Financial Instruments (Tables)

9 Months Ended

Jul. 01, 2017

Investments, Debt and Equity Securities [Abstract]

Cash and Available-for-Sale Securities by Significant Investment Category

The following tables show the Company’s cash and available-for-sale securities by significant investment category as of July 1, 2017 and September 24, 2016 (in millions):



	July 1, 2017
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	8,529	$	—	$	—		$	8,529	$	8,529	$	—	$	—

Level 1 ⁽¹⁾:
Money market funds	3,088		—		—			3,088		3,088		—		—
Mutual funds	1,004		—		(118		)	886		—		886		—
Subtotal	4,092		—		(118		)	3,974		3,088		886		—

Level 2 ⁽²⁾:
U.S. Treasury securities	52,616		77		(230		)	52,463		1,013		20,104		31,346
U.S. agency securities	5,328		3		(9		)	5,322		2,255		1,774		1,293
Non-U.S. government securities	6,987		156		(50		)	7,093		—		64		7,029
Certificates of deposit and time deposits	6,731		—		—			6,731		894		5,191		646
Commercial paper	5,187		—		—			5,187		2,683		2,504		—
Corporate securities	150,089		882		(312		)	150,659		109		27,522		123,028
Municipal securities	938		3		(2		)	939		—		127		812
Mortgage- and asset-backed securities	20,762		34		(177		)	20,619		—		16		20,603
Subtotal	248,638		1,155		(780		)	249,013		6,954		57,302		184,757

Total	$	261,259	$	1,155	$	(898	)	$	261,516	$	18,571	$	58,188	$	184,757



	September 24, 2016
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	8,601	$	—	$	—		$	8,601	$	8,601	$	—	$	—

Level 1 ⁽¹⁾:
Money market funds	3,666		—		—			3,666		3,666		—		—
Mutual funds	1,407		—		(146		)	1,261		—		1,261		—
Subtotal	5,073		—		(146		)	4,927		3,666		1,261		—

Level 2 ⁽²⁾:
U.S. Treasury securities	41,697		319		(4		)	42,012		1,527		13,492		26,993
U.S. agency securities	7,543		16		—			7,559		2,762		2,441		2,356
Non-U.S. government securities	7,609		259		(27		)	7,841		110		818		6,913
Certificates of deposit and time deposits	6,598		—		—			6,598		1,108		3,897		1,593
Commercial paper	7,433		—		—			7,433		2,468		4,965		—
Corporate securities	131,166		1,409		(206		)	132,369		242		19,599		112,528
Municipal securities	956		5		—			961		—		167		794
Mortgage- and asset-backed securities	19,134		178		(28		)	19,284		—		31		19,253
Subtotal	222,136		2,186		(265		)	224,057		8,217		45,410		170,430

Total	$	235,810	$	2,186	$	(411	)	$	237,585	$	20,484	$	46,671	$	170,430


(1)	Level 1 fair value estimates are based on quoted prices in active markets for identical assets or liabilities.


(2)	Level 2 fair value estimates are based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Derivative Instruments at Gross Fair Value

The following tables show the Company’s derivative instruments at gross fair value as of July 1, 2017 and September 24, 2016 (in millions):



	July 1, 2017
	Fair Value of Derivatives Designated as Hedge Instruments		Fair Value of Derivatives Not Designated as Hedge Instruments		Total Fair Value
Derivative assets ⁽¹⁾:
Foreign exchange contracts	$	485	$	242	$	727
Interest rate contracts	$	253	$	—	$	253

Derivative liabilities ⁽²⁾:
Foreign exchange contracts	$	842	$	362	$	1,204
Interest rate contracts	$	264	$	—	$	264



	September 24, 2016
	Fair Value of Derivatives Designated as Hedge Instruments		Fair Value of Derivatives Not Designated as Hedge Instruments		Total Fair Value
Derivative assets⁽¹⁾:
Foreign exchange contracts	$	518	$	153	$	671
Interest rate contracts	$	728	$	—	$	728

Derivative liabilities ⁽²⁾:
Foreign exchange contracts	$	935	$	134	$	1,069
Interest rate contracts	$	7	$	—	$	7


(1)	The fair value of derivative assets is measured using Level 2 fair value inputs and is recorded as other current assets in the Condensed Consolidated Balance Sheets.


(2)	The fair value of derivative liabilities is measured using Level 2 fair value inputs and is recorded as accrued expenses in the Condensed Consolidated Balance Sheets.

Pre-Tax Gains and Losses of Derivative and Non-Derivative Instruments Designated as Cash Flow, Net Investment and Fair Value Hedges

The following table shows the pre-tax gains and losses of the Company’s derivative and non-derivative instruments designated as cash flow, net investment and fair value hedges in OCI and the Condensed Consolidated Statements of Operations for the three- and nine-month periods ended July 1, 2017 and June 25, 2016 (in millions):



	Three Months Ended						Nine Months Ended
	July 1, 2017			June 25, 2016			July 1, 2017			June 25, 2016
Gains/(Losses) recognized in OCI – effective portion:
Cash flow hedges:
Foreign exchange contracts	$	(143	)	$	(170	)	$	1,267		$	18
Interest rate contracts	(2		)	(11		)	7			(53		)
Total	$	(145	)	$	(181	)	$	1,274		$	(35	)

Net investment hedges:
Foreign currency debt	$	16		$	(128	)	$	53		$	(205	)

Gains/(Losses) reclassified from AOCI into net income – effective portion:
Cash flow hedges:
Foreign exchange contracts	$	585		$	142		$	1,418		$	1,325
Interest rate contracts	—			(3		)	(3		)	(10		)
Total	$	585		$	139		$	1,415		$	1,315

Gains/(Losses) on derivative instruments:
Fair value hedges:
Interest rate contracts	$	185		$	345		$	(737	)	$	484

Gains/(Losses) related to hedged items:
Fair value hedges:
Fixed-rate debt	$	(185	)	$	(345	)	$	737		$	(484	)

Notional Amounts of Outstanding Derivative Instruments and Credit Risk Amounts Associated with Outstanding or Unsettled Derivative Instruments

The following table shows the notional amounts of the Company’s outstanding derivative instruments and credit risk amounts associated with outstanding or unsettled derivative instruments as of July 1, 2017 and September 24, 2016 (in millions):



	July 1, 2017				September 24, 2016
	Notional Amount		Credit Risk Amount		Notional Amount		Credit Risk Amount
Instruments designated as accounting hedges:
Foreign exchange contracts	$	43,700	$	485	$	44,678	$	518
Interest rate contracts	$	31,500	$	253	$	24,500	$	728

Instruments not designated as accounting hedges:
Foreign exchange contracts	$	48,774	$	242	$	54,305	$	153