Medtronic 2012 Annual Report Download - page 100

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The following tables show the gross unrealized losses and fair values of the Company’s available-for-
sale securities that have been in a continuous unrealized loss position deemed to be temporary for less than
12 months and for more than 12 months, aggregated by investment category as of April 27, 2012 and
April 29, 2011:
April 27, 2012
____________________________________________________________
Less than 12 Months More than 12 Months
____________________________ ____________________________
Unrealized Unrealized
(in millions) Fair Value Losses Fair Value Losses
___________ _____________ _____________ _____________ _____________
Corporate debt securities . . . . . . . . . . . . . . . . . . $ 664 $ (4) $ 16 $ (3)
Auction rate securities . . . . . . . . . . . . . . . . . . . . . ––127 (26)
Mortgage-backed securities . . . . . . . . . . . . . . . . 218 (2) 57 (8)
Other asset-backed securities . . . . . . . . . . . . . . . 55 –9(1)
Marketable equity securities . . . . . . . . . . . . . . . . 24 (5) ––
_____________ _____________ _____________ _____________
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 961 $ (11) $ 209 $ (38)
_____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________
April 29, 2011
____________________________________________________________
Less than 12 Months More than 12 Months
____________________________ ____________________________
Unrealized Unrealized
(in millions) Fair Value Losses Fair Value Losses
___________ _____________ _____________ _____________ _____________
Corporate debt securities . . . . . . . . . . . . . . . . . . $ 256 $ (1) $ 16 $ (5)
Auction rate securities . . . . . . . . . . . . . . . . . . . . . ––133 (34)
Mortgage-backed securities . . . . . . . . . . . . . . . . 161 (1) 67 (7)
U.S. government and agency securities . . . . . . . 267 (1) ––
Other asset-backed securities . . . . . . . . . . . . . . . 74 (1) 12 (2)
_____________ _____________ _____________ _____________
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 758 $ (4) $ 228 $ (48)
_____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________
At April 27, 2012, the Company concluded that the unrealized losses associated with the available-
for-sale securities detailed above were not other-than-temporary as the Company does not have the intent
to sell, nor is it more likely than not that the Company will be required to sell, before recovery of the
amortized cost.
Activity related to the Company’s short-term and long-term investment portfolio is as follows:
Fiscal Year
___________________________________________________________________________
2012 2011 2010
_________________________ _________________________ _________________________
(in millions) Debt (a) Equity (b)(c) Debt (a) Equity (b)(d) Debt (a) Equity (b)
___________ __________ ____________ __________ _____________ __________ _____________
Proceeds from sales . . . . . . . . . . . $ 6,062 $ 113 $ 6,443 $ 31 $ 3,791 $ 27
__________ ____________ __________ _____________ __________ _____________
Gross realized gains . . . . . . . . . . . $ 52 $ 93 $ 28 $ 85 $ 44 $ 10
__________ ____________ __________ _____________ __________ _____________
Gross realized losses . . . . . . . . . . $ (16) $ – $ (15) $ –$ (6) $–
__________ ____________ __________ _____________ __________ _____________
Impairment losses recognized . . . $ (2) $ (10) $ (5) $ (24) $ (14) $ (40)
__________ ____________ __________ _____________ __________ _____________
(a) Includes available-for-sale debt securities.
(b) Includes marketable equity securities, cost method, equity method, exchange-traded funds, and other investments.
(c) As a result of the Salient and PEAK acquisitions that occurred during fiscal year 2012, the Company recognized a non-cash gain
of $38 million on its previously-held minority investments.
(d) As a result of the Ardian acquisition that occurred during fiscal year 2011, the Company recognized a non-cash gain of $85 million
on its previously-held minority investment.
The total other-than-temporary impairment losses on available-for-sale debt securities for the fiscal
years ended April 27, 2012 and April 29, 2011 were $6 million and $18 million, respectively, of which
$4 million and $13 million, respectively, were recognized in other comprehensive income and $2 million
and $5 million, respectively, were recognized in earnings. These charges relate to credit losses on certain
mortgage-backed securities and auction rate securities. The amount of credit losses represents the difference
between the present value of cash flows expected to be collected on these securities and the amortized cost.
Based on the Company’s assessment of the credit quality of the underlying collateral and credit support
83
Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)