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Financial Instruments | 3 Months Ended
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Dec. 25, 2021
Investments, All Other Investments [Abstract] |
Financial Instruments | Financial Instruments Cash, Cash Equivalents and Marketable Securities The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category as of December 25, 2021 and September 25, 2021 (in millions):
| December 25, 2021
| Adjusted Cost |  | Unrealized Gains |  | Unrealized Losses |  | Fair Value |  | Cash and Cash Equivalents |  | Current Marketable Securities |  | Non-Current Marketable Securities
Cash | $ | 17,992 |  |  | $ | — |  |  | $ | — |  |  | $ | 17,992 |  |  | $ | 17,992 |  |  | $ | — |  |  | $ | — |
Level 1 (1): |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds | 11,356 |  |  | — |  |  | — |  |  | 11,356 |  |  | 11,356 |  |  | — |  |  | — |
Mutual funds | 215 |  |  | 16 |  |  | (2) |  |  | 229 |  |  | — |  |  | 229 |  |  | — |
Subtotal | 11,571 |  |  | 16 |  |  | (2) |  |  | 11,585 |  |  | 11,356 |  |  | 229 |  |  | — |
Level 2 (2): |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities | 1,527 |  |  | — |  |  | (850) |  |  | 677 |  |  | — |  |  | 677 |  |  | — |
U.S. Treasury securities | 29,221 |  |  | 64 |  |  | (171) |  |  | 29,114 |  |  | 3,247 |  |  | 5,775 |  |  | 20,092 |
U.S. agency securities | 7,934 |  |  | 1 |  |  | (116) |  |  | 7,819 |  |  | 1,066 |  |  | 1,581 |  |  | 5,172 |
Non-U.S. government securities | 18,983 |  |  | 160 |  |  | (177) |  |  | 18,966 |  |  | 200 |  |  | 3,279 |  |  | 15,487 |
Certificates of deposit and time deposits | 3,648 |  |  | — |  |  | — |  |  | 3,648 |  |  | 2,527 |  |  | 1,121 |  |  | — |
Commercial paper | 2,261 |  |  | — |  |  | — |  |  | 2,261 |  |  | 702 |  |  | 1,559 |  |  | — |
Corporate debt securities | 88,617 |  |  | 718 |  |  | (754) |  |  | 88,581 |  |  | 29 |  |  | 11,665 |  |  | 76,887 |
Municipal securities | 993 |  |  | 10 |  |  | (1) |  |  | 1,002 |  |  | — |  |  | 150 |  |  | 852 |
Mortgage- and asset-backed securities | 21,072 |  |  | 102 |  |  | (223) |  |  | 20,951 |  |  | — |  |  | 758 |  |  | 20,193 |
Subtotal | 174,256 |  |  | 1,055 |  |  | (2,292) |  |  | 173,019 |  |  | 7,771 |  |  | 26,565 |  |  | 138,683 |
Total (3) | $ | 203,819 |  |  | $ | 1,071 |  |  | $ | (2,294) |  |  | $ | 202,596 |  |  | $ | 37,119 |  |  | $ | 26,794 |  |  | $ | 138,683 |
| September 25, 2021
| Adjusted Cost |  | Unrealized Gains |  | Unrealized Losses |  | Fair Value |  | Cash and Cash Equivalents |  | Current Marketable Securities |  | Non-Current Marketable Securities
Cash | $ | 17,305 |  |  | $ | — |  |  | $ | — |  |  | $ | 17,305 |  |  | $ | 17,305 |  |  | $ | — |  |  | $ | — |
Level 1 (1): |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds | 9,608 |  |  | — |  |  | — |  |  | 9,608 |  |  | 9,608 |  |  | — |  |  | — |
Mutual funds | 175 |  |  | 11 |  |  | (1) |  |  | 185 |  |  | — |  |  | 185 |  |  | — |
Subtotal | 9,783 |  |  | 11 |  |  | (1) |  |  | 9,793 |  |  | 9,608 |  |  | 185 |  |  | — |
Level 2 (2): |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities | 1,527 |  |  | — |  |  | (564) |  |  | 963 |  |  | — |  |  | 963 |  |  | — |
U.S. Treasury securities | 22,878 |  |  | 102 |  |  | (77) |  |  | 22,903 |  |  | 3,596 |  |  | 6,625 |  |  | 12,682 |
U.S. agency securities | 8,949 |  |  | 2 |  |  | (64) |  |  | 8,887 |  |  | 1,775 |  |  | 1,930 |  |  | 5,182 |
Non-U.S. government securities | 20,201 |  |  | 211 |  |  | (101) |  |  | 20,311 |  |  | 390 |  |  | 3,091 |  |  | 16,830 |
Certificates of deposit and time deposits | 1,300 |  |  | — |  |  | — |  |  | 1,300 |  |  | 490 |  |  | 810 |  |  | — |
Commercial paper | 2,639 |  |  | — |  |  | — |  |  | 2,639 |  |  | 1,776 |  |  | 863 |  |  | — |
Corporate debt securities | 83,883 |  |  | 1,242 |  |  | (267) |  |  | 84,858 |  |  | — |  |  | 12,327 |  |  | 72,531 |
Municipal securities | 967 |  |  | 14 |  |  | — |  |  | 981 |  |  | — |  |  | 130 |  |  | 851 |
Mortgage- and asset-backed securities | 20,529 |  |  | 171 |  |  | (124) |  |  | 20,576 |  |  | — |  |  | 775 |  |  | 19,801 |
Subtotal | 162,873 |  |  | 1,742 |  |  | (1,197) |  |  | 163,418 |  |  | 8,027 |  |  | 27,514 |  |  | 127,877 |
Total (3) | $ | 189,961 |  |  | $ | 1,753 |  |  | $ | (1,198) |  |  | $ | 190,516 |  |  | $ | 34,940 |  |  | $ | 27,699 |  |  | $ | 127,877 |
(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. (3)As of December 25, 2021 and September 25, 2021, total marketable securities included $16.8 billion and $17.9 billion, respectively, that was restricted from general use, related to the European Commission decision finding that Ireland granted state aid to the Company, and other agreements. The following table shows the fair value of the Company’s non-current marketable debt securities, by contractual maturity, as of December 25, 2021 (in millions):
Due after 1 year through 5 years | $ | 93,206 |
Due after 5 years through 10 years | 25,183 |
Due after 10 years | 20,294 |
Total fair value | $ | 138,683 |
