Investments

The Company holds investments consisting primarily of marketable debt and equity securities. The carrying amounts of cash and cash equivalents approximate fair value due to their short maturities.

Information regarding the Company’s investments at April 26, 2013 is as follows:



(in millions)	Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	4,587	$	78	$	(4	)	$	4,661
Auction rate securities	118		—		(15		)	103
Mortgage-backed securities	1,050		8		(5		)	1,053
U.S. government and agency securities	3,882		17		(1		)	3,898
Foreign government and agency securities	38		—		—			38
Certificates of deposit	6		—		—			6
Other asset-backed securities	539		2		—			541
Marketable equity securities	82		75		(2		)	155
Trading securities:
Exchange-traded funds	45		5		—			50
Cost method, equity method, and other investments	549		—		—			NA
Total investments	$	10,896	$	185	$	(27	)	$	10,505

Information regarding the Company’s investments at April 27, 2012 is as follows:



(in millions)	Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	3,501	$	47	$	(7	)	$	3,541
Auction rate securities	153		—		(26		)	127
Mortgage-backed securities	840		9		(10		)	839
U.S. government and agency securities	3,122		38		—			3,160
Foreign government and agency securities	67		—		—			67
Certificates of deposit	47		—		—			47
Other asset-backed securities	535		3		(1		)	537
Marketable equity securities	100		158		(5		)	253
Trading securities:
Exchange-traded funds	45		2		(1		)	46
Cost method, equity method, and other investments	508		—		—			NA
Total investments	$	8,918	$	257	$	(50	)	$	8,617

Information regarding the Company’s consolidated balance sheets presentation at April 26, 2013 and April 27, 2012 is as follows:



	April 26, 2013				April 27, 2012
(in millions)	Investments		Other Assets		Investments		Other Assets
Available-for-sale securities	$	10,161	$	294	$	8,132	$	439
Trading securities	50		—		46		—
Cost method, equity method, and other investments	$	—	$	549	$	—	$	508
Total	$	10,211	$	843	$	8,178	$	947

The Company revised the classification, to investments, of certain amounts previously presented as cash and cash equivalents in the prior period consolidated balance sheets. These revisions, which are immaterial, also increased purchases and sales and maturities of marketable securities in the consolidated statements of cash flows for prior periods.

The following tables show 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 for less than 12 months and for more than 12 months, aggregated by investment category as of April 26, 2013 and April 27, 2012:



	April 26, 2013
	Less than 12 Months					More than 12 Months
(in millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate debt securities	$	544	$	(1	)	$	13	$	(3	)
Auction rate securities	—		—			103		(15		)
Mortgage-backed securities	195		(1		)	44		(4		)
U.S. government and agency securities	291		(1		)	—		—
Marketable equity securities	14		(2		)	—		—
Total	$	1,044	$	(5	)	$	160	$	(22	)
	April 27, 2012
	Less than 12 Months					More than 12 Months
(in millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate debt securities	$	664	$	(4	)	$	16	$	(3	)
Auction rate securities	—		—			127		(26		)
Mortgage-backed securities	218		(2		)	57		(8		)
Other asset-backed securities	55		—			9		(1		)
Marketable equity securities	24		(5		)	—		—
Total	$	961	$	(11	)	$	209	$	(38	)

Activity related to the Company’s investment portfolio is as follows:



	Fiscal Year
	2013						2012						2011
(in millions)	Debt (a)			Equity (b)			Debt (a)			Equity (b) (c)			Debt (a)			Equity (b) (d)
Proceeds from sales	$	10,350		$	161		$	7,675		$	113		$	9,318		$	31
Gross realized gains	$	59		$	94		$	52		$	93		$	28		$	85
Gross realized losses	$	(17	)	$	—		$	(16	)	$	—		$	(15	)	$	—
Impairment losses recognized	$	—		$	(21	)	$	(2	)	$	(10	)	$	(5	)	$	(24	)


(a)	Includes available-for-sale debt securities.


(b)	Includes marketable equity securities, cost method, equity method, exchange-traded funds, and other investments.


(c)	As a result of the Salient and PEAK acquisitions that occurred during fiscal year 2012, the Company recognized a non-cash gain of $38 million on its previously-held minority investments.


(d)	As a result of the Ardian acquisition that occurred during fiscal year 2011, the Company recognized a non-cash gain of $85 million on its previously-held minority investment.

The total other-than-temporary impairment losses on available-for-sale debt securities for the fiscal year ended April 26, 2013 were not significant. The total other-than-temporary impairment losses on available-for-sale debt securities for the fiscal year ended April 27, 2012 and April 29, 2011 were $6 million and $18 million, of which $4 million and $13 million, respectively, were recognized in other comprehensive income and $2 million and $5 million, respectively, were recognized in earnings. These charges relate to credit losses on certain mortgage-backed securities and auction rate securities. The amount of credit losses represents the difference between the present value of cash flows expected to be collected on these securities and the amortized cost. 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 invested, the Company believes it has recorded 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.

The following table shows the credit loss portion of other-than-temporary impairments on debt securities held by the Company as of the dates indicated and the corresponding changes in such amounts:



(in millions)
Balance as of April 29, 2011	$	20
Credit losses recognized on securities previously not impaired	1
Additional credit losses recognized on securities previously impaired	1
Reductions for securities sold during the period	(2		)
Balance as of April 27, 2012	$	20
Credit losses recognized on securities previously not impaired	—
Additional credit losses recognized on securities previously impaired	—
Reductions for securities sold during the period	(11		)
Balance as of April 26, 2013	$	9

The April 26, 2013 balance of available-for-sale debt securities by contractual maturity is shown in the following table at fair value. 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)	April 26, 2013
Due in one year or less	$	2,169
Due after one year through five years	7,040
Due after five years through 10 years	978
Due after 10 years	113
Total debt securities	$	10,300

As of April 26, 2013 and April 27, 2012, the aggregate carrying amount of equity and other securities without a quoted market price and accounted for using the cost or equity method was $549 million and $508 million, respectively. The total carrying value of these investments is reviewed quarterly for changes in circumstance or the occurrence of events that suggest the Company’s investment may not be recoverable. The fair value of cost or equity method investments is not adjusted if there are no identified events or changes in circumstances that may have a material adverse effect on the fair value of the investment.

Gains and losses realized on trading securities and available-for-sale debt securities are recorded in interest expense, net in the consolidated statements of earnings. Gains and losses realized on marketable equity securities, cost method, equity method, and other investments are recorded in other expense, net in the consolidated statements of earnings. In addition, unrealized gains and losses on available-for-sale debt securities are recorded in other comprehensive income (loss) and unrealized gains and losses on trading securities are recorded in interest expense, net in the consolidated statements of earnings. Gains and losses from the sale of investments are calculated based on the specific identification method.