Note 4 Cash and equivalents and marketable securities

Current Assets

Cash and equivalents and marketable securities and short-term investments consisted of the following:

(XLS:)

December 31, 2011 ($ in millions)

Cost
basis

Gross
unreal-
ized
gains

Gross
unreal-
ized
losses

Fair
value

Cash
and
equi-
valents

Market-
able
securities
and
short-term
invest-
ments

Cash

1,655

 

 

1,655

1,655

Time deposits

2,986

 

 

2,986

2,984

2

Debt securities available-for-sale:

 

 

 

 

 

 

U.S. government obligations

753

8

761

761

Other government obligations

3

3

3

Corporate

298

8

(1)

305

180

125

Equity securities available-for-sale

50

10

(3)

57

57

Total

5,745

26

(4)

5,767

4,819

948

(XLS:)

December 31, 2010 ($ in millions)

Cost
basis

Gross
unreal-
ized
gains

Gross
unreal-
ized
losses

Fair
value

Cash
and
equi-
valents

Market-
able
securities
and
short-term
invest-
ments

Cash

1,851

 

 

1,851

1,851

Time deposits

4,044

 

 

4,044

3,665

379

Debt securities available-for-sale:

 

 

 

 

 

 

U.S. government obligations

147

5

(1)

151

151

Other government obligations

4

(1)

3

3

Corporate

708

8

716

381

335

Equity securities available-for-sale

1,836

11

(2)

1,845

1,845

Total

8,590

24

(4)

8,610

5,897

2,713

Non-current assets

In 2011, the Company purchased shares in a listed company and, as such, classified these as available-for-sale equity securities. The investment is recorded in “Other non-current assets”. At December 31, 2011, an other-than-temporary impairment was recognized on these securities but was not significant.

In addition, certain held-to-maturity marketable securities (pledged in respect of a certain non-current deposit liability) are recorded in “Other non-current assets”. At December 31, 2011, the amortized cost, gross unrecognized gain and fair value (based on quoted market prices) of these securities were $92 million, $28 million and $120 million, respectively. At December 31, 2010, the amortized cost, gross unrecognized gain and fair value (based on quoted market prices) of these securities were $84 million, $19 million and $103 million, respectively. The maturity dates of these securities range from 2014 to 2021.

Gains, losses and contractual maturities

The net unrealized holding gains on available-for-sale securities were $22 million, $20 million and $20 million in 2011, 2010 and 2009, respectively. Gross realized gains (reclassified from accumulated other comprehensive loss to income) on available-for-sale securities were $8 million, $16 million and $8 million in 2011, 2010 and 2009, respectively. Gross realized losses (reclassified from accumulated other comprehensive loss to income) on available-for-sale securities were not significant in 2011 and 2010 and $35 million in 2009. Such gains and losses were included in “Interest and other finance expense”.

In 2011, an insignificant other-than-temporary impairment was recognized on available-for-sale equity securities. There were no other-than-temporary impairments in 2010 and 2009.

At December 31, 2011, 2010 and 2009, gross unrealized losses on available-for-sale securities that have been in a continuous unrealized loss position were not significant and the Company does not intend and does not expect to be required to sell these securities before the recovery of their amortized cost.

There were no sales of held-to-maturity securities in 2011, 2010 and 2009.

Contractual maturities of available-for-sale debt securities consisted of the following:

(XLS:)

 

Available-for-sale

December 31, 2011 ($ in millions)

Cost basis

Fair value

Less than one year

180

180

One to five years

799

808

Six to ten years

75

81

Total

1,054

1,069

At December 31, 2011 and 2010, the Company pledged $90 million and $68 million, respectively, of available-for-sale marketable securities as collateral for issued letters of credit and other security arrangements.

Financial review

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