Cash, Cash Equivalents and Short-Term Investments

9 Months Ended

Sep. 02, 2022

Cash, Cash Equivalents, and Short-term Investments [Abstract]

CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Cash equivalents consist of highly liquid marketable securities with remaining maturities of three months or less at the date of purchase. We classify our investments in marketable debt securities as “available-for-sale.” We carry these investments at fair value, based on quoted market prices or other readily available market information. Unrealized gains and unrealized non-credit-related losses of marketable debt securities are included in accumulated other comprehensive income, net of taxes, in our condensed consolidated balance sheets. Unrealized credit-related losses are recorded to other income (expense), net in our condensed consolidated statements of income with a corresponding allowance for credit-related losses in our condensed consolidated balance sheets. Gains and losses are determined using the specific identification method and recognized when realized in our condensed consolidated statements of income.

Cash, cash equivalents and short-term investments consisted of the following as of September 2, 2022:


(in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Current assets:
Cash	$	595	$	—	$	—	$	595
Cash equivalents:
Corporate debt securities	21		—		—		21
Money market funds	3,202		—		—		3,202

Time deposits	25		—		—		25
U.S. agency securities	13		—		—		13
U.S. Treasury securities	14		—		—		14
Total cash equivalents	3,275		—		—		3,275
Total cash and cash equivalents	3,870		—		—		3,870
Short-term fixed income securities:
Asset-backed securities	114		—		(2)		112
Corporate debt securities	1,322		—		(22)		1,300
Foreign government securities	5		—		—		5
Municipal securities	23		—		—		23
U.S. agency securities	19		—		—		19
U.S. Treasury securities	448		—		(13)		435


Total short-term investments	1,931		—		(37)		1,894
Total cash, cash equivalents and short-term investments	$	5,801	$	—	$	(37)	$	5,764

Cash, cash equivalents and short-term investments consisted of the following as of December 3, 2021:


(in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Current assets:
Cash	$	750	$	—	$	—	$	750
Cash equivalents:
Corporate debt securities	5		—		—		5
Money market funds	2,914		—		—		2,914

Time deposits	175		—		—		175

Total cash equivalents	3,094		—		—		3,094
Total cash and cash equivalents	3,844		—		—		3,844
Short-term fixed income securities:
Asset-backed securities	124		—		—		124

Corporate debt securities	1,426		2		(3)		1,425

Municipal securities	28		—		—		28

U.S. Treasury securities	378		—		(1)		377


Total short-term investments	1,956		2		(4)		1,954
Total cash, cash equivalents and short-term investments	$	5,800	$	2	$	(4)	$	5,798

See Note 5 for further information regarding the fair value of our financial instruments.

The following table summarizes the estimated fair value of short-term fixed income debt securities classified as short-term investments based on stated effective maturities as of September 2, 2022:


(in millions)	Estimated Fair Value
Due within one year	$	868
Due between one and two years	676
Due between two and three years	336
Due after three years	14
Total	$	1,894

We review our debt securities classified as short-term investments on a regular basis for impairment. For debt securities in unrealized loss positions, we determine whether any portion of the decline in fair value below the amortized cost basis is due to credit-related factors if we neither intend to sell nor anticipate that it is more likely than not that we will be required to sell prior to recovery of the amortized cost basis. We consider factors such as the extent to which the market value has been less than the cost, any noted failure of the issuer to make scheduled payments, changes to the rating of the security and other relevant credit-related factors in determining whether or not a credit loss exists. During the nine months ended September 2, 2022 and September 3, 2021, we did not recognize an allowance for credit-related losses on any of our investments.