|12 Months Ended|
Dec. 31, 2013
|Investments Disclosure [Abstract]|
Investments in debt and marketable securities, other than investments accounted for under the equity method, are classified as trading, available-for-sale or held-to-maturity. Our marketable equity investments are classified as either trading or available-for-sale with their cost basis determined by the specific identification method. Our investments in debt securities are carried at either amortized cost or fair value. Investments in debt securities that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and classified as either trading or available-for-sale. Realized and unrealized gains and losses on trading securities and realized gains and losses on available-for-sale securities are included in net income. Unrealized gains and losses, net of deferred taxes, on available-for-sale securities are included in our consolidated balance sheets as a component of AOCI, except for the change in fair value attributable to the currency risk being hedged. Refer to Note 5 for additional information related to the Company's fair value hedges of available-for-sale securities.
As of December 31, 2013 and 2012, our trading securities had a fair value of $372 million and $266 million, respectively, and consisted primarily of equity securities. The Company had net unrealized gains on trading securities of $12 million and $19 million as of December 31, 2013 and 2012, respectively, and net unrealized losses of $5 million as of December 31, 2011. The Company's trading securities were included in the following captions in our consolidated balance sheets (in millions):
Available-for-Sale and Held-to-Maturity Securities
As of December 31, 2013 and 2012, the Company did not have any held-to-maturity securities. Available-for-sale securities consisted of the following (in millions):
The sale and/or maturity of available-for-sale securities resulted in the following activity (in millions):
In 2013 and 2012, the Company had investments classified as available-for-sale securities in which our cost basis exceeded the fair value of our investment. Management assessed each of these investments on an individual basis to determine if the decline in fair value was other than temporary. Management's assessment as to the nature of a decline in fair value is based on, among other things, the length of time and the extent to which the market value has been less than our cost basis; the financial condition and near-term prospects of the issuer; and our intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in market value. As a result of these assessments, management determined that the decline in fair value of these investments was not other than temporary and did not record any impairment charges.
In 2011, the Company realized losses of $17 million due to other-than-temporary impairments of certain available-for-sale securities. These impairment charges were recorded in other income (loss) — net. Refer to Note 16 and Note 17.
During 2011, the Company began using one of its insurance captives to reinsure group annuity insurance contracts that cover the pension obligations of certain of our European pension plans. In 2013, the Company began using insurance captives for our Canadian pension plans. In accordance with local insurance regulations, our insurance captive is required to meet and maintain minimum solvency capital requirements. The Company elected to invest its solvency capital in a portfolio of available-for-sale securities, which have been classified in the line item other assets in our consolidated balance sheets because the assets are not available to satisfy our current obligations. As of December 31, 2013, and December 31, 2012, the Company's available-for-sale securities included solvency capital funds of $667 million and $451 million, respectively.
In 2013 and 2012, the Company did not have any held-to-maturity securities. The Company's available-for-sale securities were included in the following captions in our consolidated balance sheets (in millions):
The contractual maturities of these investments as of December 31, 2013, were as follows (in millions):
The Company expects that actual maturities may differ from the contractual maturities above because borrowers have the right to call or prepay certain obligations.
Cost Method Investments
Cost method investments are initially recorded at cost, and we record dividend income when applicable dividends are declared. Cost method investments are reported as other investments in our consolidated balance sheets, and dividend income from cost method investments is reported in other income (loss) — net in our consolidated statements of income. We review all of our cost method investments quarterly to determine if impairment indicators are present; however, we are not required to determine the fair value of these investments unless impairment indicators exist. When impairment indicators exist, we generally use discounted cash flow analyses to determine the fair value. We estimate that the fair values of our cost method investments approximated or exceeded their carrying values as of December 31, 2013 and 2012. Our cost method investments had a carrying value of $162 million and $145 million as of December 31, 2013 and 2012, respectively.
In 2012, the Company recorded a charge of $16 million as a result of other-than-temporary declines in the fair values of certain cost method investments. This impairment was recorded in the line item other income (loss) — net in our consolidated statement of income. Refer to Note 16 for additional information related to this impairment.
This item represents the entire disclosure related to investments in debt and equity securities, which include such securities (other than those equity securities accounted for under the equity method of accounting), with readily determinable fair values and cost method investments.
No definition available.