NOTE 4 — INVESTMENTS

Investment Components

The components of investments, including associated derivatives, but excluding held-to-maturity investments, were as follows:

 

(In millions)		Cost Basis				Unrealized Gains				Unrealized Losses				Recorded Basis				Cash and Cash Equivalents				Short-term Investments				Equity and Other Investments
June 30, 2014
Cash		$	4,980			$	0			$	0			$	4,980			$	4,980			$	0			$	0
Mutual funds			590				0				0				590				590				0				0
Commercial paper			189				0				0				189				89				100				0
Certificates of deposit			1,197				0				0				1,197				865				332				0
U.S. government and agency securities			66,952				103				(29	)			67,026				109				66,917				0
Foreign government bonds			3,328				17				(10	)			3,335				2,027				1,308				0
Mortgage-backed securities			991				30				(2	)			1,019				0				1,019				0
Corporate notes and bonds			6,845				191				(9	)			7,027				9				7,018				0
Municipal securities			287				45				0				332				0				332				0
Common and preferred stock			6,785				5,207				(81	)			11,911				0				0				11,911
Other investments			1,164				0				0				1,164				0				14				1,150
Total		$	93,308			$	5,593			$	(131	)		$	98,770			$	8,669			$	77,040			$	13,061

 

(In millions)		Cost Basis				Unrealized Gains				Unrealized Losses				Recorded Basis				Cash and Cash Equivalents				Short-term Investments				Equity and Other Investments
June 30, 2013
Cash		$	1,967			$	0			$	0			$	1,967			$	1,967			$	0			$	0
Mutual funds			868				0				0				868				868				0				0
Commercial paper			603				0				0				603				214				389				0
Certificates of deposit			994				0				0				994				609				385				0
U.S. government and agency securities			64,934				47				(84	)			64,897				146				64,751				0
Foreign government bonds			900				16				(41	)			875				0				875				0
Mortgage-backed securities			1,258				43				(13	)			1,288				0				1,288				0
Corporate notes and bonds			4,993				169				(40	)			5,122				0				5,122				0
Municipal securities			350				36				(1	)			385				0				385				0
Common and preferred stock			6,931				2,938				(281	)			9,588				0				0				9,588
Other investments			1,279				0				0				1,279				0				23				1,256
Total		$	85,077			$	3,249			$	(460	)		$	87,866			$	3,804			$	73,218			$	10,844

In addition to the investments in the table above, we also own corporate notes that were purchased in connection with our agreement to lend $2.0 billion to the group that completed their acquisition of Dell on October 29, 2013. These corporate notes are classified as held-to-maturity investments and are included in equity and other investments on the balance sheet. As of June 30, 2014, the amortized cost, recorded basis, and estimated fair value of these corporate notes was $1.5 billion, $1.5 billion, and $1.7 billion, respectively, while their associated gross unrecognized holding gains were $164 million.

As of June 30, 2014 and 2013, the recorded bases of common and preferred stock that are restricted for more than one year or are not publicly traded were $520 million and $395 million, respectively. These investments are carried at cost and are reviewed quarterly for indicators of other-than-temporary impairment. It is not practicable for us to reliably estimate the fair value of these investments.

 

Unrealized Losses on Investments

Investments, excluding those held-to-maturity, with continuous unrealized losses for less than 12 months and 12 months or greater and their related fair values were as follows:

 

		Less than 12 Months								12 Months or Greater												Total Unrealized Losses
(In millions)		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Total Fair Value
June 30, 2014
U.S. government and agency securities		$	4,161			$	(29	)		$	850			$	0			$	5,011			$	(29	)
Foreign government bonds			566				(4	)			21				(6	)			587				(10	)
Mortgage-backed securities			120				0				61				(2	)			181				(2	)
Corporate notes and bonds			1,154				(8	)			34				(1	)			1,188				(9	)
Common and preferred stock			463				(48	)			257				(33	)			720				(81	)
Total		$	6,464			$	(89	)		$	1,223			$	(42	)		$	7,687			$	(131	)

 

		Less than 12 Months								12 Months or Greater												Total Unrealized Losses
(In millions)		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Total Fair Value
June 30, 2013
U.S. government and agency securities		$	2,208			$	(84	)		$	0			$	0			$	2,208			$	(84	)
Foreign government bonds			589				(18	)			69				(23	)			658				(41	)
Mortgage-backed securities			357				(12	)			39				(1	)			396				(13	)
Corporate notes and bonds			1,142				(38	)			27				(2	)			1,169				(40	)
Municipal securities			44				(1	)			0				0				44				(1	)
Common and preferred stock			1,166				(168	)			409				(113	)			1,575				(281	)
Total		$	5,506			$	(321	)		$	544			$	(139	)		$	6,050			$	(460	)

As of June 30, 2014, we did not hold any held-to-maturity investments that are in an unrealized loss position.

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 remaining unrealized losses represent other-than-temporary impairments based on our evaluation of available evidence as of June 30, 2014.

Debt Investment Maturities

 

(In millions)		Cost Basis				Estimated Fair Value
June 30, 2014
Due in one year or less		$	28,681			$	28,719
Due after one year through five years			46,734				46,881
Due after five years through 10 years			2,910				2,987
Due after 10 years			1,464				1,538
Total (a)		$	79,789			$	80,125

 

(a)	Excludes held-to-maturity investments due October 31, 2023 with a cost basis and estimated fair value at June 30, 2014 of $1.5 billion and $1.7 billion, respectively.