XML 29 R16.htm IDEA: XBRL DOCUMENT
v3.19.3

Financial Instruments | 8 Months Ended
--- | ---
Sep. 07, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments | Financial Instruments We are exposed to market risks arising from adverse changes in:
• | commodity prices, affecting the cost of our raw materials and energy;
• | foreign exchange rates and currency restrictions; and
• | interest rates.
There have been no material changes during the 36 weeks ended September 7, 2019 with respect to our risk management policies or strategies and valuation techniques used in measuring the fair value of the financial assets or liabilities disclosed in Note 9 to our consolidated financial statements in our 2018 Form 10-K. The notional amounts of our financial instruments used to hedge the above risks as of September 7, 2019 and December 29, 2018 are as follows:
| Notional Amounts(a)
| 9/7/2019 |  |  | 12/29/2018 |
Commodity | $ | 1.0 |  |  | $ | 1.1 |
Foreign exchange | $ | 2.0 |  |  | $ | 2.0 |
Interest rate (b) | $ | 5.7 |  |  | $ | 10.5 |
Net investment (c) | $ | 1.9 |  |  | $ | 0.9 |
(a) | In billions.
(b) | The decrease is due to interest rate swap terminations and maturities.
(c) | The total notional of our net investment hedge consists of non-derivative debt instruments.
As of September 7, 2019, approximately 12% of total debt, after the impact of the related interest rate derivative instruments, was subject to variable rates, compared to approximately 29% as of December 29, 2018. Fair Value Measurements The fair values of our financial assets and liabilities as of September 7, 2019 and December 29, 2018 are categorized as follows:
|  |  | 9/7/2019 |  | 12/29/2018
| Fair Value Hierarchy Levels |  | Assets(a) |  | Liabilities(a) |  | Assets(a) |  | Liabilities(a)
Available-for-sale debt securities (b) | 2 |  | $ | 67 |  |  | $ | — |  |  | $ | 3,658 |  |  | $ | — |
Short-term investments (c) | 1 |  | $ | 220 |  |  | $ | — |  |  | $ | 196 |  |  | $ | — |
Prepaid forward contracts (d) | 2 |  | $ | 17 |  |  | $ | — |  |  | $ | 22 |  |  | $ | — |
Deferred compensation (e) | 2 |  | $ | — |  |  | $ | 460 |  |  | $ | — |  |  | $ | 450 |
Derivatives designated as fair value hedging instruments: |  |  |  |  |  |  |  |  |
Interest rate (f) | 2 |  | $ | — |  |  | $ | 7 |  |  | $ | 1 |  |  | $ | 108 |
Derivatives designated as cash flow hedging instruments: |  |  |  |  |  |  |  |  |
Foreign exchange (g) | 2 |  | $ | 26 |  |  | $ | 7 |  |  | $ | 44 |  |  | $ | 14 |
Interest rate (g) | 2 |  | — |  |  | 440 |  |  | — |  |  | 323 |
Commodity (h) | 1 |  | — |  |  | 15 |  |  | — |  |  | 1 |
Commodity (i) | 2 |  | — |  |  | 7 |  |  | — |  |  | 3 |
|  |  | $ | 26 |  |  | $ | 469 |  |  | $ | 44 |  |  | $ | 341 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |
Foreign exchange (g) | 2 |  | $ | 2 |  |  | $ | 9 |  |  | $ | 3 |  |  | $ | 10 |
Commodity (h) | 1 |  | 1 |  |  | 20 |  |  | 2 |  |  | 17 |
Commodity (i) | 2 |  | 1 |  |  | 38 |  |  | 5 |  |  | 92 |
|  |  | $ | 4 |  |  | $ | 67 |  |  | $ | 10 |  |  | $ | 119 |
Total derivatives at fair value (j) |  |  | $ | 30 |  |  | $ | 543 |  |  | $ | 55 |  |  | $ | 568 |
Total |  |  | $ | 334 |  |  | $ | 1,003 |  |  | $ | 3,931 |  |  | $ | 1,018 |
(a) | Unless otherwise noted, financial assets are classified on our balance sheet within prepaid expenses and other current assets and other assets. Financial liabilities are classified on our balance sheet within accounts payable and other current liabilities and other liabilities.
(b) | Based on quoted broker prices or other significant inputs derived from or corroborated by observable market data. As of September 7, 2019, these debt securities were classified as short-term investments. As of December 29, 2018, these debt securities were primarily classified as cash equivalents. Unrealized gains and losses on our investments in debt securities as of September 7, 2019 and December 29, 2018 were not material. The decrease in available-for-sale debt securities was due to maturities during the current year.
