Fair Value

v2.4.0.8

Fair Value	12 Months Ended
	Dec. 28, 2013
Fair Value [Abstract]
Fair Value [Text Block]	Note 4: Fair Value Assets/Liabilities Measured and Recorded at Fair Value on a Recurring Basis Assets and liabilities measured and recorded at fair value on a recurring basis consisted of the following types of instruments at the end of each period were as follows:      December 28, 2013   December 29, 2012      Fair Value Measured and Recorded at Reporting Date Using   Total   Fair Value Measured and Recorded at Reporting Date Using   Total (In Millions)   Level 1   Level 2   Level 3   Level 1   Level 2   Level 3   Assets                                 Cash equivalents:                                 Bank deposits   $ —   $ 1,017   $ —   $ 1,017   $ —   $ 822   $ —   $ 822 Commercial paper   —   2,341   —   2,341   —   2,711   —   2,711 Corporate bonds   —   21   —   21   —   —   —   — Government bonds   —   —   —   —   400   66   —   466 Money market fund deposits   1,041   —   —   1,041   1,086   —   —   1,086 Reverse repurchase agreements   —   400   —   400   —   2,800   —   2,800 Short-term investments:                                 Bank deposits   —   1,782   —   1,782   —   540   —   540 Commercial paper   —   2,123   —   2,123   —   1,474   —   1,474 Corporate bonds   383   1,121   19   1,523   75   292   21   388 Government bonds   268   276   —   544   1,307   290   —   1,597 Trading assets:                                 Asset-backed securities   —   684   4   688   —   —   68   68 Bank deposits   —   92   —   92   —   247   —   247 Commercial paper   —   240   —   240   —   336   —   336 Corporate bonds   2,625   773   —   3,398   482   1,109   —   1,591 Government bonds   2,267   1,618   —   3,885   1,743   1,479   —   3,222 Money market fund deposits   82   —   —   82   18   —   —   18 Municipal bonds   —   56   —   56   —   203   —   203 Other current assets:                                 Derivative assets   48   309   —   357   12   208   1   221 Loans receivable   —   103   —   103   —   203   —   203 Marketable equity securities   6,221   —   —   6,221   4,424   —   —   4,424 Other long-term investments:                                 Asset-backed securities   —   —   9   9   —   —   11   11 Bank deposits   —   157   —   157   —   56   —   56 Corporate bonds   282   518   27   827   10   218   26   254 Government bonds   295   185   —   480   59   113   —   172 Other long-term assets:                                 Derivative assets   —   7   29   36   —   20   18   38 Loans receivable   —   702   —   702   —   577   —   577 Total assets measured and recorded at fair value   $ 13,512   $ 14,525   $ 88   $ 28,125   $ 9,616   $ 13,764   $ 145   $ 23,525 Liabilities                                 Other accrued liabilities:                                 Derivative liabilities   $ —   $ 372   $ —   $ 372   $ 1   $ 291   $ —   $ 292 Other long-term liabilities:                                 Derivative liabilities   —   50   —   50   —   20   —   20 Total liabilities measured and recorded at fair value   $ —   $ 422   $ —   $ 422   $ 1   $ 311   $ —   $ 312 Government bonds include bonds issued or deemed to be guaranteed by government entities. Government bonds include instruments such as non-U.S. government bonds, U.S. agency securities, and U.S. Treasury securities. Investments in Debt Securities Debt securities reflected in the preceding table include investments such as asset-backed securities, bank deposits, commercial paper, corporate bonds, government bonds, money market fund deposits, municipal bonds, and reverse repurchase agreements classified as cash equivalents. When we use observable market prices for identical securities that are traded in less active markets, we classify our debt investments as Level 2. When observable market prices for identical securities are not available, we price our debt investments using non-binding market consensus prices that are corroborated with observable market data; quoted market prices for similar instruments; or pricing models, such as a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data. Non-binding market consensus prices are based on the proprietary valuation models of pricing providers or brokers. These valuation models incorporate a number of inputs, including non-binding and binding broker quotes; observable market prices for identical or similar securities; and the internal assumptions of pricing providers or brokers that use observable market inputs and unobservable market inputs that we consider to be not significant. We corroborate non-binding market consensus prices with observable market data using statistical models when observable market data exists. The discounted cash flow model uses observable market inputs, such as LIBOR-based yield curves, currency spot and forward rates, and credit ratings. Debt securities classified as Level 3, are classified as such because the fair values are generally derived from discounted cash flow models, performed either by us or our pricing providers, using inputs that we are unable to corroborate with observable market data. We monitor and review the inputs and results of these valuation models to ensure the fair value measurements are reasonable and consistent with market experience in similar asset classes. Fair Value Option for Loans Receivable We elected the fair value option for loans receivable when the interest rate or currency exchange rate risk was hedged at inception with a related derivative instrument. As of December 28, 2013, the fair value of our loans receivable for which we elected the fair value option did not significantly differ from the contractual principal balance based on the contractual currency. Loans receivable are classified within other current assets and other long-term assets. Fair value is determined using a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data. Gains and losses from changes in fair value on the loans receivable and related derivative instruments, as well as interest income, are recorded in interest and other, net. During all periods presented, changes in the fair value of our loans receivable were largely offset by changes in the related derivative instruments, resulting in an insignificant net impact on our consolidated statements of income. Gains and losses attributable to changes in credit risk are determined using observable credit default spreads for the issuer or comparable companies; these gains and losses were insignificant during all periods presented. We did not elect the fair value option for loans receivable when the interest rate or foreign exchange rate risk was not hedged at inception with a related