Derivative Instruments

9 Months Ended

May 29, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]


	Notional or Contractual Amount		Fair Value(1) of
			Assets(2)		Liabilities(3)

As of May 29, 2025
Derivative instruments with hedge accounting designation
Cash flow currency hedges	$	3,318	$	118	$	(19)
Cash flow commodity hedges	444		18		(45)
Fair value currency hedges	3,019		9		(1)

Derivative instruments without hedge accounting designation
Non-designated currency hedges	4,047		31		(3)
			$	176	$	(68)

As of August 29, 2024
Derivative instruments with hedge accounting designation
Cash flow currency hedges	$	3,724	$	57	$	(71)
Cash flow commodity hedges	471		20		(7)
Fair value currency hedges	2,511		—		(41)
Fair value interest rate hedges	900		—		(60)

Derivative instruments without hedge accounting designation
Non-designated currency hedges	2,393		18		(3)
			$	95	$	(182)

(1)Forward and swap contracts are measured at fair value based on market-based observable inputs, including market spot and forward rates, interest rates, and credit-risk spreads (Level 2).

(2)Included in receivables and other noncurrent assets.

(3)Included in accounts payable and accrued expenses and other noncurrent liabilities.

Derivative Instruments with Hedge Accounting Designation

Cash Flow Hedges: We utilize forward and swap contracts that generally mature within two years designated as cash flow hedges to minimize our exposure to changes in currency exchange rates or commodity prices for certain capital expenditures and manufacturing costs.

The effects of cash flow hedging activities were as follows:


	Quarter Ended				Nine Months Ended
	May 29, 2025		May 30, 2024		May 29, 2025		May 30, 2024

Gain (loss) from cash flow hedges in accumulated other comprehensive income (loss)	$	132	$	(99)	$	16	$	(142)
Gain (loss) excluded from effectiveness testing in cost of goods sold	(24)		(35)		(80)		(105)
Gain (loss) reclassified from accumulated other comprehensive income (loss) to earnings, primarily to cost of goods sold	(32)		(39)		(106)		(139)

As of May 29, 2025, we expect to reclassify $20 million of pre-tax gains related to cash flow hedges from accumulated other comprehensive income (loss) into earnings in the next 12 months.

Fair Value Hedges: We utilize currency forward contracts that generally mature within one year designated as fair value hedges to minimize our exposure to changes in currency exchange rates for non-U.S.-dollar-denominated cash and investments in debt securities. The fair value of our hedged cash and investments in debt securities was $3.00 billion as of May 29, 2025. The changes in the fair values of derivatives designated as fair value hedges and the offsetting changes in the underlying fair values of the hedged items are both recognized in earnings.

We recognized losses of $93 million and gains of $52 million for the third quarter and first nine months of 2025, respectively, for changes in the fair values of our fair value currency hedges and offsetting gains of $93 million and losses of $46 million for the third quarter and first nine months of 2025, respectively, for changes in the underlying fair values of the hedged items in other non-operating income (expense). The effects of the fair value currency hedges and the hedged items were not material for the other periods presented.

We also utilized fixed-to-floating interest rate swaps designated as fair value hedges to minimize certain exposures to changes in the fair value of fixed-rate debt that result from fluctuations in benchmark interest rates. The effects of fair value hedges on our consolidated statements of operations, recognized in interest expense, were not material for the periods presented. In the third quarter of 2025, we prepaid the 2027 Notes and settled the related fixed-to-floating interest rate swaps. See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Debt”.

Derivative Instruments without Hedge Accounting Designation

Currency Derivatives: We generally utilize a rolling hedge strategy with currency forward contracts that mature within three months to hedge our exposures of monetary assets and liabilities from changes in currency exchange rates. At the end of each reporting period, monetary assets and liabilities denominated in currencies other than the U.S. dollar are remeasured into U.S. dollars and the associated outstanding forward contracts are marked to market. Realized and unrealized gains and losses on derivative instruments without hedge accounting designation as well as the changes in the underlying monetary assets and liabilities from changes in currency exchange rates are included in other non-operating income (expense), net.

We recognized gains of $106 million and $38 million for derivative instruments without hedge accounting designation for the third quarter and first nine months of 2025, respectively. The amounts recognized in our consolidated statements of operations for the other periods presented were not material. We do not use derivative instruments for speculative purposes.