Microsoft 2009 Annual Report Download - page 50

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PAGE 50
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3 OTHER INCOME (EXPENSE)
The components of other income (expense) were as follows:
(In millions)
Y
ear Ended June 30, 2009 2008
2007
Dividends and interest $706
$ 888 $1,319
Net recognized gains (losses) on investments (125) 346 650
Net gains (losses) on derivatives (558)
226 (358)
Net gains (losses) on foreign currency remeasurements (509)
226 56
Other (56)
(143) (4)
Total $(542) $ 1,543 $1,663
Effective July 1, 2008, we began presenting gains and losses resulting from foreign currency remeasurements as a
component of other income (expense). Prior to July 1, 2008, we included gains and losses resulting from foreign
currency remeasurements as a component of sales and marketing expense. We changed our presentation because
this better reflects how we manage these foreign currency exposures, as such gains and losses arising from the
remeasurement of foreign currency transactions are incidental to our operations. For fiscal year 2009, $509 million of
losses were reported as other income (expense). For fiscal years 2008 and 2007, $221 million and $86 million of
gains, respectively, were previously recorded as a component of sales and marketing expense and have been
recast as other income (expense).
Net recognized gains (losses) on investments included other-than-temporary impairments of $862 million, $312
million, and $25 million in fiscal years 2009, 2008, and 2007, respectively. Realized gains and losses from sales of
available-for-sale securities (excluding other-than-temporary impairments) were $1.6 billion and $897 million,
respectively, in fiscal year 2009, $751 million and $93 million, respectively, in fiscal year 2008, and $851 million and
$176 million, respectively, in fiscal year 2007.
NOTE 4 INVESTMENTS
INVESTMENT COMPONENTS, INCLUDING ASSOCIATED DERIVATIVES
(In millions) Cost Basis
Unrealized
Gains
Unrealized
Losses
Recorded
Basis
Cash
and Cash
Equivalents
Short-term
Investments
Equity
and Other
Investments
June 30, 2009
Cash $ 2,064
$ – $ – $ 2,064 $2,064
$ – $ –
Mutual funds 1,007
– (25) 982 900
82 –
Commercial paper 2,601
– – 2,601 400
2,201 –
Certificates of deposit 555
– – 555 275
280 –
U.S. Government and
Agency securities 13,450
21 (5) 13,466 2,369
11,097 –
Foreign government
bonds 3,450
71 (4) 3,517 –
3,517 –
Mortgage-backed
securities 3,353
81 (16) 3,418 –
3,418 –
Corporate notes and
bonds 4,361
287 (52) 4,596 –
4,596 –
Municipal securities 255
2 (1) 256 68
188 –
Common and preferred
stock 4,015
627 (182) 4,460 –
– 4,460
Other investments 465
– – 465 –
(8 ) 473
Total $35,576
$1,089 $(285) $36,380 $6,076
$25,371 $4,933