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Investments, Forward Contracts and Fair Value Measurements | 9 Months Ended
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Apr. 01, 2017
Investments and Fair Value Measurements [Abstract] |
Investments, Forward Contracts and Fair Value Measurements | Note 7. Investments, Forward Contracts and Fair Value Measurements The Company’s investments in marketable debt and equity securities were primarily classified as available-for-sale securities. As of April 1, 2017, the Company’s available-for-sale securities were as follows (in millions):
| Amortized Cost/ Carrying Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Debt securities: |  |  |  |  |  |  |  |  |  |  |
U.S. treasuries | $ | 69.6 |  |  | $ | — |  |  | $ | (0.1 | ) |  | $ | 69.5 |
U.S. agencies | 35.2 |  |  | — |  |  | (0.1 | ) |  | 35.1 |
Municipal bonds and sovereign debt instruments | 4.0 |  |  | — |  |  | — |  |  | 4.0 |
Asset-backed securities | 68.0 |  |  | — |  |  | (0.3 | ) |  | 67.7 |
Corporate securities | 324.2 |  |  | 0.1 |  |  | (0.3 | ) |  | 324.0 |
Certificates of deposit | 6.0 |  |  | — |  |  | — |  |  | 6.0 |
Total debt securities | 507.0 |  |  | 0.1 |  |  | (0.8 | ) |  | 506.3 |
Marketable equity securities | 3.3 |  |  | 17.5 |  |  | — |  |  | 20.8 |
Total available-for-sale securities | $ | 510.3 |  |  | $ | 17.6 |  |  | $ | (0.8 | ) |  | $ | 527.1 |
The Company generally classifies debt securities as cash equivalents, short-term investments or other non-current assets based on the stated maturities; however, certain securities with stated maturities of longer than twelve months which are highly liquid and available to support current operations are also classified as short-term investments. As of April 1, 2017, of the total fair value of debt securities, $49.9 million was classified as cash equivalents, $455.8 million was classified as short-term investments and $0.6 million was classified as other non-current assets. Marketable equity securities consist of the Company’s ownership of 0.4 million shares of Lumentum common stock remaining as of April 1, 2017 in connection with the August 1, 2015 separation. Refer to “Note 3. Discontinued Operations” for more information. These securities are stated at fair value, with unrealized gains and losses reported in other comprehensive (loss) income, net of tax and are classified as short-term investments on the Consolidated Balance Sheet as of April 1, 2017 at $20.8 million. The Company sold 1.3 million and 6.9 million shares during the three and nine months ended April 1, 2017, respectively and recognized gross realized gains of $51.2 million and $186.5 million, reflected in "Gain on sale of investments" in the Company’s Consolidated Statements of Operations. The sale resulted in no tax effect. The realized gain is also reflected as a reconciling item to net income in the operating activities section of the Consolidated Statements of Cash Flows, while the cash proceeds received are reflected in “Sales of available-for-sale investments” within the investing activities section. In addition to the amounts presented above, as of April 1, 2017, the Company’s short-term investments classified as trading securities related to the deferred compensation plan were $2.0 million, of which $0.5 million was invested in debt securities, $0.5 million was invested in money market instruments and funds and $1.0 million was invested in equity securities. Trading securities are reported at fair value, with the unrealized gains or losses resulting from changes in fair value recognized in Interest and other income (expense), net. During the three and nine months ended April 1, 2017 and April 2, 2016, the Company recorded no other-than-temporary impairment charges in each respective period. As of April 1, 2017, contractual maturities of the Company’s debt securities classified as available-for-sale securities were as follows (in millions):
| Amortized Cost/ Carrying Cost |  | Estimated Fair Value
Amounts maturing in less than 1 year | $ | 363.2 |  |  | $ | 363.1 |
Amounts maturing in 1 - 5 years | 141.8 |  |  | 141.5 |
Amounts maturing in more than 5 years | 2.0 |  |  | 1.7 |
Total debt available-for-sale securities | $ | 507.0 |  |  | $ | 506.3 |
As of July 2, 2016, the Company’s available-for-sale securities were as follows (in millions):
