v2.4.0.6
Financial Instruments And Fair Value
 9 Months Ended
Jan. 27, 2012
Financial Instruments And Fair Value [Abstract]  
Financial Instruments And Fair Value
8. Financial Instruments and Fair Value

The accounting guidance for fair value measurements provides a framework for measuring fair value on either a recurring or nonrecurring basis whereby the inputs used in valuation techniques are assigned a hierarchical level. The following are the three levels of inputs to measure fair value:

Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2: Inputs that reflect quoted prices for identical assets or liabilities in less active markets; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3: Unobservable inputs that reflect our own assumptions incorporated in valuation techniques used to measure fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

We consider an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an on-going basis, and consider an inactive market to be one in which there are infrequent or few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, our own or the counterparty's non-performance risk is considered in measuring the fair values of liabilities and assets, respectively.

Investments

The following is a summary of our investments as of January 27, 2012 and April 29, 2011, respectively (in millions):

 

     January 27, 2012      April 29, 2011  
            Gross Unrealized                   Gross Unrealized        
     Cost or
Amortized
Cost		      Gains      Losses     Estimated
Fair
Value		      Cost or
Amortized
Cost		      Gains      Losses     Estimated
Fair
Value		  

Corporate bonds

    $ 1,968.6       $ 7.2       $ (2.0 )    $ 1,973.8       $ 1,643.2       $ 10.2       $ (0.6 )    $ 1,652.8   

U.S. treasury and government debt securities

      351.4         0.3         0.0        351.7         661.9         0.6         (0.7 )      661.8   

Commercial paper

      66.2         0.0         0.0        66.2         5.0         0.0         0.0        5.0   

Certificates of deposit

      107.3         0.4         0.0        107.7         96.3         0.0         0.0        96.3   

Money market funds

      1,612.1         0.0         0.0        1,612.1         1,539.6         0.0         0.0        1,539.6   

Auction rate securities

      54.4         0.8         (4.2 )      51.0         69.2         0.4         (4.5 )      65.1   

Equity funds

      24.3         0.0         0.0        24.3         20.2         0.0         0.0        20.2   

Private equity fund

      1.0         0.0         0.0        1.0         1.3         0.0         0.0        1.3   

Municipal bonds

      0.0         0.0         0.0        0.0         1.5         0.0         0.0        1.5   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Total debt and equity securities

    $ 4,185.3       $ 8.7       $ (6.2 )    $ 4,187.8       $ 4,038.2       $ 11.2       $ (5.8 )    $ 4,043.6   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

The following table presents the contractual maturities of our debt investments as of January 27, 2012 (in millions):

 

     Amortized
Cost		      Fair Value  

Due in one year or less

    $ 821.6       $ 823.6   

Due in one through five years

      1,672.0         1,675.8   

Due after ten years*

      54.4         51.0   
  

 

 

     

 

 

  
   $ 2,548.0       $ 2,550.4   
  

 

 

     

 

 

  

* Consists of auction rate securities which have contractual maturities of greater than 10 years.

 

Fair Value of Financial Instruments

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of January 27, 2012 (in millions):

 

            Fair Value Measurements at Reporting Date Using  
     Total      Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)		      Significant
Other
Observable
Inputs
(Level 2)		      Significant
Unobservable
Inputs
(Level 3)		  

Assets

            

Corporate bonds

    $ 1,973.8       $ 0.0       $ 1,973.8       $ 0.0   

U.S. treasuries and government debt securities

      351.7         0.0         351.7         0.0   

Commercial paper

      66.2         0.0         66.2         0.0   

Certificates of deposit

      107.7         0.0         107.7         0.0   

Money market funds

      1,612.1         1,612.1         0.0         0.0   

Auction rate securities

      51.0         0.0         0.0         51.0   

Equity funds

      24.3         24.3         0.0         0.0   

Private equity fund

      1.0         0.0         0.0         1.0   

Foreign currency contracts

      4.5         0.0         4.5         0.0   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 4,192.3       $ 1,636.4       $ 2,503.9       $ 52.0   
  

 

 

     

 

 

     

 

 

     

 

 

  

Liabilities

            

Foreign currency contracts

    $ 3.8       $ 0.0       $ 3.8       $ 0.0   
  

 

 

     

 

 

     

 

 

     

 

 

  

Reported as (in millions):

 

            Fair Value Measurements at Reporting Date Using  
     Total      Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)		      Significant
Other
Observable
Inputs
(Level 2)		      Significant
Unobservable
Inputs
(Level 3)		  

Assets

            

Cash equivalents

    $ 1,666.3       $ 1,612.1       $ 54.2       $ 0.0   

Short-term investments

      2,445.2         0.0         2,445.2         0.0   

Other current assets

      9.8         5.3         4.5         0.0   

Other non-current assets

      71.0         19.0         0.0         52.0   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 4,192.3       $ 1,636.4       $ 2,503.9       $ 52.0   
  

 

 

     

 

 

     

 

 

     

 

 

  

Liabilities

            

Other current liabilities

    $ 3.8       $ 0.0       $ 3.8       $ 0.0   
  

 

 

     

 

 

     

 

 

     

 

 

  

The unrealized losses on our available-for-sale investments in corporate bonds were caused by market value declines as a result of the economic environment, as well as fluctuations in market interest rates. Because the decline in market value is attributable to changes in market conditions and not credit quality, and because we neither intend to sell nor are likely to be required to sell these investments prior to a recovery of par value, we do not consider these investments to be other-than temporarily impaired as of January 27, 2012.

The table below provides a reconciliation of the beginning and ending balance of our Level 3 auction rate securities measured at fair value on a recurring basis using significant unobservable inputs as of January 27, 2012 and January 28, 2011, respectively (in millions):

 

     Three Months Ended     Nine Months Ended  
     January 27,
2012		     January 28,
2011		     January 27,
2012		     January 28,
2011		  

Balance at beginning of period

    $ 56.0      $ 66.2      $ 65.1      $ 69.0   

Total unrealized gains (losses), net included in other comprehensive income

      (0.7 )      (0.5 )      0.6        (1.9 ) 

Total realized gains included in earnings

      0.7        0.0        0.7        0.0   

Settlements

      (5.0 )      (0.6 )      (15.4 )      (2.0 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Balance at end of period

    $ 51.0      $ 65.1      $ 51.0      $ 65.1   
  

 

 

    

 

 

    

 

 

    

 

 

  

All of our auction rate securities (ARSs) are classified as other non-current assets and are backed by pools of student loans guaranteed by the U.S. Department of Education. As of January 27, 2012, we recorded cumulative net temporary impairment charges of $3.4 million in accumulated other comprehensive income (AOCI). Prior to the three months ended October 28, 2011, we estimated the fair value for each individual ARS using an income (discounted cash flow) approach that incorporates both observable and unobservable inputs to discount the expected future cash flows. Key inputs into the discounted cash flow analysis include managements' expectation of when the principal amount will be recovered either through redemption at par, a refinancing event by the issuer, and/or marketability adjustments. Beginning October 28, 2011, we included the market approach to the valuation technique in order to incorporate secondary market activity into our estimated fair value for each individual ARS. This change had no material impact on the valuation of our ARS portfolio. Based on our ability to access our cash and other short-term investments, our expected operating cash flows, and our other sources of cash, we do not intend to sell these investments prior to recovery of value. We will continue to monitor our ARS investments in light of the current debt market environment and evaluate these investments for impairment and classification.