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 31, 2016	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

	(In millions)
Cash	$	1,861	$	—	$	—	$	1,861
Cash equivalents:
Money market funds	856		—		—		856
Non-U.S. government securities*	10		—		—		10
Municipal securities	71		—		—		71
Commercial paper, corporate bonds and medium-term notes	164		—		—		164
Total Cash equivalents	1,101		—		—		1,101
Total Cash and Cash equivalents	$	2,962	$	—	$	—	$	2,962
Short-term and long-term investments:
U.S. Treasury and agency securities	$	101	$	—	$	—	$	101
Non-U.S. government securities*	9		—		—		9
Municipal securities	408		2		—		410
Commercial paper, corporate bonds and medium-term notes	248		—		1		247
Asset-backed and mortgage-backed securities	274		—		—		274
Total fixed income securities	1,040		2		1		1,041
Publicly traded equity securities	33		19		1		51
Equity investments in privately-held companies	58		—		—		58
Total short-term and long-term investments	$	1,131	$	21	$	2	$	1,150
Total Cash, Cash equivalents and Investments	$	4,093	$	21	$	2	$	4,112

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



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

	(In millions)
Cash	$	1,010	$	—	$	—	$	1,010
Cash equivalents:
Money market funds	3,272		—		—		3,272
Non-U.S. government securities	60		—		—		60
Municipal securities	73		—		—		73
Commercial paper, corporate bonds and medium-term notes	382		—		—		382
Total Cash equivalents	3,787		—		—		3,787
Total Cash and Cash equivalents	$	4,797	$	—	$	—	$	4,797
Short-term and long-term investments:
U.S. Treasury and agency securities	$	84	$	—	$	—	$	84
Non-U.S. government securities	9		—		—		9
Municipal securities	384		2		—		386
Commercial paper, corporate bonds and medium-term notes	250		—		—		250
Asset-backed and mortgage-backed securities	262		—		—		262
Total fixed income securities	989		2		—		991
Publicly traded equity securities	28		17		—		45
Equity investments in privately-held companies	78		—		—		78
Total short-term and long-term investments	$	1,095	$	19	$	—	$	1,114
Total Cash, Cash equivalents and Investments	$	5,892	$	19	$	—	$	5,911

Maturities of Investments

The following table summarizes the contractual maturities of Applied’s investments at January 31, 2016:



	Cost		Estimated Fair Value

	(In millions)
Due in one year or less	$	135	$	135
Due after one through five years	631		632
No single maturity date**	365		383
	$	1,131	$	1,150

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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 31, 2016 and January 25, 2015, gross realized gains and losses on investments were not material.

At January 31, 2016 and October 25, 2015, 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 31, 2016 and January 25, 2015 were temporary in nature and therefore it did not recognize any impairment of its marketable securities during the three months ended January 31, 2016 or January 25, 2015. Impairment charges on equity investments in privately-held companies during the three months ended January 31, 2016 and January 25, 2015 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.