| Amortized Cost/ Carrying Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Debt securities: |  |  |  |  |  |  |  |  |  |  |
U.S. treasuries | $ | 46.1 |  |  | $ | — |  |  | $ | — |  |  | $ | 46.1 |
U.S. agencies | 24.9 |  |  | — |  |  | — |  |  | 24.9 |
Municipal bonds and sovereign debt instruments | 2.0 |  |  | — |  |  | — |  |  | 2.0 |
Asset-backed securities | 50.4 |  |  | 0.1 |  |  | (0.3 | ) |  | 50.2 |
Corporate securities | 224.5 |  |  | 0.2 |  |  | (0.1 | ) |  | 224.6 |
Total debt securities | 347.9 |  |  | 0.3 |  |  | (0.4 | ) |  | 347.8 |
Marketable equity securities | 62.1 |  |  | 109.2 |  |  | — |  |  | 171.3 |
Total debt available-for-sale securities | $ | 410.0 |  |  | $ | 109.5 |  |  | $ | (0.4 | ) |  | $ | 519.1 |
As of July 2, 2016, of the total fair value of debt securities, $36.1 million was classified as cash equivalents, $311.1 million was classified as short-term investments and $0.6 million was classified as other non-current assets. Marketable equity securities consist of the Company’s ownership of 7.2 million shares of Lumentum common stock remaining as of July 2, 2016 in connection with the Separation. These securities are stated at fair value, with change in unrealized gains and losses reported in other comprehensive income, net of tax and are classified as short-term investments on the Consolidated Balance Sheet as of July 2, 2016 at $171.3 million. In addition to the amounts presented above, as of July 2, 2016, the Company’s short-term investments classified as trading securities, related to the deferred compensation plan, were $2.4 million, of which $0.3 million was invested in debt securities, $0.8 million was invested in money market instruments and funds and $1.3 million was invested in equity securities. Trading securities are reported at fair value, with the unrealized gains or losses resulting from changes in fair value recognized in Interest and other income (expense), net. Fair Value Measurements Assets measured at fair value as of April 1, 2017 and July 2, 2016 are summarized below (in millions):
| Fair value measurement as of |  | Fair value measurement as of
| April 1, 2017 |  | July 2, 2016
| Total |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Total |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2)
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt available-for-sale securities |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasuries | $ | 69.5 |  |  | $ | 69.5 |  |  | $ | — |  |  | $ | 46.1 |  |  | $ | 46.1 |  |  | $ | — |
U.S. agencies | 35.1 |  |  | — |  |  | 35.1 |  |  | 24.9 |  |  | — |  |  | 24.9 |
Municipal bonds and sovereign debt instruments | 4.0 |  |  | — |  |  | 4.0 |  |  | 2.0 |  |  | — |  |  | 2.0 |
Asset-backed securities | 67.7 |  |  | — |  |  | 67.7 |  |  | 50.2 |  |  | — |  |  | 50.2 |
Corporate securities | 324.0 |  |  | — |  |  | 324.0 |  |  | 224.6 |  |  | — |  |  | 224.6 |
Certificate of deposits | 6.0 |  |  | — |  |  | 6.0 |  |  | — |  |  | — |  |  | — |
Total debt available-for-sale securities | 506.3 |  |  | 69.5 |  |  | 436.8 |  |  | 347.8 |  |  | 46.1 |  |  | 301.7 |
Marketable equity securities | 20.8 |  |  | 20.8 |  |  | — |  |  | 171.3 |  |  | 171.3 |  |  | — |
Money market funds | 720.3 |  |  | 720.3 |  |  | — |  |  | 274.4 |  |  | 274.4 |  |  | — |
Trading securities | 2.0 |  |  | 2.0 |  |  | — |  |  | 2.4 |  |  | 2.4 |  |  | — |
Foreign currency forward contracts | 5.2 |  |  | — |  |  | 5.2 |  |  | — |  |  | — |  |  | — |
Total assets (1) | $ | 1,254.6 |  |  | $ | 812.6 |  |  | $ | 442.0 |  |  | $ | 795.9 |  |  | $ | 494.2 |  |  | $ | 301.7 |
Liability: |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts | 2.6 |  |  | — |  |  | 2.6 |  |  | — |  |  | — |  |  | — |
Total liabilities (2) | $ | 2.6 |  |  | $ | — |  |  | $ | 2.6 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
