Blizzard 2009 Annual Report Download - page 64

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52
Thefollowingtableillustratesthegrossunrealizedlossesonavailableforsalesecuritiesandthe
fairvalueofthosesecurities,aggregatedbyinvestmentcategoriesatDecember31,2009and2008.The
tablealsoillustratesthelengthoftimethattheyhavebeeninacontinuousunrealizedlosspositionat
December31,2009and2008(amountsinmillions):
Lessthan12months
12monthsormore
Total
AtDecember31,
2009
Unrealized
losses
Fair
value
Unrealized
losses
Fair
value
Unrealized
losses
Fair
value
Taxableauction
ratesecurities..........
$—
$—
$(4)
$23
$(4)
$23
Lessthan12months
12monthsormore
Total
AtDecember31,
2008
Unrealized
losses
Fair
value
Unrealized
losses
Fair
value
Unrealized
losses
Fair
value
Mortgagebacked
securities...................
$(1)
$7
$—
$—
$(1)
$7
Taxableauction
ratesecurities............
(4)
23
—
—
(4)
23
Total..............................
$(5)
$30
$—
$—
$(5)
$30
Thetotalunrealizedlossof$4millionatDecember31,2009isduetofailedauctionsoftaxable
ARSheldthroughMorganStanleySmithBarneyLLC,whichis51%ownedbyMorganStanleyand49%
ownedbyCitigroup,Inc.TheARSwerehelddirectlythroughawhollyownedsubsidiaryofCitigroup,Inc.
untiltheMorganStanleySmithBarneyLLCjointventureclosedinthesecondquarter2009.Our
investmentsinARSareallbackedbyhighereducationstudentloans.
Baseduponouranalysisoftheavailableforsaleinvestmentswithunrealizedlosses,wehave
concludedthatthegrossunrealizedlossesof$4millionatDecember31,2009weretemporaryinnature.
Wedonotintendtoselltheinvestmentsecuritiesthatareinanunrealizedlosspositionanddonotconsider
thatitismorelikelythannotthatwewillberequiredtoselltheinvestmentsecuritiesbeforerecoveryof
theiramortizedcostbasis,whichmaybematurity.Wehavenotidentifiedanyissuesrelatedtotheultimate
repaymentofprincipalasaresultofcreditconcernsonthesesecurities.However,factsandcircumstances
maychangewhichcouldresultinadeclineinfairvalueconsideredtobeotherthantemporaryinthe
future.
Thefollowingtablesummarizesthecontractuallystatedmaturitiesofourshortandlongterm
investmentsclassifiedasavailableforsaleatDecember31,2009(amountsinmillions):
AtDecember31,2009
Amortized
cost
Fair
value
U.S.governmentagencysecuritiesduein1yearorless.........................
$389
$389
Dueaftertenyears...................................................................................
29
25
$418
$414
TradingInvestments
WecontinuetomonitortheARSmarketandconsideritsimpact(ifany)onthefairvalueofour
ARSheldthroughUBS.Ifthemarketconditionsdeterioratefurther,wemayberequiredtorecord
additionalunrealizedlossesinearnings,whichmaybeoffsetbycorrespondingincreasesinvalueofthe
UBSarrangement.
In2008,priortoacceptingtheUBSoffer(seeNote2ofthenotestoconsolidatedfinancial
statements),weclassifiedourinvestmentinARSheldthroughUBSasavailableforsale.Werecorded
unrealizedgainsandlossesonouravailableforsalesecurities,netoftax,inaccumulatedother
comprehensiveincome(loss)intheshareholders’equitysectionofourconsolidatedbalancesheets.The
unrealizedlossdidnotreducenetincomefortheapplicableaccountingperiod.