(c) | Based on the price of index funds. These investments are classified as short-term investments and are used to manage a portion of market risk arising from our deferred compensation liability.
(d) | Based primarily on the price of our common stock.
(e) | Based on the fair value of investments corresponding to employees’ investment elections.
(f) | Based on LIBOR forward rates. As of September 7, 2019 and December 29, 2018, the carrying amount of the hedged fixed-rate debt was $3.0 billion and $7.7 billion, respectively, and classified on our balance sheet within short-term and long-term debt obligations. As of September 7, 2019, the cumulative amount of fair value hedging adjustments on discontinued hedges was a $63 million loss, which is being amortized over the remaining life of the related debt obligations.
(g) | Based on recently reported market transactions of spot and forward rates.
(h) | Based on quoted contract prices on futures exchange markets.
(i) | Based on recently reported market transactions of swap arrangements.
(j) | Derivative assets and liabilities are presented on a gross basis on our balance sheet. Amounts subject to enforceable master netting arrangements or similar agreements which are not offset on the balance sheet as of September 7, 2019 and December 29, 2018 were not material. Collateral received or posted against our asset or liability positions is classified as restricted cash. See Note 12 for further information.
The carrying amounts of our cash and cash equivalents and short-term investments approximate fair value due to their short-term maturity. The fair value of our debt obligations as of September 7, 2019 and December 29, 2018 was $35 billion and $32 billion, respectively, based upon prices of similar instruments in the marketplace, which are considered Level 2 inputs. Losses/(gains) on our hedging instruments are categorized as follows:
| 12 Weeks Ended
| Fair Value/Non- designated Hedges |  | Cash Flow and Net Investment Hedges
| Losses/(Gains) Recognized in Income Statement(a) |  | Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss |  | Losses/(Gains) Reclassified from Accumulated Other Comprehensive Loss into Income Statement(b)
| 9/7/2019 |  |  | 9/8/2018 |  |  | 9/7/2019 |  |  | 9/8/2018 |  |  | 9/7/2019 |  |  | 9/8/2018 |
Foreign exchange | $ | 11 |  |  | $ | 11 |  |  | $ | (2 | ) |  | $ | (10 | ) |  | $ | 4 |  |  | $ | (10 | )
Interest rate | (12 | ) |  | (20 | ) |  | 65 |  |  | 20 |  |  | 38 |  |  | 17 |
Commodity | 27 |  |  | 20 |  |  | 32 |  |  | 1 |  |  | 1 |  |  | — |
Net investment | — |  |  | — |  |  | (40 | ) |  | 3 |  |  | — |  |  | — |
Total | $ | 26 |  |  | $ | 11 |  |  | $ | 55 |  |  | $ | 14 |  |  | $ | 43 |  |  | $ | 7 |
| 36 Weeks Ended
| Fair Value/Non- designated Hedges |  | Cash Flow and Net Investment Hedges
| Losses/(Gains) Recognized in Income Statement(a) |  | Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss |  | Losses/(Gains) Reclassified from Accumulated Other Comprehensive Loss into Income Statement(b)
| 9/7/2019 |  |  | 9/8/2018 |  |  | 9/7/2019 |  |  | 9/8/2018 |  |  | 9/7/2019 |  |  | 9/8/2018 |
Foreign exchange | $ | 15 |  |  | $ | 8 |  |  | $ | 16 |  |  | $ | (40 | ) |  | $ | — |  |  | $ | 6 |
Interest rate | (62 | ) |  | 118 |  |  | 117 |  |  | 29 |  |  | 54 |  |  | 72 |
Commodity | 16 |  |  | 17 |  |  | 19 |  |  | (1 | ) |  | 3 |  |  | 2 |
Net investment | — |  |  | — |  |  | (55 | ) |  | (52 | ) |  | — |  |  | — |
Total | $ | (31 | ) |  | $ | 143 |  |  | $ | 97 |  |  | $ | (64 | ) |  | $ | 57 |  |  | $ | 80 |
(a) | Foreign exchange derivative losses/gains are primarily included in selling, general and administrative expenses. Interest rate derivative losses/gains are primarily from fair value hedges and are included in interest expense. These losses/gains are substantially offset by decreases/increases in the value of the underlying debt, which are also included in interest expense. Commodity derivative losses/gains are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity.
(b) | Foreign exchange derivative losses/gains are primarily included in cost of sales. Interest rate derivative losses/gains are included in interest expense. Commodity derivative losses/gains are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity.
Based on current market conditions, we expect to reclassify net losses of $24 million related to our cash flow hedges from accumulated other comprehensive loss into net income during the next 12 months.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivatives and fair value of assets and liabilities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
Name: | us-gaap_DerivativesAndFairValueTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration