
8.	Investments


(a)	Summary of Available-for-Sale Investments

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



January 23, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed income securities:
U.S. government securities	$	28,242	$	18	$	(16	)	$	28,244
U.S. government agency securities	3,492		3		(2		)	3,493
Non-U.S. government and agency securities	1,152		1		(1		)	1,152
Corporate debt securities	18,410		29		(158		)	18,281
U.S. agency mortgage-backed securities	1,452		9		(1		)	1,460
Total fixed income securities	52,748		60		(178		)	52,630
Publicly traded equity securities	1,318		176		(63		)	1,431
Total	$	54,066	$	236	$	(241	)	$	54,061



July 25, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed income securities:
U.S. government securities	$	29,904	$	41	$	(6	)	$	29,939
U.S. government agency securities	3,662		2		(1		)	3,663
Non-U.S. government and agency securities	1,128		1		(1		)	1,128
Corporate debt securities	15,802		34		(53		)	15,783
U.S. agency mortgage-backed securities	1,456		8		(3		)	1,461
Total fixed income securities	51,952		86		(64		)	51,974
Publicly traded equity securities	1,092		480		(7		)	1,565
Total	$	53,044	$	566	$	(71	)	$	53,539

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 23, 2016			January 24, 2015			January 23, 2016			January 24, 2015
Gross realized gains	$	16		$	92		$	51		$	113
Gross realized losses	(35		)	(23		)	(71		)	(37		)
Total	$	(19	)	$	69		$	(20	)	$	76

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



	Three Months Ended					Six Months Ended
	January 23, 2016			January 24, 2015		January 23, 2016			January 24, 2015
Net gains/(losses) on investments in publicly traded equity securities	$	2		$	60	$	(7	)	$	56
Net gains/(losses) on investments in fixed income securities	(21		)	9		(13		)	20
Total	$	(19	)	$	69	$	(20	)	$	76

For the three and six months ended January 23, 2016, the realized net losses related to the Company's available-for-sale investments included impairment charges of $3 million for fixed income securities, 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 2015.

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 23, 2016 and July 25, 2015 (in millions):



	UNREALIZED LOSSES LESS THAN 12 MONTHS					UNREALIZED LOSSES 12 MONTHS OR GREATER					TOTAL
January 23, 2016	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Fixed income securities:
U.S. government securities	$	15,432	$	(16	)	$	3	$	—		$	15,435	$	(16	)
U.S. government agency securities	1,793		(2		)	—		—			1,793		(2		)
Non-U.S. government and agency securities	645		(1		)	17		—			662		(1		)
Corporate debt securities	11,565		(136		)	1,252		(22		)	12,817		(158		)
U.S. agency mortgage-backed securities	387		(1		)	—		—			387		(1		)
Total fixed income securities	29,822		(156		)	1,272		(22		)	31,094		(178		)
Publicly traded equity securities	694		(62		)	2		(1		)	696		(63		)
Total	$	30,516	$	(218	)	$	1,274	$	(23	)	$	31,790	$	(241	)



	UNREALIZED LOSSES LESS THAN 12 MONTHS					UNREALIZED LOSSES 12 MONTHS OR GREATER					TOTAL
July 25, 2015	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Fixed income securities:
U.S. government securities	$	6,412	$	(6	)	$	—	$	—		$	6,412	$	(6	)
U.S. government agency securities	1,433		(1		)	—		—			1,433		(1		)
Non-U.S. government and agency securities	515		(1		)	4		—			519		(1		)
Corporate debt securities	9,552		(49		)	312		(4		)	9,864		(53		)
U.S. agency mortgage-backed securities	579		(3		)	—		—			579		(3		)
Total fixed income securities	18,491		(60		)	316		(4		)	18,807		(64		)
Publicly traded equity securities	108		(7		)	2		—			110		(7		)
Total	$	18,599	$	(67	)	$	318	$	(4	)	$	18,917	$	(71	)

As of January 23, 2016, 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 23, 2016, 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 23, 2016.

The Company has evaluated its publicly traded equity securities as of January 23, 2016 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 23, 2016 (in millions):



	Amortized Cost		Fair Value
Less than 1 year	$	17,569	$	17,555
Due in 1 to 2 years	16,105		16,081
Due in 2 to 5 years	17,423		17,345
Due after 5 years	1,651		1,649
Total	$	52,748	$	52,630

Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations. The remaining contractual principal maturities for mortgage-backed securities were allocated assuming no prepayments.


(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 each of the six months ended January 23, 2016 and January 24, 2015 was $0.6 billion. 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 23, 2016 and July 25, 2015, the Company had no outstanding securities lending transactions.


(e)	Investments in Privately Held Companies

The carrying value of the Company’s investments in privately held companies was included in other assets. For such investments that were accounted for under the equity and cost method as of January 23, 2016 and July 25, 2015, the amounts are summarized in the following table (in millions):



	January 23, 2016		July 25, 2015
Equity method investments	$	605	$	578
Cost method investments	359		319
Total	$	964	$	897

For additional information on impairment charges related to investments in privately held companies, see Note 9.

Variable Interest Entities In the ordinary course of business, the Company has investments in privately held companies and provides financing to certain customers. These privately held companies and customers may be considered to be variable interest entities. The Company evaluates on an ongoing basis its investments in these privately held companies and its customer financings and has determined that as of January 23, 2016, except as disclosed herein, there were no variable interest entities required to be consolidated in the Company’s Consolidated Financial Statements.