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Financial Instruments | 9 Months Ended
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Jan. 29, 2016
Investments [Abstract] |
Financial Instruments | Financial Instruments The Company holds investments consisting primarily of marketable debt and equity securities. The authoritative guidance is principally applied to financial assets and liabilities such as marketable equity securities and debt and equity securities that are classified and accounted for as trading and available-for-sale and are measured on a recurring basis. Further, we also hold cost or equity method investments which are measured at fair value on a nonrecurring basis. The following table summarizes the Company's investments by significant investment categories and the related condensed consolidated balance sheets presentation at January 29, 2016:
| Valuation |  | Balance Sheet Classification
(in millions) | Cost |  | Unrealized Gains |  | Unrealized Losses |  | Fair Value |  | Investments |  | Other Assets
Available-for-sale securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Level 1: |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency securities | $ | 1,517 |  |  | $ | 14 |  |  | $ | (1 | ) |  | $ | 1,530 |  |  | $ | 1,530 |  |  | $ | — |
Marketable equity securities | 77 |  |  | 24 |  |  | (5 | ) |  | 96 |  |  | — |  |  | 96 |
Total Level 1 | 1,594 |  |  | 38 |  |  | (6 | ) |  | 1,626 |  |  | 1,530 |  |  | 96 |
Level 2: |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities | 6,568 |  |  | 56 |  |  | (95 | ) |  | 6,529 |  |  | 6,526 |  |  | 3 |
U.S. government and agency securities | 1,683 |  |  | 4 |  |  | (1 | ) |  | 1,686 |  |  | 1,686 |  |  | — |
Mortgage-backed securities | 1,407 |  |  | 12 |  |  | (16 | ) |  | 1,403 |  |  | 1,403 |  |  | — |
Foreign government and agency securities | 27 |  |  | — |  |  | — |  |  | 27 |  |  | 27 |  |  | — |
Certificates of deposit | 28 |  |  | — |  |  | — |  |  | 28 |  |  | 28 |  |  | — |
Other asset-backed securities | 517 |  |  | 3 |  |  | — |  |  | 520 |  |  | 520 |  |  | — |
Debt funds | 3,148 |  |  | 1 |  |  | (379 | ) |  | 2,770 |  |  | 2,770 |  |  | — |
Total Level 2 | 13,378 |  |  | 76 |  |  | (491 | ) |  | 12,963 |  |  | 12,960 |  |  | 3 |
Level 3: |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities | 1 |  |  | — |  |  | — |  |  | 1 |  |  | — |  |  | 1 |
Auction rate securities | 109 |  |  | — |  |  | (7 | ) |  | 102 |  |  | — |  |  | 102 |
Total Level 3 | 110 |  |  | — |  |  | (7 | ) |  | 103 |  |  | — |  |  | 103 |
Total available-for-sale securities | 15,082 |  |  | 114 |  |  | (504 | ) |  | 14,692 |  |  | 14,490 |  |  | 202 |
Trading securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Level 1: |  |  |  |  |  |  |  |  |  |  |
Exchange-traded funds | 65 |  |  | 12 |  |  | (2 | ) |  | 75 |  |  | 75 |  |  | — |
Total Level 1: | 65 |  |  | 12 |  |  | (2 | ) |  | 75 |  |  | 75 |  |  | — |
Total trading securities | 65 |  |  | 12 |  |  | (2 | ) |  | 75 |  |  | 75 |  |  | — |
Cost method, equity method, and other investments: |  |  |  |  |  |  |  |  |  |  |
Level 3: |  |  |  |  |  |  |  |  |  |  |
Cost method, equity method, and other investments | 524 |  |  | — |  |  | — |  |  | N/A |  |  | — |  |  | 524 |
Total Level 3: | 524 |  |  | — |  |  | — |  |  | N/A |  |  | — |  |  | 524 |
Total cost method, equity method, and other investments | 524 |  |  | — |  |  | — |  |  | N/A |  |  | — |  |  | 524 |
Total investments | $ | 15,671 |  |  | $ | 126 |  |  | $ | (506 | ) |  | $ | 14,767 |  |  | $ | 14,565 |  |  | $ | 726 |
The following table summarizes the Company's investments by significant investment categories and the related condensed consolidated balance sheets presentation at April 24, 2015:
| Valuation |  | Balance Sheet Classification
(in millions) | Cost |  | Unrealized Gains |  | Unrealized Losses |  | Fair Value |  | Investments |  | Other Assets
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Level 1: |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency securities | $ | 1,525 |  |  | $ | 17 |  |  | $ | (1 | ) |  | $ | 1,541 |  |  | $ | 1,541 |  |  | $ | — |
