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Derivatives and Currency Exchange Risk Management
 12 Months Ended
Apr. 26, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Currency Exchange Risk Management Derivatives and Currency Exchange Risk Management
The Company uses derivative instruments and foreign currency denominated debt to manage the impact that currency exchange rate and interest rate changes have on reported financial statements. The Company does not enter into derivative contracts for speculative purposes.
Cash Flow Hedges
The Company uses foreign currency forward and option contracts designated as cash flow hedges to manage its exposure to the variability of future cash flows that are denominated in a foreign currency.
At inception, foreign currency forward and option contracts are designated as a cash flow hedge. Changes in the fair value of these derivatives are reported as a component of accumulated other comprehensive loss until the hedged transaction affects earnings. When the hedged transaction affects earnings, the gain or loss on the derivative is reclassified to earnings. Amounts excluded from the measurement of hedge effectiveness are recognized in earnings on a straight-line basis over the term of the hedge. Cash flows are reported as operating activities in the consolidated statements of cash flows.
The Company's cash flow hedges will mature within the subsequent three-year period. At April 26, 2024 and April 28, 2023, the Company had $229 million and $93 million in after-tax unrealized gains, respectively, associated with cash flow hedging instruments recorded in accumulated other comprehensive loss. The Company expects that $158 million of after-tax net unrealized gains at April 26, 2024 will be recognized in the consolidated statements of income over the next 12 months.
Net Investment Hedges
The Company uses derivative instruments and foreign currency denominated debt to manage foreign currency risk associated with its net investment in foreign operations. The derivative instruments that the Company uses for this purpose may include foreign currency forward exchange contracts used on a standalone basis or in combination with option collars and standalone cross currency interest rate contracts.
For instruments that are designated as net investment hedges, the gains or losses are reported as a component of accumulated other comprehensive loss. The gains or losses are reclassified into earnings upon a liquidation event or deconsolidation of the foreign subsidiary. Amounts excluded from the assessment of effectiveness are recognized in interest expense, net on a straight-line basis over the term of the hedge. During the twelve months ended April 26, 2024 and April 28, 2023, the Company recognized $197 million and $107 million, respectively, of after-tax unrealized gains related to excluded components in interest expense, net. The cash flows related to the Company’s derivative instruments designated as net investment hedges are reported as investing activities in the consolidated statements of cash flows. Cash flows attributable to amounts excluded from the assessment of effectiveness are reported as operating activities in the consolidated statements of cash flows.
Undesignated Derivatives
The Company uses foreign currency forward exchange contracts to offset the Company’s exposure to the change in the value of non-functional currency denominated assets, liabilities, and cash flows.
These foreign currency forward exchange rate contracts are not designated as hedges at inception, and therefore, changes in the fair value of these contracts are recognized in the consolidated statements of income. Cash flows related to the Company’s undesignated derivative contracts are reported in the consolidated statements of cash flows based on the nature of the derivative instrument.
Outstanding Instruments
The following table presents the contractual amounts of the Company's outstanding instruments:
As of
(in billions)DesignationApril 26, 2024April 28, 2023
Currency exchange rate contractsCash flow hedge$10.4 $9.1 
Currency exchange rate contracts(1)
Net investment hedge7.4 7.2 
Foreign currency-denominated debt(2)
Net investment hedge17.1 17.6 
Currency exchange rate contractsUndesignated5.9 5.8 
(1)At April 26, 2024, includes derivative contracts with a notional value of €5.0 billion, or $5.4 billion, designated as hedges of a portion of our net investment in certain European operations and derivative contracts with a notional value of ¥322 billion, or $2.1 billion, designated as hedges of a portion of our net investment in certain Japanese operations. These derivative contracts mature in fiscal years 2025 through 2033.
(2)At April 26, 2024, includes €16.0 billion, or $17.1 billion, of outstanding Euro-denominated debt designated as hedges of a portion our net investment in foreign operations. This debt matures in fiscal years 2026 through 2051.
