Fair Value Measurement of Assets and Liabilities

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [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, 2015 and 2014:

Description	Balances as of December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
	(In millions)
Assets:
Cash and cash equivalents	$	1,832	$	1,664	$	168
Short-term investments:
Restricted cash	28		28		—
Corporate debt securities	3,287		—		3,287
Government and agency securities	55		—		55
Equity instruments	929		929		—
Total short-term investments	4,299		957		3,342
Derivatives	97		—		97
Long-term investments:
Corporate debt securities	3,267		—		3,267
Total long-term investments	3,267		—		3,267
Total financial assets	$	9,495	$	2,621	$	6,874
Liabilities:
Derivatives	$	25	$	—	$	25

Description	Balances as of December 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
	(In millions)
Assets:
Cash and cash equivalents	$	4,105	$	1,694	$	2,411
Short-term investments:
Restricted cash	19		19		—
Corporate debt securities	2,519		—		2,519
Government and agency securities	3		—		3
Time deposits	152		—		152
Equity instruments	1,037		1,037		—
Total short-term investments	3,730		1,056		2,674
Derivatives	84		—		84
Long-term investments:
Corporate debt securities	5,319		—		5,319
Government and agency securities	233		—		233
Total long-term investments	5,552		—		5,552
Total financial assets	$	13,471	$	2,750	$	10,721
Liabilities:
Derivatives	$	20	$	—	$	20

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. We did not have any transfers of financial instruments between valuation levels during 2015 or 2014.

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, certificates of deposit and commercial paper.

In addition, we had cost and equity method investments of approximately $124 million and $184 million included in long-term investments on our consolidated balance sheet at December 31, 2015 and 2014, respectively.

Our derivative instruments vary in duration depending on contract type. Our foreign exchange derivative contracts are primarily short-term in nature, generally one month to one year in duration. Certain foreign currency contracts designated as cash flow hedges may have a duration of up to 18 months. The duration of our interest rate derivative contracts match the duration of the fixed rate notes due 2019, 2021 and 2024.

As of December 31, 2015 and 2014, 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 and accounts payable are carried at cost, which approximates their fair value because of the short-term nature of these instruments.