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 28, 2018	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

	(In millions)
Cash	$	1,469	$	—	$	—	$	1,469
Cash equivalents:
Money market funds	3,766		—		—		3,766
Non-U.S. government securities*	40		—		—		40
Municipal securities	836		—		—		836
Commercial paper, corporate bonds and medium-term notes	688		—		—		688
Total Cash equivalents	5,330		—		—		5,330
Total Cash and Cash equivalents	$	6,799	$	—	$	—	$	6,799
Short-term and long-term investments:
U.S. Treasury and agency securities	$	255	$	—	$	1	$	254
Non-U.S. government securities*	10		—		—		10
Municipal securities	452		—		2		450
Commercial paper, corporate bonds and medium-term notes	563		—		2		561
Asset-backed and mortgage-backed securities	397		—		3		394
Total fixed income securities	1,677		—		8		1,669
Publicly traded equity securities	22		93		1		114
Equity investments in privately-held companies	75		—		—		75
Total short-term and long-term investments	$	1,774	$	93	$	9	$	1,858
Total Cash, Cash equivalents and Investments	$	8,573	$	93	$	9	$	8,657

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



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

	(In millions)
Cash	$	1,346	$	—	$	—	$	1,346
Cash equivalents:
Money market funds	2,658		—		—		2,658
U.S. Treasury and agency securities	15		—		—		15
Non-U.S. government securities*	55		—		—		55
Municipal securities	341		—		—		341
Commercial paper, corporate bonds and medium-term notes	595		—		—		595
Total Cash equivalents	3,664		—		—		3,664
Total Cash and Cash equivalents	$	5,010	$	—	$	—	$	5,010
Short-term and long-term investments:
U.S. Treasury and agency securities	$	667	$	—	$	1	$	666
Non-U.S. government securities*	161		—		—		161
Municipal securities	1,007		—		—		1,007
Commercial paper, corporate bonds and medium-term notes	1,024		1		1		1,024
Asset-backed and mortgage-backed securities	379		—		1		378
Total fixed income securities	3,238		1		3		3,236
Publicly traded equity securities	22		78		1		99
Equity investments in privately-held companies	74		—		—		74
Total short-term and long-term investments	$	3,334	$	79	$	4	$	3,409
Total Cash, Cash equivalents and Investments	$	8,344	$	79	$	4	$	8,419

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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 28, 2018:



	Cost		Estimated Fair Value

	(In millions)
Due in one year or less	$	606	$	606
Due after one through five years	674		668
No single maturity date**	494		584
	$	1,774	$	1,858

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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 28, 2018 and January 29, 2017, gross realized gains and losses on investments were not material.

At January 28, 2018 and October 29, 2017, 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 28, 2018 and January 29, 2017 were temporary in nature and therefore it did not recognize any impairment of its marketable fixed-income securities during the three months ended January 28, 2018 or January 29, 2017. Impairment charges on equity investments in privately-held companies during the three months ended January 28, 2018 and January 29, 2017 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.