derivative instrument. Loans receivable not measured and recorded at fair value are included in the "Financial Instruments Not Recorded at Fair Value on a Recurring Basis" section that follows. Assets Measured and Recorded at Fair Value on a Non-Recurring Basis Our non-marketable equity investments, marketable equity method investments, and non-financial assets, such as intangible assets and property, plant and equipment, are recorded at fair value only if an impairment charge is recognized. A portion of our non-marketable equity investments has been measured and recorded at fair value due to events or circumstances that significantly impacted the fair value of those investments, resulting in other-than-temporary impairment charges. We classified these investments as Level 3, as we used unobservable inputs to the valuation methodologies that were significant to the fair value measurements, and the valuations required management judgment due to the absence of quoted market prices. Impairment charges recognized on non-marketable equity investments held as of December 28, 2013, were $106 million during 2013 ($68 million during 2012 on non-marketable equity investments held as of December 29, 2012 and $62 million during 2011 on non-marketable equity investments held as of December 31, 2011). The fair value of the non-marketable equity investments impaired during 2013 was $47 million at the time of impairment ($73 million and $69 million for non-marketable equity investments impaired during 2012 and 2011, respectively). Financial Instruments Not Recorded at Fair Value on a Recurring Basis On a quarterly basis, we measure the fair value of our non-marketable cost method investments, indebtedness carried at amortized cost, cost method loans receivable, grants receivable, and reverse repurchase agreements with original maturities greater than approximately three months; however, the assets are recorded at fair value only when an impairment charge is recognized. The carrying amounts and fair values of certain financial instruments not recorded at fair value on a recurring basis at the end of each period were as follows:      December 28, 2013      Carrying Amount   Fair Value Measured Using   Fair Value (In Millions)   Level 1   Level 2   Level 3   Non-marketable cost method investments   $ 1,270   $ —   $ —   $ 2,105   $ 2,105 Loans receivable   $ 267   $ —   $ 250   $ 17   $ 267 Reverse repurchase agreements   $ 400   $ —   $ 400   $ —   $ 400 Grants receivable   $ 416   $ —   $ 481   $ —   $ 481 Long-term debt   $ 13,165   $ 10,937   $ 2,601   $ —   $ 13,538 Short-term debt   $ 24   $ —   $ 24   $ —   $ 24 NVIDIA Corporation cross-license agreement liability   $ 587   $ —   $ 597   $ —   $ 597      December 29, 2012      Carrying Amount   Fair Value Measured Using   Fair Value (In Millions)   Level 1   Level 2   Level 3   Non-marketable cost method investments   $ 1,202   $ —   $ —   $ 1,766   $ 1,766 Loans receivable   $ 199   $ —   $ 150   $ 48   $ 198 Reverse repurchase agreements   $ 50   $ —   $ 50   $ —   $ 50 Grants receivable   $ 198   $ —   $ 205   $ —   $ 205 Long-term debt   $ 13,136   $ 11,442   $ 2,926   $ —   $ 14,368 Short-term debt   $ 48   $ —   $ 48   $ —   $ 48 NVIDIA Corporation cross-license agreement liability   $ 875   $ —   $ 890   $ —   $ 890 As of December 28, 2013, and December 29, 2012, the unrealized loss position of our non-marketable cost method investments was insignificant. Our non-marketable cost method investments are valued using the market and income approaches. The market approach includes the use of financial metrics and ratios of comparable public companies. The selection of comparable companies requires management judgment and is based on a number of factors, including comparable companies’ sizes, growth rates, industries, and development stages. The income approach includes the use of a discounted cash flow model, which requires significant estimates regarding the investees’ revenue, costs, and discount rates based on the risk profile of comparable companies. Estimates of revenue and costs are developed using available market, historical, and forecast data. The valuation of these non-marketable cost method investments also takes into account variables such as conditions reflected in the capital markets, recent financing activities by the investees, the investees’ capital structure, the terms of the investees’ issued interests, and the lack of marketability of the investments. The carrying amount and fair value of loans receivable exclude loans measured and recorded at a fair value of $805 million as of December 28, 2013 ($780 million as of December 29, 2012). The carrying amount and fair value of short-term debt exclude drafts payable. The fair value of our loans receivable and reverse repurchase agreements, including those held at fair value, is determined using a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data, such as LIBOR-based yield curves, currency spot and forward rates, and credit ratings. The credit quality of these assets remains high, with credit ratings of A+/A1 or better for a substantial majority of our loans receivable and reverse repurchase agreements as of December 28, 2013. The fair value of our grants receivable is determined using a discounted cash flow model, which discounts future cash flows using an appropriate yield curve. As of December 28, 2013, and December 29, 2012, the carrying amount of our grants receivable was classified within other current assets and other long-term assets, as applicable. Our long-term debt recognized at amortized cost is comprised of our senior notes and our convertible debentures. The fair value of our senior notes is determined using active market prices, and it is therefore classified as Level 1. The fair value of our convertible long-term debt is determined using discounted cash flow models with observable market inputs, and it takes into consideration variables such as interest rate changes, comparable securities, subordination discount, and credit-rating changes, and it is therefore classified as Level 2. The NVIDIA Corporation (NVIDIA) cross-license agreement liability in the preceding table was incurred as a result of entering into a long-term patent cross-license agreement with NVIDIA in January 2011. We agreed to make payments to NVIDIA over six years. As of December 28, 2013, and December 29, 2012, the carrying amount of the liability arising from the agreement was classified within other accrued liabilities and other long-term liabilities, as applicable. The fair value is determined using a discounted cash flow model, which discounts future cash flows using our incremental borrowing rates.