Microsoft 2004 Annual Report Download - page 44

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PAGE 44
NOTE 3 INVESTMENTS
The components of investments are as follows:
(In millions) Cost basis
Unrealized
gains
Unrealized
losses
Recorded
basis
Cash and
equivalents
Short - term
investments
Equity and
other
investments
June 30, 2003
Fixed maturity securities
Cash $ 1,308 $ – $ – $ 1,308 $1,308 $ – $ –
Money market mutual funds 1,263 – – 1,263 1,263 – –
Commercial paper 874 – – 874 774 100 –
Certificates of deposit 297 – – 297 28 269 –
U. S. Government and Agency
securities 7,205 126 (28) 7,303 1,889 5,414 –
Foreign government bonds 5,364 79 (16) 5,427 – 5,427 –
Mortgage backed securities 6,257 65 (3) 6,319 – 6,319 –
Corporate notes and bonds 17,913 1,033 (170) 18,776 828 16,089 1,859
Municipal securities 9,081 265 (6) 9,340 348 8,992 –
Fixed maturity securities 49,562 1,568 (223) 50,907 6,438 42,610 1,859
Equity securities
Common stock and equivalents 8,395 1,686 (3) 10,078 – – 10,078
Preferred stock 1,262 – – 1,262 – – 1,262
Other investments 493 – – 493 – – 493
Equity securities 10,150 1,686 (3) 11,833 – – 11,833
Total $59,712 $3,254 $(226) $62,740 $6,438 $42,610 $13,692
(In millions) Cost basis
Unrealized
gains
Unrealized
losses
Recorded
basis
Cash and
equivalents
Short - term
investments
Equity and
other
investments
June 30, 2004
Fixed maturity securities
Cash $ 1,812 $ – $ – $ 1,812 $ 1,812 $ – $ –
Money market mutual funds 3,595 – – 3,595 3,595 – –
Commercial paper 7,286 – – 7,286 4,109 3,177 –
Certificates of deposit 415 – – 415 330 85 –
U. S. Government and Agency
securities 20,565 26 (54) 20,537 4,083 16,454 –
Foreign government bonds 4,524 41 (60) 4,505 – 4,505 –
Mortgage backed securities 3,656 21 (42) 3,635 – 3,635 –
Corporate notes and bonds 15,048 122 (50) 15,120 1,010 12,629 1,481
Municipal securities 5,154 39 (25) 5,168 1,043 4,125 –
Fixed maturity securities 62,055 249 (231) 62,073 15,982 44,610 1,481
Equity securities
Common stock and equivalents 7,722 1,571 (62) 9,231 – – 9,231
Preferred stock 1,290 – – 1,290 – – 1,290
Other investments 208 – – 208 – – 208
Equity securities 9,220 1,571 (62) 10,729 – – 10,729
Total $71,275 $1,820 $(293) $72,802 $15,982 $44,610 $12,210
At June 30, 2004 unrealized losses of $293 million consisted of: $188 million related to investment grade fixed income
securities, $43 million related to investments in high yield and emerging market fixed income securities, $49 million related
to domestic equity securities and $13 million related to international equity securities. Unrealized losses from fixed income
securities are primarily attributable to changes in interest rates. Unrealized losses from domestic and international equities
are due to market price movements. Of the unrealized losses of $293 million at June 30, 2004,$51 million exceeded
twelve months. Management does not believe any unrealized losses represent an other-than temporary impairment based
on our evaluation of available evidence as of June 30, 2004.