
8.	Investments


(a)	Summary of Available-for-Sale Investments

The following tables summarize the Company’s available-for-sale investments (in millions):



January 25, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed income securities:
U.S. government securities	$	29,166	$	30	$	(5	)	$	29,191
U.S. government agency securities	1,307		2		—			1,309
Non-U.S. government and agency securities	687		2		(1		)	688
Corporate debt securities	8,031		74		(15		)	8,090
U.S. agency mortgage-backed securities	449		4		—			453
Total fixed income securities	39,640		112		(21		)	39,731
Publicly traded equity securities	1,280		719		(4		)	1,995
Total	$	40,920	$	831	$	(25	)	$	41,726



July 27, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed income securities:
U.S. government securities	$	27,814	$	22	$	(13	)	$	27,823
U.S. government agency securities	3,083		7		(1		)	3,089
Non-U.S. government and agency securities	1,094		3		(2		)	1,095
Corporate debt securities	7,876		55		(50		)	7,881
Total fixed income securities	39,867		87		(66		)	39,888
Publicly traded equity securities	2,063		738		(4		)	2,797
Total	$	41,930	$	825	$	(70	)	$	42,685

Non-U.S. government and agency securities include agency and corporate debt securities that are guaranteed by non-U.S. governments.


(b)	Gains and Losses on Available-for-Sale Investments

The following table presents the gross realized gains and gross realized losses related to the Company’s available-for-sale investments (in millions):



	Three Months Ended						Six Months Ended
	January 25, 2014			January 26, 2013			January 25, 2014			January 26, 2013
Gross realized gains	$	97		$	57		$	192		$	120
Gross realized losses	(15		)	(44		)	(27		)	(80		)
Total	$	82		$	13		$	165		$	40

The following table presents the realized net gains related to the Company’s available-for-sale investments by security type (in millions):



	Three Months Ended				Six Months Ended
	January 25, 2014		January 26, 2013		January 25, 2014		January 26, 2013
Net gains on investments in publicly traded equity securities	$	69	$	4	$	144	$	14
Net gains on investments in fixed income securities	13		9		21		26
Total	$	82	$	13	$	165	$	40

For the second quarter and first six months of fiscal 2014, the realized net gains related to the Company's available-for-sale investments included impairment charges of $11 million for publicly traded equity securities, which were due to a decline in the fair value of those securities below their cost basis that were determined to be other than temporary. There were no impairment charges on available-for-sale investments for the corresponding periods in fiscal 2013.

The following tables present the breakdown of the available-for-sale investments with gross unrealized losses and the duration that those losses had been unrealized at January 25, 2014 and July 27, 2013 (in millions):



	UNREALIZED LOSSES LESS THAN 12 MONTHS					UNREALIZED LOSSES 12 MONTHS OR GREATER					TOTAL
January 25, 2014	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Fixed income securities:
U.S. government securities	$	3,528	$	(5	)	$	8	$	—		$	3,536	$	(5	)
U.S. government agency securities	170		—			—		—			170		—
Non-U.S. government and agency securities	294		(1		)	2		—			296		(1		)
Corporate debt securities	1,906		(14		)	69		(1		)	1,975		(15		)
U.S. agency mortgage-backed securities	13		—			—		—			13		—
Total fixed income securities	5,911		(20		)	79		(1		)	5,990		(21		)
Publicly traded equity securities	61		(4		)	—		—			61		(4		)
Total	$	5,972	$	(24	)	$	79	$	(1	)	$	6,051	$	(25	)



	UNREALIZED LOSSES LESS THAN 12 MONTHS					UNREALIZED LOSSES 12 MONTHS OR GREATER				TOTAL
July 27, 2013	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Fixed income securities:
U.S. government securities	$	7,865	$	(13	)	$	—	$	—	$	7,865	$	(13	)
U.S. government agency securities	294		(1		)	—		—		294		(1		)
Non-U.S. government and agency securities	432		(2		)	—		—		432		(2		)
Corporate debt securities	3,704		(50		)	4		—		3,708		(50		)
Total fixed income securities	12,295		(66		)	4		—		12,299		(66		)
Publicly traded equity securities	278		(4		)	—		—		278		(4		)
Total	$	12,573	$	(70	)	$	4	$	—	$	12,577	$	(70	)

As of January 25, 2014, for fixed income securities that were in unrealized loss positions, the Company has determined that (i) it does not have the intent to sell any of these investments, and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. In addition, as of January 25, 2014, the Company anticipates that it will recover the entire amortized cost basis of such fixed income securities and has determined that no other-than-temporary impairments associated with credit losses were required to be recognized during the six months ended January 25, 2014.

The Company has evaluated its publicly traded equity securities as of January 25, 2014 and has determined that there was no indication of other-than-temporary impairments in the respective categories of unrealized losses. This determination was based on several factors, which include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the issuer, and the Company’s intent and ability to hold the publicly traded equity securities for a period of time sufficient to allow for any anticipated recovery in market value.


(c)	Maturities of Fixed Income Securities

The following table summarizes the maturities of the Company’s fixed income securities at January 25, 2014 (in millions):



	Amortized Cost		Fair Value
Less than 1 year	$	15,121	$	15,132
Due in 1 to 2 years	12,161		12,196
Due in 2 to 5 years	11,634		11,673
Due after 5 years	724		730
Total	$	39,640	$	39,731

Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations.


(d)	Securities Lending

The Company periodically engages in securities lending activities with certain of its available-for-sale investments. These transactions are accounted for as a secured lending of the securities, and the securities are typically loaned only on an overnight basis. The average daily balance of securities lending for the six months ended January 25, 2014 and January 26, 2013 was $0.9 billion and $0.8 billion, respectively. The Company requires collateral equal to at least 102% of the fair market value of the loaned security and that the collateral be in the form of cash or liquid, high-quality assets. The Company engages in these secured lending transactions only with highly creditworthy counterparties, and the associated portfolio custodian has agreed to indemnify the Company against collateral losses. The Company did not experience any losses in connection with the secured lending of securities during the periods presented. As of January 25, 2014 and July 27, 2013, the Company had no outstanding securities lending transactions.