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MARKETABLE SECURITIES

12 Months Ended

Nov. 03, 2019

MARKETABLE SECURITIES

MARKETABLE SECURITIES

12. MARKETABLE SECURITIES

All marketable securities are classified as available-for-sale. Prior to 2019, all unrealized gains and losses on marketable securities were shown as a component of stockholders’ equity. Beginning in 2019 with the adoption of ASU No. 2016-01, unrealized gains and losses on equity securities are shown as a component of net income (see Note 3). Realized gains or losses from the sales of marketable securities are based on the specific identification method.

The amortized cost and fair value of marketable securities at November 3, 2019 and October 28, 2018 in millions of dollars follow:


					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
		Cost			Gains			Losses			Value
2019
Equity fund											$	59
Total equity securities												59
U.S. government debt securities		$	128		$	4		$	1			131
Municipal debt securities			57			3						60
Corporate debt securities			157			8						165
International debt securities			9						3			6
Mortgage-backed securities*			155			5						160
Total debt securities			506			20			4			522
Marketable securities		$	506		$	20		$	4		$	581
2018
Equity fund		$	36		$	10					$	46
U.S. government debt securities			113			1		$	3			111
Municipal debt securities			49						3			46
Corporate debt securities			143			1			4			140
International debt securities			11						1			10
Mortgage-backed securities*			144						7			137
Marketable securities		$	496		$	12		$	18		$	490

* Primarily issued by U.S. government sponsored enterprises.

Equity Securities

Unrealized gains on equity securities held at November 3, 2019 were $17 million in total, with $7 million recognized in 2019. Proceeds and realized gains on equity securities sold during 2019 and 2018 were not material. Proceeds and realized gains on equity securities sold in 2017 were $294 million and $273 million, respectively (see Note 5).

Debt Securities

The contractual maturities of debt securities at November 3, 2019 in millions of dollars follow:


		Amortized			Fair
		Cost			Value
Due in one year or less		$	29		$	26
Due after one through five years			95			98
Due after five through 10 years			95			100
Due after 10 years			132			138
Mortgage-backed securities			155			160
Debt securities		$	506		$	522

Actual maturities may differ from contractual maturities because some securities may be called or prepaid. Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity. Proceeds from the sales of debt securities were $31 million in 2019, $40 million in 2018, and $109 million in 2017. Realized gains, realized losses, the increase (decrease) in net unrealized gains or losses, and unrealized losses that have been continuous for over twelve months were not significant in 2019, 2018, and 2017. Unrealized losses at November 3, 2019 and October 28, 2018 were primarily the result of an increase in interest rates and were not recognized in income due to the ability and intent to hold to maturity. There were no significant impairment write-downs in the periods reported.