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Financial Instruments | 3 Months Ended
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Jul. 28, 2017
Investments [Abstract] |
Financial Instruments | Financial Instruments The Company holds investments such as marketable debt and equity securities that are classified and accounted for as available-for-sale and are remeasured on a recurring basis. The Company also holds cost method, equity method, and other investments which are measured at fair value on a nonrecurring basis. For information regarding the valuation techniques and inputs used in the fair value measurements, refer to Note 1 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended April 28, 2017. The following table summarizes the Company's investments by significant investment category and the related consolidated balance sheet classification at July 28, 2017:
| 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 | $ | 653 |  |  | $ | 1 |  |  | $ | (4 | ) |  | $ | 650 |  |  | $ | 650 |  |  | $ | — |
Marketable equity securities | 55 |  |  | 48 |  |  | (2 | ) |  | 101 |  |  | — |  |  | 101 |
Total Level 1 | 708 |  |  | 49 |  |  | (6 | ) |  | 751 |  |  | 650 |  |  | 101 |
Level 2: |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities | 4,157 |  |  | 73 |  |  | (18 | ) |  | 4,212 |  |  | 4,212 |  |  | — |
U.S. government and agency securities | 854 |  |  | — |  |  | (9 | ) |  | 845 |  |  | 845 |  |  | — |
Mortgage-backed securities | 804 |  |  | 9 |  |  | (16 | ) |  | 797 |  |  | 797 |  |  | — |
Foreign government and agency securities | 49 |  |  | — |  |  | — |  |  | 49 |  |  | 49 |  |  | — |
Other asset-backed securities | 258 |  |  | 1 |  |  | (1 | ) |  | 258 |  |  | 258 |  |  | — |
Debt funds | 1,246 |  |  | 7 |  |  | (158 | ) |  | 1,095 |  |  | 1,095 |  |  | — |
Total Level 2 | 7,368 |  |  | 90 |  |  | (202 | ) |  | 7,256 |  |  | 7,256 |  |  | — |
Level 3: |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities | 1 |  |  | — |  |  | — |  |  | 1 |  |  | — |  |  | 1 |
Auction rate securities | 47 |  |  | — |  |  | (3 | ) |  | 44 |  |  | — |  |  | 44 |
Total Level 3 | 48 |  |  | — |  |  | (3 | ) |  | 45 |  |  | — |  |  | 45 |
Investments measured at net asset value(1): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt Funds | 497 |  |  | — |  |  | (6 | ) |  | 491 |  |  | 491 |  |  | — |
Total available-for-sale securities | 8,621 |  |  | 139 |  |  | (217 | ) |  | 8,543 |  |  | 8,397 |  |  | 146 |
Cost method, equity method, and other investments: |  |  |  |  |  |  |  |  |  |  |
Level 3: |  |  |  |  |  |  |  |  |  |  |
Cost method, equity method, and other investments | 627 |  |  | — |  |  | — |  |  | N/A |  |  | — |  |  | 627 |
Total Level 3 | 627 |  |  | — |  |  | — |  |  | N/A |  |  | — |  |  | 627 |
Total cost method, equity method, and other investments | 627 |  |  | — |  |  | — |  |  | N/A |  |  | — |  |  | 627 |
Total investments | $ | 9,248 |  |  | $ | 139 |  |  | $ | (217 | ) |  | $ | 8,543 |  |  | $ | 8,397 |  |  | $ | 773 |
(1) Certain investments that are measured at the net asset value per share (or its equivalent) as a practical expedient are excluded from the fair value hierarchy. The fair value amounts presented herein are intended to permit reconciliation to the consolidated balance sheets. The following table summarizes the Company's investments by significant investment category and the related consolidated balance sheet classification at April 28, 2017:
| 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 | $ | 613 |  |  | $ | 2 |  |  | $ | (5 | ) |  | $ | 610 |  |  | $ | 610 |  |  | $ | — |
Marketable equity securities | 58 |  |  | 49 |  |  | (4 | ) |  | 103 |  |  | — |  |  | 103 |
Total Level 1 | 671 |  |  | 51 |  |  | (9 | ) |  | 713 |  |  | 610 |  |  | 103 |
Level 2: |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities | 4,643 |  |  | 62 |  |  | (23 | ) |  | 4,682 |  |  | 4,682 |  |  | — |
