
8.	Investments


(a)	Summary of Available-for-Sale Investments

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



October 24, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed income securities:
U.S. government securities	$	27,409	$	63	$	(1	)	$	27,471
U.S. government agency securities	3,606		11		—			3,617
Non-U.S. government and agency securities	1,133		3		—			1,136
Corporate debt securities	18,314		70		(78		)	18,306
U.S. agency mortgage-backed securities	1,454		15		—			1,469
Total fixed income securities	51,916		162		(79		)	51,999
Publicly traded equity securities	1,094		268		(12		)	1,350
Total	$	53,010	$	430	$	(91	)	$	53,349



July 25, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed income securities:
U.S. government securities	$	29,904	$	41	$	(6	)	$	29,939
U.S. government agency securities	3,662		2		(1		)	3,663
Non-U.S. government and agency securities	1,128		1		(1		)	1,128
Corporate debt securities	15,802		34		(53		)	15,783
U.S. agency mortgage-backed securities	1,456		8		(3		)	1,461
Total fixed income securities	51,952		86		(64		)	51,974
Publicly traded equity securities	1,092		480		(7		)	1,565
Total	$	53,044	$	566	$	(71	)	$	53,539

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 24, 2015			October 25, 2014
Gross realized gains	$	35		$	21
Gross realized losses	(36		)	(14		)
Total	$	(1	)	$	7

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 24, 2015			October 25, 2014
Net losses on investments in publicly traded equity securities	$	(9	)	$	(4	)
Net gains on investments in fixed income securities	8			11
Total	$	(1	)	$	7

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 24, 2015 and July 25, 2015 (in millions):



	UNREALIZED LOSSES LESS THAN 12 MONTHS					UNREALIZED LOSSES 12 MONTHS OR GREATER					TOTAL
October 24, 2015	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Fixed income securities:
U.S. government securities	$	2,566	$	(1	)	$	—	$	—		$	2,566	$	(1	)
U.S. government agency securities	80		—			—		—			80		—
Non-U.S. government and agency securities	57		—			10		—			67		—
Corporate debt securities	7,421		(66		)	1,048		(12		)	8,469		(78		)
U.S. agency mortgage-backed securities	77		—			—		—			77		—
Total fixed income securities	10,201		(67		)	1,058		(12		)	11,259		(79		)
Publicly traded equity securities	103		(11		)	2		(1		)	105		(12		)
Total	$	10,304	$	(78	)	$	1,060	$	(13	)	$	11,364	$	(91	)



	UNREALIZED LOSSES LESS THAN 12 MONTHS					UNREALIZED LOSSES 12 MONTHS OR GREATER					TOTAL
July 25, 2015	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Fixed income securities:
U.S. government securities	$	6,412	$	(6	)	$	—	$	—		$	6,412	$	(6	)
U.S. government agency securities	1,433		(1		)	—		—			1,433		(1		)
Non-U.S. government and agency securities	515		(1		)	4		—			519		(1		)
Corporate debt securities	9,552		(49		)	312		(4		)	9,864		(53		)
U.S. agency mortgage-backed securities	579		(3		)	—		—			579		(3		)
Total fixed income securities	18,491		(60		)	316		(4		)	18,807		(64		)
Publicly traded equity securities	108		(7		)	2		—			110		(7		)
Total	$	18,599	$	(67	)	$	318	$	(4	)	$	18,917	$	(71	)

As of October 24, 2015, 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 24, 2015, 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 24, 2015.

The Company has evaluated its publicly traded equity securities as of October 24, 2015 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 24, 2015 (in millions):



	Amortized Cost		Fair Value
Less than 1 year	$	17,274	$	17,276
Due in 1 to 2 years	15,914		15,950
Due in 2 to 5 years	17,105		17,138
Due after 5 years	1,623		1,635
Total	$	51,916	$	51,999

Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations. The remaining contractual principal maturities for mortgage-backed securities were allocated assuming no prepayments.


(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 24, 2015 and October 25, 2014 was $0.5 billion and $1.0 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 24, 2015 and July 25, 2015, the Company had no outstanding securities lending transactions.


(e)	Investments in Privately Held Companies

The carrying value of the Company’s investments in privately held companies was included in other assets. For such investments that were accounted for under the equity and cost method as of October 24, 2015 and July 25, 2015, the amounts are summarized in the following table (in millions):



	October 24, 2015		July 25, 2015
Equity method investments	$	619	$	578
Cost method investments	309		319
Total	$	928	$	897

For additional information on impairment charges related to investments in privately held companies, see Note 9.

Variable Interest Entities In the ordinary course of business, the Company has investments in privately held companies and provides financing to certain customers. These privately held companies and customers may be considered to be variable interest entities. The Company evaluates on an ongoing basis its investments in these privately held companies and its customer financings and has determined that as of October 24, 2015 there were no variable interest entities required to be consolidated in the Company’s Consolidated Financial Statements.