(1) $754.6 million in cash and cash equivalents, $478.6 million in short-term investments, $11.7 million in restricted cash, $5.2 million in prepayments and other current assets, and $4.5 million in other non-current assets on the Company’s Consolidated Balance Sheets as of April 1, 2017. $295.4 million in cash and cash equivalents, $484.7 million in short-term investments, $11.3 million in restricted cash, and $4.5 million in other non-current assets on the Company’s Consolidated Balance Sheets as of July 2, 2016. (2) $2.6 million in other current liabilities on the Company’s Consolidated Balance Sheets as of April 1, 2017. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. There is an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the assumptions about the factors that market participants would use in valuing the asset or liability. The Company’s cash and investment instruments are classified within Level 1 or Level 2 of the fair value hierarchy based on quoted prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.
• | Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets. Level 1 assets of the Company include money market funds, U.S. Treasury securities and marketable equity securities as they are traded with sufficient volume and frequency of transactions.
• | Level 2 includes financial instruments for which the valuations are based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. Level 2 instruments of the Company generally include certain U.S. and foreign government and agency securities, commercial paper, corporate and municipal bonds and notes, asset-backed securities, and foreign currency forward contracts. To estimate their fair value, the Company utilizes pricing models based on market data. The significant inputs for the valuation model usually include benchmark yields, reported trades, broker and dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data, and industry and economic events.
• | Level 3 includes financial instruments for which fair value is derived from valuation based on inputs that are unobservable and significant to the overall fair value measurement. As of April 1, 2017 and July 2, 2016, the Company did not hold any Level 3 investment securities.
Non-Designated Foreign Currency Forward Contracts The Company has foreign subsidiaries that operate and sell the Company’s products in various markets around the world. As a result, the Company is exposed to foreign exchange risks. The Company utilizes foreign exchange forward contracts and other instruments to manage foreign currency risk associated with foreign currency denominated monetary assets and liabilities, primarily certain short-term intercompany receivables and payables, and to reduce the volatility of earnings and cash flows related to foreign-currency transactions. The Company does not use these foreign currency forward contracts for trading purposes. As of April 1, 2017 and July 2, 2016, the notional amounts of the forward contracts the Company held to purchase foreign currencies were $133.6 million and $110.0 million, respectively, and the notional amounts of forward contracts the Company held to sell foreign currencies were $31.8 million and $55.2 million, respectively. The fair values of the Company’s outstanding foreign currency forward contracts were not material as of July 2, 2016. As of April 1, 2017, the Company had forward contracts that were effectively closed but not settled with the counterparties by quarter end; therefore, the fair value of these contracts of $5.2 million and $2.6 million is reflected as prepayments and other current assets and other current liabilities in the Consolidated Balance Sheets as of April 1, 2017, respectively. The change in the fair value of foreign currency forward contracts is recorded as gain or loss in the Company’s Consolidated Statements of Operations as a component of Interest and other income (expense), net. The cash flows related to the settlement of foreign currency forward contracts are classified as operating activities. The foreign exchange forward contracts incurred a gain of $2.6 million and a loss of $2.7 million for the three and nine months ended April 1, 2017, respectively. The losses on foreign exchange forward contracts were $5.6 million and $4.9 million for the three and nine months ended April 2, 2016, respectively.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=73719730&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=73719730&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=73719730&loc=d3e13433-108611 + Details
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- Definition Investments and Fair Value Measurements [Abstract] + References No definition available. + Details
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