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The loss related to the manufacturing operations held for sale during fiscal 2011 was primarily related to a reduction in
goodwill related to the sale of the Company’s set-top box manufacturing operations in Juarez, Mexico, which sale was
completed during the first quarter of fiscal 2012. See Note 5. This goodwill reduction represented the difference between the
carrying value and the implied fair value of the goodwill associated with the disposal group being evaluated.
(c) Other Fair Value Disclosures
As of July 27, 2013, the carrying value of the Company’s investments in privately held companies that were accounted for
under the cost method was $242 million. It was not practicable to estimate the fair value of this portfolio.
The fair value of the Company’s short-term loan receivables and financed service contracts approximates their carrying value
due to their short duration.
The aggregate carrying value of the Company’s long-term loan receivables and financed service contracts and other as of
July 27, 2013 and July 28, 2012 was $2.1 billion and $1.9 billion, respectively. The estimated fair value of the Company’s
long-term loan receivables and financed service contracts and other approximates their carrying value. The Company uses
significant unobservable inputs in determining discounted cash flows to estimate the fair value of its long-term loan
receivables and financed service contracts and therefore they are categorized as Level 3.
As of July 27, 2013, the fair value of the Company’s long-term debt was $17.6 billion with a carrying amount of $16.2 billion.
This compares to a fair value of $18.8 billion and a carrying amount of $16.3 billion as of July 28, 2012. The fair value of the
long-term debt was determined based on observable market prices in a less active market and was categorized as Level 2 in the
fair value hierarchy.
10. Borrowings
(a) Short-Term Debt
The following table summarizes the Company’s short-term debt (in millions, except percentages):
July 27, 2013 July 28, 2012
Amount
Weighted-Average
Interest Rate Amount
Weighted-Average
Interest Rate
Current portion of long-term debt ................... $3,273 0.63% $— —%
Other notes and borrowings ....................... 10 2.52% 31 6.72%
Total short-term debt ......................... $3,283 $31
In fiscal 2011, the Company established a short-term debt financing program of up to $3.0 billion through the issuance of
commercial paper notes. The Company uses the proceeds from the issuance of commercial paper notes for general corporate
purposes. The Company had no commercial paper notes outstanding as of each of July 27, 2013 and July 28, 2012.
Other notes and borrowings consisted of the short-term portion of secured borrowings associated with customer financing
arrangements as well as notes and credit facilities with a number of financial institutions that are available to certain of the
Company’s foreign subsidiaries. These notes and credit facilities were subject to various terms and foreign currency market
interest rates pursuant to individual financial arrangements between the financing institution and the applicable foreign
subsidiary.
As of July 27, 2013 and July 28, 2012, the estimated fair value of the short-term debt approximates its carrying value due to
the short maturities.
101