Gains and Losses on Hedging Instruments and Derivatives not Designated as Hedging Instruments
The amount of the gains and losses on hedging instruments and the classification of those gains and losses within our consolidated financial statements for fiscal years 2024, 2023, and 2022 were as follows:
(Gain) Loss Recognized in Accumulated Other Comprehensive Income(Gain) Loss Reclassified into Income
Fiscal YearFiscal YearLocation of (Gain) Loss in Income Statement
(in millions)202420232022202420232022
Cash flow hedges
Currency exchange rate contracts$(416)$(161)$(953)$(312)$(703)$(144)Other operating expense (income), net
Currency exchange rate contracts(124)(79)18 (57)(3)61 Cost of products sold
Net investment hedges
Foreign currency-denominated debt(431)524 (2,299)— — — N/A
Currency exchange rate contracts(202)73 — — — — N/A
Total$(1,173)$356 $(3,234)$(369)$(706)$(83)
The amount of the gains and losses on our derivative instruments not designated as hedging instruments and the classification of those gains and losses within our consolidated financial statements for fiscal years 2024, 2023, and 2022 were as follows:
(Gain) Loss Recognized in Income
Fiscal YearLocation of (Gain) Loss in Income Statement
(in millions)202420232022
Currency exchange rate contracts$136 $31 $(54)Other operating expense (income), net
Balance Sheet Presentation
The following tables summarize the balance sheet classification and fair value of derivative instruments included in the consolidated balance sheets at April 26, 2024 and April 28, 2023. The fair value amounts are presented on a gross basis and are segregated between derivatives that are designated and qualify as hedging instruments and those that are not designated and do not qualify as hedging instruments, and are further segregated by type of contract within those two categories.
 Fair Value - AssetsFair Value - Liabilities
(in millions)April 26, 2024April 28, 2023Balance Sheet ClassificationApril 26, 2024April 28, 2023Balance Sheet Classification
Derivatives designated as hedging instruments  
Currency exchange rate contracts$368 $318 Other current assets$37 $109 Other accrued expenses
Currency exchange rate contracts276 33 Other assets17 117 Other liabilities
Total derivatives designated as hedging instruments644 351  54 226  
Derivatives not designated as hedging instruments  
Currency exchange rate contracts15 17 Other current assets12 10 Other accrued expenses
Total derivatives$659 $368  $66 $236  
The following table provides information by level for the derivative assets and liabilities that are measured at fair value on a recurring basis:
April 26, 2024April 28, 2023
(in millions)Derivative AssetsDerivative LiabilitiesDerivative AssetsDerivative Liabilities
Level 1$659 $66 $368 $236 
The Company has elected to present the fair value of derivative assets and liabilities within the consolidated balance sheets on a gross basis, even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. The cash flows related to collateral posted and received are reported gross as investing and financing activities, respectively, in the consolidated statements of cash flows.
The following tables provide information as if the Company had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria as stipulated by the terms of the master netting arrangements with each of the counterparties. Derivatives not subject to master netting arrangements are not eligible for net presentation.
April 26, 2024
Gross Amount Not Offset on the Balance Sheet
(in millions)Gross Amount of Recognized Assets (Liabilities)Financial InstrumentsCash Collateral (Received) PostedNet Amount
Derivative assets:
Currency exchange rate contracts$659 $(66)$(101)$492 
Derivative liabilities:
Currency exchange rate contracts(66)66 — — 
Total $593 $— $(101)$492 
April 28, 2023
Gross Amount Not Offset on the Balance Sheet
(in millions)Gross Amount of Recognized Assets (Liabilities)Financial InstrumentsCash Collateral (Received) PostedNet Amount
Derivative assets:
Currency exchange rate contracts$368 $(189)$(11)$168 
Derivative liabilities:
Currency exchange rate contracts(236)189 — (48)
Total$132 $— $(11)$121 
Concentrations of Credit Risk
Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of interest-bearing investments, derivative contracts, and trade accounts receivable. Global concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of customers and their dispersion across many geographic areas. The Company monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business.
The Company maintains cash and cash equivalents, investments, and certain other financial instruments (including currency exchange rate and interest rate derivative contracts) with various major financial institutions. The Company performs periodic evaluations of the relative credit standings of these financial institutions and limits the amount of credit exposure with any one institution. In addition, the Company has collateral credit agreements with its primary derivatives counterparties. Under these agreements, either party is required to post eligible collateral when the market value of transactions covered by the agreement exceeds specific thresholds, thus limiting credit exposure for both parties. As of April 26, 2024 and April 28, 2023, the Company received net cash collateral of $101 million and $11 million, respectively,
from its counterparties. Cash collateral posted is recorded as a reduction in cash and cash equivalents, with the offset recorded as an increase in other current assets in the consolidated balance sheets. Cash collateral received is recorded as an increase in cash and cash equivalents with the offset recorded in other accrued expenses in the consolidated balance sheets.