Cash and Cash Equivalents and Short-Term Investments

3 Months Ended

Mar. 31, 2012

Cash and Cash Equivalents and Short-Term Investments

Cash and Cash Equivalents and Short-Term Investments

3.  Cash and Cash Equivalents and Short-Term Investments

Cash and cash equivalents include cash balances and all highly liquid investments with initial maturities of three months or less. Short-term investments include certificates of deposit, money market funds and highly liquid debt instruments purchased with initial maturities in excess of three months but less than one year and are carried at amortized cost, which approximates fair value.

The Company was required to hold £77 million of operating funds in the U.K., which were included in Short-term investments. These operating funds, when translated to U.S, dollars, were $123 million and $120 million at March 31, 2012 and December 31, 2011, respectively. Cash and cash equivalents included restricted balances of $90 million and $71 million at March 31, 2012 and December 31, 2011, respectively. The increase in restricted cash balances from December 31, 2011 is primarily due to increased requirements to hold cash and cash equivalents as collateral in Europe.