Cash, Cash Equivalents and Investments

6 Months Ended

Apr. 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:


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

	(In millions)
Cash	$	1,029	$	—	$	—	$	1,029
Cash equivalents:
Money market funds	4,231		—		—		4,231



Commercial paper, corporate bonds and medium-term notes	21		—		—		21

Total Cash equivalents	4,252		—		—		4,252
Total Cash and Cash equivalents	$	5,281	$	—	$	—	$	5,281
Short-term and long-term investments:
U.S. Treasury and agency securities	$	380	$	6	$	—	$	386
Non-U.S. government securities*	4		—		—		4
Municipal securities	397		5		—		402
Commercial paper, corporate bonds and medium-term notes	555		5		3		557
Asset-backed and mortgage-backed securities	594		7		4		597
Total fixed income securities	1,930		23		7		1,946
Publicly traded equity securities	11		31		4		38
Equity investments in privately-held companies	104		18		5		117
Total equity investments	115		49		9		155
Total short-term and long-term investments	$	2,045	$	72	$	16	$	2,101

Total Cash, Cash equivalents and Investments	$	7,326	$	72	$	16	$	7,382

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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 April 26, 2020:


	Cost		Estimated Fair Value

	(In millions)
Due in one year or less	$	378	$	380
Due after one through five years	958		969

No single maturity date**	709		752
Total	$	2,045	$	2,101

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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 and six months ended April 26, 2020 and April 28, 2019 gross realized gains and losses on investments were not material.

As of April 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 April 26, 2020 and April 28, 2019 were temporary in nature and therefore it did not recognize any impairment of its marketable fixed-income securities during the three and six months ended April 26, 2020 or April 28, 2019. Impairment charges on equity investments in privately-held companies during the three and six months ended April 26, 2020 and April 28, 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 and six months ended April 26, 2020 and April 28, 2019 were as follows:


	Three Months Ended						Six Months Ended
	April 26, 2020		April 28, 2019		April 26, 2020		April 28, 2019


	(In millions)
Publicly traded equity securities
Unrealized gain	$	3	$	7	$	5	$	13
Unrealized loss	(12)		(1)		(15)		(3)
Realized gain on sales	—		1		—		2

Equity investments in privately-held companies
Unrealized gain	9		2		9		9
Unrealized loss	(2)		(2)		(3)		(3)
Realized gain on sales or other	1		4		1		5
Realized loss on sales or impairment	(6)		—		(8)		—
Total gain (loss) on equity investments, net	$	(7)	$	11	$	(11)	$	23