FAIR VALUES OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2011

FAIR VALUES OF FINANCIAL INSTRUMENTS

NOTE 7—FAIR VALUES OF FINANCIAL INSTRUMENTS

The valuation methodologies we use to measure the fair values of our available-for-sale securities and derivatives are as follows:

Derivatives

Level 2 derivative assets and liabilities primarily include over-the-counter forward contracts, largely consisting of foreign currency derivative instruments. Where applicable, the value of these derivative assets and liabilities is computed by discounting the projected future cash flow amounts to present value using market-based observable inputs, including foreign exchange forward and spot rates, interest rates and counterparty performance risk adjustments.

At December 31, 2011, we had forward contracts outstanding to purchase or sell foreign currencies with a total notional value of $295.3 million and a total liability position fair value of $5.0 million.

Available-for-Sale Securities

Investments other than derivatives primarily include commercial paper, money-market funds, mortgage-backed securities and corporate notes and bonds.

The following is a summary of our available-for-sale securities measured at fair value:

	12/31/11		Level 1		Level 2		Level 3
	(In thousands)
Mutual funds(1)	$	1,923	$	—	$	1,923	$	—
Commercial paper		123,210		—		123,210		—
Asset-backed securities and collateralized mortgage obligations(2)		8,131		—		2,101		6,030
Corporate notes and bonds(3)		5,742		—		5,742		—
Total	$	139,006	$	—	$	132,976	$	6,030

	12/31/10		Level 1		Level 2		Level 3
	(In thousands)
Mutual funds(1)	$	2,007	$	—	$	2,007	$	—
U.S. Government and agency securities(4)		269,161		269,161		—		—
Asset-backed securities and collateralized mortgage obligations(2)		9,869		—		2,497		7,372
Corporate notes and bonds(3)		4,168		—		4,168		—
Total	$	285,205	$	269,161	$	8,672	$	7,372

(1) Various U.S. equities and other investments managed under mutual funds

(2) Asset-backed and mortgage-backed securities with maturities of up to 26 years

(3) Corporate notes and bonds with maturities of three years or less

(4) Investments in U.S. Treasury securities, which were sold during 2011

Our Level 2 investments consist primarily of commercial paper, mutual funds and asset-backed commercial paper notes backed by a pool of mortgage-backed securities. The fair value of our Level 2 investments was determined using a market approach which is based on quoted prices and other information for similar or identical instruments.

Our Level 3 investment consists of asset-backed commercial paper notes backed by a pool of mortgage-backed securities. The fair value of this Level 3 investment was based on the calculation of an overall weighted-average valuation, using the prices of the underlying individual securities. Individual securities in the pool were valued based on market observed prices, where available. If market prices were not available, prices of similar securities backed by similar assets were used.

Changes in Level 3 Instrument

The following is a summary of the changes in our Level 3 instrument measured on a recurring basis for the years ended December 31, 2011 and 2010:

	December 31,
	2011			2010
	(In thousands)
Balance at beginning of period	$	7,372		$	7,494
Instruments attributable to discontinued operations		—			(168	)
Total realized and unrealized gains		75			1,821
Purchases, issuances, and settlements		—			172
Principal repayments		(1,417	)		(1,947	)
Balance at end of period	$	6,030		$	7,372

Other Financial Instruments

We used the following methods and assumptions in estimating our fair value disclosures for other financial instruments:

Cash and cash equivalents and restricted cash and cash equivalents. The carrying amounts that we have reported in the accompanying consolidated balance sheets for cash and cash equivalents approximate their fair values.

Long- and short-term debt. We base the fair values of debt instruments on quoted market prices. Where quoted prices are not available, we base the fair values on the present value of future cash flows discounted at estimated borrowing rates for similar debt instruments or on estimated prices based on current yields for debt issues of similar quality and terms.

The estimated fair values of certain of our financial instruments are as follows:

	December 31, 2011						December 31, 2010
	Carrying Amount			Fair Value			Carrying Amount		Fair Value
	(In thousands)
Balance Sheet Instruments
Cash and cash equivalents	$	570,854		$	570,854		$	403,463	$	403,463
Restricted cash and cash equivalents	$	21,962		$	21,962		$	197,861	$	197,861
Investments	$	139,006		$	139,006		$	285,205	$	285,205
Debt	$	93,735		$	96,187		$	55,295	$	56,180
Forward contracts	$	(5,029	)	$	(5,029	)	$	1,352	$	1,352