FINANCIAL INSTRUMENTS

Short-term investments

Fair values were as follows:



	June 29, 2019									June 30, 2018
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Value		Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Value
	(in thousands)
Available-for-sale investments
Certificates of deposit	$	1,000	$	—	$	—		$	1,000	$	52,429	$	—	$	(1	)	$	52,428
Commercial paper	—		—		—			—		64,354		—		—			64,354
Corporate debt securities	140,031		68		(109		)	139,990		369,734		39		(2,008		)	367,765
U.S. Treasury securities	—		—		—			—		600,068		10		(1,710		)	598,368
Total available-for-sale investments	$	141,031	$	68	$	(109	)	$	140,990	$	1,086,585	$	49	$	(3,719	)	$	1,082,915

In the fiscal years ended June 29, 2019 and June 30, 2018, the Company did not recognize any impairment charges on short-term investments. All available-for-sale investments have maturity dates between April 1, 2019 and March 12, 2021.

Derivative instruments and hedging activities

The Company incurs expenditures denominated in non-U.S. currencies, primarily the Philippine Peso and the Thai Baht associated with the Company's manufacturing activities in the Philippines and Thailand, respectively, and European Euro, Indian Rupee, Taiwan New Dollar, South Korean Won, Chinese Yuan, Japanese Yen, Singapore Dollar, and Canadian Dollar expenditures for sales offices and research and development activities undertaken outside of the U.S.

The Company has established a program that exclusively utilizes foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures. The Company does not use these foreign currency forward contracts for trading purposes.

Derivatives designated as cash flow hedging instruments

The Company designates certain forward contracts as hedging instruments pursuant to ASC No. 815, Derivatives and Hedging (“ASC 815”). As of June 29, 2019 and June 30, 2018, respectively, the notional amounts of the forward contracts the Company held to purchase international currencies were $48.5 million and $49.7 million, respectively, and the notional amounts of forward contracts the Company held to sell international currencies were $0 million and $1.2 million, respectively.

Derivatives not designated as hedging instruments

As of June 29, 2019 and June 30, 2018, respectively, the notional amounts of the forward contracts the Company held to purchase international currencies were $19.6 million and $21.1 million, respectively, and the notional amounts of forward contracts the Company held to sell international currencies were $21.1 million and $21.3 million, respectively. The fair values of outstanding foreign currency forward contracts and gain (loss) included in the Consolidated Statements of Income were not material for the fiscal years ended June 29, 2019 and June 30, 2018.

Effect of hedge accounting on the Consolidated Statements of Income

The following table summarizes the gains and (losses) from hedging activities recognized in the Company's Consolidated Statements of Income:



	June 29, 2019								June 30, 2018
	Net Revenue		Cost of Goods Sold			Operating Expenses			Net Revenue			Cost of Goods Sold			Operating Expenses
	(in thousands)								(in thousands)
Income and expenses line items in which the effects of cash flow hedges are recorded	$	2,314,329	$	813,823		$	753,408		$	2,480,066		$	853,945		$	792,673

Gain (loss) on cash flow hedges:
Foreign exchange contracts:
Gain (loss) reclassified from accumulated other comprehensive income into income	$	49	$	(430	)	$	(2,275	)	$	(54	)	$	(78	)	$	1,551

Outstanding debt obligations

The following table summarizes the Company's outstanding debt obligations:



	June 29, 2019			June 30, 2018
	(in thousands)
3.45% fixed rate notes due June 2027	$	500,000		$	500,000
2.50% fixed rate notes due November 2018	—			500,000
3.375% fixed rate notes due March 2023	500,000			500,000
Total outstanding debt	1,000,000			1,500,000
Less: Current portion (included in “Current portion of debt”)	—			(499,406		)
Less: Reduction for unamortized discount and debt issuance costs	(7,416		)	(9,447		)
Total long-term debt	$	992,584		$	991,147

On June 15, 2017, the Company completed a public offering of $500 million aggregate principal amount of the Company's 3.45% senior unsecured and unsubordinated notes due in June 2027 (“2027 Notes”), with an effective interest rate of 3.5%. Interest on the 2027 Notes is payable semi-annually in arrears on June 15 and December 15 of each year, commencing on December 15, 2017. The net proceeds of this offering were approximately $495.2 million, after issuing at a discount and deducting paid expenses.

On November 21, 2013, the Company completed a public offering of $500 million aggregate principal amount of the Company’s 2.5% coupon senior unsecured and unsubordinated notes due in November 2018 (“2018 Notes”), with an effective interest rate of 2.6%. Interest on the 2018 Notes is payable semi-annually in arrears on May 15 and November 15 of each year, commencing on May 15, 2014. The net proceeds of this offering were approximately $494.5 million, after issuing at a discount and deducting paid expenses. In November of 2018, the Company repaid the entire principal and any outstanding interest related to these outstanding notes.

On March 18, 2013, the Company completed a public offering of $500 million aggregate principal amount of the Company's 3.375% senior unsecured and unsubordinated notes due in March 2023 (“2023 Notes”), with an effective interest rate of 3.5%. Interest on the 2023 Notes is payable semi-annually in arrears on March 15 and September 15 of each year. The net proceeds of this offering were approximately $490.0 million, after issuing at a discount and deducting paid expenses.

The debt indentures that govern the 2027 and the 2023 Notes include covenants that limit the Company's ability to grant liens on its facilities and to enter into sale and leaseback transactions, which could limit the Company's ability to secure additional debt funding in the future. In circumstances involving a change of control of the Company followed by a downgrade of the rating of the 2027 Notes or the 2023 Notes, the Company would be required to make an offer to repurchase the affected notes at a purchase price equal to 101% of the aggregate principal amount of such notes, plus accrued and unpaid interest.

The Company accounts for all the notes above based on their amortized cost. The discount and expenses are being amortized to Interest and other income (expense), net in the Consolidated Statements of Income over the life of the notes. The interest expense is recorded in Interest and other income (expense), net in the Consolidated Statements of Income. Amortized discount and expenses, as well as interest expense associated with the notes was $41.4 million, $49.5 million and $31.7 million during the years ended June 29, 2019, June 30, 2018, and June 24, 2017, respectively.

The estimated fair value of the Company's outstanding debt obligations was approximately $1.0 billion as of June 29, 2019. The estimated fair value of the debt is based primarily on observable market inputs and is a Level 2 measurement.

The Company recorded interest expense of $43.5 million, $50.2 million, and $34.3 million during the fiscal years ended June 29, 2019, June 30, 2018, and June 24, 2017, respectively.

Credit facilities

In January 2019, the Company terminated its $350 million revolving credit facility with certain institutional lenders. As of June 30, 2018, the Company had not borrowed any amounts from this credit facility and was in compliance with all debt covenants.

Other financial instruments

For the balance of the Company's financial instruments, cash equivalents, accounts receivable, accounts payable and other accrued liabilities, the carrying amounts approximate fair value due to their short maturities.