Note 4. Investments
Merrill Lynch has several broad categories of investments on its Consolidated Balance Sheets, including Marketable investment securities, Investments of insurance subsidiaries, and Other investments.Marketable investment securities consist of highly liquid debt and equity securities, including those held for liquidity management purposes. Investments of insurance subsidiaries, primarily debt securities, are used to fund policyholder liabilities. Other investments consist of equity and debt securities, including those acquired in connection with merchant banking activities. Certain merchant banking investments are subject to restrictions that may limit Merrill Lynch's ability to realize its investment until such restrictions expire.
Marketable investment securities and certain investments of insurance subsidiaries and other investments are classified as available-for-sale, held-to-maturity, or trading as described in Note 1. Investment securities reported on the Consolidated Balance Sheets at December 29, 2000 and December 31, 1999 are as follows:
- Non-qualifying for SFAS No. 115 purposes.
- Primarily consists of insurance policy loans.
- Includes merchant banking investments and investments hedging deferred compensation liabilities.
Information regarding investment securities subject to SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities," follows:
The amortized cost and estimated fair value of debt securities at December 29, 2000, by contractual maturity, for available-for-sale and held-to-maturity investments follow:
- Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without prepayment penalties.
The proceeds and gross realized gains (losses) from the sale of available-for-sale investments are as follows:
Net unrealized gains (losses) from investment securities classified as trading included in the 2000, 1999, and 1998 Consolidated Statements of Earnings were $(22) million, $46 million, and $6 million, respectively.
Merrill Lynch hedges interest rate risk exposures on certain investments (see Note 6 for further information).
