Cash and Investments

v2.4.1.9

Cash and Investments	3 Months Ended
	Mar. 28, 2015
Investments and Cash [Abstract]
Cash and Investments [Text Block]	Note 4: Cash and Investments Cash and investments at the end of each period were as follows: (In Millions)   Mar 28, 2015   Dec 27, 2014 Available-for-sale investments   $ 13,278   $ 13,038 Cash   816   805 Equity method investments   1,574   1,446 Loans receivable   898   971 Non-marketable cost method investments   1,800   1,769 Reverse repurchase agreements   688   718 Trading assets   8,010   9,063 Total cash and investments   $ 27,064   $ 27,810 Available-for-Sale Investments Available-for-sale investments at the end of each period were as follows:     March 28, 2015   December 27, 2014 (In Millions)   Adjusted Cost   Gross Unrealized Gains   Gross Unrealized Losses   Fair Value   Adjusted Cost   Gross Unrealized Gains   Gross Unrealized Losses   Fair Value Asset-backed securities   $ 8   $ —   $ (2 )   $ 6   $ 8   $ —   $ (2 )   $ 6 Corporate debt   2,609   15   (5 )   2,619   2,040   13   (5 )   2,048 Financial institution instruments   3,452   1   (1 )   3,452   3,146   2   (1 )   3,147 Government debt   651   1   —   652   741   —   (1 )   740 Marketable equity securities   3,300   3,255   (6 )   6,549   3,318   3,779   —   7,097 Total available-for-sale investments   $ 10,020   $ 3,272   $ (14 )   $ 13,278   $ 9,253   $ 3,794   $ (9 )   $ 13,038 Government debt includes instruments such as non-U.S. government bonds and U.S. agency securities. Financial institution instruments include instruments issued or managed by financial institutions in various forms such as commercial paper, fixed and floating rate bonds, money market fund deposits, and time deposits. Substantially all time deposits were issued by institutions outside the U.S. as of March 28, 2015 and December 27, 2014. For information on the unrealized holding gains (losses) on available-for-sale investments reclassified out of accumulated other comprehensive income (loss) into the consolidated condensed statements of income, see "Note 18: Other Comprehensive Income (Loss)." During the first three months of 2015, we sold available-for-sale investments for proceeds of $43 million, none of which was related to sales of cash and cash equivalents ($279 million in the first three months of 2014 of which $105 million related to sales of cash and cash equivalents). The gross realized gains on sales of available-for-sale investments were $43 million in the first three months of 2015 ($67 million in the first three months of 2014). The amortized cost and fair value of available-for-sale debt investments, by contractual maturity, as of March 28, 2015, were as follows: (In Millions)   Cost   Fair Value Due in 1 year or less   $ 4,697   $ 4,707 Due in 1–2 years   864   865 Due in 2–5 years   779   778 Instruments not due at a single maturity date   380   379 Total   $ 6,720   $ 6,729 Equity Method Investments IM Flash Technologies, LLC Micron Technology, Inc. (Micron) and Intel formed IM Flash Technologies, LLC (IMFT) in 2006 to manufacture NAND flash memory products for Micron and Intel. During 2012, we amended the operating agreement for IMFT and entered into agreements with Micron that modified our joint venture relationship. The amended operating agreement extended the term of IMFT to 2024, unless earlier terminated under certain terms and conditions, and provides that IMFT may manufacture certain emerging memory technologies in addition to NAND flash memory. The amended agreement provides for certain buy-sell rights. Intel has the ability to cause Micron to buy our interest in IMFT. If we exercise this put right, Micron would set the closing date of the transaction within two years following such election and could elect to receive financing from us for one to two years. Subsequent to our put right, and commencing in January 2018, Micron has the right to call our interest in IMFT with the closing date to be effective within one year. Additionally, our agreements with Micron include a supply agreement for Micron to supply us with NAND flash memory products. These agreements also extend and expand our NAND joint development program with Micron to include emerging memory technologies. As of March 28, 2015, we own a 49% interest in IMFT. The carrying value of our investment was $786 million as of March 28, 2015 ($713 million as of December 27, 2014) and is classified within other long-term assets. IMFT is a variable interest entity. All costs of the IMFT joint venture will be passed on to Micron and Intel pursuant to our purchase agreements. Intel's portion of IMFT costs, primarily related to product purchases and production-related services, was approximately $95 million in the first three months of 2015 (approximately $105 million in the first three months of 2014). The amount due to IMFT for product purchases and services provided was approximately $20 million as of March 28, 2015 (approximately $60 million as of December 27, 2014). IMFT depends on Micron and Intel for any additional cash needs. Our known maximum exposure to loss approximated the carrying value of our investment balance in IMFT, which was $786 million as of March 28, 2015. Except for the amount due to IMFT for product purchases and services, we did not have any additional liabilities recognized on our consolidated condensed balance sheets in connection with our interests in this joint venture as of March 28, 2015. Our potential future losses could be higher than the carrying amount of our investment, as Intel and Micron are liable for other future operating costs or obligations of IMFT. Future cash calls could also increase our investment balance and the related exposure to loss. In addition, because we are currently committed to purchasing 49% of IMFT’s production output and production-related services, we may be required to purchase products at a cost in excess of realizable value. We have determined that we do not have the characteristics of a consolidating investor in the variable interest entity and, therefore, we account for our interest in IMFT using the equity method of accounting. Cloudera, Inc. During 2014, we invested in Cloudera, Inc. (Cloudera). Our fully-diluted ownership interest in Cloudera is 17% as of March 28, 2015. Our investment is accounted for under the equity and cost methods of accounting based on the rights associated with different securities we own, and is classified within other long-term assets. The carrying value of our equity method investment was $278 million and of our cost method investment was $454 million as of March 28, 2015 ($280 million for our equity method investment and $454 million for our cost method investment as of December 27, 2014). Trading Assets As of March 28, 2015 and December 27, 2014, substantially all of our trading assets were marketable debt instruments. Net losses related to trading assets still held at the reporting date were $200 million in the first three months of 2015 (net gains of $79 million in the first three months of 2014). Net gains on the related derivatives were $194 million in the first three months of 2015 (net losses of $82 million in the first three months of 2014).