Quarterly report pursuant to Section 13 or 15(d)

Marketable Securities (Notes)

v3.3.1.900
Marketable Securities (Notes)
 6 Months Ended
Mar. 27, 2016
Marketable Securities [Abstract]  
Marketable Securities
Note 12. Marketable Securities
Marketable securities were comprised as follows (in millions):
 
Current
 
Noncurrent
 
March 27,
2016
 
September 27,
2015
 
March 27,
2016
 
September 27,
2015
Trading:
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
$
—

 
$
—

 
$
23

 
$
12

Corporate bonds and notes
—

 
—

 
—

 
364

Mortgage- and asset-backed and auction rate securities
—

 
—

 
—

 
242

Total trading
—

 
—

 
23

 
618

Available-for-sale:
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
238

 
156

 
861

 
691

Corporate bonds and notes
8,770

 
7,926

 
7,926

 
7,112

Mortgage- and asset-backed and auction rate securities
1,505

 
1,302

 
461

 
263

Equity and preferred securities and equity funds
114

 
377

 
1,377

 
1,253

Debt funds
—

 
—

 
2,934

 
2,909

Total available-for-sale
10,627

 
9,761

 
13,559

 
12,228

Fair value option:
 
 
 
 
 
 
 
Debt fund
—

 
—

 
—

 
780

Total marketable securities
$
10,627

 
$
9,761

 
$
13,582

 
$
13,626


In the second quarter of fiscal 2016, the Company exited an investment in a debt fund for which the Company elected the fair value option. The investment would have otherwise been recorded using the equity method. Changes in fair value associated with this investment were recognized in net investment income. During the three and six months ended March 27, 2016 and March 29, 2015, the changes in fair value associated with this investment were negligible.
The Company classifies certain portfolios of debt securities that utilize derivative instruments to acquire or reduce foreign exchange, interest rate and/or equity, prepayment and credit risks as trading. Net gains or net losses recognized on debt securities classified as trading held at March 27, 2016 and March 29, 2015 were negligible during the three and six months ended March 27, 2016 and March 29, 2015, respectively.
At March 27, 2016, the contractual maturities of available-for-sale debt securities were as follows (in millions):
Years to Maturity
 
 
 
 
Less Than
One Year
 
One to
Five Years
 
Five to
Ten Years
 
Greater Than
Ten Years
 
No Single
Maturity
Date
 
Total
$
3,616

 
$
11,239

 
$
2,187

 
$
753

 
$
4,900

 
$
22,695


Debt securities with no single maturity date included debt funds, mortgage- and asset-backed securities and auction rate securities.
The Company recorded realized gains and losses on sales of available-for-sale securities as follows (in millions):
 
Gross Realized Gains
 
Gross Realized Losses
 
Net Realized Gains
For the three months ended
 
 
 
 
 
March 27, 2016
$
34

 
$
(11
)
 
$
23

March 29, 2015
128

 
(30
)
 
98

 
 
 
 
 
 
For the six months ended
 
 
 
 
 
March 27, 2016
$
84

 
$
(22
)
 
$
62

March 29, 2015
308

 
(37
)
 
271


Available-for-sale securities were comprised as follows (in millions):
 
Cost
 
Unrealized Gains
 
Unrealized Losses
 
Fair Value
March 27, 2016
 
 
 
 
 
 
 
Equity securities
$
1,283

 
$
242

 
$
(34
)
 
$
1,491

Debt securities (including debt funds)
22,824

 
196

 
(325
)
 
22,695

 
$
24,107

 
$
438

 
$
(359
)
 
$
24,186

September 27, 2015
 
 
 
 
 
 
 
Equity securities
$
1,394

 
$
264

 
$
(28
)
 
$
1,630

Debt securities (including debt funds)
20,459

 
185

 
(285
)
 
20,359

 
$
21,853

 
$
449

 
$
(313
)
 
$
21,989


The following table shows the gross unrealized losses and fair values of the Company’s investments in individual securities that are classified as available-for-sale and have been in a continuous unrealized loss position deemed to be temporary for less than 12 months and for more than 12 months, aggregated by investment category (in millions):
 
March 27, 2016
 
Less than 12 months
 
More than 12 months
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
U.S. Treasury securities and government-related securities
$
468

 
$
(3
)
 
$
39

 
$
(1
)
Corporate bonds and notes
7,498

 
(117
)
 
1,065

 
(93
)
Mortgage- and asset-backed and auction rate securities
1,122

 
(9
)
 
171

 
(2
)
Equity and preferred securities and equity funds
358

 
(34
)
 
4

 
—

Debt funds
1,953

 
(95
)
 
79

 
(5
)
 
$
11,399

 
$
(258
)
 
$
1,358

 
$
(101
)
 
September 27, 2015
 
Less than 12 months
 
More than 12 months
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
U.S. Treasury securities and government-related securities
$
304

 
$
(4
)
 
$
—

 
$
—

Corporate bonds and notes
7,656

 
(93
)
 
368

 
(62
)
Mortgage- and asset-backed and auction rate securities
862

 
(3
)
 
108

 
(1
)
Equity and preferred securities and equity funds
392

 
(28
)
 
17

 
—

Debt funds
1,792

 
(117
)
 
124

 
(5
)
 
$
11,006

 
$
(245
)
 
$
617

 
$
(68
)

At March 27, 2016, the Company concluded that the unrealized losses on its available-for-sale securities were temporary. Further, for common stock and for equity and debt funds with unrealized losses, the Company has the ability and the intent to hold such securities until they recover, which is expected to be within a reasonable period of time. For debt securities and preferred stock with unrealized losses, the Company did not have the intent to sell, nor was it more likely than not that the Company will be required to sell, such securities before recovery or maturity.
The ending balance of the credit loss portion of other-than-temporary impairments on debt securities held by the Company was $52 million and negligible at March 27, 2016 and March 29, 2015, respectively.