Marketable equity securities | 64 |  |  | 35 |  |  | (19 | ) |  | 80 |  |  | — |  |  | 80 |
Total Level 1 | 1,589 |  |  | 52 |  |  | (20 | ) |  | 1,621 |  |  | 1,541 |  |  | 80 |
Level 2: |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities | 6,282 |  |  | 105 |  |  | (10 | ) |  | 6,377 |  |  | 6,377 |  |  | — |
U.S. government and agency securities | 1,597 |  |  | 4 |  |  | (3 | ) |  | 1,598 |  |  | 1,598 |  |  | — |
Mortgage-backed securities | 1,462 |  |  | 22 |  |  | (6 | ) |  | 1,478 |  |  | 1,478 |  |  | — |
Foreign government and agency securities | 85 |  |  | — |  |  | — |  |  | 85 |  |  | 85 |  |  | — |
Certificates of deposit | 44 |  |  | — |  |  | — |  |  | 44 |  |  | 44 |  |  | — |
Other asset-backed securities | 504 |  |  | 3 |  |  | — |  |  | 507 |  |  | 507 |  |  | — |
Debt funds | 3,061 |  |  | 19 |  |  | (150 | ) |  | 2,930 |  |  | 2,930 |  |  | — |
Total Level 2 | 13,035 |  |  | 153 |  |  | (169 | ) |  | 13,019 |  |  | 13,019 |  |  | — |
Level 3: |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities | 1 |  |  | — |  |  | — |  |  | 1 |  |  | — |  |  | 1 |
Auction rate securities | 109 |  |  | — |  |  | (4 | ) |  | 105 |  |  | — |  |  | 105 |
Total Level 3 | 110 |  |  | — |  |  | (4 | ) |  | 106 |  |  | — |  |  | 106 |
Total available-for-sale securities | 14,734 |  |  | 205 |  |  | (193 | ) |  | 14,746 |  |  | 14,560 |  |  | 186 |
Trading securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Level 1: |  |  |  |  |  |  |  |  |  |  |
Exchange-traded funds | 58 |  |  | 19 |  |  | — |  |  | 77 |  |  | 77 |  |  | — |
Total Level 1 | 58 |  |  | 19 |  |  | — |  |  | 77 |  |  | 77 |  |  | — |
Total trading securities | 58 |  |  | 19 |  |  | — |  |  | 77 |  |  | 77 |  |  | — |
Cost method, equity method, and other investments: |  |  |  |  |  |  |  |  |  |  |
Level 3: |  |  |  |  |  |  |  |  |  |  |
Cost method, equity method, and other investments | 520 |  |  | — |  |  | — |  |  | N/A |  |  | — |  |  | 520 |
Total Level 3 | 520 |  |  | — |  |  | — |  |  | N/A |  |  | — |  |  | 520 |
Total cost method, equity method, and other investments | 520 |  |  | — |  |  | — |  |  | N/A |  |  | — |  |  | 520 |
Total investments | $ | 15,312 |  |  | $ | 224 |  |  | $ | (193 | ) |  | $ | 14,823 |  |  | $ | 14,637 |  |  | $ | 706 |
Marketable Debt and Equity Securities: The following tables show the gross unrealized losses and fair values of the Company’s available-for-sale securities that have been in a continuous unrealized loss position deemed to be temporary, aggregated by investment category as of January 29, 2016 and April 24, 2015:
| January 29, 2016
| Less than 12 months |  | More than 12 months
(in millions) | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Corporate debt securities | $ | 2,817 |  |  | $ | (80 | ) |  | $ | 186 |  |  | $ | (16 | )
Auction rate securities | — |  |  | — |  |  | 102 |  |  | (7 | )
Mortgage-backed securities | 626 |  |  | (11 | ) |  | 223 |  |  | (6 | )
U.S. government and agency securities | 716 |  |  | (1 | ) |  | 103 |  |  | — |
Debt funds | 1,231 |  |  | (62 | ) |  | 1,538 |  |  | (317 | )
Marketable equity securities | 51 |  |  | (6 | ) |  | — |  |  | — |
Total | $ | 5,441 |  |  | $ | (160 | ) |  | $ | 2,152 |  |  | $ | (346 | )
| April 24, 2015
| Less than 12 months |  | More than 12 months
(in millions) | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Corporate debt securities | $ | 944 |  |  | $ | (9 | ) |  | $ | 34 |  |  | $ | (1 | )
Auction rate securities | — |  |  | — |  |  | 105 |  |  | (4 | )
Mortgage-backed securities | 346 |  |  | (3 | ) |  | 206 |  |  | (3 | )
U.S. government and agency securities | 356 |  |  | (1 | ) |  | 267 |  |  | (3 | )
Debt funds | 1,291 |  |  | (109 | ) |  | 559 |  |  | (41 | )
Marketable equity securities | 4 |  |  | (19 | ) |  | — |  |  | — |
Total | $ | 2,941 |  |  | $ | (141 | ) |  | $ | 1,171 |  |  | $ | (52 | )
The following table represents the range of the unobservable inputs utilized in the fair value measurement of the auction rate securities classified as Level 3 as of January 29, 2016:
| Valuation Technique | Unobservable Input | Range (Weighted Average)
Auction rate securities | Discounted cash flow | Years to principal recovery | 2 yrs. - 12 yrs. (3 yrs.)
