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Financial Review

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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, 2010
Cash $1,661 $0 $0 $1,661 $1,661 $0 $0
Mutual funds 1,120 0 0 1,120 1,120 0 0
Commercial paper 188 0 0 188 13 175 0
Certificates of deposit 348 0 0 348 68 280 0
U.S. Government and Agency securities 21,036 167 (1) 21,202 1,822 19,380 0
Foreign government bonds 518 13 0 531 0 531 0
Mortgage-backed securities 3,137 135 (7) 3,265 0 3,265 0
Corporate notes and bonds 7,450 289 (18) 7,721 701 7,020 0
Municipal securities 726 22 (1) 747 120 627 0
Common and preferred stock 6,640 1,030 (418) 7,252 0 0 7,252
Other investments 507 0 0 507 0 5 502
Total $43,331 $1,656 $(445) $44,542 $5,505 $31,283 $7,754
(In millions) Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash
and Cash Equivalents
Short-Term Investments Equity
and Other Investments
June 30, 2009
Cash $2,064 $0 $0 $2,064 $2,064 $0 $0
Mutual funds 1,007 0 (25) 982 900 82 0
Commercial paper 2,601 0 0 2,601 400 2,201 0
Certificates of deposit 555 0 0 555 275 280 0
U.S. Government and Agency securities 13,450 21 (5) 13,466 2,369 11,097 0
Foreign government bonds 3,450 71 (4) 3,517 0 3,517 0
Mortgage-backed securities 3,353 81 (16) 3,418 0 3,418 0
Corporate notes and bonds 4,361 287 (52) 4,596 0 4,596 0
Municipal securities 255 2 (1) 256 68 188 0
Common and preferred stock 4,015 627 (182) 4,460 0 0 4,460
Other investments 465 0 0 465 0 (8) 473
Total $35,576 $1,089 $(285) $36,380 $6,076 $25,371 $4,933

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
(In millions) Fair Value Unrealized Losses Fair Value Unrealized Losses Total
Fair Value
Unrealized Losses
June 30, 2010
U.S. Government and Agency securities $216 (1) 0 0 216 (1)
Mortgage-backed securities 105 (6) 18 (1) 123 (7)
Corporate notes and bonds 1,124 (13) 89 (5) 1,213 (18)
Municipal securities 66 (1) 0 0 66 (1)
Common and preferred stock 2,102 (339) 190 (79) 2,292 (418)
Total $3,613 $(360) $ 297 $(85) $3,910 $(445)
Less than 12 months 12 months or greater Total
(In millions) Fair Value Unrealized Losses Fair Value Unrealized Losses Total
Fair Value
Unrealized Losses
June 30, 2009
Mutual funds $ 3 $ (1) $ 77 $ (24) $ 80 $(25)
U.S. Government and Agency securities 4,033 (5) 0 0 4,033 (5)
Foreign government bonds 1,444 (3) 669 (1) 2,113 (4)
Mortgage-backed securities 503 (16) 0 0 503 (16)
Corporate notes and bonds 713 (10) 504 (42) 1,217 (52)
Municipal securities 16 (1) 0 0 16 (1)
Common and preferred stock 1,154 (135) 120 (47) 1,274 (182)
Total $7,866 $(171) $ 1,370 $(114) $9,236 $(285)

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, 2010.

At June 30, 2010 and 2009, the recorded bases and estimated fair values of common and preferred stock and other investments that are restricted for more than one year or are not publicly traded were $216 million and $204 million, respectively.

Debt Investment Maturities

(In millions) Cost Basis Estimated Fair Value
June 30, 2010
Due in one year or less $ 12,489 $ 12,526
Due after one year through five years 14,987 15,283
Due after five years through 10 years 2,137 2,242
Due after 10 years 3,791 3,952
Total $33,404 $34,003