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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 2—Financial Instruments (Continued)
In accordance with EITF 03-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments , the following
table shows gross unrealized losses and fair value for those investments that were in an unrealized loss position as of September 24, 2005 and
September 25, 2004, aggregated by investment category and the length of time that individual securities have been in a continuous loss position
(in millions):
Market values were determined for each individual security in the investment portfolio. The decline in value of these investments is primarily
related to changes in interest rates and is considered to be temporary in nature. Investments are reviewed periodically to identify possible
impairment. When evaluating the investments, the Company reviews factors such as the length of time and extent to which fair value has been
below cost basis, the financial condition of the issuer, and the Company’s ability and intent to hold the investment for a period of time which
may be sufficient for anticipated recovery in market value.
Accounts Receivable
Trade Receivables
The Company distributes its products through third-party resellers and directly to certain education, consumer, and commercial customers. The
Company generally does not require collateral from its customers. However, when possible the Company does attempt to limit credit risk on
trade receivables with credit insurance for certain customers in Latin America, Europe, and Asia and by arranging with third-party financing
companies to provide flooring arrangements and other loan and lease programs to the Company’s direct customers. These credit financing
arrangements are directly between the third-party financing company and the end customer. As such, the Company generally does not assume
any recourse or credit risk sharing related to any of these arrangements. However, considerable trade receivables that
73
2005
Less than 12
Months
12 Months or
Greater
Total
Security Description
Fair
Value
Unrealized
Loss
Fair
Value
Unrealized
Loss
Fair
Value
Unrealized
Loss
U.S. Treasury and Agencies
$
160
$
(1
)
$
2
$
—
$
162
$
(1
)
Corporate bonds
468
(3
)
26
—
494
(3
)
Certificate of deposits
288
—
—
—
288
—
Asset backed securities
60
(1
)
—
—
60
(1
)
Commercial paper
4,526
(1
)
—
—
4,526
(1
)
Total
$
5,502
$
(6
$
28
$
—
$
5,530
$
(6
2004
Less than 12
Months
12 Months or
Greater
Total
Security Description
Fair
Value
Unrealized
Loss
Fair
Value
Unrealized
Loss
Fair
Value
Unrealized
Loss
U.S. Treasury and Agencies
$
1,126
$
(4
)
$
—
$
—
$
1,126
$
(4
)
Corporate bonds
134
—
144
(1
)
278
(1
)
Certificate of deposits
420
(1
)
—
—
420
(1
)
Asset backed securities
426
—
—
—
426
—
Commercial paper
2,407
(1
)
—
—
2,407
(1
)
Total
$
4,513
$
(6
$
144
$
(1
$
4,657
$
(7
)
)
)
)
)