Illiquidity premium | 6%
The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The Company’s policy is to recognize transfers into and out of levels within the fair value hierarchy at the end of the fiscal quarter in which the actual event or change in circumstances that caused the transfer occurs. There were no transfers between Level 1, Level 2, or Level 3 during the three and nine months ended January 29, 2016 or January 23, 2015. When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. The following tables provide a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3):
Three months ended January 29, 2016 |  |  |  |  |  |  |  |
(in millions) | Total Level 3 Investments |  | Corporate debt securities |  | Auction rate securities
Balance as of October 30, 2015 | $ | 103 |  |  | $ | 1 |  |  | $ | 102 |
Total unrealized gains included in other comprehensive income | — |  |  | — |  |  | — |
Balance as of January 29, 2016 | $ | 103 |  |  | $ | 1 |  |  | $ | 102 |
Three months ended January 23, 2015 |  |  |  |  |  |  |  |
(in millions) | Total Level 3 Investments |  | Corporate debt securities |  | Auction rate securities
Balance as of October 24, 2014 | $ | 108 |  |  | $ | 9 |  |  | $ | 99 |
Total unrealized gains included in other comprehensive income | — |  |  | — |  |  | — |
Balance as of January 23, 2015 | $ | 108 |  |  | $ | 9 |  |  | $ | 99 |
Nine months ended January 29, 2016 |  |  |  |  |  |  |  |
(in millions) | Total Level 3 Investments |  | Corporate debt securities |  | Auction rate securities
Balance as of April 24, 2015 | $ | 106 |  |  | $ | 1 |  |  | $ | 105 |
Total unrealized losses included in other comprehensive income | (3 | ) |  | — |  |  | (3 | )
Balance as of January 29, 2016 | $ | 103 |  |  | $ | 1 |  |  | $ | 102 |
Nine months ended January 23, 2015 |  |  |  |  |  |  |  |
(in millions) | Total Level 3 Investments |  | Corporate debt securities |  | Auction rate securities
Balance as of April 24, 2014 | $ | 106 |  |  | $ | 9 |  |  | $ | 97 |
Total unrealized gains included in other comprehensive income | 2 |  |  | — |  |  | 2 |
Balance as of January 23, 2015 | $ | 108 |  |  | $ | 9 |  |  | $ | 99 |
Activity related to the Company’s investment portfolio is as follows:
| Three months ended
| January 29, 2016 |  | January 23, 2015
(in millions) | Debt (a) |  | Equity (b) |  | Debt (a) |  | Equity (b)
Proceeds from sales | $ | 1,261 |  |  | $ | 4 |  |  | $ | 1,478 |  |  | $ | 208 |
Gross realized gains | 2 |  |  | 4 |  |  | 10 |  |  | 99 |
Gross realized losses | (9 | ) |  | — |  |  | (4 | ) |  | — |
Impairment losses recognized | — |  |  | (2 | ) |  | — |  |  | (1 | )
| Nine months ended
| January 29, 2016 |  | January 23, 2015
(in millions) | Debt (a) |  | Equity (b) (c) |  | Debt (a) |  | Equity (b) (d)
Proceeds from sales | $ | 3,979 |  |  | $ | 38 |  |  | $ | 4,114 |  |  | $ | 237 |
Gross realized gains | 11 |  |  | 36 |  |  | 26 |  |  | 157 |
Gross realized losses | (21 | ) |  | — |  |  | (9 | ) |  | — |
Impairment losses recognized | — |  |  | (43 | ) |  | — |  |  | (22 | )
(a) | Includes available-for-sale debt securities.
