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2006 Annual Report 61
The following table presents gross realized gains and losses related to the Company’s investments (in millions):
Years Ended July 29, 2006 July 30, 2005 July 31, 2004
Gross realized gains $ 141 $ 144 $ 208
Gross realized losses (88) (61) (2)
Total $ 53 $ 83 $ 206
The gross realized losses in scal 2005 included charges of $5 million related to the impairment of certain publicly traded equity securities.
The impairment charges were due to a decline in the fair value of the investments below their cost basis that were judged to be other-than-
temporary. There were no impairment charges related to publicly traded equity securities in scal 2006 or scal 2004. The following tables
present the breakdown of the investments with unrealized losses at July 29, 2006 and July 30, 2005 (in millions):
UNREALIZED LOSSES
LESS THAN 12 MONTHS
UNREALIZED LOSSES
12 MONTHS OR GREATER TOTAL
Fair Value
Gross
Unrealized
Losses Fair Value
Gross
Unrealized
Losses Fair Value
Gross
Unrealized
LossesJuly 29, 2006
U.S. government notes and bonds $ 3,263 $ (33) $ 644 $ (14) $ 3,907 $ (47)
Corporate notes, bonds, and asset-backed securities 2,420 (18) 1,968 (70) 4,388 (88)
Municipal notes and bonds 146 (1) 103 (2) 249 (3)
Publicly traded equity securities 41 (6) 2 (1) 43 (7)
Total $ 5,870 $ (58) $ 2,717 $ (87) $ 8,587 $ (145)
UNREALIZED LOSSES
LESS THAN 12 MONTHS
UNREALIZED LOSSES
12 MONTHS OR GREATER TOTAL
Fair Value
Gross
Unrealized
Losses Fair Value
Gross
Unrealized
Losses Fair Value
Gross
Unrealized
LossesJuly 30, 2005
U.S. government notes and bonds $ 2,947 $ (21) $ 220 $ (4) $ 3,167 $ (25)
Corporate notes, bonds, and asset-backed securities 4,388 (52) 531 (11) 4,919 (63)
Municipal notes and bonds 260 (2) — — 260 (2)
Publicly traded equity securities 34 (5) 4 (1) 38 (6)
Total $ 7,629 $ (80) $ 755 $ (16) $ 8,384 $ (96)
The gross unrealized losses related to xed income securities were primarily due to changes in interest rates. The gross unrealized losses
related to publicly traded equity securities were due to changes in market prices. The Company’s management has determined that the
gross unrealized losses on its investment securities at July 29, 2006 are temporary in nature. The Company reviews its investments to
identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether a loss is temporary
include the length of time and extent to which fair value has been less than the cost basis, the nancial condition and near-term prospects
of the investee, and the Company’s intent and ability to hold the investment for a period of time sufcient to allow for any anticipated recovery
in market value. Substantially all of the Company’s xed income securities are rated investment grade. The following table summarizes the
maturities of the Company’s xed income securities at July 29, 2006 (in millions):
Amortized
Cost
Fair
Value
Less than 1 year $ 3,412 $ 3,398
Due in 1 to 2 years 3,752 3,723
Due in 2 to 5 years 5,555 5,470
Due after 5 years 1,219 1,214
Total $ 13,938 $ 13,805
Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations.
Notes to Consolidated Financial Statements