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Notes to Consolidated Financial Statements
The following table summarizes the activity related to credit losses for fixed income securities during the fourth quarter of fiscal 2009
(in millions):
Credit
Losses
Balance of credit losses at the adoption of FSP 115-2 on April 26, 2009 $(159)
Sales of other-than-temporarily-impaired fixed income securities 6
Balance at July 25, 2009 $(153)
The following tables present the breakdown of the investments with gross unrealized losses at July 25, 2009 and July 26, 2008 (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
Losses
July 25, 2009
Fixed income securities:
Government securities $1,850 $ (5) $ — $ — $1,850 $ (5)
Government agency securities 1,362 (2) 5 — 1,367 (2)
Corporate debt securities 123 (10) 613 (76) 736 (86)
Asset-backed securities 41 (11) 141 (23) 182 (34)
Total fixed income securities 3,376 (28) 759 (99) 4,135 (127)
Publicly traded equity securities 25 (3) 328 (86) 353 (89)
Total $3,401 $ (31) $1,087 $(185) $4,488 $(216)
UNREALIZED LOSSES
LESS THAN 12 MONTHS
UNREALIZED LOSSES
12 MONTHS OR GREATER TOTAL
July 26, 2008 Fair Value
Gross
Unrealized
Losses Fair Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
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)
For fixed income securities that have unrealized losses as of July 25, 2009, the Company has determined that (i) it does not have the intent
to sell any of these investments, and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery
of the entire amortized cost basis. In addition, the Company has evaluated these fixed income securities and has determined that no credit
losses exist. In conclusion, the Company’s management has determined that the unrealized losses on its fixed income securities as of
July 25, 2009 were temporary in nature.
The Company has evaluated its publicly traded equity securities as of July 25, 2009, and has determined that there were no unrealized
losses that indicate an other-than-temporary impairment. This determination was based on several factors, which include the length of time
and extent to which fair value has been less than the cost basis and the financial condition and near-term prospects of the issuer, and the
Company’s intent and ability to hold the publicly traded equity securities for a period of time sufficient to allow for any anticipated recovery
in market value.
56 Cisco Systems, Inc.