FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Mar. 25, 2018

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 March 25, 2018, and June 25, 2017:



	March 25, 2018
										(Reported Within)
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		Cash and Cash Equivalents		Investments		Restricted Cash & Investments		Other Assets
	(in thousands)
Cash	$	536,477	$	—	$	—		$	536,477	$	529,918	$	—	$	6,559	$	—
Level 1:
Time deposit	715,363		—		—			715,363		465,335		—		250,028		—
Money market funds	2,954,408		—		—			2,954,408		2,954,408		—		—		—
U.S. Treasury and agencies	967,581		1		(206		)	967,376		749,334		218,042		—		—
Mutual funds	69,659		669		(67		)	70,261		—		—		—		70,261
Level 1 Total	4,707,011		670		(273		)	4,707,408		4,169,077		218,042		250,028		70,261
Level 2:
Municipal notes and bonds	156,279		1		(533		)	155,747		—		155,747		—		—
Government-sponsored enterprises	19,467		1		(180		)	19,288		—		19,288		—		—
Foreign government bonds	6,462		—		—			6,462		—		6,462		—		—
Corporate notes and bonds	1,300,174		137		(1,090		)	1,299,221		—		1,299,221		—		—
Mortgage backed securities — residential	12,204		5		—			12,209		—		12,209		—		—
Mortgage backed securities — commercial	75,005		2		—			75,007		—		75,007		—		—
Level 2 Total	1,569,591		146		(1,803		)	1,567,934		—		1,567,934		—		—
Total	$	6,813,079	$	816	$	(2,076	)	$	6,811,819	$	4,698,995	$	1,785,976	$	256,587	$	70,261



	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 investment in unrealized loss positions:



	March 25, 2018
	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	$	19,026	$	(144	)	$	4,338	$	(62	)	$	23,364	$	(206	)
Municipal notes and bonds	149,564		(533		)	—		—			149,564		(533		)
Mutual funds	9,117		(67		)	—		—			9,117		(67		)
Government-sponsored enterprises	10,805		(180		)	—		—			10,805		(180		)
Corporate notes and bonds	79,534		(954		)	17,840		(136		)	97,374		(1,090		)
	$	268,046	$	(1,878	)	$	22,178	$	(198	)	$	290,224	$	(2,076	)

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 March 25, 2018:



	Cost		Estimated Fair Value
	(in thousands)
Due in one year or less	$	4,780,498	$	4,780,239
Due after one year through five years	1,345,093		1,343,499
Due in more than five years	81,352		81,343
	$	6,206,943	$	6,205,081

Schedule of Outstanding Foreign Currency Forward Contracts

As of March 25, 2018, 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	$	—	$	836,677	$	—	$	196,023
Euro	104,593		—		57,781		—
Korean won	33,474		—		—		93,412
Taiwan dollar	—		—		24,086		—
Singapore dollar	—		—		15,943		—
British pound sterling	—		—		9,859		—
Swiss franc	—		—		7,354		—
Indian rupee	—		—		1,527		—
	$	138,067	$	836,677	$	116,550	$	289,435
Foreign currency option contracts
	Buy Put		Sell Put		Buy Put		Sell Put
Japanese yen	$	—	$	—	$	18,018	$	18,018

Schedule of Fair Value of Derivatives Instruments

The fair value of derivative instruments in the Company’s Condensed Consolidated Balance Sheets as of March 25, 2018, and June 25, 2017 were as follows:



	March 25, 2018						June 25, 2017
	Fair Value of Derivative Instruments (Level 2)						Fair Value of Derivative Instruments (Level 2)
	Derivative Assets			Derivative Liabilities			Derivative Assets			Derivative Liabilities
	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 contracts	Prepaid expense and other assets	$	3,129	Accrued expenses and other current liabilities	$	28,780	Prepaid expense and other assets	$	8,061	Accrued expenses and other current liabilities	$	2,916
Interest rate contracts, short-term		—		Accrued expenses and other current liabilities	2,981					Accrued expenses and other current liabilities	2,833
Interest rate contracts, long-term		—		Other long-term liabilities	25,926					Other long-term liabilities	7,269
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Prepaid expense and other assets	69		Accrued expenses and other current liabilities	145		Prepaid expense and other assets	213		Accrued expenses and other current liabilities	342
Total Derivatives		$	3,198		$	57,832		$	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 March 25, 2018						Nine Months Ended March 25, 2018
	Location of Gain or (Loss) Reclassified from AOCI into Income	(Loss) Gain Recognized in AOCI			(Loss) Gain Reclassified from AOCI into Income			(Loss) Gain Recognized in AOCI			(Loss) Gain Reclassified from AOCI into Income
		(in thousands)
Derivatives in Cash Flow Hedging Relationships
Foreign Exchange Contracts	Revenue	$	(44,399	)	$	(7,375	)	$	(36,214	)	$	(7,410	)
Foreign Exchange Contracts	Cost of goods sold	2,735			1,084			4,928			3,556
Foreign Exchange Contracts	Selling, general, and administrative	690			501			1,840			2,227
		$	(40,974	)	$	(5,790	)	$	(29,446	)	$	(1,627	)
Derivatives in Fair Value Hedging Relationships
Interest Rate Contracts	Other expense, net	—			(32		)	—			(94		)



		Three Months Ended March 26, 2017									Nine Months Ended March 26, 2017
		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			Gain (Loss) 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	$	(16,734	)	$	5,646		$	2,367		$	(1,509	)	$	(8,379	)	$	3,780
Foreign Exchange Contracts	Cost of goods sold	2,095			(56		)	(227		)	1,544			(63		)	(322		)
Foreign Exchange Contracts	Selling, general, and administrative	898			(57		)	(76		)	526			(212		)	(112		)
Foreign Exchange Contracts	Other expense, net	—			—			(16		)	—			—			(13		)
Interest Rate Contracts	Other expense, net	—			(30		)	—			—			1,757			—
		$	(13,741	)	$	5,503		$	2,048		$	561		$	(6,897	)	$	3,333

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

Nine Months Ended

March 25,
2018

March 26,
2017

March 25,
2018

March 26,
2017

Derivatives Not Designated as Hedging Instruments:

Location
of Gain Recognized
in Income

Gain
Recognized
in Income

Loss
Recognized
in Income

Gain
Recognized
in Income

(in thousands)

Foreign Exchange Contracts

Other
income

1,198

(3,067

)

6,482

893

The following table presents the effect of fair value cash flow hedge accounting on the Statement of Financial Performance:



	Location and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	Three Months Ended										Nine Months Ended
	March 25, 2018										March 25, 2018
	Revenue			Cost of Goods Sold		Selling, General and Admini-strative		Other Income (Expense)			Revenue			Cost of Goods Sold		Selling, General and Admini-strative		Other Income (Expense)
	(in thousands)
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded:
	$	2,892,115		$	1,561,401	$	197,791	$	(55,810	)	$	7,951,070		$	4,265,446	$	565,719	$	(64,464	)

The effects of fair value and cash flow hedging:
Gain or (loss) on fair value hedging relationships in Subtopic 815-20:
Interest contracts:
Hedged items	—			—		—		9,725			—			—		—		18,805
Derivatives designated as hedging instruments	—			—		—		(9,725		)	—			—		—		(18,805		)

Gain or (loss) on cash flow hedging relationships in Subtopic 815-20:
Foreign exchange contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income	(7,375		)	1,084		501		—			(7,410		)	3,556		2,227		—