XML 41 R29.htm IDEA: XBRL DOCUMENT v3.10.0.1
Financial Instruments (Tables)
 3 Months Ended
Jul. 27, 2018
Investments [Abstract]  
Investments by Category and Related Balance Sheet Classification, Debt Securities
The following table summarizes the Company's investments in available-for-sale debt securities by significant investment category and the related consolidated balance sheet classification at July 27, 2018:    
 
Valuation
 
Balance Sheet Classification
(in millions)
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Value
 
Investments
 
Other Assets
Level 1:
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency securities
$
635

 
$
—

 
$
(25
)
 
$
610

 
$
610

 
$
—

Level 2:
 
 
 
 
 
 
 
 
 
 
 
Corporate debt securities
4,162

 
16

 
(71
)
 
4,107

 
4,107

 
—

U.S. government and agency securities
838

 
—

 
(23
)
 
815

 
815

 
—

Mortgage-backed securities
620

 
1

 
(36
)
 
585

 
585

 
—

Non-U.S. government and agency securities
87

 
—

 
(1
)
 
86

 
86

 
—

Other asset-backed securities
424

 
—

 
(3
)
 
421

 
421

 
—

Total Level 2
6,131

 
17

 
(134
)
 
6,014

 
6,014

 
—

Level 3:
 
 
 
 
 
 
 
 
 
 
 
Auction rate securities
47

 
—

 
(3
)
 
44

 
—

 
44

Total available-for-sale debt securities
$
6,813

 
$
17

 
$
(162
)
 
$
6,668

 
$
6,624

 
$
44

The following table summarizes the Company's investments in available-for-sale debt securities by significant investment category and the related consolidated balance sheet classification at April 27, 2018:    
 
Valuation
 
Balance Sheet Classification
(in millions)
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Value
 
Investments
 
Other Assets
Level 1:
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency securities
$
732

 
$
—

 
$
(26
)
 
$
706

 
$
706

 
$
—

Level 2:
 
 
 
 
 
 
 
 
 
 
 
Corporate debt securities
4,179

 
20

 
(75
)
 
4,124

 
4,124

 
—

U.S. government and agency securities
848

 
—

 
(24
)
 
824

 
824

 
—

Mortgage-backed securities
725

 
2

 
(34
)
 
693

 
693

 
—

Non-U.S. government and agency securities
74

 
—

 
(1
)
 
73

 
73

 
—

Other asset-backed securities
358

 
—

 
(2
)
 
356

 
356

 
—

Total Level 2
6,184

 
22

 
(136
)
 
6,070

 
6,070

 
—

Level 3:
 
 
 
 
 
 
 
 
 
 
 
Auction rate securities
47

 
—

 
(3
)
 
44

 
—

 
44

Total available-for-sale debt securities
$
6,963

 
$
22

 
$
(165
)
 
$
6,820

 
$
6,776

 
$
44
Available-For-Sale Debt Securities in Continuous Unrealized Loss Position

The following tables present the gross unrealized losses and fair values of the Company’s available-for-sale debt securities that have been in a continuous unrealized loss position deemed to be temporary, aggregated by investment category at July 27, 2018 and April 27, 2018:
 
July 27, 2018
 
Less than 12 months
 
More than 12 months
(in millions)
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
U.S. government and agency securities
$
668

 
$
(31
)
 
$
358

 
$
(17
)
Corporate debt securities
2,766

 
(56
)
 
265

 
(15
)
Mortgage-backed securities
425

 
(13
)
 
115

 
(23
)
Non-U.S. government and agency securities
42

 
—

 
36

 
(1
)
Other asset-backed securities
288

 
(2
)
 
60

 
(1
)
Auction rate securities
—

 
—

 
44

 
(3
)
Total
$
4,189

 
$
(102
)
 
$
878

 
$
(60
)
 
April 27, 2018
 
Less than 12 months
 
More than 12 months
(in millions)
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
U.S. government and agency securities
$
762

 
$
(33
)
 
$
374

 
$
(17
)
Corporate debt securities
2,620

 
(58
)
 
272

 
(17
)
Mortgage-backed securities
442

 
(15
)
 
102

 
(19
)
Non-U.S. government and agency securities
32

 
—

 
36

 
(1
)
Other asset-backed securities
238

 
(1
)
 
63

 
(1
)
Auction rate securities
—

 
—

 
44

 
(3
)
Total
$
4,094

 
$
(107
)
 
$
891

 
$
(58
)
Unobservable Inputs Utilized in the Fair Value Measurement of Auction Rate Securities Classified as Level 3
The recurring Level 3 fair value measurements of contingent consideration include the following significant unobservable inputs:
 
