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2008 Annual Report 65
Notes to Consolidated Financial Statements
The following tables present the breakdown of the investments with unrealized losses at July 26, 2008 and July 28, 2007 (in millions):
UNREALIZED LOSSES
LESS THAN 12 MONTHS
UNREALIZED LOSSES
12 MONTHS OR GREATER TOTA L
Fair Value
Gross
Unrealized
Losses Fair Value
Gross
Unrealized
Losses Fair Value
Gross
Unrealized
LossesJuly 26, 2008
Fixed income securities:
Government securities $ 1,824 $ (33) $ — $ — $ 1,824 $ (33)
Government agency securities 1,763 (10) — — 1,763 (10)
Corporate debt securities 2,103 (46) 683 (50) 2,786 (96)
Asset-backed securities 368 (14) 117 (4) 485 (18)
Total fixed income securities 6,058 (103) 800 (54) 6,858 (157)
Publicly traded equity securities 370 (57) 32 (19) 402 (76)
Total $ 6,428 $ (160) $ 832 $ (73) $ 7,260 $ (233)
UNREALIZED LOSSES
LESS THAN 12 MONTHS
UNREALIZED LOSSES
12 MONTHS OR GREATER TOTA L
Fair Value
Gross
Unrealized
Losses Fair Value
Gross
Unrealized
Losses Fair Value
Gross
Unrealized
LossesJuly 28, 2007
Fixed income securities:
Government securities $ 278 $ (1) $ 332 $ (3) $ 610 $ (4)
Government agency securities 841 (1) 347 (3) 1,188 (4)
Corporate debt securities 2,288 (18) 1,732 (37) 4,020 (55)
Asset-backed securities 624 (1) 25 (1) 649 (2)
Municipal notes and bonds 645 (1) — — 645 (1)
Total fixed income securities 4,676 (22) 2,436 (44) 7,112 (66)
Publicly traded equity securities 309 (14) — — 309 (14)
Total $ 4,985 $ (36) $ 2,436 $ (44) $ 7,421 $ (80)
The gross unrealized losses related to fixed income securities as of July 26, 2008 were primarily due to changes in interest rates and
credit market conditions. The gross unrealized losses related to publicly traded equity securities as of July 26, 2008 were due to changes
in market prices. The Company’s management has determined that the gross unrealized losses on its investment securities at July 26,
2008 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 financial condition and near-term prospects of the investee, and the Company’s intent and ability to hold
the investment for a period of time sufficient to allow for any anticipated recovery in market value. Substantially all of the Company’s fixed
income securities are rated investment grade.
(c) Maturities of Fixed Income Securities
The following table summarizes the maturities of the Company’s fixed income securities at July 26, 2008 (in millions):
Amortized
Cost
Fair
Value
Less than 1 year $ 9,750 $ 9,757
Due in 1 to 2 years 4,096 4,116
Due in 2 to 5 years 5,185 5,170
Due after 5 years 882 826
Total $ 19,913 $ 19,869
Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations.