The Company follows the authoritative guidance on fair value measurements and disclosures, with respect to assets and liabilities that are measured at fair value on both a recurring and nonrecurring basis. Under this guidance, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The authoritative guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy is broken down into three levels. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Descriptions of the three levels of the fair value hierarchy are discussed in Note 6 of the Company's Annual Report on Form 10-K for the year ended April 29, 2011.

See the section below titled Valuation Techniques for further discussion of how the Company determines fair value for financial assets and liabilities.

The authoritative guidance is principally applied to financial assets and liabilities such as marketable debt and equity securities that are classified and accounted for as trading, available-for-sale, and derivative instruments. Derivatives include cash flow hedges, freestanding derivative forward contracts, and interest rate swaps. These items are marked-to-market at each reporting period. The information in the following paragraphs and tables primarily addresses matters relative to these financial assets and liabilities.

The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis.

	Fair Value		Fair Value Measurements
	as of		Using Inputs Considered as
(in millions)	July 29, 2011		Level 1		Level 2		Level 3
Assets:
Corporate debt securities	$	2,390	$	-	$	2,373	$	17
Auction rate securities		134		-		-		134
Mortgage-backed securities		857		-		824		33
U.S. government and agency securities		2,695		1,398		1,297		-
Foreign government and agency securities		89		-		89		-
Certificates of deposit		109		-		109		-
Other asset-backed securities		400		-		394		6
Marketable equity securities		225		225		-		-
Exchange-traded funds		41		41		-		-
Derivative assets		175		33		142		-
Total assets	$	7,115	$	1,697	$	5,228	$	190

Liabilities:
Derivative liabilities	$	296	$	296	$	-	$	-
Total liabilities	$	296	$	296	$	-	$	-

	Fair Value		Fair Value Measurements
	as of		Using Inputs Considered as
(in millions)	April 29, 2011		Level 1		Level 2		Level 3
Assets:
Corporate debt securities	$	1,961	$	-	$	1,944	$	17
Auction rate securities		133		-		-		133
Mortgage-backed securities		785		-		750		35
U.S. government and agency securities		2,756		1,453		1,303		-
Foreign government and agency securities		131		-		131		-
Certificates of deposit		119		-		119		-
Other asset-backed securities		349		-		343		6
Marketable equity securities		237		237		-		-
Exchange-traded funds		39		39		-		-
Derivative assets		130		21		109		-
Total assets	$	6,640	$	1,750	$	4,699	$	191

Liabilities:
Derivative liabilities	$	303	$	303	$	-	$	-
Total liabilities	$	303	$	303	$	-	$	-

Financial assets that are classified as Level 1 securities include highly liquid government bonds within the U.S. government and agency securities, marketable equity securities, and exchange-traded funds for which quoted market prices are available. In addition, the Company has determined that foreign currency forward contracts will be included in Level 1 as these are valued using quoted market prices in active markets which have identical assets or liabilities.

The valuation for most fixed maturity securities are classified as Level 2. Financial assets that are classified as Level 2 include corporate debt securities, U.S. government and agency securities, foreign government and agency securities, certificates of deposit, other asset-backed securities, and certain mortgage-backed securities whose value is determined using inputs that are observable in the market or can be derived principally from or corroborated by observable market data such as pricing for similar securities, recently executed transactions, cash flow models with yield curves, and benchmark securities. In addition, interest rate swaps are included in Level 2 as the Company uses inputs other than quoted prices that are observable for the asset. The Level 2 derivative instruments are primarily valued using standard calculations and models that use readily observable market data as their basis.

Financial assets and liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable. Level 3 financial assets also include certain investment securities for which there is limited market activity such that the determination of fair value requires significant judgment or estimation. Level 3 investment securities primarily include certain corporate debt securities, auction rate securities, certain mortgage-backed securities, and certain other asset-backed securities for which there was a decrease in the observability of market pricing for these investments. At July 29, 2011, these securities were valued primarily using broker pricing models that incorporate transaction details such as contractual terms, maturity, timing, and amount of expected future cash flows, as well as assumptions about liquidity and credit valuation adjustments of marketplace participants. The Company uses level 3 inputs in the measurement of contingent milestone payments and related liabilities for all acquisitions subsequent to April 24, 2009. See Note 3 for further information regarding contingent consideration.

