MICROSOFT CORP | 2013 | FY | 3


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

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
    


 


 


 


 


 


 

     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, 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   
    


 



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