(b) | Includes marketable equity securities, cost method, equity method, exchange-traded funds, and other investments.
(c) | As a result of certain acquisitions that occurred during the nine months ended January 29, 2016, the Company recognized a non-cash realized gain of $9 million on its previously-held minority investment included in other expense, net on the condensed consolidated statement of income.
(d) | As a result of certain acquisitions that occurred during the nine months ended January 23, 2015, the Company recognized a non-cash realized gain of $41 million on its previously-held minority investments included in other expense, net on the condensed consolidated statement of income.
Credit losses represent the difference between the present value of cash flows expected to be collected on certain mortgage-backed securities and auction rate securities and the amortized cost of these securities. Based on the Company’s assessment of the credit quality of the underlying collateral and credit support available to each of the remaining securities in which invested, the Company believes it has recorded all necessary other-than-temporary impairments as the Company does not have the intent to sell, nor is it more likely than not that the Company will be required to sell, before recovery of the amortized cost. As of January 29, 2016 and April 24, 2015, the credit loss portion of other-than temporary impairments on debt securities were not significant. The total reductions for available-for-sale debt securities sold during the three and nine months ended January 29, 2016 and January 23, 2015 were not significant. The total other-than-temporary impairment losses on available-for-sale debt securities for the three and nine months ended January 29, 2016 and January 23, 2015 were not significant. The January 29, 2016 balance of available-for-sale debt securities, excluding debt funds which have no single maturity date, by contractual maturity is shown in the following table. Within the table, maturities of mortgage-backed securities have been allocated based upon timing of estimated cash flows assuming no change in the current interest rate environment. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.
(in millions) | January 29, 2016
Due in one year or less | $ | 2,197 |
Due after one year through five years | 6,294 |
Due after five years through ten years | 3,050 |
Due after ten years | 285 |
Total | $ | 11,826 |
The Company holds investments in marketable equity securities, which are classified as other assets in the condensed consolidated balance sheets. The aggregate carrying amount of these investments was $96 million and $80 million as of January 29, 2016 and April 24, 2015, respectively. The Company did not record any significant impairment charges related to marketable equity securities during the three months ended January 29, 2016. During the nine months ended January 29, 2016, the Company determined that the fair value of certain marketable equity securities were below their carrying values and that the carrying values of these investments were not expected to be recoverable within a reasonable period of time. As a result, the Company recognized $20 million in impairment charges for the nine months ended January 29, 2016, which were recorded within other expense, net in the condensed consolidated statements of income. During the nine months ended January 23, 2015, the Company determined that the fair value of certain marketable equity securities were below their carrying values and that the carrying values of these investments were not expected to be recoverable within a reasonable period of time. As a result, the Company recognized $7 million in impairment charges for the nine months ended January 23, 2015, which were recorded in other expense, net in the condensed consolidated statements of income. Cost method, equity method, and other investments The Company holds investments in equity and other securities that are accounted for using the cost or equity method, which are classified as other assets in the condensed consolidated balance sheets. As of January 29, 2016 and April 24, 2015, the aggregate carrying amount of equity and other securities without a quoted market price and accounted for using the cost or equity method was $524 million and $520 million, respectively. These cost or equity method investments are measured at fair value on a nonrecurring basis. The total carrying value of these investments is reviewed quarterly for changes in circumstance or the occurrence of events that suggest the Company’s investment may not be recoverable. The value of cost or equity method investments is not adjusted if there are no identified events or changes in circumstances that may have a material adverse effect on the fair value of the investment. During the three and nine months ended January 29, 2016, the Company determined that the fair values of certain cost method investments were below their carrying values and that the carrying values of these investments were not expected to be recoverable within a reasonable period of time. As a result, the Company recognized $2 million and $23 million in impairment charges during the three and nine months ended January 29, 2016, respectively, which were recorded in other expense, net in the condensed consolidated statements of income. During the three and nine months ended January 23, 2015, the Company determined that the fair values of certain cost method investments were below their carrying values and that the carrying values of these investments were not expected to be recoverable within a reasonable period of time. As a result, the Company recognized $1 million and $14 million in impairment charges during the three and nine months ended January 23, 2015, which were recorded in other expense, net in the condensed consolidated statements of income. These investments fall within Level 3 of the fair value hierarchy, due to the use of significant unobservable inputs to determine fair value, as the investments are privately-held entities without quoted market prices. To determine the fair value of these investments, the Company used all pertinent financial information available related to the entities, including financial statements and market participant valuations from recent and proposed equity offerings.

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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- References No definition available. + Details
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