U.S. government and agency securities | 860 |  |  | — |  |  | (10 | ) |  | 850 |  |  | 850 |  |  | — |
Mortgage-backed securities | 766 |  |  | 9 |  |  | (16 | ) |  | 759 |  |  | 759 |  |  | — |
Foreign government and agency securities | 49 |  |  | — |  |  | — |  |  | 49 |  |  | 49 |  |  | — |
Other asset-backed securities | 228 |  |  | 1 |  |  | (1 | ) |  | 228 |  |  | 228 |  |  | — |
Debt funds | 1,246 |  |  | 4 |  |  | (178 | ) |  | 1,072 |  |  | 1,072 |  |  | — |
Total Level 2 | 7,792 |  |  | 76 |  |  | (228 | ) |  | 7,640 |  |  | 7,640 |  |  | — |
Level 3: |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities | 1 |  |  | — |  |  | — |  |  | 1 |  |  | — |  |  | 1 |
Auction rate securities | 47 |  |  | — |  |  | (3 | ) |  | 44 |  |  | — |  |  | 44 |
Total Level 3 | 48 |  |  | — |  |  | (3 | ) |  | 45 |  |  | — |  |  | 45 |
Investments measured at net asset value(1): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt funds | 497 |  |  | — |  |  | (6 | ) |  | 491 |  |  | 491 |  |  | — |
Total available-for-sale securities | 9,008 |  |  | 127 |  |  | (246 | ) |  | 8,889 |  |  | 8,741 |  |  | 148 |
Cost method, equity method, and other investments: |  |  |  |  |  |  |  |  |  |  |
Level 3: |  |  |  |  |  |  |  |  |  |  |
Cost method, equity method, and other investments | 589 |  |  | — |  |  | — |  |  | N/A |  |  | — |  |  | 589 |
Total Level 3 | 589 |  |  | — |  |  | — |  |  | N/A |  |  | — |  |  | 589 |
Total cost method, equity method, and other investments | 589 |  |  | — |  |  | — |  |  | N/A |  |  | — |  |  | 589 |
Total investments | $ | 9,597 |  |  | $ | 127 |  |  | $ | (246 | ) |  | $ | 8,889 |  |  | $ | 8,741 |  |  | $ | 737 |
(1) Certain investments that are measured at the net asset value per share (or its equivalent) as a practical expedient are excluded from the fair value hierarchy. The fair value amounts presented herein are intended to permit reconciliation to the consolidated balance sheets. Marketable Debt and Equity Securities The following tables present 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 at July 28, 2017 and April 28, 2017:
| July 28, 2017
| Less than 12 months |  | More than 12 months
(in millions) | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Corporate debt securities | $ | 927 |  |  | $ | (13 | ) |  | $ | 47 |  |  | $ | (5 | )
Auction rate securities | — |  |  | — |  |  | 44 |  |  | (3 | )
Mortgage-backed securities | 270 |  |  | (3 | ) |  | 92 |  |  | (13 | )
U.S. government and agency securities | 898 |  |  | (13 | ) |  | — |  |  | — |
Debt funds | 188 |  |  | (1 | ) |  | 1,126 |  |  | (163 | )
Other asset-backed securities | 108 |  |  | (1 | ) |  | — |  |  | — |
Marketable equity securities | 1 |  |  | (1 | ) |  | 2 |  |  | (1 | )
Total | $ | 2,392 |  |  | $ | (32 | ) |  | $ | 1,311 |  |  | $ | (185 | )
| April 28, 2017
| Less than 12 months |  | More than 12 months
(in millions) | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Corporate debt securities | $ | 1,263 |  |  | $ | (19 | ) |  | $ | 46 |  |  | $ | (4 | )
Auction rate securities | — |  |  | — |  |  | 44 |  |  | (3 | )
Mortgage-backed securities | 276 |  |  | (4 | ) |  | 95 |  |  | (12 | )
U.S. government and agency securities | 896 |  |  | (15 | ) |  | — |  |  | — |
Other asset-backed securities | 127 |  |  | (1 | ) |  | — |  |  | — |
Debt funds | 173 |  |  | (1 | ) |  | 1,125 |  |  | (183 | )
Marketable equity securities | 14 |  |  | (3 | ) |  | 2 |  |  | (1 | )
Total | $ | 2,749 |  |  | $ | (43 | ) |  | $ | 1,312 |  |  | $ | (203 | )
The following table presents the unobservable inputs utilized in the fair value measurement of the auction rate securities classified as Level 3 at July 28, 2017:
| 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 months ended July 28, 2017 and July 29, 2016. 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 July 28, 2017
