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Investments
12 Months Ended
Aug. 28, 2011
Investments 
Investments

Note 2—Investments

The major categories of the Company's investments are as follows:

Money market mutual funds

The Company invests in money funds that seek to maintain a net asset value of par, while limiting overall exposure to credit, market, and liquidity risks.

U.S. government and agency securities

These U.S. government-secured debt instruments are publically traded and valued. Losses in this category are primarily due to market liquidity and interest rate reductions.

Corporate notes and bonds

The Company evaluates its corporate debt securities based on a variety of factors including, but not limited to, the credit rating of the issuer. The vast majority of the Company's corporate debt securities are rated investment grade by the major rating agencies.

FDIC-insured corporate bonds

These bonds are guaranteed by the full faith and credit of the U.S. government under the FDIC's Temporary Liquidity Guarantee Program. Losses in this category are primarily due to market liquidity and interest rate reductions.

Asset and mortgage-backed securities

The vast majority of the Company's asset and mortgage-backed securities have investment grade credit ratings from the major rating agencies. These investments are collateralized by residential real estate, credit card receivables, commercial real estate, foreign mortgage receivables, and lease receivables. Estimates of fair value are based upon a variety of factors including, but not limited to, credit rating of the issuer, internal credit risk, interest rate variation, prepayment assumptions, and the potential for default.

Certificates of deposit

Certificate of deposits are short-term interest-bearing debt instruments issued by various financial institutions with which the Company has an established banking relationship.

 

The Company's investments at the end of 2011 and 2010, were as follows:

 

2011:

    Cost
Basis		      Unrealized
Gains		      Unrealized
Losses		      Recorded
Basis		  

Available-for-sale:

            

U.S. government and agency securities

    $ 1,096       $ 8       $ 0       $ 1,104   

Corporate notes and bonds

      6         1         0         7   

FDIC-insured corporate bonds

      208         1         0         209   

Asset and mortgage-backed securities

      12         0         0         12   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total available-for-sale

      1,322         10         0         1,332   

Held-to-maturity:

            

Certificates of deposit

      272               272   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total investments

    $ 1,594       $ 10       $ 0       $ 1,604   
  

 

 

     

 

 

     

 

 

     

 

 

  

2010:

    Cost
Basis		      Unrealized
Gains		      Unrealized
Losses		      Recorded
Basis		  

Available-for-sale:

            

U.S. government and agency securities

    $ 1,222       $ 7       $ 0       $ 1,229   

Corporate notes and bonds

      10         1         0         11   

FDIC-insured corporate bonds

      139         0         0         139   

Asset and mortgage-backed securities

      23         0         0         23   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total available-for-sale

      1,394         8         0         1,402   

Held-to-maturity:

            

Certificates of deposit

      133               133   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total investments

    $ 1,527       $ 8       $ 0       $ 1,535   
  

 

 

     

 

 

     

 

 

     

 

 

  

Gross unrealized gains and losses on cash equivalents were not material at August 28, 2011 and August 29, 2010.

The proceeds and gross realized gains and losses from sales of available-for-sale securities during 2011, 2010, and 2009 are provided in the following table:

 

      2011      2010      2009  

Proceeds

    $ 602       $ 309       $ 183   

Realized gains

      1         5         5   

Realized losses

      0         1         2   

During 2009, the Company recognized $12 other-than-temporary impairment losses related to certain enhanced money fund investment securities, which were included in interest income and other, net in the accompanying consolidated statements of income. At the end of 2010, the Company no longer held any of these securities. At the end of 2011 and 2010 the Company's available-for-sale securities that were in continuous unrealized-loss position were insignificant.

 

The maturities of available-for-sale and held-to-maturity securities at August 28, 2011 were as follows:

 

     Available-For-Sale      Held-To-Maturity  
     Cost Basis      Fair Value      Cost Basis      Fair Value  

Due in one year or less

    $ 890       $ 892       $ 272       $ 272   

Due after one year through five years

      426         433         0         0   

Due after five years

      6         7         0         0   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 1,322       $ 1,332       $ 272       $ 272