Issue link: http://catalog.e-digitaleditions.com/i/114936
The estimated fair value of the liability for contingent consideration represents milestone payments for acquisitions. The fair value of the liability was estimated using a discounted cash flow technique. Significant inputs to this technique included our probability assessments of occurrence of triggering events, appropriately discounted considering the uncertainties associated with the obligation. We remeasure this liability each reporting period and record the changes in the fair value in general and administrative expense (for probability of occurrence) and other income (expense) (for changes in time value of money) in earnings. The following table presents quantitative information about the inputs and valuation methodologies we use for material fair value measurements classified in Level 3: Range (Weighted Average) Fair Value Unobservable Input Minimum Maximum Weighted Average $103 Contingent consideration Valuation Technique Discounted cash flow Probability of occurrence 47 100 91 The following is a summary of our marketable securities: Amortized Cost 2012 2011 Available-for-sale marketable securities: Corporate and asset-backed debt securities $ Foreign government debt securities United States agency debt securities Certificates of deposit Other Total available-for-sale marketable securities $ Trading marketable securities Total marketable securities Reported as: Current assets-marketable securities Noncurrent assets-other 1,277 $ 846 288 114 360 2,885 $ Gross Unrealized Gains 2012 2011 1,353 745 241 36 140 2,515 $ 4 $ 2 ��� ��� ��� 6 $ $ Gross Unrealized (Losses) 2012 2011 2 3 ��� ��� ��� 5 $ (1) $ ��� ��� ��� ��� (1) $ $ Estimated Fair Value 2012 2011 (5) $ (1) ��� ��� ��� (6) 1,280 $ 848 288 114 360 2,890 57 2,947 $ 2,890 $ 57 2,947 $ $ $ $ 1,350 747 241 36 140 2,514 50 2,564 2,513 51 2,564 The unrealized losses on our available-for-sale marketable securities were primarily caused by increases in yields as a result of changing conditions in the global credit markets. While some of these investments have been downgraded by rating agencies since their initial purchase, less than 1% of our investments in available-for-sale marketable securities had a credit quality rating of less than single A (per Standard & Poors and Fitch) and A2 (per Moody's). Because we do not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, we do not consider these investments to be other-than-temporarily impaired at December 31, 2012. The cost and estimated fair value of available-for-sale marketable securities at December 31, 2012 by contractual maturity are: Estimated Fair Value Cost Due in one year or less Due after one year through three years Due after three years $ 470 2,324 91 2,885 $ $ 470 2,328 92 2,890 $ The gross unrealized losses and fair value of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2012, are as follows: Corporate and AssetBacked Debt Securities Less Than 12 Total Months Number of investments Fair value Unrealized losses 2012 2011 2012 2011 2012 2011 $ 216 266 425 $ 573 1 5 216 266 425 573 1 5 Foreign Government Debt Securities Less Than 12 Months $ 67 58 324 $ 285 ��� 1 U.S. Agency Debt Securities Less Than 12 Months Total 67 58 324 285 ��� 1 $ 27 60 87 $ 145 ��� ��� Total 27 60 87 145 ��� ��� Other Less Than 12 Months $ 15 33 27 $ 88 ��� ��� Total Total 15 33 27 88 ��� ��� Less Than 12 Months $ 325 417 863 $ 1,091 1 6 Total 325 417 863 1,091 1 6 Interest and marketable securities income totaled $47, $34, and $49 in 2012, 2011 and 2010, respectively, and is included in Other Income (Expense). 30 Dollar amounts in millions except per share amounts or as otherwise specified