NOTE 3   INVESTMENTS

(In millions)	Cost basis		Unrealized gains		Unrealized losses		Recorded basis		Cash and equivalents		Short-term investments		Equity and other investments
June 30, 2007
Cash	$03,040		$0,00–		$(00–)		$03,040		$3,040		$00,00–		$00,00–
Mutual funds	398		4		(1)		401		132		205		64
Commercial paper	227		–		–)		227		179		48		–
Certificates of deposit	98		–		–)		98		–		98		–
U.S. Government and        Agency securities	3,085		4		(12)		3,077		1		3,002		74
Foreign government        bonds	3,845		2		(63)		3,784		–		3,784		–
Mortgage backed         securities	3,236		4		(49)		3,191		–		3,191		–
Corporate notes and         bonds	7,184		14		(18)		7,180		2,425		4,753		2
Municipal securities	2,639		3		(25)		2,617		334		2,283		–
Common stock and         equivalents	7,290		2,309		(18)		9,581		–		–		9,581
Preferred stock	62		12		–)		74		–		–		74
Other investments	258		–		–)		258		–		(64)		322
Total	$31,362		$2,352		$(186)		$33,528		$6,111		$17,300		$10,117
(In millions)	Cost basis		Unrealized gains		Unrealized losses		Recorded basis		Cash and equivalents		Short-term investments		Equity and other investments
June 30, 2006
Cash	$03,248		$0,00–		$(00–)		$03,248		$3,248		$00,00–		$0,00–
Mutual funds	723		11		(1))		733		288		445		–
Commercial paper	3,242		–		–)		3,242		3,150		92		–
Certificates of deposit	364		–		–)		364		–		364		–
U.S. Government         and Agency securities	4,904		4		(30)		4,878		14		4,790		74
Foreign government         bonds	6,034		21		(73)		5,982		–		5,982		–
Mortgage backed         securities	4,285		–		(42)		4,243		–		4,243		–
Corporate notes and         bonds	7,605		15		(18)		7,602		–		7,475		127
Municipal securities	4,008		5		(45)		3,968		14		3,954		–
Common stock and         equivalents	6,933		1,846		(34)		8,745		–		–		8,745
Preferred stock	41		5		–)		46		–		–		46
Other investments	342		–		–)		342		–		102		240
Total	$41,729		$1,907		$(243)		$43,393		$6,714		$27,447		$9,232

Investments with continuous unrealized losses for less than and greater than 12 months and their related fair values were as follows:

(In millions)	Fair value		Less than 12 months unrealized losses		Fair value		12 months or greater unrealized losses		Fair value		Total unrealized losses
June 30, 2007
Mutual funds	$ 0076		$00(1)		$003		$(0)–		$ 0079		$00(1)
U.S. Government and        Agency securities	1,219		(8)		238		(4)		1,457		(12)
Foreign government         bonds	3,554		(63)		2		–		3,556		(63)
Mortgage backed         securities	2,520		(43)		214		(6)		2,734		(49)
Corporate notes         and bonds	526		(14)		74		(4)		600		(18)
Municipal securities	575		(9)		420		(16)		995		(25)
Common stock and         equivalents	237		(17)		9		(1)		246		(18)
Total	$8,707		$(155)		$960		$(31)		$9,667		$(186)
(In millions)	Fair value		Less than 12 months unrealized losses		Fair value		12 months or greater unrealized losses		Fair value		Total unrealized losses
June 30, 2006
Mutual funds	$ 00 14		$00(1)		$ 0 0 4		$,00–		$ 0 0 18		$00(1)
U.S. Government and         Agency securities	2,303		(24)		172		(6)		2,475		(30)
Foreign government         bonds	2,523		(56)		1,749		(17)		4,272		(73)
Mortgage backed         securities	2,692		(40)		102		(2)		2,794		(42)
Corporate notes         and bonds	4,721		(13)		359		(5)		5,080		(18)
Municipal securities	1,323		(13)		1,192		(32)		2,515		(45)
Common stock and         equivalents	266		(33)		29		(1)		295		(34)
Total	$13,842		$(180)		$3,607		$(63)		$17,449		$(243)

At June 30, 2007, unrealized losses of $186 million consisted of: $161 million related to investment grade fixed-income securities, $7 million related to investments in high yield and emerging market fixed-income securities, $7 million related to domestic equity securities, and $11 million related to international equity securities. At June 30, 2006, unrealized losses of $243 million consisted of: $196 million related to investment grade fixed-income securities, $12 million related to investments in high yield and emerging market fixed-income securities, $2 million related to domestic equity securities, and $33 million related to international equity securities. 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 unrealized losses represent an other-than-temporary impairment based on our evaluation of available evidence as of June 30, 2007.

Common and preferred stock and other investments that are restricted for more than one year or are not publicly traded are recorded at cost. At June 30, 2007, the recorded basis and estimated fair value of these investments was $38 million. At June 30, 2006, the recorded basis and estimated fair value of these investments was $41 million. The estimate of fair value is based on publicly available market information or other estimates determined by management.

The maturities of debt securities, including fixed-maturity securities, at June 30, 2007 were as follows:

(In millions)	Cost basis		Estimated fair value
Due in one year or less	$05,519		$05,518
Due after one year through five years	6,886		6,849
Due after five years through ten years	2,935		2,890
Due after ten years	4,910		4,853
Total	$20,250		$20,110