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 25, 2015	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

	(In millions)
Cash	$	491	$	—	$	—	$	491
Cash equivalents:
Money market funds	2,438		—		—		2,438
Total Cash equivalents	2,438		—		—		2,438
Total Cash and Cash equivalents	$	2,929	$	—	$	—	$	2,929
Short-term and long-term investments:
U.S. Treasury and agency securities	$	79	$	—	$	—	$	79
Non-U.S. government securities*	12		—		—		12
Municipal securities	374		2		—		376
Commercial paper, corporate bonds and medium-term notes	221		1		—		222
Asset-backed and mortgage-backed securities	284		1		2		283
Total fixed income securities	970		4		2		972
Publicly traded equity securities	19		30		—		49
Equity investments in privately-held companies	67		—		—		67
Total short-term and long-term investments	$	1,056	$	34	$	2	$	1,088
Total Cash, Cash equivalents and Investments	$	3,985	$	34	$	2	$	4,017

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



October 26, 2014	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

	(In millions)
Cash	$	508	$	—	$	—	$	508
Cash equivalents:
Money market funds	2,494		—		—		2,494
Total Cash equivalents	2,494		—		—		2,494
Total Cash and Cash equivalents	$	3,002	$	—	$	—	$	3,002
Short-term and long-term investments:
U.S. Treasury and agency securities	$	62	$	—	$	—	$	62
Non-U.S. government securities	14		—		—		14
Municipal securities	391		2		—		393
Commercial paper, corporate bonds and medium-term notes	223		1		—		224
Asset-backed and mortgage-backed securities	287		1		2		286
Total fixed income securities	977		4		2		979
Publicly traded equity securities	19		31		—		50
Equity investments in privately-held companies	66		—		—		66
Total short-term and long-term investments	$	1,062	$	35	$	2	$	1,095
Total Cash, Cash equivalents and Investments	$	4,064	$	35	$	2	$	4,097

Maturities of Investments

The following table summarizes the contractual maturities of Applied’s investments at January 25, 2015:



	Cost		Estimated Fair Value

	(In millions)
Due in one year or less	$	149	$	149
Due after one through five years	537		539
No single maturity date**	370		400
	$	1,056	$	1,088

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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

During the three months ended January 25, 2015, gross realized gains and losses on investments were not material. During the three months ended January 26, 2014, gross realized gains on investments were $12 million and gross realized losses on investments were not material.

At January 25, 2015 and October 26, 2014, 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 is 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 25, 2015 and January 26, 2014 were temporary in nature and therefore it did not recognize any impairment of its marketable securities during the three months ended January 25, 2015 or January 26, 2014. Impairment charges on equity investments in privately-held companies during the three months ended January 25, 2015 and January 26, 2014 were not material. These impairment charges are included in interest and other income, net in the consolidated condensed statement of operations.

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.