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Fair Value of Financial Investments and Liabilities
 3 Months Ended
Mar. 31, 2013
Fair Value Disclosures [Abstract]  
Fair Value of Financial Investments and Liabilities
E. The Company has maintained investments in available-for-sale securities and a number of private equity funds, principally as part of its tax planning strategies, as any gains enhance the utilization of any current and future tax capital losses. Financial investments included in other assets were as follows, in millions:

 

     March 31,
2013		      December 31,
2012		  

Auction rate securities

    $ 22       $ 22   
  

 

 

     

 

 

  

Total recurring investments

      22         22   
  

 

 

     

 

 

  

Private equity funds

      67         69   

Other investments

      4         4   
  

 

 

     

 

 

  

Total non-recurring investments

      71         73   
  

 

 

     

 

 

  

Total

    $ 93       $ 95   
  

 

 

     

 

 

  

The Company’s investments in available-for-sale securities at March 31, 2013 and December 31, 2012 were as follows, in millions:

 

            Pre-tax         
     Cost Basis      Unrealized
Gains		      Unrealized
Losses		      Recorded
Basis		  

March 31, 2013

    $ 19       $ 3       $ —         $ 22   

December 31, 2012

    $ 19       $ 3       $ —         $ 22   

Recurring Fair Value Measurements. Financial investments measured at fair value on a recurring basis at each reporting period and the amounts for each level within the fair value hierarchy were as follows, in millions:

 

            Fair Value Measurements Using  
     Mar. 31,
2013		      Quoted
Market
Prices
(Level 1)		      Significant
Other
Observable
Inputs
(Level 2)		      Significant
Unobservable
Inputs
(Level 3)		  

Auction rate securities

    $ 22         —           —         $ 22   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 22       $ —         $ —         $ 22   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

            Fair Value Measurements Using  
     Dec. 31,
2012		      Quoted
Market
Prices
(Level 1)		      Significant
Other
Observable
Inputs
(Level 2)		      Significant
Unobservable
Inputs
(Level 3)		  

Auction rate securities

    $ 22       $ —         $ —         $ 22   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 22       $ —         $ —         $ 22   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

The fair value of the auction rate securities held by the Company have been estimated, on a recurring basis, using a discounted cash flow model (Level 3 input). The significant inputs in the discounted cash flow model used to value the auction rate securities include the expected maturity date of auction rate securities, discount rate used to determine the present value of expected cash flows and the assumptions for credit defaults, since the auction rate securities are backed by credit default swap agreements.

The following table summarizes the changes in Level 3 financial assets measured at fair value on a recurring basis for the three months ended March 31, 2013 and the year ended December 31, 2012, in millions:

 

     March 31, 2013
Auction Rate
Securities		      December 31, 2012
Auction Rate
Securities		  

Fair value at beginning of period

    $ 22       $ 22   

Total losses included in earnings

      —           —     

Unrealized (losses)

      —           —     

Purchases

      —           —     

Settlements

      —           —     

Transfer from Level 3 to Level 2

      —           —     
  

 

 

     

 

 

  

Fair value at period end

    $ 22       $ 22   
  

 

 

     

 

 

  

Non-Recurring Fair Value Measurements. During the three-months ended March 31, 2013 and 2012, the Company did not measure any financial investments at fair value on a non-recurring basis, as there was no other-than-temporary decline in the estimated value of private equity funds.

The Company did not have any transfers between Level 1 and Level 2 financial assets in the three months ended March 31, 2013 or 2012

Realized Gains. Income from financial investments net, included in other, net, within other income (expense), net, was as follows, in millions:

 

     Three Months Ended
March  31,		  
     2013      2012  

Realized gains from private equity funds

    $ 3       $ 16   
  

 

 

     

 

 

  

Total income from financial investments

    $ 3       $ 16   
  

 

 

     

 

 

  

The fair value of the Company’s short-term and long-term fixed-rate debt instruments is based principally upon modeled market prices for the same or similar issues or the current rates available to the Company for debt with similar terms and remaining maturities. The aggregate estimated market value of short-term and long-term debt at March 31, 2013 was approximately $4.0 billion, compared with the aggregate carrying value of $3.6 billion. The aggregate estimated market value of short-term and long-term debt at December 31, 2012 was approximately $4.0 billion, compared with the aggregate carrying value of $3.6 billion.