
8.	Investments


(a)	Summary of Available-for-Sale Investments

The following tables summarize the Company’s available-for-sale investments (in millions):



October 26, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed income securities:
U.S. government securities	$	28,603	$	37	$	(2	)	$	28,638
U.S. government agency securities	2,394		5		—			2,399
Non-U.S. government and agency securities	907		3		(1		)	909
Corporate debt securities	7,974		73		(21		)	8,026
U.S. agency mortgage-backed securities	456		5		—			461
Total fixed income securities	40,334		123		(24		)	40,433
Publicly traded equity securities	1,820		696		(2		)	2,514
Total	$	42,154	$	819	$	(26	)	$	42,947



July 27, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed income securities:
U.S. government securities	$	27,814	$	22	$	(13	)	$	27,823
U.S. government agency securities	3,083		7		(1		)	3,089
Non-U.S. government and agency securities	1,094		3		(2		)	1,095
Corporate debt securities	7,876		55		(50		)	7,881
Total fixed income securities	39,867		87		(66		)	39,888
Publicly traded equity securities	2,063		738		(4		)	2,797
Total	$	41,930	$	825	$	(70	)	$	42,685

Non-U.S. government and agency securities include agency and corporate debt securities that are guaranteed by non-U.S. governments.


(b)	Gains and Losses on Available-for-Sale Investments

The following table presents the gross realized gains and gross realized losses related to the Company’s available-for-sale investments (in millions):



	Three Months Ended
	October 26, 2013			October 27, 2012
Gross realized gains	$	95		$	63
Gross realized losses	(12		)	(36		)
Total	$	83		$	27

The following table presents the realized net gains (losses) related to the Company’s available-for-sale investments by security type (in millions):



	Three Months Ended
	October 26, 2013		October 27, 2012
Net gains (losses) on investments in publicly traded equity securities	$	75	$	10
Net gains on investments in fixed income securities	8		17
Total	$	83	$	27

There were no impairment charges on available-for-sale investments for the periods presented.

The following tables present the breakdown of the available-for-sale investments with gross unrealized losses and the duration that those losses had been unrealized at October 26, 2013 and July 27, 2013 (in millions):



	UNREALIZED LOSSES LESS THAN 12 MONTHS					UNREALIZED LOSSES 12 MONTHS OR GREATER				TOTAL
October 26, 2013	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Fixed income securities:
U.S. government securities	$	3,303	$	(2	)	$	8	$	—	$	3,311	$	(2	)
U.S. government agency securities	201		—			—		—		201		—
Non-U.S. government and agency securities	208		(1		)	2		—		210		(1		)
Corporate debt securities	2,357		(21		)	13		—		2,370		(21		)
U.S. agency mortgage-backed securities	32		—			—		—		32		—
Total fixed income securities	6,101		(24		)	23		—		6,124		(24		)
Publicly traded equity securities	45		(2		)	—		—		45		(2		)
Total	$	6,146	$	(26	)	$	23	$	—	$	6,169	$	(26	)



	UNREALIZED LOSSES LESS THAN 12 MONTHS					UNREALIZED LOSSES 12 MONTHS OR GREATER				TOTAL
July 27, 2013	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Fixed income securities:
U.S. government securities	$	7,865	$	(13	)	$	—	$	—	$	7,865	$	(13	)
U.S. government agency securities	294		(1		)	—		—		294		(1		)
Non-U.S. government and agency securities	432		(2		)	—		—		432		(2		)
Corporate debt securities	3,704		(50		)	4		—		3,708		(50		)
Total fixed income securities	12,295		(66		)	4		—		12,299		(66		)
Publicly traded equity securities	278		(4		)	—		—		278		(4		)
Total	$	12,573	$	(70	)	$	4	$	—	$	12,577	$	(70	)

As of October 26, 2013, for fixed income securities that were in unrealized loss positions, the Company has determined that (i) it does not have the intent to sell any of these investments, and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. In addition, as of October 26, 2013, the Company anticipates that it will recover the entire amortized cost basis of such fixed income securities and has determined that no other-than-temporary impairments associated with credit losses were required to be recognized during the three months ended October 26, 2013.

The Company has evaluated its publicly traded equity securities as of October 26, 2013 and has determined that there was no indication of other-than-temporary impairments in the respective categories of unrealized losses. This determination was based on several factors, which include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the issuer, and the Company’s intent and ability to hold the publicly traded equity securities for a period of time sufficient to allow for any anticipated recovery in market value.


(c)	Maturities of Fixed Income Securities

The following table summarizes the maturities of the Company’s fixed income securities at October 26, 2013 (in millions):



	Amortized Cost		Fair Value
Less than 1 year	$	15,286	$	15,297
Due in 1 to 2 years	12,310		12,346
Due in 2 to 5 years	12,160		12,204
Due after 5 years	578		586
Total	$	40,334	$	40,433

Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations.


(d)	Securities Lending

The Company periodically engages in securities lending activities with certain of its available-for-sale investments. These transactions are accounted for as a secured lending of the securities, and the securities are typically loaned only on an overnight basis. The average daily balance of securities lending for the three months ended October 26, 2013 and October 27, 2012 was $0.6 billion and $0.8 billion, respectively. The Company requires collateral equal to at least 102% of the fair market value of the loaned security and that the collateral be in the form of cash or liquid, high-quality assets. The Company engages in these secured lending transactions only with highly creditworthy counterparties, and the associated portfolio custodian has agreed to indemnify the Company against collateral losses. The Company did not experience any losses in connection with the secured lending of securities during the periods presented. As of October 26, 2013 and July 27, 2013, the Company had no outstanding securities lending transactions.