Annual Report
2013

Note 4 - Investments

Investment Components

The components of investments, including associated derivatives, 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, 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 millions) Cost Basis   Unrealized
Gains		   Unrealized
Losses		   Recorded
Basis		   Cash
and Cash
Equivalents		   Short-term
Investments		   Equity
and Other
Investments
June 30, 2012                          
Cash $ 2,019   $ 0   $ 0   $ 2,019   $ 2,019   $ 0   $ 0
Mutual funds 820   0   0   820   820   0   0
Commercial paper 96   0   0   96   96   0   0
Certificates of deposit 744   0   0   744   342   402   0
U.S. government and agency securities 47,178   130   (2)   47,306   561   46,745   0
Foreign government bonds 1,741   18   (29)   1,730   575   1,155   0
Mortgage-backed securities 1,816   82   (2)   1,896   0   1,896   0
Corporate notes and bonds 7,799   224   (15)   8,008   2,525   5,483   0
Municipal securities 358   58   (0)   416   0   416   0
Common and preferred stock 6,965   2,204   (436)   8,733   0   0   8,733
Other investments 1,048   0   0   1,048   0   5   1,043
Total $ 70,584   $ 2,716   $ (484)   $ 72,816   $ 6,938   $ 56,102   $ 9,776

Unrealized Losses on Investments

Investments 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
Fair Value		   Total
Unrealized
Losses
(In millions) Fair Value   Unrealized
Losses		   Fair Value   Unrealized
Losses		  
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)
                       
  Less than 12 Months   12 Months or Greater   Total
Fair Value		   Total
Unrealized
Losses
(In millions) Fair Value   Unrealized
Losses		   Fair Value   Unrealized
Losses		  
June 30, 2012                      
U.S. government and agency securities $ 44   $ (2)   $ 0   $ 0   $ 44   $ (2)
Foreign government bonds 657   (27)   12   (2)   669   (29)
Mortgage-backed securities 53   0   48   (2)   101   (2)
Corporate notes and bonds 640   (11)   70   (4)   710   (15)
Common and preferred stock 2,135   (329)   305   (107)   2,440   (436)
Total $ 3,529   $ (369)   $ 435   $ (115)   $ 3,964   $ (484)

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, 2013.

At June 30, 2013 and 2012, the recorded bases of common and preferred stock and other investments that are restricted for more than one year or are not publicly traded were $395 million and $313 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.

Debt Investment Maturities

(In millions) Cost Basis   Estimated
Fair Value
June 30, 2013      
Due in one year or less $ 26,386   $ 26,412
Due after one year through five years 42,343   42,400
Due after five years through 10 years 3,293   3,303
Due after 10 years 2,010   2,049
Total $ 74,032   $ 74,164