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PAGE 50
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Investments with continuous unrealized losses for less than and greater than 12 months and their related fair values were as
follows:
Less than 12 months
12 months or greater
T
otal
(In millions)
Fair value
Unrealized
losses
Fair value
Unrealized
losses
Fair value
Unrealized
losses
June 30, 2006
Mutual funds
$14
$
(1
)
$4
$–
$18
$(1)
U.S. Government and Agency securities
2,303
(24
)
172
(6) 2,475
(30)
Foreign government bonds
2,523
(56
)
1,749
(17) 4,272
(73)
Mortgage backed securities
2,692
(40
)
102
(2) 2,794
(42)
Corporate notes and bonds
4,72
1
(13
)
359
(5) 5,080
(18)
Municipal securities
1,323
(13
)
1,192
(32) 2,515
(45)
Common stock and equivalents
266
(33
)
29
(1) 295
(34)
Total
$13,842
$
(180
)
$3,607
$(63) $17,449
$(243)
Less than 12 months
12 months or greater
T
otal
(In millions)
Fair value
Unrealized
losses
Fair value
Unrealized
losses
Fair value
Unrealized
losses
June 30, 2005
U.S. Government and Agency securities
$ 7,490
$(59)
$–
$–
$ 7,490
$(59)
Foreign government bonds
32
(2)
–
–
32
(2)
Corporate notes and bonds
4,536
(31)
–
–
4,536
(31)
Municipal securities
4,339
(30)
239
(3
) 4,578
(33)
Common stock and equivalents
1,168
(111)
89
(22
) 1,257
(133)
Total
$17,565
$(233)
$328
$(25
) $17,893
$(258)
At June 30, 2006 unrealized losses of $243 million consisted of: $196 million related to investment grade fixed-income
securities, $12 million related to investments in high yield and emerging market fixed-income securities, $2 million related to
domestic equity securities and $33 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. At June 30, 2005 unrealized losses of $258 million consisted of: $112 million related to
investment grade fixed-income securities, $13 million related to investments in high yield and emerging market fixed income
securities, $90 million related to domestic equity securities and $43 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. Management does not believe any unrealized losses represent an
other-than-temporary impairment based on our evaluation of available evidence as of June 30, 2006.
Common and preferred stock and other investments that are restricted for more than one year or are not publicly traded are
recorded at cost. At June 30, 2006 the recorded basis of these investments was $41 million, and their estimated fair value was
$41 million. At June 30, 2005 the recorded basis of these investments was $1.05 billion, and their estimated fair value was
$1.27 billion. The estimate of fair value is based on publicly available market information or other estimates determined by
management.
The maturities of debt securities, including fixed maturity securities, at June 30, 2006 were as follows:
(In millions) Cost basis
Estimated
fair
value
Due in one year or less $ 5,680
$
5,686
Due after one year through five years 12,011
11,971
Due after five years through ten years 6,111
6,041
Due after ten years 6,741
6,683
Total $30,543
$30,381