Investments


(a)	Summary of Available-for-Sale Investments

The following tables summarize our available-for-sale investments (in millions):



July 28, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed income securities:
U.S. government securities	$	7,318	$	—	$	(43	)	$	7,275
U.S. government agency securities	732		—		(5		)	727
Non-U.S. government and agency securities	209		—		(1		)	208
Corporate debt securities	27,765		44		(445		)	27,364
U.S. agency mortgage-backed securities	1,488		—		(53		)	1,435
Total fixed income securities	37,512		44		(547		)	37,009
Publicly traded equity securities	372		233		—			605
Total	$	37,884	$	277	$	(547	)	$	37,614

July 29, 2017	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed income securities:
U.S. government securities	$	19,880	$	3	$	(60	)	$	19,823
U.S. government agency securities	2,057		—		(5		)	2,052
Non-U.S. government and agency securities	389		—		(1		)	388
Corporate debt securities	31,626		202		(93		)	31,735
U.S. agency mortgage-backed securities	2,037		3		(17		)	2,023
Commercial paper	996		—		—			996
Certificates of deposit	60		—		—			60
Total fixed income securities	57,045		208		(176		)	57,077
Publicly traded equity securities	1,180		554		(27		)	1,707
Total	$	58,225	$	762	$	(203	)	$	58,784

Net unsettled investment sales as of July 28, 2018 and July 29, 2017 were $1.5 billion and $30 million, respectively and were included in other current assets and other current liabilities.

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 our available-for-sale investments (in millions):



Years Ended	July 28, 2018			July 29, 2017			July 30, 2016
Gross realized gains	$	628		$	114		$	152
Gross realized losses	(341		)	(201		)	(153		)
Total	$	287		$	(87	)	$	(1	)

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



Years Ended	July 28, 2018			July 29, 2017			July 30, 2016
Net gains/(losses) on investments in publicly traded equity securities	$	529		$	(45	)	$	33
Net gains/(losses) on investments in fixed income securities	(242		)	(42		)	(34		)
Total	$	287		$	(87	)	$	(1	)

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 July 28, 2018 and July 29, 2017 (in millions):



	UNREALIZED LOSSES LESS THAN 12 MONTHS					UNREALIZED LOSSES 12 MONTHS OR GREATER					TOTAL
July 28, 2018	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Fixed income securities:
U.S. government securities	$	2,966	$	(20	)	$	4,303	$	(23	)	$	7,269	$	(43	)
U.S. government agency securities	206		(2		)	521		(3		)	727		(5		)
Non-U.S. government and agency securities	105		(1		)	103		—			208		(1		)
Corporate debt securities	16,990		(344		)	3,511		(101		)	20,501		(445		)
U.S. agency mortgage-backed securities	826		(24		)	581		(29		)	1,407		(53		)
Total fixed income securities	21,093		(391		)	9,019		(156		)	30,112		(547		)
Publicly traded equity securities	—		—			—		—			—		—
Total	$	21,093	$	(391	)	$	9,019	$	(156	)	$	30,112	$	(547	)



	UNREALIZED LOSSES LESS THAN 12 MONTHS					UNREALIZED LOSSES 12 MONTHS OR GREATER					TOTAL
July 29, 2017	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Fixed income securities:
U.S. government securities	$	14,962	$	(55	)	$	771	$	(5	)	$	15,733	$	(60	)
U.S. government agency securities	1,791		(4		)	130		(1		)	1,921		(5		)
Non-U.S. government and agency securities	368		(1		)	—		—			368		(1		)
Corporate debt securities	9,487		(92		)	101		(1		)	9,588		(93		)
U.S. agency mortgage-backed securities	1,485		(16		)	38		(1		)	1,523		(17		)
Total fixed income securities	28,093		(168		)	1,040		(8		)	29,133		(176		)
Publicly traded equity securities	122		(27		)	—		—			122		(27		)
Total	$	28,215	$	(195	)	$	1,040	$	(8	)	$	29,255	$	(203	)

For fiscal 2018, the realized net losses for available-for-sale investments included impairment charges of $52 million. These impairment charges related primarily to publicly traded equity securities and were due to a decline in the fair value of those securities below their cost basis that were determined to be other than temporary. For fiscal 2017, the realized net losses related to available-for-sale investments included impairment charges of $74 million, primarily related to publicly traded equity securities. These impairment charges were due to a decline in the fair value of those securities below their cost basis that were determined to be other than temporary. For fiscal 2016, the realized net losses related to available-for-sale investments included impairment charges of $3 million for fixed income securities.

As of July 28, 2018, for available-for-sale investments that were in unrealized loss positions, we have determined that no additional other-than-temporary impairments were required to be recognized.


(c)	Maturities of Fixed Income Securities

The following table summarizes the maturities of our fixed income securities at July 28, 2018 (in millions):



	Amortized Cost		Fair Value
Less than 1 year	$	12,361	$	12,316
Due in 1 to 2 years	7,573		7,514
Due in 2 to 5 years	14,290		14,012
Due after 5 years	1,800		1,732
Mortgage-backed securities with no single maturity	1,488		1,435
Total	$	37,512	$	37,009

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

We periodically engage in securities lending activities with certain of our 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 fiscal 2018 and 2017 was $0.3 billion and $0.7 billion, respectively. We require 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. We engage in these secured lending transactions only with highly creditworthy counterparties, and the associated portfolio custodian has agreed to indemnify us against collateral losses. We did not experience any losses in connection with the secured lending of securities during the periods presented. As of July 28, 2018 and July 29, 2017, we had no outstanding securities lending transactions.


(e)	Investments in Privately Held Companies

The carrying value of our 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 July 28, 2018 and July 29, 2017, the amounts are summarized in the following table (in millions):



	July 28, 2018		July 29, 2017
Equity method investments	$	118	$	124
Cost method investments	978		859
Total	$	1,096	$	983

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, we have investments in privately held companies and provide financing to certain customers. These privately held companies and customers may be considered to be variable interest entities. We evaluate on an ongoing basis our investments in these privately held companies and our customer financings and have determined that as of July 28, 2018, except as disclosed herein, there were no variable interest entities required to be consolidated in our Consolidated Financial Statements.

As of July 28, 2018, the carrying value of our investments in privately held companies was $1.1 billion, of which $531 million of such investments are considered to be in variable interest entities which are unconsolidated. In addition, we have additional funding commitments of $223 million related to these investments, some of which are based on the achievement of certain agreed-upon milestones, and some of which are required to be funded on demand. The carrying value of these investments and the additional funding commitments collectively represent our maximum exposure related to these variable interest entities.