Balance Sheet Information

Investments

The following table summarizes, by major type, the fair value and amortized cost of the Company’s investments as of September 27, 2013:



(Dollars in millions)	Amortized Cost		Unrealized Gain/(Loss)			Fair Value
Available-for-sale securities:
Money market funds	$	709	$	—		$	709
Commercial paper	908		—			908
Corporate bonds	214		—			214
U.S. treasuries and agency bonds	84		—			84
Certificates of deposit	156		—			156
Auction rate securities	17		(2		)	15
Equity securities	3		—			3
Other debt securities	121		—			121
	2,212		(2		)	2,210
Trading securities	80		7			87
Total	$	2,292	$	5		$	2,297

Included in Cash and cash equivalents						$	1,685
Included in Short-term investments						489
Included in Restricted cash and investments						108
Included in Other assets, net						15
Total						$	2,297

The Company’s available-for-sale securities include investments in auction rate securities. Beginning in fiscal year 2008, the Company’s auction rate securities failed to settle at auction and have continued to fail through September 27, 2013. Since the Company continues to earn interest on its auction rate securities at the maximum contractual rate, there have been no payment defaults with respect to such securities, and they are all collateralized, the Company expects to recover the entire amortized cost basis of these auction rate securities. The Company does not intend to sell these securities and has concluded it is not more likely than not that the Company will be required to sell the securities before the recovery of their amortized cost basis. As such, the Company believes the impairments totaling $2 million are not other-than-temporary and therefore have been recorded in Accumulated other comprehensive loss. Given the uncertainty as to when the liquidity issues associated with these securities will improve, these securities are classified within Other assets, net in the Company’s Condensed Consolidated Balance Sheets.

As of September 27, 2013, the Company’s Restricted cash and investments consisted of $87 million in cash equivalents and investments held in trust for payment of its non-qualified deferred compensation plan liabilities and $21 million in cash and investments held as collateral at banks for various performance obligations. As of June 28, 2013, the Company’s Restricted cash and investments consisted of $79 million in cash equivalents and investments held in trust for payment of its non-qualified deferred compensation plan liabilities and $22 million in cash and investments held as collateral at banks for various performance obligations.

As of September 27, 2013, with the exception of the Company’s auction rate securities, the Company had no material available-for-sale securities that had been in a continuous unrealized loss position for a period greater than 12 months. The Company determined no available-for-sale securities were other-than-temporarily impaired as of September 27, 2013.

The fair value and amortized cost of the Company’s investments classified as available-for-sale at September 27, 2013, by remaining contractual maturity were as follows:



(Dollars in millions)	Amortized Cost		Fair Value
Due in less than 1 year	$	1,790	$	1,790
Due in 1 to 5 years	402		402
Thereafter	17		15
Total	$	2,209	$	2,207

Equity securities which do not have a contractual maturity date are not included in the above table.

The following table summarizes, by major type, the fair value and amortized cost of the Company’s investments as of June 28, 2013:



(Dollars in millions)	Amortized Cost		Unrealized Gain/(Loss)			Fair Value
Available-for-sale securities:
Money market funds	$	804	$	—		$	804
Commercial paper	655		—			655
Corporate bonds	211		—			211
U.S. treasuries and agency bonds	96		—			96
Certificates of deposit	154		—			154
Auction rate securities	17		(2		)	15
Equity Securities	4		—			4
Other debt securities	107		(1		)	106
	2,048		(3		)	2,045
Trading securities	74		5			79
Total	$	2,122	$	2		$	2,124

Included in Cash and cash equivalents						$	1,528
Included in Short-term investments						480
Included in Restricted cash and investments						101
Included in Other assets, net						15
Total						$	2,124

As of June 28, 2013, with the exception of the Company’s auction rate securities, the Company had no material available-for-sale securities that had been in a continuous unrealized loss position for a period greater than 12 months. The Company determined no available-for-sale securities were other-than-temporarily impaired as of June 28, 2013.

Strategic Investments

The Company enters into certain strategic investments for the promotion of business and strategic objectives. Strategic investments in equity securities where the Company does not have the ability to exercise significant influence over the investees, included in Other assets, net in the Condensed Consolidated Balance Sheets, are recorded at cost and are periodically analyzed to determine whether or not there are indicators of impairment. The carrying value of the Company’s strategic investments at September 27, 2013 and June 28, 2013 totaled $77 million and $66 million, respectively, and consisted primarily of privately held equity securities without a readily determinable fair value.

Inventories



(Dollars in millions)	September 27, 2013		June 28, 2013
Raw materials and components	$	212	$	213
Work-in-process	226		231
Finished goods	433		410
	$	871	$	854

Other Current Assets



(Dollars in millions)	September 27, 2013		June 28, 2013
Vendor non-trade receivables	$	319	$	329
Other	182		155
	$	501	$	484

Other current assets include non-trade receivables from certain manufacturing vendors resulting from the sale of components to these vendors who manufacture completed sub-assemblies or finished goods for the Company. The Company does not reflect the sale of these components in revenue and does not recognize any profits on these sales. The costs of the completed sub-assemblies are included in inventory upon purchase from the vendors.

Property, Equipment and Leasehold Improvements, net



(Dollars in millions)	September 27, 2013			June 28, 2013
Property, equipment and leasehold improvements	$	8,624		$	8,544
Accumulated depreciation and amortization	(6,437		)	(6,275		)
	$	2,187		$	2,269

Accumulated Other Comprehensive Income ("AOCI")

The components of AOCI, net of tax, were as follows:



(Dollars in millions)	Unrealized Gains (Losses) on Cash Flow Hedges		Unrealized Gains (Losses) on Marketable Securities (a)			Unrealized gains (losses) on post-retirements			Foreign currency translation adjustments		Total
Balance as of June 28, 2013	$	—	$	(3	)	$	(10	)	$	—	$	(13	)
Other comprehensive income before reclassifications	1		1			—			5		7
Amounts reclassified from AOCI	—		—			—			—		—
Other comprehensive income	1		1			—			5		7
Balance as of September 27, 2013	$	1	$	(2	)	$	(10	)	$	5	$	(6	)

Balance as of June 29, 2012	$	—	$	(1	)	$	(8	)	$	—	$	(9	)
Other comprehensive income before reclassifications	—		27			—			1		28
Amounts reclassified from AOCI	—		(1		)	—			—		(1		)
Other comprehensive income	—		26			—			1		27
Balance as of September 28, 2012	$	—	$	25		$	(8	)	$	1	$	18

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(a)The cost of a security sold or the amount reclassified out of AOCI into earnings was determined from specific identification.