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All market sensitive instruments discussed in this section relate to our investment assets that are classified as available for sale. As of December 31, 2004, our $5.3 billion investment portfolio includes $2.4 billion of fixed income securities that are subject primarily to interest rate risk and credit risk. 

## Interest Rate Risk 

The table below displays the potential impact of market value fluctuations on our fixed income securities portfolio as of December 31, 2004 and December 31, 2003, based on parallel 200 basis point shifts in interest rates up and down in 100 basis point increments. This analysis was performed on each security individually. 

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The preceding table indicates an asymmetric market value response to equivalent basis point shifts, up and down, in interest rates. This partly reflects exposur to fixed income securities containing a put feature. In total these securities represent approximately 4% and 5% of the fair market value of the total fixed income portfolio as of December 31, 2004 and December 31, 2003, respectively. The asymmetric market value response reflects our ability to put these bonds back to the issuer for early maturity in a rising interest rate environment (thereby limiting market value loss) but to hold these bonds to their much longer full maturity dates in a falling interest rate environment (thereby maximizing the full benefit of higher market values in that environment). 

As of December 31, 2004, we had gross unrealized appreciation on our entire investment portfolio of $293.9 million, which is offset by gross unrealized depreciation of $164.1 million. 

## Disclosure about Limitations of Interest Rate Sensitivity Analysis 

Computations of the prospective effects of hypothetical interest rate changes are based on numerous assumptions, including the maintenance of the existing level and composition of fixed income security assets, and should not be relied on as indicative of future results. 

Certain shortcomings are inherent in the method of analysis used in the computation of the fair value of fixed rate instruments. Actual values may differ from those projections presented should market conditions vary from assumptions used in the calculation of the fair value of individual securities, including non-parallel shifts in the term structure of interest rates and a change in individual issuer credit spreads. 

## Credit Risk 

We have exposure to credit risk, primarily as a holder of fixed income securities. We control this exposure by emphasizing investment grade credit quality in the fixed income securities we pur chase. 

As of December 31, 2004 and 2003, 86.7% and 92.3%, r espectively , of the aggregate of our fixed income securities, short-term investments, cash and cash equivalents portfolio consisted of securities rated investment grade, with 13.3% and 7.7%, respectively, rated below investment grade. 

We believe that this concentration in investment grade securities r educes our exposure to credit risk on these fixed income investments to an acceptable level. 