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. The Company's policy is to recognize transfers into and out of levels within the fair value hierarchy at the end of the fiscal quarter in which the actual event or change in circumstances that caused the transfer occurs. There were no significant transfers between Level 1, Level 2, or Level 3 during the three months ended July 29, 2011 or July 30, 2010. 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. The following tables provide a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3) for the three months ended July 29, 2011 and July 30, 2010.

Three Months Ended July 29, 2011
(in millions)	Total Level 3 Investments		Corporate debt securities		Auction rate securities		Mortgage-backed securities		Other asset-backed securities
Balance as of April 29, 2011	$	191	$	17	$	133	$	35	$	6
Total realized losses and other-than-temporary impairment losses included in earnings		(1)		-		-		-		(1)
Total unrealized gains/(losses) included in other comprehensive income		2		-		1		-		1
Settlements		(2)		-		-		(2)		-
Balance as of July 29, 2011	$	190	$	17	$	134	$	33	$	6

Three Months Ended July 30, 2010
(in millions)	Total Level 3 Investments		Corporate debt securities		Auction rate securities		Mortgage-backed securities		Other asset-backed securities
Balance as of April 30, 2010	$	213	$	16	$	142	$	39	$	16
Total realized losses and other-than-temporary impairment losses included in earnings		(2)		(1)		-		(1)		-
Total unrealized gains/(losses) included in other comprehensive income		(2)		2		(4)		-		-
Settlements		(11)		(1)		-		(1)		(9)
Balance as of July 30, 2010	$	198	$	16	$	138	$	37	$	7

Non-financial assets such as equity and other securities that are accounted for using the cost or equity method, goodwill, intangible assets, and property, plant, and equipment are measured at fair value when there is an indicator of impairment and recorded at fair value only when an impairment is recognized.

The Company holds investments in equity and other securities that are accounted for using the cost or equity method, which are classified as long-term investments in the condensed consolidated balance sheets. The aggregate carrying amount of these investments was $843 million as of July 29, 2011 and $656 million as of April 29, 2011. These cost or equity method investments are measured at fair value on a nonrecurring basis. The fair value of the Company's cost or equity method investments is not estimated if there are no identified events or changes in circumstance that may have a significant adverse effect on the fair value of these investments. The Company did not record any impairment charges related to cost method investments during the three months ended July 29, 2011. During the three months ended July 30, 2010, the Company determined that the fair values of certain cost method investments were below their carrying values and that the carrying values of these investments were not expected to be recoverable within a reasonable period of time. As a result, the Company recognized $3 million in impairment charges during the three months ended July 30, 2010. The impairment charges related to the cost method investments were recorded in other expense (income) in the condensed consolidated statements of earnings. These investments fall within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs to determine fair value, as the investments are privately held entities without quoted market prices. To determine the fair value of these investments, the Company used all pertinent financial information that was available related to the entities, including financial statements and market participant valuations from recent and proposed equity offerings.

The Company assesses the impairment of intangible assets whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. The aggregate carrying amount of intangible assets was $2.695 billion as of July 29, 2011 and $2.777 billion as of April 29, 2011, respectively. These assets are measured at fair value on a nonrecurring basis. The fair value of the Company's intangible assets is not estimated if there is no change in events or circumstances that indicate the carrying amount of an intangible asset may not be recoverable. The Company did not record any intangible asset impairments during the three months ended July 29, 2011 or July 30, 2010.

The Company assesses the impairment of goodwill annually or whenever an event occurs or circumstances change that would indicate that the carrying amount may be impaired. The aggregate carrying amount of goodwill was $9.541 billion as of July 29, 2011 and $9.537 billion as of April 29, 2011, respectively. These assets are measured at fair value on a nonrecurring basis. The fair value of the Company's goodwill is not estimated if there is no change in events or circumstances that indicate the carrying amount may be impaired. The Company did not record any goodwill impairments during the three months ended July 29, 2011 or July 30, 2010.

The Company assesses the impairment of property, plant, and equipment whenever events or changes in circumstances indicate that the carrying amount of a property, plant, and equipment asset may not be recoverable. The Company did not recognize any significant impairments during the three months ended July 29, 2011 or July 30, 2010.

The estimated fair value of the Company's long-term debt, including the short-term portion, as of July 29, 2011 was $8.635 billion compared to a principal value of $8.093 billion, and as of April 29, 2011 was $8.524 billion compared to a principal value of $8.096 billion. Fair value was estimated using quoted market prices for the same or similar instruments. The fair values and principal values consider the terms of the related debt and exclude the impacts of debt discounts, and derivative/hedging activity.