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 29, 2017	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

	(In millions)
Cash	$	1,322	$	—	$	—	$	1,322
Cash equivalents:
Money market funds	1,533		—		—		1,533
U.S. Treasury and agency securities	50		—		—		50
Non-U.S. government securities*	31		—		—		31
Municipal securities	210		—		—		210
Commercial paper, corporate bonds and medium-term notes	345		—		—		345
Total Cash equivalents	2,169		—		—		2,169
Total Cash and Cash equivalents	$	3,491	$	—	$	—	$	3,491
Short-term and long-term investments:
U.S. Treasury and agency securities	$	103	$	—	$	1	$	102
Non-U.S. government securities*	35		—		—		35
Municipal securities	560		—		1		559
Commercial paper, corporate bonds and medium-term notes	470		—		1		469
Asset-backed and mortgage-backed securities	265		—		1		264
Total fixed income securities	1,433		—		4		1,429
Publicly traded equity securities	26		47		1		72
Equity investments in privately-held companies	64		—		—		64
Total short-term and long-term investments	$	1,523	$	47	$	5	$	1,565
Total Cash, Cash equivalents and Investments	$	5,014	$	47	$	5	$	5,056

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



October 30, 2016	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

	(In millions)
Cash	$	1,103	$	—	$	—	$	1,103
Cash equivalents:
Money market funds	1,889		—		—		1,889
U.S. Treasury and agency securities	10		—		—		10
Non-U.S. government securities*	10		—		—		10
Municipal securities	253		—		—		253
Commercial paper, corporate bonds and medium-term notes	141		—		—		141
Total Cash equivalents	2,303		—		—		2,303
Total Cash and Cash equivalents	$	3,406	$	—	$	—	$	3,406
Short-term and long-term investments:
U.S. Treasury and agency securities	$	195	$	—	$	—	$	195
Non-U.S. government securities*	5		—		—		5
Municipal securities	408		—		—		408
Commercial paper, corporate bonds and medium-term notes	273		1		—		274
Asset-backed and mortgage-backed securities	253		1		1		253
Total fixed income securities	1,134		2		1		1,135
Publicly traded equity securities	26		44		3		67
Equity investments in privately-held companies	70		—		—		70
Total short-term and long-term investments	$	1,230	$	46	$	4	$	1,272
Total Cash, Cash equivalents and Investments	$	4,636	$	46	$	4	$	4,678

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

Maturities of Investments

The following table summarizes the contractual maturities of Applied’s investments at January 29, 2017:



	Cost		Estimated Fair Value

	(In millions)
Due in one year or less	$	639	$	639
Due after one through five years	529		526
No single maturity date**	355		400
	$	1,523	$	1,565

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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 29, 2017 and January 31, 2016, gross realized gains and losses on investments were not material.

At January 29, 2017 and October 30, 2016, 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 fixed-income securities at January 29, 2017 and January 31, 2016 were temporary in nature and therefore it did not recognize any impairment of its marketable fixed-income securities during the three months ended January 29, 2017 or January 31, 2016. Impairment charges on equity investments in privately-held companies during the three months ended January 29, 2017 and January 31, 2016 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.