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Available-for-Sale Debt Investments and Equity Investments
 3 Months Ended
Oct. 26, 2019
Investments, Debt and Equity Securities [Abstract]  
Available-for-Sale Debt Investments and Equity Investments
Available-for-Sale Debt Investments and Equity Investments
The following table summarizes our available-for-sale debt investments and equity investments (in millions):
 
October 26, 2019
 
July 27, 2019
Available-for-sale debt investments
$
19,445

 
$
21,660

Marketable equity securities
3

 
3

Total investments
19,448

 
21,663

Non-marketable equity securities included in other assets (1)
1,151

 
1,113

Equity method investments included in other assets
66

 
87

Total
$
20,665

 
$
22,863


(1) We held equity interests in certain private equity funds of $0.7 billion and $0.6 billion as of October 26, 2019 and July 27, 2019, respectively, which are accounted for under the NAV practical expedient.
(a)
Summary of Available-for-Sale Debt Investments
The following tables summarize our available-for-sale debt investments (in millions):
October 26, 2019
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
U.S. government securities
$
1,322

 
$
3

 
$
(1
)
 
$
1,324

U.S. government agency securities
98

 
—

 
—

 
98

Corporate debt securities
16,057

 
153

 
(11
)
 
16,199

U.S. agency mortgage-backed securities
1,509

 
9

 
(8
)
 
1,510

Commercial paper
283

 
—

 
—

 
283

Certificates of deposit
31

 
—

 
—

 
31

Total
$
19,300

 
$
165

 
$
(20
)
 
$
19,445


July 27, 2019
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
U.S. government securities
$
808

 
$
1

 
$
(1
)
 
$
808

U.S. government agency securities
169

 
—

 
—

 
169

Corporate debt securities
19,188

 
103

 
(29
)
 
19,262

U.S. agency mortgage-backed securities
1,425

 
7

 
(11
)
 
1,421

Total
$
21,590

 
$
111

 
$
(41
)
 
$
21,660

The following table presents the gross realized gains and gross realized losses related to available-for-sale debt investments (in millions):
 
Three Months Ended
 
October 26, 2019
 
October 27, 2018
Gross realized gains
$
12

 
$
2

Gross realized losses
(2
)
 
(8
)
Total
$
10

 
$
(6
)
The following tables present the breakdown of the available-for-sale debt investments with gross unrealized losses and the duration that those losses had been unrealized at October 26, 2019 and July 27, 2019 (in millions):
 
UNREALIZED LOSSES
LESS THAN 12 MONTHS
 
UNREALIZED LOSSES
12 MONTHS OR GREATER
 
TOTAL
October 26, 2019
Fair Value
 
Gross
Unrealized
Losses
 
Fair Value
 
Gross
Unrealized
Losses
 
Fair Value
 
Gross 
Unrealized 
Losses
U.S. government securities 
$
479

 
$
(1
)
 
$
25

 
$
—

 
$
504

 
$
(1
)
U.S. government agency securities
—

 
—

 
98

 
—

 
98

 
—

Corporate debt securities
1,642

 
(4
)
 
1,200

 
(7
)
 
2,842

 
(11
)
U.S. agency mortgage-backed securities
378

 
(1
)
 
462

 
(7
)
 
840

 
(8
)
Commercial paper
25

 
—

 
—

 
—

 
25

 
—

Certificates of deposit
6

 
—

 
—

 
—

 
6

 
—

Total
$
2,530

 
$
(6
)
 
$
1,785

 
$
(14
)
 
$
4,315

 
$
(20
)
 
UNREALIZED LOSSES
LESS THAN 12 MONTHS
 
UNREALIZED LOSSES
12 MONTHS OR GREATER
 
TOTAL
July 27, 2019
Fair Value
 
Gross
Unrealized
Losses
 
Fair Value
 
Gross
Unrealized
Losses
 
Fair Value
 
Gross 
Unrealized 
Losses
U.S. government securities 
$
204

 
$
—

 
$
488

 
$
(1
)
 
$
692

 
$
(1
)
U.S. government agency securities
—

 
—

 
169

 
—

 
169

 
—

Corporate debt securities
2,362

 
(4
)
 
5,271

 
(25
)
 
7,633

 
(29
)
U.S. agency mortgage-backed securities
123

 
—

 
847

 
(11
)
 
970

 
(11
)
Total
$
2,689

 
$
(4
)
 
$
6,775

 
$
(37
)
 
$
9,464

 
$
(41
)

For available-for-sale debt investments that were in an unrealized loss position as of October 26, 2019, we have determined that no other-than-temporary impairments were required to be recognized.
The following table summarizes the maturities of our available-for-sale debt investments as of October 26, 2019 (in millions): 
 
Amortized Cost
 
Fair Value
Within 1 year
$
5,472

 
$
5,481

After 1 year through 5 years
10,604

 
10,676

After 5 years through 10 years
1,709

 
1,773

After 10 years
6

 
5

Mortgage-backed securities with no single maturity
1,509

 
1,510

Total
$
19,300

 
$
19,445


Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations.
(b)
Summary of Equity Investments
We recorded adjustments to the carrying value of our non-marketable equity securities measured using the measurement alternative as follows (in millions):
 
Three Months Ended
 
October 26, 2019
 
October 27, 2018
Adjustments to non-marketable equity securities measured using the measurement alternative:
 
 
 
Upward adjustments
$
1

 
$
10

Downward adjustments, including impairments
(2
)
 
(16
)
Net adjustments
$
(1
)
 
$
(6
)
Gains and losses recognized on our marketable and non-marketable equity securities are summarized below (in millions):
 
Three Months Ended
 
October 26, 2019
 
October 27, 2018
Net gains and losses recognized during the period on equity investments
$
7

 
$
8

Less: Net gains and losses recognized on equity investments sold
(8
)
 
(12
)
Net unrealized gains and losses recognized during reporting period on equity securities still held at the reporting date
$
(1
)
 
$
(4
)
(c)
Securities Lending
We periodically engage in securities lending activities with certain of our available-for-sale debt 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 was $21 million and $0.5 billion for the first quarter of fiscal 2020 and 2019, 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 October 26, 2019 and July 27, 2019, we had no outstanding securities lending transactions.
(d)
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 are evaluated for consolidation under the variable interest or voting interest entity models. We evaluate on an ongoing basis our investments in these privately held companies and our customer financings, and have determined that as of October 26, 2019, except as disclosed herein, there were no significant variable interest or voting interest entities required to be consolidated in our Consolidated Financial Statements.
As of October 26, 2019, the carrying value of investments in privately held companies was $1.2 billion. $659 million of such investments are considered to be in variable interest entities which are unconsolidated. We have total funding commitments of $311 million related to these privately held 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 privately held investments.