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Annual Report
Notwithstanding our efforts to manage interest rate risks, there can be no assurance that we will be adequately
protected against risks associated with interest rate fluctuations. At any time, a sharp change in interest rates
could have a significant impact on the fair value of our investment portfolio. The following table presents the
hypothetical changes in fair value in our short-term investment portfolio as of March 31, 2010, arising from
potential changes in interest rates. The modeling technique estimates the change in fair value from immediate
hypothetical parallel shifts in the yield curve of plus or minus 50 basis points (“BPS”), 100 BPS, and 150 BPS.
Valuation of Securities Given an
Interest Rate
Decrease of X Basis Points
Fair Value
as of
March 31,
2010
Valuation of Securities Given an
Interest Rate
Increase of X Basis Points
(In millions) (150 BPS) (100 BPS) (50 BPS) 50 BPS 100 BPS 150 BPS
Corporate bonds .............. $237 $236 $234 $233 $231 $229 $228
U.S. agency securities ......... 117 116 115 115 114 114 113
U.S. Treasury securities ........ 85 85 84 83 83 82 82
Commercial paper ............ 1 1 1 1 1 1 1
Total short-term
investments ............. $440 $438 $434 $432 $429 $426 $424
The following table presents the hypothetical changes in fair value in our short-term investment portfolio as of
March 31, 2009, arising from selected potential changes in interest rates.
Valuation of Securities Given an
Interest Rate
Decrease of X Basis Points
Fair Value
as of
March 31,
2009
Valuation of Securities Given an
Interest Rate Increase of X Basis
Points
(In millions) (150 BPS) (100 BPS) (50 BPS) 50 BPS 100 BPS 150 BPS
U.S. Treasury securities ........ $205 $203 $201 $200 $198 $196 $194
Corporate bonds .............. 134 133 132 131 130 129 128
U.S. agency securities ......... 111 110 110 109 109 108 108
Commercial paper ............ 80 80 80 79 79 79 79
Asset-backed securities ........ 15 15 15 15 15 15 15
Total short-term
investments ............. $545 $541 $538 $534 $531 $527 $524
Market Price Risk
The fair value of our marketable equity securities in publicly traded companies is subject to market price
volatility and foreign currency risk for investments denominated in foreign currencies. As of March 31, 2010 and
March 31, 2009, our marketable equity securities were classified as available-for-sale securities and,
consequently, were recorded in our Consolidated Balance Sheets at fair market value with unrealized gains or
losses resulting from changes in fair value reported as a separate component of accumulated other comprehensive
income, net of any tax effects, in stockholders’ equity. The fair value of our marketable equity securities was
$291 million and $365 million as of March 31, 2010 and March 31, 2009, respectively.
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