance as of December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
	(In millions)
Assets:
Cash and cash equivalents	$	6,817	$	5,685	$	1,132
Short-term investments:
Restricted cash	15		15		—
Corporate debt securities	1,153		—		1,153
Government and agency securities	20		—		20
Time deposits	765		—		765
Equity instruments	638		638		—
Total short-term investments	2,591		653		1,938
Derivatives	55		—		55
Long-term investments:
Restricted cash	—		—		—
Corporate debt securities	2,669		—		2,669
Government and agency securities	42		—		42
Total long-term investments	2,711		—		2,711
Total financial assets	$	12,174	$	6,338	$	5,836
Liabilities:
Derivatives	$	86	$	—	$	86

Description	Balance as of December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
	(In millions)
Assets:
Cash and cash equivalents	$	4,691	$	4,691	$	—
Short-term investments:
Restricted cash	19		19		—
Corporate debt securities	449		—		449
Government and agency securities	42		—		42
Time deposits	82		—		82
Equity instruments	646		646		—
Total short-term investments	1,238		665		573
Derivatives	112		—		112
Long-term investments:
Restricted cash	1		1		—
Corporate debt securities	2,186		—		2,186
Government and agency securities	71		—		71
Total long-term investments	2,258		1		2,257
Total financial assets	$	8,299	$	5,357	$	2,942
Liabilities:
Derivatives	$	60	$	—	$	60

Our financial assets and liabilities are valued using market prices on both active markets (level 1) and less active markets (level 2). Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 instrument valuations are obtained from readily available pricing sources for comparable instruments, identical instruments in less active markets, or models using market observable inputs. The majority of our derivative instruments are valued using pricing models that take into account the contract terms as well as multiple inputs where applicable, such as equity prices, interest rate yield curves, option volatility and currency rates. Our derivative instruments are primarily short-term in nature, generally one month to one year in duration. Certain foreign currency contracts designated as cash flow hedges extend to 18 months in duration. Cash and cash equivalents are short-term, highly liquid investments with original or remaining maturities of three months or less when purchased and are comprised primarily of bank deposits, money market funds, and commercial paper. We did not have any transfers of financial instruments between valuation levels during 2012 and 2011.

In addition to the long-term investments noted above, we had approximately $327 million and $190 million of cost and equity method investments included in long-term investments on our consolidated balance sheet at December 31, 2012 and 2011, respectively.

As of December 31, 2012, we held no direct investments in auction rate securities, collateralized debt obligations, structured investment vehicles or mortgage-backed securities.

Other financial instruments, including accounts receivable, loans and interest receivable, funds receivable, customer accounts, short-term debt, accounts payable, funds payable and amounts due to customers are carried at cost, which approximates their fair value because of the short-term nature of these instruments.