 
Fair Value at
 
 
 
 
 
 
(in millions)
 
July 27, 2018
 
Valuation Technique
 
Unobservable Input
 
Range
 
 
 
 
 
 
Discount rate
 
11.5% - 32.5%
Revenue and other performance-based payments
 
$121
 
Discounted cash flow
 
Probability of payment
 
100%
 
 
 
 
 
 
Projected fiscal year of payment
 
2019 - 2025
 
 
 
 
 
 
Discount rate
 
5.5%
Product development and other milestone-based payments
 
$87
 
Discounted cash flow
 
Probability of payment
 
75% - 100%
 
 
 
 
 
 
Projected fiscal year of payment
 
2019 - 2027
The following table presents the unobservable inputs utilized in the fair value measurement of the auction rate securities classified as Level 3 at July 27, 2018:
 
Valuation Technique
Unobservable Input
Range (Weighted Average)
Auction rate securities
Discounted cash flow
Years to principal recovery
2 yrs. - 12 yrs. (3 yrs.)
Illiquidity premium
6%
Activity Related to the Company's Debt Securities Portfolio
Activity related to the Company’s debt securities portfolio is as follows:
 
Three months ended
(in millions)
July 27, 2018
July 28, 2017
Proceeds from sales
$
1,112

 
$
971

Gross realized gains
6

 
8

Gross realized losses
(7
)
 
(3
)
Impairment losses recognized
—

 
—
Available-for-sale Debt Securities Contractual Maturities
The July 27, 2018 balance of available-for-sale debt securities by contractual maturity is shown in the following table. Within the table, maturities of mortgage-backed securities have been allocated based upon timing of estimated cash flows assuming no change in the current interest rate environment. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.
(in millions)
July 27, 2018
Due in one year or less
$
1,009

Due after one year through five years
2,769

Due after five years through ten years
2,775

Due after ten years
115

Total
$
6,668
Summary of Equity and Other Investments
The following table summarizes the Company's equity and other investments at July 27, 2018, which are classified as other assets in the consolidated balance sheets:
(in millions)
 
July 27, 2018
Investments with readily determinable fair values (marketable equity securities)
 
$
218

Investments without readily determinable fair values
 
150

Equity method and other investments
 
132

Total equity and other investments
 
$
500
Investments by Category and Related Balance Sheet Classification, Equity and Other Investments
The follow table summarizes the values of the Company's equity and other investments by significant investment category and the related consolidated balance sheet classification at April 27, 2018:
 
Valuation
 
Balance Sheet Classification
(in millions)
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Value
 
Investments
 
Other Assets
Available-for-sale securities
 

 
 

 
 

 
 

 
 
 
 
Level 1:
 
 
 
 
 
 
 
 
 
 
 
Marketable equity securities
$
63

 
$
99

 
$
—

 
$
162

 
$
—

 
$
162

Level 2:
 
 
 
 
 
 
 
 
 
 
 
Debt funds
739

 
—

 
(154
)
 
585

 
585

 
—

Investments measured at net asset value(1):
 
 
 
 
 
 
 
 
 
 
 
Debt funds
199

 
—

 
(2
)
 
197

 
197

 
—

Total available-for-sale equity securities
1,001

 
99

 
(156
)
 
944

 
782

 
162

Cost method, equity method, and other investments:
 
 
 
 
 
 
 
 
 
 
 
Level 3:
 
 
 
 
 
 
 
 
 
 
 
Cost method, equity method, and other investments
353

 
—

 
—

 
N/A

 
—

 
353

Total equity and other investments
$
1,354

 
$
99

 
$
(156
)
 
$
944

 
$
782

 
$
515

(1) Certain investments that are measured at the net asset value per share (or its equivalent) as a practical expedient are excluded from the fair value hierarchy. The fair value amounts presented herein are intended to permit reconciliation to the consolidated balance sheets.
Activity Related to the Company's Equity and Other Investments Portfolio
The table below includes activity related to the Company’s portfolio of equity and other investments. Gains and losses on equity and other investments are recognized in other non-operating income, net in the consolidated statements of income.    
 
 
Three months ended
(in millions)
 
July 27, 2018
 
July 28, 2017(1)
Proceeds from sales
 
$
908

 
$
—

Gross gains
 
114

 
7

Gross losses
 
(16
)
 
—

Impairment losses recognized
 
—

 
—

(1) Gains and losses for the three months ended July 28, 2017 represent realized amounts.