Financial Instruments (Tables)

12 Months Ended

Jun. 25, 2017

Cash, Cash Equivalents, Short-Term Investments, Restricted Cash and Investments and Other Assets Measured at Fair Value on Recurring Basis

The following table sets forth the Company’s cash, cash equivalents, investments, restricted cash and investments, and other assets measured at fair value on a recurring basis as of June 25, 2017, and June 26, 2016:



	June 25, 2017
										(Reported Within)
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		Cash and Cash Equivalents		Investments		Restricted Cash & Investments		Other Assets
	(in thousands)
Cash	$	551,308	$	—	$	—		$	551,308	$	545,130	$	—	$	6,178	$	—
Level 1:
Time deposit	640,666		—		—			640,666		390,639		—		250,027		—
Money market funds	1,423,417		—		—			1,423,417		1,423,417		—		—		—
U.S. Treasury and agencies	783,848		684		(2,111		)	782,421		8,297		774,124		—		—
Mutual funds	53,247		3,007					56,254		—		—		—		56,254
Level 1 total	2,901,178		3,691		(2,111		)	2,902,758		1,822,353		774,124		250,027		56,254
Level 2:
Municipal notes and bonds	194,575		308		(7		)	194,876		—		194,876		—		—
U.S. Treasury and Agencies	12,795		—		(167		)	12,628		—		12,628		—		—
Government-sponsored enterprises	24,502		—		(6		)	24,496		—		24,496		—		—
Foreign government bonds	62,917		219		(114		)	63,022		—		63,022		—		—
Corporate notes and bonds	2,433,622		4,654		(1,840		)	2,436,436		10,051		2,426,385		—		—
Mortgage backed securities - residential	102,760		87		(489		)	102,358		—		102,358		—		—
Mortgage backed securities - commercial	65,828		9		(98		)	65,739		—		65,739		—		—
Level 2 total	2,896,999		5,277		(2,721		)	2,899,555		10,051		2,889,504		—		—
Total	$	6,349,485	$	8,968	$	(4,832	)	$	6,353,621	$	2,377,534	$	3,663,628	$	256,205	$	56,254



	June 26, 2016
										(Reported Within)
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		Cash and Cash Equivalents		Investments		Restricted Cash & Investments		Other Assets
	(in thousands)
Cash	$	418,216	$	—	$	—		$	418,216	$	412,573	$	—	$	5,643	$	—
Level 1:
Time deposit	904,243		—		—			904,243		659,465		—		244,778		—
Money market funds	3,904,288		—		—			3,904,288		3,904,288		—		—		—
U.S. Treasury and agencies	446,530		2,041		(2		)	448,569		62,996		385,573		—		—
Mutual funds	39,318		1,400		(397		)	40,321		—		—		—		40,321
Level 1 total	5,294,379		3,441		(399		)	5,297,421		4,626,749		385,573		244,778		40,321
Level 2:
Municipal notes and bonds	265,386		355		(16		)	265,725		—		265,725		—		—
U.S. Treasury and agencies	8,068		151		—			8,219		—		8,219		—		—
Government-sponsored enterprises	31,885		91		(13		)	31,963		—		31,963		—		—
Foreign government bonds	41,440		76		(4		)	41,512		—		41,512		—		—
Corporate notes and bonds	979,566		4,341		(566		)	983,341		—		983,341		—		—
Mortgage backed securities - residential	17,395		37		(152		)	17,280		—		17,280		—		—
Mortgage backed securities - commercial	55,129		30		(160		)	54,999		—		54,999		—		—
Level 2 total	1,398,869		5,081		(911		)	1,403,039		—		1,403,039		—		—
Total	$	7,111,464	$	8,522	$	(1,310	)	$	7,118,676	$	5,039,322	$	1,788,612	$	250,421	$	40,321

Schedule of Cash, Cash Equivalents, Short-Term Investments and Restricted Cash and Investments in Unrealized Loss Positions

The following is an analysis of the Company’s cash, cash equivalents, investments, and restricted cash and investments in unrealized loss positions:



	June 25, 2017
	Unrealized Losses Less than 12 Months					Unrealized Losses 12 Months or Greater					Total
	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
	(in thousands)
U.S. Treasury and agencies	$	539,374	$	(2,278	)	$	—	$	—		$	539,374	$	(2,278	)
Municipal notes and bonds	7,905		(7		)	—		—			7,905		(7		)
Government-sponsored enterprises	20,104		(2		)	506		(4		)	20,610		(6		)
Foreign government bonds	26,227		(114		)	—		—			26,227		(114		)
Corporate notes and bonds	998,793		(1,840		)	127		—			998,920		(1,840		)
Mortgage backed securities - residential	86,870		(468		)	1,369		(21		)	88,239		(489		)
Mortgage backed securities - commercial	50,014		(94		)	1,339		(4		)	51,353		(98		)
	$	1,729,287	$	(4,803	)	$	3,341	$	(29	)	$	1,732,628	$	(4,832	)

