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:



April 30, 2017	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

	(In millions)
Cash	$	1,190	$	—	$	—	$	1,190
Cash equivalents:
Money market funds	2,637		—		—		2,637
U.S. Treasury and agency securities	5		—		—		5
Municipal securities	193		—		—		193
Commercial paper, corporate bonds and medium-term notes	919		—		—		919
Total Cash equivalents	3,754		—		—		3,754
Total Cash and Cash equivalents	$	4,944	$	—	$	—	$	4,944
Short-term and long-term investments:
U.S. Treasury and agency securities	$	531	$	—	$	1	$	530
Non-U.S. government securities*	162		—		—		162
Municipal securities	847		1		—		848
Commercial paper, corporate bonds and medium-term notes	768		1		1		768
Asset-backed and mortgage-backed securities	293		—		—		293
Total fixed income securities	2,601		2		2		2,601
Publicly traded equity securities	24		63		—		87
Equity investments in privately-held companies	73		—		—		73
Total short-term and long-term investments	$	2,698	$	65	$	2	$	2,761
Total Cash, Cash equivalents and Investments	$	7,642	$	65	$	2	$	7,705

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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 April 30, 2017:



	Cost		Estimated Fair Value

	(In millions)
Due in one year or less	$	1,777	$	1,778
Due after one through five years	531		530
No single maturity date**	390		453
	$	2,698	$	2,761

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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 and six months ended April 30, 2017 and May 1, 2016, gross realized gains and losses on investments were not material.

At April 30, 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 April 30, 2017 and May 1, 2016 were temporary in nature and therefore it did not recognize any impairment of its marketable fixed-income securities during the three and six months ended April 30, 2017 or May 1, 2016. Impairment charges on equity investments in privately-held companies during the three and six months ended April 30, 2017 and May 1, 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.