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Investments
9 Months Ended
Apr. 30, 2011
Investments  
Investments
8. Investments

(a) Summary of Available-for-Sale Investments

The following tables summarize the Company's available-for-sale investments (in millions):

 

April 30, 2011

   Amortized
Cost
     Gross
Unrealized
Gains
     Gross
Unrealized
Losses
    Fair
Value
 

Fixed income securities:

          

U.S. government securities

   $ 19,785       $ 38       $ (6 )   $ 19,817   

U.S. government agency securities (1)

     8,197         30         (2 )     8,225   

Non-U.S. government and agency securities (2)

     2,721         14         (1 )     2,734   

Corporate debt securities

     4,351         64         (9 )     4,406   

Asset-backed securities

     126         7         (3 )     130   
                                  

Total fixed income securities

     35,180         153         (21 )     35,312   

Publicly traded equity securities

     758         666         (4 )     1,420   
                                  

Total

   $ 35,938       $ 819       $ (25 )   $ 36,732   
                                  

July 31, 2010

   Amortized
Cost
     Gross
Unrealized
Gains
     Gross
Unrealized
Losses
    Fair
Value
 

Fixed income securities:

          

U.S. government securities

   $ 16,570       $ 42       $ —        $ 16,612   

U.S. government agency securities (1)

     13,511         68         —          13,579   

Non-U.S. government and agency securities (2)

     1,452         15         —          1,467   

Corporate debt securities

     2,179         64         (21     2,222   

Asset-backed securities

     145         9         (5     149   
                                  

Total fixed income securities

     33,857         198         (26     34,029   

Publicly traded equity securities

     889         411         (49     1,251   
                                  

Total

   $ 34,746       $ 609       $ (75   $ 35,280   
                                  

 

(b) Gains and Losses on Available-for-Sale Investments

The following table presents the realized net gains (losses) related to the Company's available-for-sale investments (in millions):

 

     Three Months Ended      Nine Months Ended  
     April 30, 2011      May 1, 2010      April 30, 2011      May 1, 2010  

Net gains on investments in publicly traded equity securities

   $ 42       $ 36       $ 72       $ 64   

Net gains on investments in fixed income securities

     7         35         84         55   
                                   

Total

   $ 49       $ 71       $ 156       $ 119   
                                   

There were no impairment charges on available-for-sale investments for either the nine months ended April 30, 2011 or the nine months ended May 1, 2010.

The following table summarizes the activity related to credit losses for fixed income securities (in millions):

 

Nine Months Ended

   April 30, 2011     May 1, 2010  

Balance at beginning of period

   $ (95 )   $ (153 )

Sales of other-than-temporarily impaired fixed income securities

     52        20   
                

Balance at end of period

   $ (43 )   $ (133 )
                

The following tables present the breakdown of the available-for-sale investments with gross unrealized losses and the duration that those losses had been unrealized at April 30, 2011 and July 31, 2010 (in millions):

 

     UNREALIZED LOSSES
LESS THAN 12 MONTHS
    UNREALIZED LOSSES
12 MONTHS OR GREATER
    TOTAL  

April 30, 2011

   Fair
Value
     Gross
Unrealized
Losses
    Fair
Value
     Gross
Unrealized
Losses
    Fair
Value
     Gross
Unrealized
Losses
 

Fixed income securities:

               

U.S. government securities

   $ 2,090       $ (6 )   $ —         $ —        $ 2,090       $ (6 )

U.S. government agency securities (1)

     819         (2 )     —           —          819         (2 )

Non-U.S. government and agency securities (2)

     305         (1 )     —           —          305         (1 )

Corporate debt securities

     606         (2 )     211         (7 )     817         (9 )

Asset-backed securities

     —           —          109         (3 )     109         (3 )
                                                   

Total fixed income securities

     3,820         (11 )     320         (10 )     4,140         (21 )

Publicly traded equity securities

     52         (4 )     2         —          54         (4 )
                                                   

Total

   $ 3,872       $ (15 )   $ 322       $ (10 )   $ 4,194       $ (25 )
                                                   
     UNREALIZED LOSSES
LESS THAN 12 MONTHS
    UNREALIZED LOSSES
12 MONTHS OR GREATER
    TOTAL  

July 31, 2010

   Fair
Value
     Gross
Unrealized
Losses
    Fair
Value
     Gross
Unrealized Losses
    Fair
Value
     Gross
Unrealized
Losses
 

Fixed income securities:

               

Corporate debt securities

   $ 140       $ (1   $ 304       $ (20   $ 444       $ (21

Asset-backed securities

     2         —          115         (5     117         (5
                                                   

Total fixed income securities

     142         (1     419         (25     561         (26

Publicly traded equity securities

     168         (12     393         (37     561         (49
                                                   

Total

   $ 310       $ (13   $ 812       $ (62   $ 1,122       $ (75
                                                   

 

 

For fixed income securities that have unrealized losses as of April 30, 2011, the Company has determined that (i) it does not have the intent to sell any of these investments and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. In addition, as of April 30, 2011, the Company anticipates that it will recover the entire amortized cost basis of such fixed income securities and has determined that no other-than-temporary impairments associated with credit losses were required to be recognized during the three and nine months ended April 30, 2011.

The Company has evaluated its publicly traded equity securities as of April 30, 2011 and has determined that there was no indication of other-than-temporary impairments in the respective categories of unrealized losses. This determination was based on several factors, which include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the issuer, and the Company's intent and ability to hold the publicly traded equity securities for a period of time sufficient to allow for any anticipated recovery in market value.

(c) Maturities of Fixed Income Securities

The following table summarizes the maturities of the Company's fixed income securities at April 30, 2011 (in millions):

 

     Amortized
Cost
     Fair
Value
 

Less than 1 year

   $ 13,718       $ 13,744   

Due in 1 to 2 years

     15,189         15,250   

Due in 2 to 5 years

     5,933         5,961   

Due after 5 years

     340         357   
                 

Total

   $ 35,180       $ 35,312   
                 

Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations.

(d) Securities Lending

The Company periodically engages in securities lending activities with certain of its available-for-sale investments. These transactions, with a daily balance averaging less than 25% of the Company's total available-for-sale investments portfolio, are accounted for as a secured lending of the securities, and the securities are typically loaned only on an overnight basis. The Company requires collateral equal to at least 102% of the fair market value of the loaned security in the form of cash or liquid, high-quality assets. The Company engages in these secured lending transactions only with highly creditworthy counterparties, and the associated portfolio custodian has agreed to indemnify the Company against any collateral losses. As of April 30, 2011 and July 31 2010, the Company had no outstanding securities lending transactions. The Company did not experience any losses in connection with the secured lending of securities during the periods presented.