|3 Months Ended|
Dec. 28, 2014
|Marketable Securities [Abstract]|
Note 11 — Marketable Securities
Marketable securities were comprised as follows (in millions):
In connection with the pending acquisition of CSR (Note 8), the Company agreed to set aside certain cash, cash equivalents and marketable securities to be held for purposes of satisfying payment of the consideration to effect the acquisition, which is expected to close by the end of the summer of 2015. At December 28, 2014, the fair values of the marketable securities that were set aside were $2.8 billion of corporate bonds and notes, $777 million of mortgage- and asset-backed securities and $146 million in U.S. Treasury securities and government-related securities. Additionally, $38 million in cash equivalents, which were recorded as other current assets, were set aside. If the combined fair values fall below approximately £1.9 billion (approximately $2.8 billion using an exchange rate of 1.51571), the Company may be required to set aside additional amounts. Additionally, if certain conditions are met, such as a reduction in the liquidity of any of the securities that are set aside, the Company may be required to liquidate the securities and transfer the cash to a third party until the acquisition closes.
The Company holds an investment in a debt fund for which the Company elected the fair value option because the Company is able to redeem its shares at net asset value, which is determined daily. The investment would have otherwise been recorded using the equity method. The debt fund has no single maturity date. At December 28, 2014, the Company had an effective ownership interest in the debt fund of 26%. Changes in fair value associated with this investment are recognized in net investment income. During the three months ended December 28, 2014, the net decrease in fair value associated with this investment was $6 million. During the three months ended December 29, 2013, the net increase in fair value associated with this investment was $13 million.
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 losses recognized on debt securities classified as trading held at December 28, 2014 and December 29, 2013 were $12 million for the three months ended December 28, 2014 and negligible for the three months ended December 29, 2013, respectively.
At December 28, 2014, the contractual maturities of available-for-sale debt securities were as follows (in millions):
Debt securities with no single maturity date included debt funds, mortgage- and asset-backed securities, auction rate securities and corporate bonds and notes.
The Company recorded realized gains and losses on sales of available-for-sale securities as follows (in millions):
Available-for-sale securities were comprised as follows (in millions):
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):
At December 28, 2014, the Company concluded that the unrealized losses on its available-for-sale securities were temporary. Further, for common and preferred 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 with unrealized losses, the Company does not have the intent to sell, nor is 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 negligible for each of the three months ended December 28, 2014 and December 29, 2013.
The entire disclosure for investments in certain debt and equity securities.
Reference 1: http://www.xbrl.org/2003/role/presentationRef