Available-for-Sale Investments

6 Months Ended

Jul. 02, 2011

Available-for-Sale Securities [Abstract]

Note 7: Available-for-Sale Investments

Available-for-sale investments as of July 2, 2011 and December 25, 2010 were as follows:

	July 2, 2011								December 25, 2010
			Gross		Gross						Gross		Gross
	Adjusted		Unrealized		Unrealized		Fair		Adjusted		Unrealized		Unrealized		Fair
(In Millions)	Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
Commercial paper	$	3,777	$	—	$	—	$	3,777	$	5,312	$	—	$	—	$	5,312
Government bonds		1,392		1		(1)		1,392		10,075		9		(5)		10,079
Corporate bonds		1,332		13		(3)		1,342		2,250		9		(4)		2,255
Bank deposits		1,155		—		(1)		1,154		1,550		1		—		1,551
Marketable equity securities		334		568		(10)		892		380		629		(1)		1,008
Asset-backed securities		69		—		(10)		59		76		—		(9)		67
Money market fund deposits		550		—		—		550		34		—		—		34
Total available-for-sale
investments	$	8,609	$	582	$	(25)	$	9,166	$	19,677	$	648	$	(19)	$	20,306

In the preceding table, government bonds include bonds issued or deemed to be guaranteed by government entities, such as instruments issued by non-U.S. governments, U.S. Treasury securities, FDIC-insured corporate bonds, and U.S. agency securities. Bank deposits were primarily issued by institutions outside the U.S. as of July 2, 2011 and December 25, 2010.

The amortized cost and fair value of available-for-sale debt investments as of July 2, 2011, by contractual maturity, were as follows:

(In Millions)	Cost		Fair Value
Due in 1 year or less	$	6,726	$	6,724
Due in 1–2 years		643		650
Due in 2–5 years		283		288
Due after 5 years		4		3
Instruments not due at a single maturity date		619		609
Total	$	8,275	$	8,274

Instruments not due at a single maturity date in the table above includes asset-backed securities and money market fund deposits.

We sold available-for-sale investments for proceeds of $1.2 billion in the second quarter of 2011 and $8.8 billion in the first half of 2011 ($44 million in the second quarter of 2010 and $337 million in the first half of 2010). Substantially all of the proceeds in the first half of 2011 were from debt investments that were primarily used to fund our acquisition of McAfee. The gross realized gains on sales of available-for-sale investments were $36 million in the second quarter of 2011 and $64 million in the first half of 2011 ($12 million in the second quarter of 2010 and $79 million in the first half of 2010) and were primarily related to our sales of marketable equity securities. We determine the cost of an investment sold on an average cost basis at the individual security level.

The before-tax net unrealized holding gains (losses) on available-for-sale investments that have been included in other comprehensive income (loss) and the before-tax net gains (losses) reclassified from accumulated other comprehensive income (loss) into earnings were as follows:

	Three Months Ended				Six Months Ended
	July 2,		June 26,		July 2,		June 26,
(In Millions)	2011		2010		2011		2010
Net unrealized holding gains (losses) included in
other comprehensive income (loss)	$	(12)	$	(17)	$	24	$	134
Net gains (losses) reclassified from accumulated other
comprehensive income (loss) into earnings	$	44	$	7	$	88	$	74

- Definition

This item represents the entire disclosure related to Available-for-sale Securities which consist of all investments in certain debt and equity securities neither classified as trading or held-to-maturity securities. A debt security represents a creditor relationship with an enterprise. Debt securities include, among other items, US Treasury securities, US government securities, municipal securities, corporate bonds, convertible debt, commercial paper, and all securitized debt instruments. An equity security represents an ownership interest in an enterprise or the right to acquire or dispose of an ownership interest in an enterprise at fixed or determinable prices. Equity securities include, among other things, common stock, certain preferred stock, warrant rights, call options, and put options, but do not include convertible debt. An entity may opt to provide the reader with additional narrative text to better understand the nature of investments in debt and equity securities which are categorized as Available-for-sale.

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