Cash, Cash Equivalents and Investments

Summary of Cash, Cash Equivalents and Investments

The following tables summarize Applied’s cash, cash equivalents and investments by security type:



January 27, 2013	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

	(In millions)
Cash	$	709	$	—	$	—	$	709
Cash equivalents:
Money market funds	814		—		—		814
Total Cash equivalents	814		—		—		814
Total Cash and Cash equivalents	$	1,523	$	—	$	—	$	1,523
Short-term and long-term investments:
U.S. Treasury and agency securities	$	210	$	1	$	—	$	211
Non-U.S. government securities*	13		—		—		13
Municipal securities	389		2		—		391
Commercial paper, corporate bonds and medium-term notes	270		3		—		273
Asset-backed and mortgage-backed securities	283		3		—		286
Total fixed income securities	1,165		9		—		1,174
Publicly traded equity securities	30		16		—		46
Equity investments in privately-held companies	72		—		—		72
Total short-term and long-term investments	$	1,267	$	25	$	—	$	1,292
Total Cash, Cash equivalents and Investments	$	2,790	$	25	$	—	$	2,815

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* Includes agency and corporate debt securities guaranteed by non-U.S. governments, which consist of Canada, Germany and Australia.



October 28, 2012	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

	(In millions)
Cash	$	876	$	—	$	—	$	876
Cash equivalents:
Money market funds	483		—		—		483
Municipal securities	33		—		—		33
Total Cash equivalents	516		—		—		516
Total Cash and Cash equivalents	$	1,392	$	—	$	—	$	1,392
Short-term and long-term investments:
U.S. Treasury and agency securities	$	373	$	1	$	—	$	374
Non-U.S. government securities	29		—		—		29
Municipal securities	396		2		—		398
Commercial paper, corporate bonds and medium-term notes	381		3		—		384
Asset-backed and mortgage-backed securities	294		4		—		298
Total fixed income securities	1,473		10		—		1,483
Publicly traded equity securities	32		15		—		47
Equity investments in privately-held companies	70		—		—		70
Total short-term and long-term investments	$	1,575	$	25	$	—	$	1,600
Total Cash, Cash equivalents and Investments	$	2,967	$	25	$	—	$	2,992

Maturities of Investments

The following table summarizes the contractual maturities of Applied’s investments at January 27, 2013:



	Cost		Estimated Fair Value

	(In millions)
Due in one year or less	$	200	$	201
Due after one through five years	682		687
No single maturity date**	385		404
	$	1,267	$	1,292

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** Securities with no single maturity date include publicly-traded and privately-held equity securities, and asset-backed and mortgage-backed securities.

Gains and Losses on Investments

At January 27, 2013 and October 28, 2012, gross unrealized losses related to Applied's investment portfolio were not material. Applied regularly reviews its investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether an unrealized loss was considered to be temporary, or other-than-temporary and therefore impaired, include: the length of time and extent to which fair value has been lower than the cost basis; the financial condition, credit quality and near-term prospects of the investee; and whether it is more likely than not that Applied will be required to sell the security prior to recovery. Generally, the contractual terms of investments in marketable securities do not permit settlement at prices less than the amortized cost of the investments. Applied determined that the gross unrealized losses on its marketable securities at January 27, 2013 and January 29, 2012 were temporary in nature and therefore it did not recognize any impairment of its marketable securities during the three months ended January 27, 2013 or January 29, 2012. Applied did not recognize any impairment on its equity investments in privately-held companies for the three months ended January 27, 2013 or January 29, 2012.

Unrealized gains and temporary losses on investments classified as available-for-sale are included within accumulated other comprehensive income (loss), net of any related tax effect. Upon realization, those amounts are reclassified from accumulated other comprehensive income (loss) to results of operations.