Dell 2005 Annual Report Download - page 50

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Table of Contents
Cash and cash equivalents, accounts receivable, accounts payable, and accrued and other liabilities are reflected in the accompanying
consolidated statement of financial position at cost, which approximates fair value because of the short-term maturity of these assets and
liabilities.
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 statement of financial position.
February 3, 2006 January 28, 2005
Fair Unrealized Fair Unrealized
Value Cost Gain (Loss) Value Cost Gain (Loss)
(in millions)
Debt securities:
U.S. government and agencies $ 2,501 $ 2,547 $ (46) $ 7,973 $ 8,012 $ (39)
U.S. corporate 1,638 1,657 (19) 1,012 1,021 (9)
International corporate 352 359 (7) 243 245 (2)
State and municipal governments 115 115 — 25 25 —
Total debt securities 4,606 4,678 (72) 9,253 9,303 (50)
Equity and other securities 101 101 — 101 98 3
Total investments $ 4,707 $ 4,779 $ (72) $ 9,354 $ 9,401 $ (47)
Short-term $ 2,016 $ 2,028 $ (12) $ 5,060 $ 5,068 $ (8)
Long-term 2,691 2,751 (60) 4,294 4,333 (39)
Total investments $ 4,707 $ 4,779 $ (72) $ 9,354 $ 9,401 $ (47)
As of February 3, 2006, Dell had approximately 385 debt investment positions that had fair values below their carrying values for a period of
less than 12 months. The fair value and unrealized losses on these investment positions totaled $2 billion and $27 million, respectively, as of
February 3, 2006. As of February 3, 2006, Dell had approximately 660 investment positions that had fair values below their carrying values for a
period of more than 12 months. The fair value and unrealized losses on these investment positions totaled $2 billion and $45 million,
respectively, as of February 3, 2006. The unrealized losses are due to changes in interest rates and are expected to be recovered over the
contractual term of the instrument.
The following table summarizes Dell's recognized gains and losses on investments, including impairments of certain investments:
Fiscal Year Ended
February 3, January 28, January 30,
2006 2005 2004
(in millions)
Gains $ 13 $ 40 $ 94
Losses (9) (34) (78)
Net recognized gains $ 4 $ 6 $ 16
Dell routinely enters into securities lending agreements with financial institutions in order to enhance investment income. Dell requires that the
loaned securities be collateralized in the form of cash or securities for values which generally exceed the value of the loaned security. As of
February 3, 2006, there were no securities on loan.
Foreign Currency Instruments
Dell uses purchased option contracts and forward contracts designated as cash flow hedges to protect against the foreign currency exchange
risk inherent in its forecasted transactions denomi- 47