(in millions) | Total Level 3 Investments |  | Corporate debt securities |  | Auction rate securities
April 28, 2017 | $ | 45 |  |  | $ | 1 |  |  | $ | 44 |
Total unrealized gains (losses) included in other comprehensive income | — |  |  | — |  |  | — |
July 28, 2017 | $ | 45 |  |  | $ | 1 |  |  | $ | 44 |
| Three months ended July 29, 2016
(in millions) | Total Level 3 Investments |  | Corporate debt securities |  | Auction rate securities
April 29, 2016 | $ | 45 |  |  | $ | 1 |  |  | $ | 44 |
Total unrealized gains (losses) included in other comprehensive income | — |  |  | — |  |  | — |
July 29, 2016 | $ | 45 |  |  | $ | 1 |  |  | $ | 44 |
Activity related to the Company’s investment portfolio is as follows:
| Three months ended
| July 28, 2017 |  | July 29, 2016
(in millions) | Debt(1) |  | Equity(2) |  | Debt(1) |  | Equity(2)
Proceeds from sales | $ | 971 |  |  | $ | — |  |  | $ | 1,098 |  |  | $ | 6 |
Gross realized gains | 8 |  |  | 7 |  |  | 7 |  |  | 4 |
Gross realized losses | (3 | ) |  | — |  |  | (12 | ) |  | — |
Impairment losses recognized | — |  |  | — |  |  | — |  |  | (3 | )
(1) | Includes available-for-sale debt securities.
(2) | Includes marketable equity securities, cost and equity method investments, and other investments.
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 the Company is invested, the Company believes it has recognized 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. At July 28, 2017 and April 28, 2017, the credit loss portion of other-than-temporary impairments on debt securities was no t significant. The total reductions of available-for-sale debt securities sold during the three months ended July 28, 2017 and July 29, 2016 were no t significant. The July 28, 2017 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) | July 28, 2017
Due in one year or less | $ | 888 |
Due after one year through five years | 2,681 |
Due after five years through ten years | 3,203 |
Due after ten years | 84 |
Total | $ | 6,856 |
The Company holds investments in marketable equity securities, which are classified as other assets in the consolidated balance sheets. The aggregate carrying amount of these investments was $101 million and $103 million at July 28, 2017 and April 28, 2017, respectively. The Company did no t recognize any significant impairment charges related to marketable equity securities during the three months ended July 28, 2017 and July 29, 2016. 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 consolidated balance sheets. At July 28, 2017 and April 28, 2017, the aggregate carrying amount of equity and other securities without a quoted market price and accounted for using the cost or equity method was $627 million and $589 million, respectively. Cost and equity method investments are measured at fair value on a nonrecurring basis. Changes in circumstance or the occurrence of events that suggest the Company’s investment may not be recoverable are assessed quarterly. If events or changes in circumstances are identified that may have a material adverse effect on the fair value of the investment, the investment is assessed for impairment. Cost and equity method 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 in privately-held entities without quoted market prices. To determine the fair value of these investments, the Company uses all pertinent financial information available related to the entities, including financial statements and market participant valuations from recent and proposed equity offerings. During the three months ended July 28, 2017 and July 29, 2016, the Company did no t recognize any significant impairment charges related to cost method investments.

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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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