Medtronic 2015 Annual Report Download - page 102

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Medtronic plc
Notes to Consolidated Financial Statements (Continued)
Credit losses represent the difference between the present value of cash flows expected to be collected on certain mortgage-
backed securities and auction rate securities and the amortized cost of these securities. Based on the Company’s assessment of
the credit quality of the underlying collateral and credit support available to each of the remaining securities in which invested,
the Company believes it has recorded all necessary other-than-temporary impairments as the Company does not have the intent
to sell, nor is it more likely than not that the Company will be required to sell, before recovery of the amortized cost.
As of April 24, 2015, the credit loss portion of other-than temporary impairments on debt securities was not significant. As of
April 25, 2014 and April 26, 2013, the credit loss portion of other-than-temporary impairments on debt securities was $4 million
and $9 million, respectively. The total reductions for available-for-sale debt securities sold for the fiscal years ended April 24,
2015 and April 25, 2014 were $4 million and $5 million, respectively. The total other-than-temporary impairment losses on
available-for-sale debt securities for the fiscal years ended April 24, 2015 and April 25, 2014 were not significant.
The April 24, 2015 balance of available-for-sale debt securities, excluding debt funds which have no single maturity date, by
contractual maturity is shown in the following table. Within the table, maturities of mortgage-backed securities have been
allocated based upon timing of estimated cash flows, assuming no change in the current interest rate environment. Actual
maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations
without prepayment penalties.
(in millions) April 24, 2015
Due in one year or less $ 1,812
Due after one year through five years 6,646
Due after five years through 10 years 3,097
Due after 10 years 182
Total debt securities $ 11,737
As of April 24, 2015 and April 25, 2014, the aggregate carrying amount of equity and other securities without a quoted market
price and accounted for using the cost or equity method was $520 million and $666 million, respectively. The total carrying
value of these investments is reviewed quarterly for changes in circumstance or the occurrence of events that suggest the
Company’s investment may not be recoverable. The value of cost or equity method investments is not adjusted if there are no
identified events or changes in circumstances that may have a material adverse effect on the fair value of the investment.
Gains and losses realized on trading securities and available-for-sale debt securities are recorded in interest expense, net in the
consolidated statements of income. Gains and losses realized on marketable equity securities, cost method, equity method, and
other investments are recorded in other expense, net in the consolidated statements of income. In addition, unrealized gains and
losses on available-for-sale debt securities are recorded in other comprehensive loss in the consolidated statements of
comprehensive income and unrealized gains and losses on trading securities are recorded in interest expense, net in the
consolidated statements of income. Gains and losses from the sale of investments are calculated based on the specific
identification method.
6. Fair Value Measurements
Assets and Liabilities That Are Measured at Fair Value on a Recurring Basis
The authoritative guidance is principally applied to financial assets and liabilities such as marketable equity securities and debt
and equity securities that are classified and accounted for as trading, available-for-sale, and derivative instruments and
contingent consideration associated with acquisitions subsequent to April 24, 2009. Derivatives include cash flow hedges,
freestanding derivative forward contracts, and fair value hedges. These items are marked-to-market at each reporting period.
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