Cash, Cash Equivalents and Investments

3 Months Ended

Jan. 26, 2020

Cash and Cash Equivalents [Abstract]

Summary of Cash, Cash Equivalents and Investments

The following tables summarize Applied’s cash, cash equivalents and investments:


January 26, 2020	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

	(In millions)
Cash	$	1,370	$	—	$	—	$	1,370
Cash equivalents:
Money market funds	1,644		—		—		1,644
U.S. Treasury and agency securities	2		—		—		2

Municipal securities	1		—		—		1
Commercial paper, corporate bonds and medium-term notes	407		—		—		407

Total Cash equivalents	2,054		—		—		2,054
Total Cash and Cash equivalents	$	3,424	$	—	$	—	$	3,424
Short-term and long-term investments:
U.S. Treasury and agency securities	$	330	$	2	$	—	$	332
Non-U.S. government securities*	4		—		—		4
Municipal securities	397		5		—		402
Commercial paper, corporate bonds and medium-term notes	698		5		—		703
Asset-backed and mortgage-backed securities	648		4		—		652
Total fixed income securities	2,077		16		—		2,093
Publicly traded equity securities	8		39		3		44
Equity investments in privately-held companies	106		10		4		112
Total equity investments	114		49		7		156
Total short-term and long-term investments	$	2,191	$	65	$	7	$	2,249

Total Cash, Cash equivalents and Investments	$	5,615	$	65	$	7	$	5,673

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* Includes agency debt securities guaranteed by Canada.


October 27, 2019	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

	(In millions)
Cash	$	1,071	$	—	$	—	$	1,071
Cash equivalents:
Money market funds	1,677		—		—		1,677
U.S. Treasury and agency securities	4		—		—		4


Commercial paper, corporate bonds and medium-term notes	377		—		—		377
Total Cash equivalents	2,058		—		—		2,058
Total Cash and Cash equivalents	$	3,129	$	—	$	—	$	3,129
Short-term and long-term investments:
U.S. Treasury and agency securities	$	336	$	1	$	—	$	337
Non-U.S. government securities*	10		—		—		10
Municipal securities	402		4		—		406
Commercial paper, corporate bonds and medium-term notes	642		5		—		647
Asset-backed and mortgage-backed securities	631		4		—		635
Total fixed income securities	2,021		14		—		2,035
Publicly traded equity securities	8		40		3		45
Equity investments in privately-held companies	105		10		3		112
Total equity investments	113		50		6		157
Total short-term and long-term investments	$	2,134	$	64	$	6	$	2,192

Total Cash, Cash equivalents and Investments	$	5,263	$	64	$	6	$	5,321

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* Includes agency debt securities guaranteed by Canada.

Maturities of Investments

The following table summarizes the contractual maturities of Applied’s investments as of January 26, 2020:


	Cost		Estimated Fair Value

	(In millions)
Due in one year or less	$	477	$	478
Due after one through five years	953		964

No single maturity date**	761		807
Total	$	2,191	$	2,249

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** Securities with no single maturity date include publicly-traded and privately-held equity securities and asset-backed and mortgage-backed securities.

Gains and Losses on Investments

During the three months ended January 26, 2020 and January 27, 2019 gross realized gains and losses on investments were not material.

As of January 26, 2020, and October 27, 2019, gross unrealized losses related to Applied’s debt investment portfolio were not material. Applied regularly reviews its debt investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether an unrealized loss is considered to be temporary, or other-than-temporary and therefore impaired, include: the length of time and extent to which fair value has been lower than the cost basis; the financial condition, credit quality and near-term prospects of the investee; and whether it is more likely than not that Applied will be required to sell the security prior to recovery.

Applied determined that the gross unrealized losses on its marketable fixed-income securities as of January 26, 2020 and January 27, 2019 were temporary in nature and therefore it did not recognize any impairment of its marketable fixed-income securities during the three months ended January 26, 2020 or January 27, 2019. Impairment charges on equity investments in privately-held companies during the three months ended January 26, 2020 and January 27, 2019 were not material. These impairment charges are included in interest and other income, net in the Consolidated Condensed Statement of Operations.

The components of gain (loss) on equity investments for the three months ended January 26, 2020 and January 27, 2019 were as follows:


	Three Months Ended
	January 26, 2020		January 27, 2019


	(In millions)
Publicly traded equity securities
Unrealized gain	$	2	$	6
Unrealized loss	(3)		(2)
Gain on sales	—		1

Equity investments in privately-held companies
Unrealized gain	—		7
Unrealized loss	(1)		(1)
Gain on sales	—		1
Loss on sales or impairment	(2)		—
Total gain on equity investments, net	$	(4)	$	12