Cash, Cash Equivalents and Investments

12 Months Ended

Oct. 31, 2021

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 31, 2021	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

	(In millions)
Cash	$	1,407	$	—	$	—	$	1,407
Cash equivalents:
Money market funds	3,556		—		—		3,556


Municipal securities	22		—		—		22
Commercial paper, corporate bonds and medium-term notes	10		—		—		10

Total Cash equivalents	3,588		—		—		3,588
Total Cash and Cash equivalents	$	4,995	$	—	$	—	$	4,995
Short-term and long-term investments:
U.S. Treasury and agency securities	$	314	$	—	$	—	$	314
Non-U.S. government securities*	5		—		—		5
Municipal securities	367		3		1		369
Commercial paper, corporate bonds and medium-term notes	587		2		2		587
Asset-backed and mortgage-backed securities	555		3		1		557
Total fixed income securities	1,828		8		4		1,832
Publicly traded equity securities	22		39		3		58
Equity investments in privately-held companies	561		82		14		629
Total equity investments	583		121		17		687
Total short-term and long-term investments	$	2,411	$	129	$	21	$	2,519
Total Cash, Cash equivalents and Investments	$	7,406	$	129	$	21	$	7,514

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* Includes Canadian provincial government debt


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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Maturities of Investments

The following table summarizes the contractual maturities of Applied’s investments at October 31, 2021:


	Cost		Estimated Fair Value

	(In millions)
Due in one year or less	$	393	$	395
Due after one through five years	878		878
Due after five years	2		2
No single maturity date**	1,138		1,244
Total	$	2,411	$	2,519

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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

At October 31, 2021, 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 from credit losses or other factors. Factors considered in determining whether an unrealized loss is considered to be a credit loss include: the significance of the decline in value compared to 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. Credit losses related to available-for-sale debt securities are recorded as an allowance for credit losses through interest and other income, net. Any additional changes in fair value that are not related to credit losses are recognized in accumulated other comprehensive income.

During fiscal 2021, with the adoption of credit losses authoritative guidance, Applied did not recognize significant credit losses and the ending allowance for credit losses was not material. Applied determined that the gross unrealized losses on its marketable fixed-income securities at October 25, 2020 and October 27, 2019 were temporary in nature and therefore it did not recognize any impairment of its marketable fixed-income securities for fiscal 2020 or 2019. During fiscal 2021, 2020 and 2019, impairment charges 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.

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


	2021		2020		2019

	(In millions)
Publicly traded equity securities
Unrealized gain	$	14	$	14	$	28
Unrealized loss	(11)		(17)		(5)
Realized gain on sales	2		1		2

Equity investments in privately-held companies
Unrealized gain	65		18		13
Unrealized loss	(12)		(7)		(6)
Realized gain on sales	48		8		5
Realized loss on sales or impairment	(7)		(8)		(1)
Total gain (loss) on equity investments, net	$	99	$	9	$	36