Financial Instruments

6 Months Ended

Oct. 28, 2022

Debt Securities

The Company holds investments in marketable debt securities that are classified and accounted for as available-for-sale and are remeasured on a recurring basis. The following tables summarize the Company's investments in available-for-sale debt securities by significant investment category and the related consolidated balance sheet classification at October 28, 2022 and April 29, 2022:


	October 28, 2022
	Valuation								Balance Sheet Classification
(in millions)	Cost		Unrealized Gains		Unrealized Losses		Fair Value		Investments		Other Assets
Level 1:
U.S. government and agency securities	$	556	$	—	$	(34)	$	522	$	522	$	—
Level 2:
Corporate debt securities	4,386		1		(273)		4,114		4,114		—
U.S. government and agency securities	946		—		(59)		887		887		—
Mortgage-backed securities	558		—		(61)		497		497		—
Non-U.S. government and agency securities	17		—		(1)		16		16		—
Certificates of deposit	10		—		—		10		10		—
Other asset-backed securities	587		—		(31)		556		556		—
Total Level 2	6,502		1		(424)		6,079		6,079		—
Level 3:
Auction rate securities	36		—		(3)		33		—		33
Total available-for-sale debt securities	$	7,094	$	1	$	(460)	$	6,635	$	6,602	$	33


	April 29, 2022
	Valuation								Balance Sheet Classification
(in millions)	Cost		Unrealized Gains		Unrealized Losses		Fair Value		Investments		Other Assets
Level 1:
U.S. government and agency securities	$	533	$	1	$	(15)	$	518	$	518	$	—
Level 2:
Corporate debt securities	4,457		4		(140)		4,321		4,321		—
U.S. government and agency securities	910		—		(41)		869		869		—
Mortgage-backed securities	592		—		(35)		558		558		—
Non-U.S. government and agency securities	17		—		—		17		17		—
Certificates of deposit	20		—		—		20		20		—
Other asset-backed securities	567		—		(11)		556		556		—
Total Level 2	6,563		4		(227)		6,341		6,341		—
Level 3:
Auction rate securities	36		—		(3)		33		—		33
Total available-for-sale debt securities	$	7,131	$	5	$	(245)	$	6,893	$	6,859	$	33

The amortized cost of debt securities excludes accrued interest, which is reported in other current assets in the consolidated balance sheets.

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 October 28, 2022 and April 29, 2022:


	October 28, 2022
	Less than 12 months				More than 12 months
(in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Corporate debt securities	$	207	$	(4)	$	3,133	$	(269)
U.S. government and agency securities	—		—		916		(93)
Mortgage-backed securities	—		—		491		(61)
Other asset-backed securities	—		—		554		(31)
Auction rate securities	—		—		33		(3)
Total	$	207	$	(4)	$	5,128	$	(456)


	April 29, 2022
	Less than 12 months				More than 12 months
(in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Corporate debt securities	$	222	$	(1)	$	2,993	$	(139)
U.S. government and agency securities	—		—		945		(56)
Mortgage-backed securities	—		—		507		(35)
Other asset-backed securities	—		—		526		(11)
Auction rate securities	—		—		33		(3)
Total	$	222	$	(1)	$	5,004	$	(244)

The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. There were no transfers into or out of Level 3 during the three and six months ended October 28, 2022 and October 29, 2021. When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement.

Activity related to the Company’s available-for-sale debt securities portfolio is as follows:


	Three months ended				Six months ended
(in millions)	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
Proceeds from sales	$	1,723	$	2,299	$	3,587	$	4,571
Gross realized gains	1		4		2		8
Gross realized losses	(10)		(2)		(19)		(4)

The October 28, 2022 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)	October 28, 2022
Due in one year or less	$	1,419
Due after one year through five years	3,649
Due after five years through ten years	899
Due after ten years	669
Total	$	6,635

Equity Securities, Equity Method Investments, and Other Investments

The Company holds investments in equity securities with readily determinable fair values, equity investments without readily determinable fair values, investments accounted for under the equity method, and other investments. Equity securities with readily determinable fair values are included in Level 1 of the fair value hierarchy, as they are measured using quoted market prices. Equity method investments and investments without readily determinable fair values are included within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs to determine fair value. To determine the fair value of these investments, the Company uses all pertinent financial information available related to the investees, including financial statements, market participant valuations from recent and proposed equity offerings, and other third-party data.

The following table summarizes the Company's equity and other investments at October 28, 2022 and April 29, 2022, which are classified as other assets in the consolidated balance sheets:


(in millions)	October 28, 2022		April 29, 2022
Investments with readily determinable fair value (marketable equity securities)	$	19	$	64
Investments without readily determinable fair values	808		732
Equity method and other investments	85		85
Total equity and other investments	$	912	$	881

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				Six months ended
(in millions)	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
Proceeds from sales	$	—	$	14	$	21	$	66
Gross gains	23		12		37		70
Gross losses	(7)		(15)		(11)		(20)
Impairment losses recognized	(4)		—		(12)		(10)

During the three and six months ended October 28, 2022, there were $7 million of net unrealized losses and $1 million of net unrealized gains, respectively, on equity securities and other investments still held at October 28, 2022. During the three and six months ended October 29, 2021, there were $8 million of net unrealized losses and $7 million of net unrealized gains, respectively, on equity securities and other investments still held at October 29, 2021.