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Notes to Consolidated Financial Statements
UNREALIZED LOSSES
LESS THAN 12 MONTHS
UNREALIZED LOSSES
12 MONTHS OR GREATER TOTAL
July 25, 2009 Fair Value
Gross
Unrealized
Losses Fair Value
Gross
Unrealized
Losses Fair Value
Gross
Unrealized
Losses
Fixed income securities:
U.S. government securities $ 1,850 $ (5) $ — $ — $ 1,850 $ (5)
U.S. government agency securities(1) 1,346 (2) — — 1,346 (2)
Non-U.S. government and agency securities(2) 16 — 5 — 21 —
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)
(1) Includes corporate securities that are guaranteed by the FDIC.
(2) Includes agency and corporate securities that are guaranteed by non-U.S. governments.
For fixed income securities that have unrealized losses as of July 31, 2010, 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, as of July 31, 2010, the Company anticipates that it will recover the
entire amortized cost basis of such fixed income securities and has determined that no other-than-temporary impairments
associated with credit losses were required to be recognized during the year ended July 31, 2010.
The Company has evaluated its publicly traded equity securities as of July 31, 2010 and has determined that there was no
indication of other-than-temporary impairments in the respective categories of unrealized losses. 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, 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.
(c) Maturities of Fixed Income Securities
The following table summarizes the maturities of the Company’s fixed income securities at July 31, 2010 (in millions):
Amortized
Cost Fair Value
Less than 1 year $ 24,004 $ 24,044
Due in 1 to 2 years 5,631 5,703
Due in 2 to 5 years 3,867 3,928
Due after 5 years 355 354
Total $ 33,857 $ 34,029
Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain
obligations.
(d) Securities Lending
The Company periodically engages in securities lending activities with certain of its fixed income securities. These transactions,
with a daily balance averaging less than 25% of the Company’s total fixed income portfolio, are accounted for as a secured lending
of the securities, and the securities are typically loaned only on an overnight basis. The Company requires collateral equal to at
least 102% of the fair market value of the loaned security in the form of cash or liquid, high-quality assets. The Company engages
in these secured lending transactions only with highly creditworthy counterparties, and the associated portfolio custodian has
agreed to indemnify the Company against any collateral losses. The Company did not experience any losses in connection with the
secured lending of securities during the years presented. As of July 31, 2010 and July 25, 2009, the Company had no outstanding
securities lending transactions.
2010 Annual Report 57