MSFT Annual Report 2004 - Financial Review

NOTE 4 INVESTMENT INCOME/(LOSS)

The components of investment income/(loss) are as follows:

(In millions)
Year Ended June 30	2002	2003	2004

Dividends and interest	$2,119)	$1,957)	$1,892)
Net recognized gains/(losses) on investments	(1,807)	44)	1,563)
Net losses on derivatives	(617)	(424)	(268)
Investment income/(loss)	$1(305)	$1,577)	$3,187)

Net recognized gains/(losses) on investments include other-than-temporary impairments of $4.32 billion in fiscal 2002, $1.15 billion in fiscal 2003, and $82 million in fiscal 2004. Realized gains and (losses) from sales of available-for-sale securities (excluding other-than-temporary impairments) were $3.02 billion and $(504) million in fiscal 2002, $1.44 billion and $(245) million in fiscal 2003, and $2.16 billion and $(518) million in fiscal 2004.