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FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Sep. 23, 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 September 23, 2018, and June 24, 2018:



	September 23, 2018
										(Reported Within)
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		Cash and Cash Equivalents		Investments		Restricted Cash & Investments		Other Assets
	(in thousands)
Cash	$	653,135	$	—	$	—		$	653,135	$	647,238	$	—	$	5,897	$	—
Time deposit	980,416		—		—			980,416		730,389		—		250,027		—
Level 1:
Money market funds	1,091,683		—		—			1,091,683		1,091,683		—		—		—
U.S. Treasury and agencies	459,201		1		(211		)	458,991		32,929		426,062		—		—
Mutual funds	69,807		2,390		(83		)	72,114		—		—		—		72,114
Level 1 Total	1,620,691		2,391		(294		)	1,622,788		1,124,612		426,062		—		72,114
Level 2:
Municipal notes and bonds	152,337		2		(581		)	151,758		—		151,758		—		—
Government-sponsored enterprises	11,022		—		(204		)	10,818		—		10,818		—		—
Foreign government bonds	31,052		—		(8		)	31,044		—		31,044		—		—
Corporate notes and bonds	497,206		76		(999		)	496,283		65,846		430,437		—		—
Mortgage backed securities — residential	746		—		(2		)	744		—		744		—		—
Level 2 Total	692,363		78		(1,794		)	690,647		65,846		624,801		—		—
Total	$	3,946,605	$	2,469	$	(2,088	)	$	3,946,986	$	2,568,085	$	1,050,863	$	255,924	$	72,114



	June 24, 2018
										(Reported Within)
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Value		Cash and Cash Equivalents		Investments		Restricted Cash & Investments		Other Assets
	(in thousands)
Cash	$	708,364	$	—	$	—		$	708,364	$	702,090	$	—	$	6,274	$	—
Time deposit	999,666		—		—			999,666		749,639		—		250,027		—
Level 1:
Money market funds	2,341,807		—		—			2,341,807		2,341,807		—		—		—
U.S. Treasury and agencies	356,679		—		(170		)	356,509		333,721		22,788		—		—
Mutual funds	68,568		516		(142		)	68,942		—		—		—		68,942
Level 1 Total	2,767,054		516		(312		)	2,767,258		2,675,528		22,788		—		68,942
Level 2:
Municipal notes and bonds	152,378		37		(279		)	152,136		—		152,136		—		—
Government-sponsored enterprises	110,963		—		(201		)	110,762		99,934		10,828		—		—
Foreign government bonds	19,986		—		(1		)	19,985		19,985		—		—		—
Corporate notes and bonds	516,955		95		(1,184		)	515,866		265,081		250,785		—		—
Mortgage backed securities — residential	804		—		(3		)	801		—		801		—		—
Level 2 Total	801,086		132		(1,668		)	799,550		385,000		414,550		—		—
Total	$	5,276,170	$	648	$	(1,980	)	$	5,274,838	$	4,512,257	$	437,338	$	256,301	$	68,942

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 23, 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	$	421,723	$	(92	)	$	5,880	$	(119	)	$	427,603	$	(211	)
Municipal notes and bonds	141,051		(534		)	5,725		(47		)	146,776		(581		)
Mutual funds	17,592		(83		)	—		—			17,592		(83		)
Government-sponsored enterprises	—		—			10,785		(204		)	10,785		(204		)
Foreign government bonds	26,928		(8		)	—		—			26,928		(8		)
Corporate notes and bonds	266,159		(751		)	24,286		(248		)	290,445		(999		)
Mortgage backed securities — residential	743		(2		)	—		—			743		(2		)
	$	874,196	$	(1,470	)	$	46,676	$	(618	)	$	920,872	$	(2,088	)

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 23, 2018:



	Cost		Estimated Fair Value
	(in thousands)
Due in one year or less	$	3,018,982	$	3,018,518
Due after one year through five years	200,903		199,465
Due in more than five years	3,778		3,754
	$	3,223,663	$	3,221,737

Schedule of Outstanding Foreign Currency Forward Contracts

As of September 23, 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	$	—	$	438,871	$	—	$	244,735
Euro	73,297		—		33,956		—
Korean won	24,387		—		—		169,276
British pound sterling	—		—		32,923		—
Taiwan dollar	—		—		26,044		—
Singapore dollar	—		—		21,915		—
Swiss franc	—		—		19,059		—
Indian rupee	—		—		3,289		—
	$	97,684	$	438,871	$	137,186	$	414,011
Foreign currency option contracts
	Buy Put		Sell Put		Buy Put		Sell Put
Japanese yen ⁽¹⁾	$	53,765	$	56,236	$	—	$	—

⁽¹⁾ The local currency notional amounts of these foreign currency option contracts are equal to each other.

Schedule of Fair Value of Derivatives Instruments

The fair value of derivative instruments in the Company’s Condensed Consolidated Balance Sheets as of September 23, 2018, and June 24, 2018 were as follows:



	September 23, 2018						June 24, 2018
	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	$	11,330	Accrued expenses and other current liabilities	$	3,724	Prepaid expense and other assets	$	7,581	Accrued expenses and other current liabilities	$	8,866
Interest rate contracts, short-term		—		Accrued expenses and other current liabilities	4,349			—		Accrued expenses and other current liabilities	7,468
Interest rate contracts, long-term		—		Other long-term liabilities	29,126			—		Other long-term liabilities	23,720
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Prepaid expense and other assets	105		Accrued expenses and other current liabilities	46		Prepaid expense and other assets	111		Accrued expenses and other current liabilities	32
Total Derivatives		$	11,435		$	37,245		$	7,692		$	40,086

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 23, 2018
	Location of Gain or (Loss) Recognized in or Reclassified into Income	Gain (Loss) Recognized in AOCI			Gain (Loss) Reclassified from AOCI into Income
		(in thousands)
Derivatives in Cash Flow Hedging Relationships
Foreign Exchange Contracts	Revenue	$	8,441		$	674
Foreign Exchange Contracts	Cost of goods sold	(124		)	(1,557		)
Foreign Exchange Contracts	Selling, general, and administrative	(204		)	(527		)
Interest Rate Contracts	Other expense, net	—			(33		)
		$	8,113		$	(1,443	)



		Three Months Ended September 24, 2017
		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
		(in thousands)
Foreign Exchange Contracts	Revenue	$	(9	)	$	(3,806	)	$	2,547
Foreign Exchange Contracts	Cost of goods sold	2,443			824			(208		)
Foreign Exchange Contracts	Selling, general, and administrative	1,356			714			(117		)
Foreign Exchange Contracts	Other expense, net	—			—			(17		)
Interest Rate Contracts	Other expense, net	—			(31		)	—
		$	3,790		$	(2,299	)	$	2,205

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 23, 2018		September 24, 2017
Derivatives Not Designated as Hedging Instruments:	Location of Gain Recognized in Income	Gain Recognized in Income		Gain Recognized in Income
		(in thousands)
Foreign Exchange Contracts	Other income	$	10,588	$	2,672

The following table presents the effect of the fair value cash flow hedge accounting on the Statement of Financial Performance as well as presents the location and amount of gain/(loss) recognized in Income on fair value and cash flow hedging relationships:



	Three Months Ended
	September 23, 2018
	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:
	$	2,330,691	$	1,272,493		$	174,775		$	(377	)

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	—		—			—			2,286
Derivatives designated as hedging instruments	—		—			—			(2,286		)

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	674		(1,557		)	(527		)	—
Interest rate contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income	—		—			—			(33		)