Derivative Instruments and Hedging The Company may use derivative instruments to partially offset its business exposure to foreign exchange and interest rate risk. However, the Company may choose not to hedge certain exposures for a variety of reasons, including accounting considerations or the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign exchange or interest rates. Foreign Exchange Risk To protect gross margins from fluctuations in foreign currency exchange rates, the Company may enter into forward contracts, option contracts or other instruments, and may designate these instruments as cash flow hedges. The Company generally hedges portions of its forecasted foreign currency exposure associated with revenue and inventory purchases, typically for up to 12 months. To protect the Company’s foreign currency–denominated term debt or marketable securities from fluctuations in foreign currency exchange rates, the Company may enter into forward contracts, cross-currency swaps or other instruments. The Company designates these instruments as either cash flow or fair value hedges. As of December 25, 2021, the Company’s hedged term debt– and marketable securities–related foreign currency transactions are expected to be recognized within 21 years. The Company may also enter into derivative instruments that are not designated as accounting hedges to protect gross margins from certain fluctuations in foreign currency exchange rates, as well as to offset a portion of the foreign currency exchange gains and losses generated by the remeasurement of certain assets and liabilities denominated in non-functional currencies. Interest Rate Risk To protect the Company’s term debt or marketable securities from fluctuations in interest rates, the Company may enter into interest rate swaps, options or other instruments. The Company designates these instruments as either cash flow or fair value hedges. The notional amounts of the Company’s outstanding derivative instruments as of December 25, 2021 and September 25, 2021 were as follows (in millions):
| December 25, 2021 |  | September 25, 2021
Derivative instruments designated as accounting hedges: |  |  |
Foreign exchange contracts | $ | 77,009 |  |  | $ | 76,475 |
Interest rate contracts | $ | 16,875 |  |  | $ | 16,875 |
Derivative instruments not designated as accounting hedges: |  |  |
Foreign exchange contracts | $ | 176,268 |  |  | $ | 126,918 |
The gross fair values of the Company’s derivative assets and liabilities were not material as of December 25, 2021 and September 25, 2021. The gains and losses recognized in other comprehensive income and amounts reclassified from accumulated other comprehensive income to net income for the Company’s derivative instruments designated as cash flow hedges were not material in the three months ended December 25, 2021 and December 26, 2020. The carrying amounts of the Company’s hedged items in fair value hedges as of December 25, 2021 and September 25, 2021 were as follows (in millions):
| December 25, 2021 |  | September 25, 2021 |  |
Hedged assets/(liabilities): |  |  |  |  |
Current and non-current marketable securities | $ | 15,322 |  |  | $ | 15,954 |  |  |
Current and non-current term debt | $ | (17,444) |  |  | $ | (17,857) |  |  |
The gains and losses on the Company’s derivative instruments designated as fair value hedges and the related hedged item adjustments were not material in the three months ended December 25, 2021 and December 26, 2020. Accounts Receivable Trade Receivables The Company has considerable trade receivables outstanding with its third-party cellular network carriers, wholesalers, retailers, resellers, small and mid-sized businesses and education, enterprise and government customers. The Company generally does not require collateral from its customers; however, the Company will require collateral or third-party credit support in certain instances to limit credit risk. In addition, when possible, the Company attempts to limit credit risk on trade receivables with credit insurance for certain customers or by requiring third-party financing, loans or leases to support credit exposure. These credit-financing arrangements are directly between the third-party financing company and the end customer. As such, the Company generally does not assume any recourse or credit risk sharing related to any of these arrangements. The Company’s cellular network carriers accounted for 45% and 42% of total trade receivables as of December 25, 2021 and September 25, 2021, respectively. Vendor Non-Trade Receivables The Company has non-trade receivables from certain of its manufacturing vendors resulting from the sale of components to these vendors who manufacture subassemblies or assemble final products for the Company. The Company purchases these components directly from suppliers. As of December 25, 2021, the Company had three vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 54%, 13% and 12%. As of September 25, 2021, the Company had three vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 52%, 11% and 11%.

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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