Available-for-sale investments

12 Months Ended

Dec. 31, 2011

Available-for-sale investments [Abstract]

Available-for-sale investments

9. Available-for-sale investments

The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security were as follows (in millions):

Type of security as of December 31, 2011	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
U.S. Treasury securities	$	3,878	$	68	$	—		$	3,946
Other government-related debt securities:
Obligations of U.S. government agencies and FDIC-guaranteed bank debt		1,548		23		—			1,571
Foreign and other		441		9		—			450
Corporate debt securities:
Financial		2,493		30		(15	)		2,508
Industrial		3,077		79		(10	)		3,146
Other		280		9		-			289
Mortgage- and asset-backed securities		1,789		6		(10	)		1,785
Money market mutual funds		6,266		—		—			6,266
Total debt security investments		19,772		224		(35	)		19,961
Equity securities		42		—		—			42
Total available-for-sale investments	$	19,814	$	224	$	(35	)	$	20,003

Type of security as of December 31, 2010	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
U.S. Treasury securities	$	5,044	$	50	$	(14	)	$	5,080
Other government-related debt securities:
Obligations of U.S. government agencies and FDIC-guaranteed bank debt		2,158		51		(1	)		2,208
Foreign and other		837		16		(1	)		852
Corporate debt securities:
Financial		2,252		53		(9	)		2,296
Industrial		2,441		71		(5	)		2,507
Other		307		10		(1	)		316
Mortgage- and asset-backed securities		841		5		(5	)		841
Money market mutual funds		3,030		—		—			3,030
Other short-term interest-bearing securities		147		—		—			147
Total debt security investments		17,057		256		(36	)		17,277
Equity securities		50		—		(2	)		48
Total available-for-sale investments	$	17,107	$	256	$	(38	)	$	17,325

The fair values of available-for-sale investments by classification in the Consolidated Balance Sheets were as follows as of December 31, 2011 and 2010 (in millions):

Classification in the Consolidated Balance Sheets	2011		2010
Cash and cash equivalents	$	6,266	$	3,142
Marketable securities		13,695		14,135
Other assets — noncurrent		42		48
Total available-for-sale investments	$	20,003	$	17,325

Cash and cash equivalents in the table above excludes cash of $680 million and $145 million as of December 31, 2011 and 2010, respectively.

The fair values of available-for-sale debt security investments by contractual maturity were as follows as of December 31, 2011 and 2010 (in millions):

Contractual maturity	2011		2010
Maturing in one year or less	$	6,811	$	4,118
Maturing after one year through three years		6,346		6,736
Maturing after three years through five years		5,710		5,812
Maturing after five years		1,094		611
Total debt securities	$	19,961	$	17,277

For the years ended December 31, 2011, 2010 and 2009, realized gains totaled $191 million, $115 million and $104 million, respectively, and realized losses totaled $37 million, $25 million and $62 million, respectively. The cost of securities sold is based on the specific identification method.

The primary objective of our investment portfolio is to enhance overall returns in an efficient manner while maintaining safety of principal, prudent levels of liquidity and acceptable levels of risk. Our investment policy limits debt security investments to certain types of debt and money market instruments issued by institutions with primarily investment grade credit ratings and places restrictions on maturities and concentration by asset class and issuer.

We review our available-for-sale investments for other-than-temporary declines in fair value below our cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. This evaluation is based on a number of factors including, the length of time and the extent to which the fair value has been below our cost basis and adverse conditions related specifically to the security, including any changes to the credit rating of the security. As of December 31, 2011 and 2010, we believe the cost bases for our available-for-sale investments were recoverable in all material respects.