Fair Value

3 Months Ended

Oct. 28, 2023

(a)Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis were as follows (in millions):


	OCTOBER 28, 2023						JULY 29, 2023
	FAIR VALUE MEASUREMENTS						FAIR VALUE MEASUREMENTS
	Level 1		Level 2		Total Balance		Level 1		Level 2		Total Balance
Assets:
Cash equivalents:
Money market funds	$	6,650	$	—	$	6,650	$	6,496	$	—	$	6,496
Commercial paper	—		738		738		—		1,090		1,090
Certificates of deposit	—		12		12		—		47		47
Corporate debt securities	—		16		16		—		25		25
Available-for-sale debt investments:
U.S. government securities	—		2,524		2,524		—		3,526		3,526
U.S. government agency securities	—		415		415		—		423		423
Non-U.S. government and agency securities	—		351		351		—		363		363
Corporate debt securities	—		6,500		6,500		—		6,914		6,914
U.S. agency mortgage-backed securities	—		2,113		2,113		—		2,205		2,205
Commercial paper	—		943		943		—		1,484		1,484
Certificates of deposit	—		666		666		—		677		677
Equity investments:
Marketable equity securities	409		—		409		431		—		431
Other current assets:
Money market funds	375		—		375		188		—		188
Other assets:
Money market funds	1,125		—		1,125		1,313		—		1,313
Derivative assets	—		58		58		—		32		32
Total	$	8,559	$	14,336	$	22,895	$	8,428	$	16,786	$	25,214
Liabilities:
Derivative liabilities	$	—	$	92	$	92	$	—	$	75	$	75
Total	$	—	$	92	$	92	$	—	$	75	$	75

Level 1 marketable equity securities are determined by using quoted prices in active markets for identical assets. Level 2 available-for-sale debt investments are priced using quoted market prices for similar instruments or nonbinding market prices that are corroborated by observable market data. We use inputs such as actual trade data, benchmark yields, broker/dealer quotes, and other similar data, which are obtained from quoted market prices, independent pricing vendors, or other sources, to determine the ultimate fair value of these assets and liabilities. We use such pricing data as the primary input to make our assessments and determinations as to the ultimate valuation of our investment portfolio and have not made, during the periods presented, any material adjustments to such inputs. We are ultimately responsible for the financial statements and underlying estimates. Our derivative instruments are primarily classified as Level 2, as they are not actively traded and are valued using pricing models that use observable market inputs. We did not have any transfers between Level 1 and Level 2 fair value measurements during the periods presented.

(b)Assets Measured at Fair Value on a Nonrecurring Basis

Our non-marketable equity securities using the measurement alternative are adjusted to fair value on a non-recurring basis. Adjustments are made when observable transactions for identical or similar investments of the same issuer occur, or due to impairment. These securities are classified as Level 3 in the fair value hierarchy because we estimate the value based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs such as volatility, rights, and obligations of the securities we hold.

The fair value of our short-term loan receivables approximates their carrying value due to their short duration. The aggregate carrying value of our long-term loan receivables as of October 28, 2023 and July 29, 2023 was $2.7 billion and $2.9 billion, respectively. The estimated fair value of our long-term loan receivables approximates their carrying value. We use unobservable inputs in determining discounted cash flows to estimate the fair value of our long-term loan receivables, and therefore they are categorized as Level 3.

As of October 28, 2023, the estimated fair value of our short-term debt approximates its carrying value due to the short maturities. As of October 28, 2023, the fair value of our senior notes was $7.5 billion with a carrying amount of $7.7 billion. This compares to a fair value of $8.7 billion and a carrying amount of $8.4 billion as of July 29, 2023. The fair value of the senior notes was determined based on observable market prices in a less active market and was categorized as Level 2.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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