Cash, Cash Equivalents and Investments

12 Months Ended

Oct. 25, 2020

Cash and Cash Equivalents [Abstract]

Summary of Cash, Cash Equivalents and Investments

The following tables summarize Applied’s cash, cash equivalents and investments by security type:


October 25, 2020	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

	(In millions)
Cash	$	1,136	$	—	$	—	$	1,136
Cash equivalents:
Money market funds	4,209		—		—		4,209


Municipal securities	6		—		—		6


Total Cash equivalents	4,215		—		—		4,215
Total Cash and Cash equivalents	$	5,351	$	—	$	—	$	5,351
Short-term and long-term investments:
U.S. Treasury and agency securities	$	394	$	4	$	—	$	398

Municipal securities	359		6		—		365
Commercial paper, corporate bonds and medium-term notes	492		8		1		499
Asset-backed and mortgage-backed securities	470		9		—		479
Total fixed income securities	1,715		27		1		1,741
Publicly traded equity securities	11		36		2		45
Equity investments in privately-held companies	121		25		7		139
Total equity investments	132		61		9		184
Total short-term and long-term investments	$	1,847	$	88	$	10	$	1,925
Total Cash, Cash equivalents and Investments	$	7,198	$	88	$	10	$	7,276

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October 27, 2019	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

	(In millions)
Cash	$	1,071	$	—	$	—	$	1,071
Cash equivalents:
Money market funds	1,677		—		—		1,677
U.S. Treasury and agency securities	4		—		—		4


Commercial paper, corporate bonds and medium-term notes	377		—		—		377
Total Cash equivalents	2,058		—		—		2,058
Total Cash and Cash equivalents	$	3,129	$	—	$	—	$	3,129
Short-term and long-term investments:
U.S. Treasury and agency securities	$	336	$	1	$	—	$	337
Non-U.S. government securities*	10		—		—		10
Municipal securities	402		4		—		406
Commercial paper, corporate bonds and medium-term notes	642		5		—		647
Asset-backed and mortgage-backed securities	631		4		—		635
Total fixed income securities	2,021		14		—		2,035
Publicly traded equity securities	8		40		3		45
Equity investments in privately-held companies	105		10		3		112
Total equity investments	113		50		6		157
Total short-term and long-term investments	$	2,134	$	64	$	6	$	2,192
Total Cash, Cash equivalents and Investments	$	5,263	$	64	$	6	$	5,321

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* Includes agency debt securities guaranteed by Canada.

Maturities of Investments

The following table summarizes the contractual maturities of Applied’s investments at October 25, 2020:


	Cost		Estimated Fair Value

	(In millions)
Due in one year or less	$	367	$	369
Due after one through five years	878		893
Due after five years	—		—
No single maturity date**	602		663
Total	$	1,847	$	1,925

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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

Gross realized gains and losses on sales of investments for each fiscal year were as follows:


	2020		2019		2018

	(In millions)
Gross realized gains	$	19	$	10	$	29
Gross realized losses	$	2	$	2	$	3

At October 25, 2020, gross unrealized losses related to Applied’s debt investment portfolio were not material. Applied regularly reviews its debt 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.

Applied determined that the gross unrealized losses on its marketable fixed-income securities at October 25, 2020, October 27, 2019 and October 28, 2018 were temporary in nature and therefore it did not recognize any impairment of its marketable fixed-income securities for fiscal 2020, 2019 or 2018. During fiscal 2020, 2019 and 2018, impairment charge on equity investments in privately-held companies were not material. These impairment charges are included in interest and other income, net in the Consolidated Statement of Operations.

Unrealized gains and losses on investments classified as equity investments are recognized in other income (expense), net in the Consolidated Statement of Operations. Prior to the adoption of Accounting Standards Update (ASU) 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities in the first quarter of fiscal 2019, these unrealized gains and temporary losses were included within accumulated other comprehensive income (loss), net of any related tax effect.

The components of gain (loss) on equity investments for each fiscal year were as follows:


	2020		2019

	(In millions)
Publicly traded equity securities
Unrealized gain	$	14	$	28
Unrealized loss	(17)		(5)
Realized gain on sales	1		2

Equity investments in privately-held companies
Unrealized gain	18		13
Unrealized loss	(7)		(6)
Realized gain on sales	8		5
Realized loss on sales or impairment	(8)		(1)
Total gain (loss) on equity investments, net	$	9	$	36