Fair Value Measurements (Tables)

9 Months Ended

Mar. 31, 2017

Cash, Cash Equivalents, and Marketable Securities

The Company’s total cash, cash equivalents and marketable securities was as follows:



	March 31, 2017		July 1, 2016
	(in millions)
Cash and cash equivalents	$	5,652	$	8,151
Short-term marketable securities	25		227
Long-term marketable securities	89		119
Total cash, cash equivalents and marketable securities	$	5,766	$	8,497

Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following tables present information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2017 and July 1, 2016, and indicate the fair value hierarchy of the valuation techniques utilized to determine such values:



	March 31, 2017
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Cash equivalents:
Money market funds	$	1,776	$	—	$	—	$	1,776
Certificates of deposit	—		9		—		9
Total cash equivalents	1,776		9		—		1,785
Short-term investments:
Corporate notes and bonds	—		13		—		13
Asset-backed securities	—		8		—		8
Municipal notes and bonds	—		3		—		3
Equity securities	1		—		—		1
Total short-term investments	1		24		—		25
Long-term investments:
U.S. Treasury securities	4		—		—		4
U.S. Government agency securities	—		5		—		5
International government securities	—		1		—		1
Corporate notes and bonds	—		63		—		63
Asset-backed securities	—		7		—		7
Municipal notes and bonds	—		9		—		9
Total long-term investments	4		85		—		89
Foreign exchange contracts	—		16		—		16
Call options	—		—		1		1
Total assets at fair value	$	1,781	$	134	$	1	$	1,916
Liabilities:
Foreign exchange contracts	$	—	$	100	$	—	$	100
Exchange option	—		—		2		2
Total liabilities at fair value	$	—	$	100	$	2	$	102



	July 1, 2016
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Cash equivalents:
Money market funds	$	2,199	$	—	$	—	$	2,199
Certificates of deposit	—		1		—		1
Total cash equivalents	2,199		1		—		2,200
Short-term investments:
Certificates of deposit	—		202		—		202
Corporate notes and bonds	—		8		—		8
Asset-backed securities	—		11		—		11
Municipal notes and bonds	—		6		—		6
Total short-term investments	—		227		—		227
Long-term investments:
U.S. Treasury securities	2		—		—		2
U.S. Government agency securities	—		10		—		10
International government securities	—		1		—		1
Corporate notes and bonds	—		89		—		89
Asset-backed securities	—		11		—		11
Municipal notes and bonds	—		6		—		6
Total long-term investments	2		117		—		119
Foreign exchange contracts	—		126		—		126
Call options	—		—		71		71
Total assets at fair value	$	2,201	$	471	$	71	$	2,743
Liabilities:
Foreign exchange contracts	$	—	$	23	$	—	$	23
Exchange option	—		—		155		155
Total liabilities at fair value	$	—	$	23	$	155	$	178

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

call options reported in Other current assets and Other non-current assets in the Company’s condensed consolidated balance sheets:



	2017 Call Options			2020 Call Options			Total
	(in millions)
Fair value at July 1, 2016	$	70		$	1		$	71
Net realized gain (loss)	2			(1		)	1
Redemptions	(72		)	—			(72		)
Net unrealized gain	—			1			1
Fair value at March 31, 2017	$	—		$	1		$	1

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

the exchange options reported in Accrued expenses and Other liabilities in the Company’s condensed consolidated balance sheets:



	2017 Exchange Options			2020 Exchange Options			Total
	(in millions)
Fair value at July 1, 2016	$	87		$	68		$	155
Net realized gain	(3		)	(31		)	(34		)
Redemptions	(83		)	(46		)	(129		)
Net unrealized loss	—			10			10
Fair value at March 31, 2017	$	1		$	1		$	2

For financial instruments where the carrying value (which includes principal adjusted for any unamortized issuance costs, and discounts or premiums) differs from fair value (which is based on quoted market prices), the following table represents the related carrying value and fair value for each of the Company’s outstanding financial instruments. Each of the financial instruments presented below was categorized as Level 2 for all periods presented, based on the frequency of trading immediately prior to the end of the third quarter of 2017 and the fourth quarter of 2016, respectively.



	March 31, 2017				July 1, 2016
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in millions)
Secured Notes	$	1,833	$	2,059	$	1,828	$	2,044
Unsecured Notes	3,241		3,951		3,229		3,575
Term Loan A	4,071		4,140		4,061		4,161
U.S. Term Loan B	—		—		3,546		3,773
U.S. Term Loan B-2	2,976		2,998		—		—
Euro Term Loan B⁽¹⁾	—		—		960		981
Euro Term Loan B-2⁽¹⁾	937		942		—		—
Bridge Loan	—		—		2,995		3,000
Convertible Debt 2017	—		—		124		125
Convertible Debt 2020	30		33		251		264
Total	$	13,088	$	14,123	$	16,994	$	17,923


⁽¹⁾	Euro Term Loan B and Euro Term Loan B-2 outstanding principal amounts as of March 31, 2017 and July 1, 2016 were based upon the Euro to U.S. dollar exchange rate as of those respective dates.

Available-for-sale Securities

The cost basis and fair value of the Company’s investments classified as available-for-sale securities as of March 31, 2017, by remaining contractual maturity, were as follows:



	Cost Basis		Fair Value
	(in millions)
Due in less than one year (short-term investments)	$	25	$	25
Due in one to five years (included in other non-current assets)	89		89
Total	$	114	$	114

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

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