Dell 2007 Annual Report Download - page 63

Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Investments
The following table summarizes, by major security type, the fair value and cost of Dell's investments. All investments with remaining
maturities in excess of one year are recorded as long-term investments in the accompanying Consolidated Statements of Financial
Position.
February 1, 2008 February 2, 2007
Fair Unrealized Unrealized Fair Unrealized Unrealized
Value Cost Gain (Loss) Value Cost Gain (Loss)
(in millions)
Debt securities:
U.S. government and agencies $ 1,013 $ 991 $ 23 $ (1) $ 1,424 $ 1,449 $ - $ (25)
U.S. corporate 571 569 10 (8) 1,163 1,170 - (7)
International corporate 68 67 1 - 156 159 - (3)
State and municipal governments 5 5 - - 41 41 - -
Debt securities 1,657 1,632 34 (9) 2,784 2,819 - (35)
Equity and other securities 111 111 - - 115 109 6 -
Investments $ 1,768 $ 1,743 $ 34 $ (9) $ 2,899 $ 2,928 $ 6 $ (35)
Short-term $ 208 $ 206 $ 2 $ - $ 752 $ 756 $ - $ (4)
Long-term 1,560 1,537 32 (9) 2,147 2,172 6 (31)
Investments $ 1,768 $ 1,743 $ 34 $ (9) $ 2,899 $ 2,928 $ 6 $ (35)
The fair value of Dell's portfolio is affected primarily by interest rates more than the credit and liquidity issues currently facing the capital
markets. Dell attempts to mitigate these risks by investing primarily in high credit quality securities with AAA and AA ratings and short-
term securities with an A-1 rating, limiting the amount that can be invested in any single issuer, and by investing in short to intermediate
term investments whose market value is less sensitive to interest rate changes. As part of its cash and risk management processes, Dell
performs periodic evaluations of the credit standing of the institutions in accordance with its investment policy. Dell's investments in debt
securities have effective maturities of less than five years. Management believes that no significant concentration of credit risk for
investments exists for Dell.
As of February 1, 2008, Dell did not hold any auction rate securities. At February 2, 2007, Dell held auction rate securities that had a
carrying value of $255 million. The total carrying value of investments in asset-backed and mortgage-backed debt securities was
approximately $550 million.
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