Note 8-Equity and Other Investments

 

(In millions)

Cost Basis

 

Unrealized
Gains

 

Unrealized Losses

 

Recorded
Basis

June 30, 2002

 

  

 

  

   

 

 

 

 

 

 

 

 

 

 

Debt securities recorded at market, maturing:

   

  

   

  

     

 

   

Within one year

$      485

  

$           26

  

$             - 

 

$        511

Between 2 and 10 years

  893

  

  46

  

  (4)

 

  935

Between 10 and 15 years

  541

  

  19

  

  (2)

 

  558

Beyond 15 years

  3,036

  

  -

  

  - 

 

  3,036

Debt securities recorded at market

  4,955

  

  91

  

  (6)

 

  5,040

 

 

 

 

 

 

 

 

Common stock and warrants

  6,580

  

  1,287

  

  (617)

 

  7,250

Preferred stock

  1,382

  

  -

  

  - 

 

  1,382

Other investments

  519

  

  -

  

  - 

 

  519

Equity and other investments

$  13,436

  

$      1,378

  

$        (623)

 

$   14,191

 

(In millions)

Cost Basis

 

Unrealized
Gains

 

Unrealized Losses

 

Recorded
Basis

June 30, 2003

 

  

 

  

   

 

 

 

 

 

 

 

 

 

 

Debt securities recorded at market, maturing:

   

  

   

  

     

 

   

Within one year

$      293

  

$           9

  

$             - 

 

$        302

Between 2 and 10 years

  1,436

  

  194

  

  (73)

 

  1,557

Debt securities recorded at market

  1,729

  

  203

  

  (73)

 

  1,859

 

 

 

 

 

 

 

 

Common stock and warrants

  8,395

  

  1,686

  

  (3)

 

  10,078

Preferred stock

  1,262

  

  -

  

  - 

 

  1,262

Other investments

  493

  

  -

  

  - 

 

  493

Equity and other investments

$  11,879

  

$     1,889

  

$     (76)

 

$   13,692

 

Debt securities include corporate and government notes and bonds and derivative securities. In connection with the definitive agreement to combine AT&T Broadband with Comcast into a new company called Comcast Corporation, Microsoft exchanged its AT&T 5% convertible preferred debt for 115 million shares of Comcast Corporation on November 18, 2002, resulting in a $20 million net recognized loss.

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, 2002 the recorded basis of these investments was $2.31 billion, and their estimated fair value was $2.28 billion. At June 30, 2003, the recorded basis of these investments was $2.15 billion, and their estimated fair value was $2.56 billion. The estimate of fair value is based on publicly available market information or other estimates determined by management. Realized gains and (losses) from equity and other investments (excluding impairments) were $3.03 billion and $(23) million in 2001, $2.24 billion and $(121) million in 2002, and $540 million and $(88) million in 2003.