Available-For-Sale Investments

6 Months Ended

Jun. 30, 2011

7. Available-for-Sale Investments

The following is a summary of the fair value of available-for-sale investments (in millions):


	Amortized cost				Fair value
	June 30, 2011		December 31, 2010		June 30, 2011		December 31, 2010
Bonds, notes and other securities:
U.S. government and agencies	$	1,733	$	1,734	$	1,737	$	1,737
Other debt securities		5		11		11		15
Total short-term investments	$	1,738	$	1,745	$	1,748	$	1,752
Asset-backed securities	$	61	$	64	$	41	$	45
Total long-term investments	$	61	$	64	$	41	$	45

We do not intend to sell, nor do we believe it is more likely than not that we would be required to sell, the long-term investment asset-backed securities (which are collateralized by mortgages) before recovery of their amortized cost basis. It is possible that a significant degradation in the delinquency or foreclosure rates in the underlying assets could cause further temporary or other-than-temporary impairments in the future.

The following table summarizes the maturities at market value of available-for-sale securities at June 30, 2011 (in millions):

Less than one year	$1,385
Due in 1-5 years	352
Due in 5-10 years	0
Due after 10 years (1)	52
Total	$1,789

(1)	Includes $41 million of asset-based securities that mature over time and are being reported at their final maturity dates.

The following tables provide the fair value and gross unrealized losses of the Company's investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2011 and December 31, 2010 (in millions):


		June 30, 2011
		12 months or greater				Total
	Number of securities in a loss position	Fair value		Unrealized losses (1)		Fair value		Unrealized losses
Asset-backed securities	22	$	41	$	(20)	$	41	$	(20)
Total long-term investments	22	$	41	$	(20)	$	41	$	(20)

(1)	Unrealized losses in securities less than 12 months were not significant.


		December 31, 2010
		12 months or greater				Total
	Number of securities in a loss position	Fair value		Unrealized losses (1)		Fair value		Unrealized losses
Asset-backed securities	22	$	45	$	(20)	$	45	$	(20)
Total long-term investments	22	$	45	$	(20)	$	45	$	(20)

(1)	Unrealized losses in securities less than 12 months were not significant.

Gross realized gains and losses for the three and six months ended June 30, 2011 and 2010 were not significant.

A reconciliation of the changes in credit losses recognized in earnings for the six months ended June 30, 2011 and June 30, 2010 (in millions):

	2011	2010
Beginning balance of credit losses, January 1	$ 4	$ 2
Additions for credit losses not previously recognized in earnings	0	0
Balance of credit losses, March 31	$ 4	$ 2
Additions for credit losses not previously recognized in earnings	1	1
Ending balance of credit losses, June 30	$ 5	$ 3

The $5 million loss represents management's estimate of credit losses inherent in the securities considering projected cash flows using assumptions of delinquency rates, loss severities, and other estimates of future collateral performance. These credit losses are limited to asset-backed securities in our investment portfolio.

As of June 30, 2011 and December 31, 2010, for securities that have credit losses, an other than temporary impairment loss of $16 million and $16 million, respectively, is recognized in accumulated other comprehensive income.

Proceeds from sales and maturities of short-term investments totaled $1.9 billion and $0.9 billion for the six months ended June 30, 2011 and 2010, respectively.

- Definition

This item represents the entire disclosure related to Available-for-sale Securities which consist of all investments in certain debt and equity securities neither classified as trading or held-to-maturity securities. A debt security represents a creditor relationship with an enterprise. 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 which are categorized as Available-for-sale.

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