FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Sep. 24, 2017

Cash, Cash Equivalents, 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 September 24, 2017, and June 25, 2017:



	September 24, 2017
										(Reported Within)
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		Cash and Cash Equivalents		Investments		Restricted Cash & Investments		Other Assets
	(in thousands)
Cash	$	543,990	$	—	$	—		$	543,990	$	537,972	$	—	$	6,018	$	—
Level 1:
Time deposit	693,205		—		—			693,205		443,178		—		250,027		—
Money market funds	1,395,032		—		—			1,395,032		1,395,032		—		—		—
U.S. Treasury and agencies	821,441		265		(2,569		)	819,137		15,648		803,489		—		—
Mutual funds	53,131		3,125		(70		)	56,186		—		—		—		56,186
Level 1 Total	2,962,809		3,390		(2,639		)	2,963,560		1,853,858		803,489		250,027		56,186
Level 2:
Municipal notes and bonds	165,029		322		(21		)	165,330		—		165,330		—		—
U.S. Treasury and agencies	12,798		—		(102		)	12,696		—		12,696		—		—
Government-sponsored enterprises	55,845		—		(322		)	55,523		—		55,523		—		—
Foreign government bonds	67,040		90		(128		)	67,002		—		67,002		—		—
Corporate notes and bonds	2,532,374		4,020		(2,376		)	2,534,018		14,632		2,519,386		—		—
Mortgage backed securities — residential	46,614		63		(116		)	46,561		—		46,561		—		—
Mortgage backed securities — commercial	106,173		40		(275		)	105,938		—		105,938		—		—
Level 2 Total	2,985,873		4,535		(3,340		)	2,987,068		14,632		2,972,436		—		—
Total	$	6,492,672	$	7,925	$	(5,979	)	$	6,494,618	$	2,406,462	$	3,775,925	$	256,045	$	56,186



	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

Schedule of Cash, Cash Equivalents, 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:



	September 24, 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	$	660,429	$	(2,671	)	$	—	$	—		$	660,429	$	(2,671	)
Municipal notes and bonds	18,653		(21		)	—		—			18,653		(21		)
Mutual funds	3,122		(70		)	—		—			3,122		(70		)
Government-sponsored enterprises	55,297		(322		)	—		—			55,297		(322		)
Foreign government bonds	33,729		(128		)	—		—			33,729		(128		)
Corporate notes and bonds	1,282,655		(2,376		)	—		—			1,282,655		(2,376		)
Mortgage backed securities — residential	30,210		(93		)	2,006		(23		)	32,216		(116		)
Mortgage backed securities — commercial	98,303		(261		)	2,634		(14		)	100,937		(275		)
	$	2,182,398	$	(5,942	)	$	4,640	$	(37	)	$	2,187,038	$	(5,979	)

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

The amortized cost and fair value of cash equivalents, investments, and restricted investments with contractual maturities are as follows as of September 24, 2017:



	Cost		Estimated Fair Value
	(in thousands)
Due in one year or less	$	2,764,552	$	2,764,415
Due after one year through five years	2,987,295		2,986,525
Due in more than five years	143,704		143,502
	$	5,895,551	$	5,894,442

Schedule of Outstanding Foreign Currency Forward Contracts

As of September 24, 2017, the Company had the following outstanding foreign currency contracts that were entered into under its cash flow and balance sheet hedge programs:



	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	$	—	$	393,345	$	—	$	282,311
Euro	31,917		—		31,246		—
Korean won	13,536		—		—		84,122
Taiwan dollar	—		—		12,658		—
Swiss franc	—		—		9,375		—
Chinese renminbi	—		—		7,137
Singapore dollar	—		—		4,469		—
	$	45,453	$	393,345	$	64,885	$	366,433
Foreign currency option contracts
	Buy Put		Sell Put		Buy Put⁽¹⁾		Sell Put
Japanese yen	$	36,036	$	—	$	8,929	$	8,929

(1) Contracts were entered into and designated as cash flow hedges under ASC 815 at contract inception as part of the Company’s cash flow hedge program. The contracts were subsequently de-designated; 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 Condensed Consolidated Balance Sheets as of September 24, 2017, and June 25, 2017 were as follows:



	September 24, 2017						June 25, 2017
	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	$	9,598	Accrued expenses and other current liabilities	$	368	Prepaid expense and other assets	$	8,061	Accrued expenses and other current liabilities	$	2,916
Interest rate contracts, short-term	Prepaid expense and other assets	316								Accrued expenses and other current liabilities	2,833
Interest rate contracts, long-term				Other long-term liabilities	13,077					Other long-term liabilities	7,269
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Prepaid expense and other assets	109		Accrued expenses and other current liabilities	461		Prepaid expense and other assets	213		Accrued expenses and other current liabilities	342
Total Derivatives		$	10,023		$	13,906		$	8,274		$	13,360

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 Condensed Consolidated Statements of Operations, including accumulated other comprehensive income (“AOCI”) was as follows:



		Three Months Ended September 24, 2017									Three Months Ended September 25, 2016
		Effective Portion						Ineffective Portion and Amount Excluded from Effectiveness			Effective Portion						Ineffective Portion and Amount Excluded from Effectiveness
Derivatives Designated as Hedging Instruments	Location of Gain (Loss) Recognized in or Reclassified into Income	(Loss) Gain Recognized in AOCI			(Loss) Gain Reclassified from AOCI into Income			Gain (Loss) Recognized in Income			(Loss) Gain Recognized in AOCI			(Loss) Gain Reclassified from AOCI into Income			Gain (Loss) Recognized in Income
		(in thousands)
Foreign Exchange Contracts	Revenue	$	(9	)	$	(3,806	)	$	2,547		$	(2,913	)	$	(13,605	)	$	705
Foreign Exchange Contracts	Cost of goods sold	2,443			824			(208		)	235			173			(67		)
Foreign Exchange Contracts	Selling, general, and administrative	1,356			714			(117		)	(24		)	(9		)	(21		)
Foreign Exchange Contracts	Other expense, net	—			—			(17		)	—			—			—
Interest Rate Contracts	Other expense, net	—			(31		)	—			—			9			—
		$	3,790		$	(2,299	)	$	2,205		$	(2,702	)	$	(13,432	)	$	617

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



		Three Months Ended
		September 24, 2017		September 25, 2016
Derivatives Not Designated as Hedging Instruments:	Location of Gain (Loss) Recognized in Income	Gain Recognized in Income		Loss Recognized in Income
		(in thousands)
Foreign Exchange Contracts	Other income	$	2,672	$	(383	)