Fair Value Measurements and Investments

The Company’s total cash, cash equivalents and available-for-sale securities was as follows:



	September 28, 2018		June 29, 2018
	(in millions)
Cash and cash equivalents	$	4,646	$	5,005
Short-term available-for-sale securities (included within Other current assets)	24		23
Long-term available-for-sale securities (included within Other non-current assets)	91		93
Total cash, cash equivalents and available-for-sale securities	$	4,761	$	5,121

Financial Instruments Carried at Fair Value

Financial assets and liabilities that are remeasured and reported at fair value at each reporting period are classified and disclosed in one of the following three levels:


Level 1.	Quoted prices in active markets for identical assets or liabilities.


Level 2.	Inputs other than Level 1 that are observable, either directly or indirectly, such as 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 market data for substantially the full term of the assets or liabilities.


Level 3.	Inputs that are unobservable for the asset or liability and that are significant to the fair value of the assets or liabilities.

The following tables present information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of September 28, 2018 and June 29, 2018, and indicate the fair value hierarchy of the valuation techniques utilized to determine such values:



	September 28, 2018
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Cash equivalents:
Money market funds	$	2,229	$	—	$	—	$	2,229
Total cash equivalents	2,229		—		—		2,229
Short-term available-for-sale securities:
U.S. Treasury securities	1		—		—		1
Corporate notes and bonds	—		12		—		12
Asset-backed securities	—		7		—		7
Municipal notes and bonds			2		—		2
Equity securities	2		—		—		2
Total short-term available-for-sale securities	3		21		—		24
Long-term available-for-sale securities:
U.S. Treasury securities	2		—		—		2
U.S. Government agency securities	—		5		—		5
International government securities	—		1		—		1
Corporate notes and bonds	—		69		—		69
Asset-backed securities	—		4		—		4
Municipal notes and bonds	—		10		—		10
Total long-term available-for-sale securities	2		89		—		91
Foreign exchange contracts	—		46		—		46
Interest rate swap contracts	—		23		—		23
Total assets at fair value	$	2,234	$	179	$	—	$	2,413
Liabilities:
Foreign exchange contracts	$	—	$	31	$	—	$	31
Total liabilities at fair value	$	—	$	31	$	—	$	31



	June 29, 2018
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Cash equivalents:
Money market funds	$	2,554	$	—	$	—	$	2,554
Certificates of deposit	—		4		—		4
Total cash equivalents	2,554		4		—		2,558
Short-term available-for-sale securities:
U.S. Treasury securities	3		—		—		3
Corporate notes and bonds	—		12		—		12
Asset-backed securities	—		4		—		4
Municipal notes and bonds	—		2		—		2
Equity securities	2		—		—		2
Total short-term available-for-sale securities	5		18		—		23
Long-term available-for-sale securities:
U.S. Treasury securities	3		—		—		3
U.S. Government agency securities	—		5		—		5
International government securities	—		1		—		1
Corporate notes and bonds	—		65		—		65
Asset-backed securities	—		8		—		8
Municipal notes and bonds	—		11		—		11
Total long-term available-for-sale securities	3		90		—		93
Foreign exchange contracts	—		51		—		51
Interest rate swap contracts	—		16		—		16
Total assets at fair value	$	2,562	$	179	$	—	$	2,741
Liabilities:
Foreign exchange contracts	$	—	$	28	$	—	$	28
Total liabilities at fair value	$	—	$	28	$	—	$	28

During the three months ended September 28, 2018, the Company had no transfers of financial assets and liabilities between levels.

Available-for-Sale Securities

The cost basis of the Company’s investments classified as available-for-sale securities, individually and in the aggregate, approximated its fair value as of September 28, 2018 and June 29, 2018.

Equity Securities Without a Readily Determinable Fair Value (“RDFV”)

From time to time, the Company enters into certain strategic investments for the promotion of business and strategic objectives. The equity securities of these privately-held companies do not have a RDFV. Under ASU 2016-01, these equity securities are now measured and recorded using the measurement alternative, which is cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. In addition, the existing impairment model has been replaced with a new one-step qualitative impairment model. Adjustments resulting from impairments and qualifying observable price changes are recorded in Other income (expense), net in the Condensed Consolidated Statements of Operations. As of September 28, 2018 and June 30, 2018, these investments were not material.

Financial Instruments Not Carried at Fair Value

The carrying value of the Company’s revolving credit facility approximates its fair value given the revolving nature of the balance and the variable market interest rate. For financial instruments where the carrying value (which includes principal adjusted for any unamortized issuance costs, and discounts or premiums) differs from fair value (which is based on quoted market prices), the following table represents the related carrying value and fair value for each of the Company’s outstanding financial instruments. Each of the financial instruments presented below was categorized as Level 2 for all periods presented, based on the frequency of trading immediately prior to the end of the first quarter of 2019 and the fourth quarter of 2018, respectively.



	September 28, 2018				June 29, 2018
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in millions)
0.50% convertible senior notes due 2020	$	31	$	34	$	31	$	34
Variable interest rate Term Loan A-1 maturing 2023	4,951		4,968		4,982		5,013
Variable interest rate U.S. Term Loan B-4 maturing 2023	2,442		2,451		2,448		2,452
1.50% convertible notes due 2024	938		1,022		931		1,114
4.750% senior unsecured notes due 2026	2,281		2,232		2,280		2,238
Total	$	10,643	$	10,707	$	10,672	$	10,851