Schedule of Amortized Cost and Fair Value of Cash Equivalents, Short-Term Investments, Restricted Cash and Investments with Contractual Maturities

The amortized cost and fair value of cash equivalents, investments, and restricted investments with contractual maturities as of June 25, 2017, are as follows:



	Cost		Estimated Fair Value
	(in thousands)
Due in one year or less	$	2,701,107	$	2,700,908
Due after one year through five years	2,896,063		2,897,363
Due in more than five years	147,760		147,788
	$	5,744,930	$	5,746,059

Schedule of Outstanding Foreign Currency Forward Contracts

As of June 25, 2017, the Company had the following outstanding foreign currency contracts that were entered into under its cash flow and balance sheet hedge program:



	Notional Value
	Derivatives Designated as Hedging Instruments:				Derivatives Not Designated as Hedging Instruments:
	(in thousands)
Foreign currency forward contracts
	Buy Contracts		Sell Contracts		Buy Contracts		Sell Contracts
Japanese yen	$	—	$	670,162	$	—	$	269,518
Euro	58,854		—		18,417		—
Korean won	22,038		—		—		34,145
Taiwan dollar	—		—		11,168		—
Swiss franc	—		—		8,739		—
Chinese renminbi	—		—		7,169		—
	$	80,892	$	670,162	$	45,493	$	303,663
Foreign currency option contracts
	Buy Put		Sell Put		Buy Put ⁽¹⁾		Sell Put
Japanese yen	$	36,036	$	—	$	26,481	$	26,481

(1) Contracts were entered into and designated as cash flow hedges under ASC 815 during the fiscal year as part of our cash flow hedge program. The contracts were subsequently de-designated during the fiscal year ended June 25, 2017; changes in fair market value subsequent to de-designation effect current earnings.

Schedule of Fair Value of Derivatives Instruments

The fair value of derivative instruments in the Company’s Consolidated Balance Sheet as of June 25, 2017, and June 26, 2016, were as follows:



	June 25, 2017						June 26, 2016
	Fair Value of Derivative Instruments (Level 2)						Fair Value of Derivative Instruments (Level 2)
	Asset Derivatives			Liability Derivatives			Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
	(in thousands)
Derivatives designated as hedging instruments:
Foreign exchange forward contracts	Prepaid expense and other assets	$	8,061	Accrued expense and other current liabilities	$	2,916	Prepaid expense and other assets	$	249	Accrued expense and other current liabilities	$	16,585
Interest rate contracts, short-term		—		Accrued expense and other current liabilities	2,833		Prepaid expense and other assets	50		Accrued expense and other current liabilities	159
Interest rate contracts, long-term		—		Other long-term liabilities	7,269		Other assets	8,661			—
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Prepaid expense and other assets	213		Accrued expense and other current liabilities	342		Prepaid expense and other assets	107		Accrued expense and other current liabilities	1,529
Total derivatives		$	8,274		$	13,360		$	9,067		$	18,273

Schedule of Derivative Instruments Designated as Cash Flow Hedges in Statements of Operations

The effect of derivative instruments designated as cash flow hedges on the Company’s Consolidated Statements of Operations, including accumulated other comprehensive income (“AOCI”), was as follows:



		Year Ended June 25, 2017								Year Ended June 26, 2016
	Location of Gain (Loss) Recognized in or Reclassified into Income	Effective Portion					Ineffective Portion and Amount Excluded from Effectiveness			Effective Portion						Ineffective Portion and Amount Excluded from Effectiveness
Derivatives Designated as Hedging Instruments		Gain (Loss) Recognized in AOCI		Gain (Loss) Reclassified from AOCI into Income			Gain (Loss) Recognized in Income			Gain (Loss) Recognized in AOCI			Gain (Loss) Reclassified from AOCI into Income			Gain (Loss) Recognized in Income
		(in thousands)
Foreign exchange contracts	Revenue	$	2,927	$	(12,000	)	$	6,982		$	(22,575	)	$	(2,950	)	$	1,009
Foreign exchange contracts	Cost of goods sold	2,859		666			(686		)	81			(2,423		)	(172		)
Foreign exchange contracts	Selling, general, and administrative	1,128		71			(267		)	188			5			(69		)
Foreign exchange contracts	Other expense, net	—		—			(82		)	—			—			(11		)
Interest rate contracts	Other expense, net	—		1,727			—			3,329			(360		)	96
		$	6,914	$	(9,536	)	$	5,947		$	(18,977	)	$	(5,728	)	$	853

The effect of derivative instruments not designated as cash flow hedges on the Company’s Consolidated Statement of Operations was as follows:



		Year Ended
		June 25, 2017		June 26, 2016
Derivatives Not Designated as Hedging Instruments:	Location of (Loss) Gain Recognized in Income	Gain Recognized in Income		Loss Recognized in Income
		(in thousands)
Foreign exchange contracts	Other income	$	523	$	(16,208	)