Investments

The Company holds investments consisting primarily of marketable debt and equity securities.

Information regarding the Company’s investments at October 24, 2014 is as follows:



(in millions)	Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	5,596	$	69	$	(12	)	$	5,653
Auction rate securities	109		—		(10		)	99
Mortgage-backed securities	1,257		13		(6		)	1,264
U.S. government and agency securities	2,868		11		(19		)	2,860
Foreign government and agency securities	80		—		—			80
Certificates of deposit	46		—		—			46
Other asset-backed securities	469		2		—			471
Debt funds	2,775		22		(55		)	2,742
Marketable equity securities	41		18		(13		)	46
Trading securities:
Exchange-traded funds	56		14		—			70
Cost method, equity method, and other investments	563		—		—			NA
Total	$	13,860	$	149	$	(115	)	$	13,331

Information regarding the Company’s investments at April 25, 2014 is as follows:



(in millions)	Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	5,504	$	55	$	(17	)	$	5,542
Auction rate securities	109		—		(12		)	97
Mortgage-backed securities	1,337		7		(8		)	1,336
U.S. government and agency securities	3,138		7		(29		)	3,116
Foreign government and agency securities	67		—		—			67
Certificates of deposit	54		—		—			54
Other asset-backed securities	540		2		—			542
Debt funds	2,143		9		(29		)	2,123
Marketable equity securities	47		15		(13		)	49
Trading securities:
Exchange-traded funds	54		13		—			67
Cost method, equity method, and other investments	666		—		—			NA
Total	$	13,659	$	108	$	(108	)	$	12,993

Information regarding the Company’s condensed consolidated balance sheets presentation at October 24, 2014 and April 25, 2014 is as follows:



	October 24, 2014				April 25, 2014
(in millions)	Investments		Other Assets		Investments		Other Assets
Available-for-sale securities	$	13,107	$	154	$	12,771	$	155
Trading securities	70		—		67		—
Cost method, equity method, and other investments	—		563		—		666
Total	$	13,177	$	717	$	12,838	$	821

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, aggregated by investment category as of October 24, 2014 and April 25, 2014:



	October 24, 2014
	Less than 12 months					More than 12 months
(in millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate debt securities	$	1,305	$	(8	)	$	97	$	(4	)
Auction rate securities	—		—			99		(10		)
Mortgage-backed securities	327		(2		)	311		(4		)
U.S. government and agency securities	368		(1		)	681		(18		)
Debt funds	1,372		(40		)	133		(15		)
Marketable equity securities	17		(13		)	—		—
Total	$	3,389	$	(64	)	$	1,321	$	(51	)



	April 25, 2014
	Less than 12 months					More than 12 months
(in millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate debt securities	$	1,601	$	(14	)	$	50	$	(3	)
Auction rate securities	—		—			97		(12		)
Mortgage-backed securities	682		(7		)	28		(1		)
U.S. government and agency securities	1,500		(27		)	46		(2		)
Debt funds	1,224		(29		)	—		—
Marketable equity securities	25		(13		)	—		—
Total	$	5,032	$	(90	)	$	221	$	(18	)

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



	Three months ended
	October 24, 2014						October 25, 2013
(in millions)	Debt (a)			Equity (b)			Debt (a)			Equity (b)
Proceeds from sales	$	806		$	7		$	2,072		$	24
Gross realized gains	4			39			—			15
Gross realized losses	(2		)	—			(1		)	—
Impairment losses recognized	—			(20		)	—			—

	Six months ended
	October 24, 2014						October 25, 2013
(in millions)	Debt (a)			Equity (b)			Debt (a)			Equity (b)
Proceeds from sales	$	2,636		$	29		$	4,235		$	56
Gross realized gains	16			58			6			33
Gross realized losses	(5		)	—			(6		)	—
Impairment losses recognized	—			(20		)	—			—

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

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

Credit losses represent the difference between the present value of cash flows expected to be collected on certain mortgage-backed securities and auction rate securities and the amortized cost of these securities. 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.

As of October 24, 2014 and April 25, 2014, the credit loss portion of other-than-temporary impairments on debt securities was $4 million. The total reductions for available-for-sale debt securities sold during the three and six months ended October 24, 2014 and October 25, 2013 were not significant. The total other-than-temporary impairment losses on available-for-sale debt securities for the three and six months ended October 24, 2014 and October 25, 2013 were not significant.

The October 24, 2014 balance of available-for-sale debt securities, excluding debt funds which have no single maturity date, by contractual maturity is shown in the following table. 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)	October 24, 2014
Due in one year or less	$	1,714
Due after one year through five years	6,046
Due after five years through ten years	2,559
Due after ten years	154
Total	$	10,473

The Company holds investments in marketable equity securities which are classified as investments in the condensed consolidated balance sheets. The aggregate carrying amount of these investments was $46 million and $49 million as of October 24, 2014 and April 25, 2014, respectively. During the three and six months ended October 24, 2014, the Company determined that the fair value of certain marketable equity securities were below their carrying values and that the carrying values of these investments were not expected to be recoverable within a reasonable period of time. As a result, the Company recognized $7 million in impairment charges for the three and six months ended October 24, 2014, which were recorded in other expense, net in the condensed consolidated statements of earnings. The Company did not record any significant impairment charges related to marketable equity securities during the three and six months ended October 25, 2013.

As of October 24, 2014 and April 25, 2014, the aggregate carrying amount of equity and other securities without a quoted market price and accounted for using the cost or equity method was $563 million and $666 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 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 condensed 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 condensed consolidated statements of earnings. In addition, unrealized gains and losses on available-for-sale debt securities are recorded in other comprehensive income (loss) in the condensed consolidated statements of comprehensive income and unrealized gains and losses on trading securities are recorded in interest expense, net in the condensed consolidated statements of earnings. Gains and losses from the sale of investments are calculated based on the specific identification method.