Microsoft 2007 Annual Report Download - page 45

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PAGE 44
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 greate
r
Total
(In millions) Fair value
unrealized
losses Fair value
unrealized
losses Fair value
unrealized
losses
June 30, 2007
Mutual funds $ 76 $ (1) $ 3 $ – $ 79 $ (1)
U. S. Government and Agency
securities 1,219 (8) 238 (4) 1,457 (12)
Foreign government bonds 3,554 (63) 2 – 3,556 (63)
Mortgage backed securities 2,520 (43) 214 (6) 2,734 (49)
Corporate notes and bonds 526 (14) 74 (4) 600 (18)
Municipal securities 575 (9) 420 (16) 995 (25)
Common stock and equivalents 237 (17) 9 (1) 246 (18)
Total $8,707 $(155) $960 $(31) $9,667 $(186)
Less than 12 months 12 months or greate
r
Total
(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 4,721 (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)
At June 30, 2007, unrealized losses of $186 million consisted of: $161 million related to investment grade fixed-
income securities, $7 million related to investments in high yield and emerging market fixed-income securities, $7
million related to domestic equity securities, and $11 million related to international equity securities. 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. Management does not believe any
unrealized losses represent an other-than-temporary impairment based on our evaluation of available evidence
as of June 30, 2007.
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, 2007, the recorded basis and estimated fair value of these
investments was $38 million. At June 30, 2006, the recorded basis and estimated fair value of these investments
was $41 million. The estimate of fair value is based on publicly available market information or other estimates
determined by management.