Fair Value Measurement of Assets and Liabilities

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurement of Assets and Liabilities

Fair Value Measurement of Assets and Liabilities

The following tables presents financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016 (in millions):

	March 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Assets:
Cash and cash equivalents	$	1,979	$	1,979	$	—
Short-term investments:
Restricted cash	20		20		—
Corporate debt securities	4,687		—		4,687
Government and agency securities	68		—		68
Total short-term investments	4,775		20		4,755
Derivatives	107		—		107
Long-term investments:
Corporate debt securities	4,421		—		4,421
Total long-term investments	4,421		—		4,421
Total financial assets	$	11,282	$	1,999	$	9,283
Liabilities:
Derivatives	$	33	$	—	$	33

	December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Assets:
Cash and cash equivalents	$	1,816	$	1,816	$	—
Short-term investments:
Restricted cash	19		19		—
Corporate debt securities	5,246		—		5,246
Government and agency securities	68		—		68
Total short-term investments	5,333		19		5,314
Derivatives	154		—		154
Long-term investments:
Corporate debt securities	3,851		—		3,851
Total long-term investments	3,851		—		3,851
Total financial assets	$	11,154	$	1,835	$	9,319
Liabilities:
Derivatives	$	48	$	—	$	48

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 the three months ended March 31, 2017.

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.