EMC 2008 Annual Report Download - page 41

Table of Contents
Asset and Mortgage-Backed Securities
Our asset and mortgage-backed securities are predominantly rated AAA. The assets underlying these securities are generally residential or commercial
obligations, automobile loans, credit card loans, equipment loans and home equity loans. The average maturity is 0.67 years and 2.06 years for the asset-
backed and mortgage-backed securities, respectively. For these securities, 50% are mortgage-backed. The mortgage loans may have fixed rate or adjustable
rate terms. The remainder of the portfolio consists of asset-backed securities. To date we have collected all interest payable on all these securities when due
and expect to continue to do so in the future. For each security which has a temporary decline in value, we analyzed the collateral value, collateral statistics,
including the borrowers' payment history, and our position in the capital structure. We estimated the losses in the underlying loans for these securities and
compared these losses to our position in the security. For those securities where the underlying collateral is not sufficient, we have recorded other-than-
temporary losses on these securities which aggregated $2.6. For the securities where the collateral is deemed to be adequate, we believe we will realize the
current cost basis of these securities based on our position in the credit structure.
U.S. Corporate Debt Securities
Our U.S. corporate debt securities are predominantly rated A or better. The security issuers are from a cross section of industries, including banking and
finance, insurance, consumer, industrial, technology and utilities. To mitigate concentration of risk, we impose sector limits at the portfolio and CUSIP level.
The average maturity is 1.14 years. To date, we have collected all interest payable on all the debt securities when due and expect to continue to do so in the
future. We have analyzed the issuers' credit history, current financial standing and their ability to retire the debt obligations. We expect that we will receive
the entire principal associated with these securities.
At December 31, 2008, we held $5,843.7 of cash and cash equivalents with a maturity of 90 days or less. Due to the nature of these assets, we consider it
reasonable to expect that their fair market values will not be significantly impacted by a change in interest rates.
We believe our current cash and investment position should be sufficient to meet our operating requirements in 2009.
To date, inflation has not had a material impact on our financial results.
Off-Balance Sheet Arrangements, Contractual Obligations, Contingent Liabilities and Commitments
Contractual Obligations
We have various contractual obligations impacting our liquidity. The following represents our contractual obligations as of December 31, 2008:
Payments Due by Period
Total Less than
1 year 1-3 years* 3-5 years** More than 5 years
Operating leases $ 894.4 $ 171.1 $ 304.1 $ 56.2 $ 363.0
Long-term convertible debt 3,450.0 — 1,725.0 1,725.0 —
Other long-term obligations, including notes payable, current portion of long-term obligations and post
retirement obligations 180.9 70.9 2.5 1.2 2.6
Purchase orders 1,425.3 1,385.2 40.1 — —
Securities lending payable 412.3 412.3 — — —
Uncertain tax positions 218.5 — — — —
Total $6,581.4 $2,039.5 $2,071.7 $ 1,782.4 $ 365.6
Includes payments from January 1, 2010 through December 31, 2012.
Includes payments from January 1, 2013 through December 31, 2014.
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