APPLIED MATERIALS INC /DE | 2013 | FY | 3


Cash, Cash Equivalents and Investments
Summary of Cash, Cash Equivalents and Investments
The following tables summarize Applied’s cash, cash equivalents and investments by security type:
 
October 27, 2013
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair  Value
 
 
 
 
 
 
 
 
 
(In millions)
Cash
$
611

 
$

 
$

 
$
611

Cash equivalents:
 
 
 
 
 
 
 
Money market funds
1,095

 

 

 
1,095

Municipal securities
5

 

 

 
5

Total Cash equivalents
1,100

 

 

 
1,100

Total Cash and Cash equivalents
$
1,711

 
$

 
$

 
$
1,711

Short-term and long-term investments:
 
 
 
 
 
 
 
U.S. Treasury and agency securities
$
170

 
$

 
$

 
$
170

Non-U.S. government securities*
11

 

 

 
11

Municipal securities
379

 
2

 

 
381

Commercial paper, corporate bonds and medium-term notes
218

 
2

 
1

 
219

Asset-backed and mortgage-backed securities
268

 
2

 
2

 
268

Total fixed income securities
1,046

 
6

 
3

 
1,049

Publicly traded equity securities
27

 
33

 

 
60

Equity investments in privately-held companies
76

 

 

 
76

Total short-term and long-term investments
$
1,149

 
$
39

 
$
3

 
$
1,185

Total Cash, Cash equivalents and Investments
$
2,860

 
$
39

 
$
3

 
$
2,896

 _________________________
* Includes agency and corporate debt securities guaranteed by non-U.S. governments, which consist of Germany, Canada and Australia.

October 28, 2012
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair  Value
 
 
 
 
 
 
 
 
 
(In millions)
Cash
$
876

 
$

 
$

 
$
876

Cash equivalents:
 
 
 
 
 
 
 
Money market funds
483

 

 

 
483

Municipal securities
33

 

 

 
33

Total Cash equivalents
516

 

 

 
516

Total Cash and Cash equivalents
$
1,392

 
$

 
$

 
$
1,392

Short-term and long-term investments:
 
 
 
 
 
 
 
U.S. Treasury and agency securities
$
373

 
$
1

 
$

 
$
374

Non-U.S. government securities
29

 

 

 
29

Municipal securities
396

 
2

 

 
398

Commercial paper, corporate bonds and medium-term notes
381

 
3

 

 
384

Asset-backed and mortgage-backed securities
294

 
4

 

 
298

Total fixed income securities
1,473

 
10

 

 
1,483

Publicly traded equity securities
32

 
15

 

 
47

Equity investments in privately-held companies
70

 

 

 
70

Total short-term and long-term investments
$
1,575

 
$
25

 
$

 
$
1,600

Total Cash, Cash equivalents and Investments
$
2,967

 
$
25

 
$

 
$
2,992


 
Maturities of Investments
The following table summarizes the contractual maturities of Applied’s investments at October 27, 2013:
 
 
Cost
 
Estimated
Fair  Value
 
 
 
 
 
(In millions)
Due in one year or less
$
149

 
$
149

Due after one through five years
629

 
632

No single maturity date**
371

 
404

 
$
1,149

 
$
1,185

 _________________________
** 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
Gross realized gains and losses on sales of investments during fiscal 2013, 2012, and 2011 were as follows:
 
 
2013
 
2012
 
2011
 
 
 
 
 
 
 
(In millions)
Gross realized gains
$
7

 
$
3

 
$
20

Gross realized losses
$
2

 
$
3

 
$
4


At October 27, 2013, gross unrealized losses related to Applied's investment portfolio were not material. Applied regularly reviews its investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether an unrealized loss was 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. Generally, the contractual terms of investments in marketable securities do not permit settlement at prices less than the amortized cost of the investments. Applied determined that the gross unrealized losses on its marketable securities at October 27, 2013, October 28, 2012 and October 30, 2011 were temporary in nature and therefore it did not recognize any impairment of its marketable securities for fiscal 2013, 2012 or 2011. During fiscal 2013, 2012 and 2011, Applied determined that certain of its equity investments held in privately-held companies were other-than-temporarily impaired and, accordingly, recognized impairment charges of $6 million, $17 million and $3 million, respectively.
Unrealized gains and temporary losses on investments classified as available-for-sale are included within accumulated other comprehensive income (loss), net of any related tax effect. Upon realization, those amounts are reclassified from accumulated other comprehensive income (loss) to results of operations.

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