Financial Instruments (Tables)

9 Months Ended

Jun. 29, 2019

Investments, All Other Investments [Abstract]

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

The following tables show the Company’s cash and marketable securities by significant investment category as of June 29, 2019 and September 29, 2018 (in millions):

	June 29, 2019
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	12,075	$	—	$	—		$	12,075	$	12,075	$	—	$	—
Level 1 (1):
Money market funds	10,558		—		—			10,558		10,558		—		—
Subtotal	10,558		—		—			10,558		10,558		—		—
Level 2 (2):
U.S. Treasury securities	37,307		22		(102		)	37,227		11,116		8,436		17,675
U.S. agency securities	9,552		1		(5		)	9,548		7,711		450		1,387
Non-U.S. government securities	20,569		272		(63		)	20,778		636		3,467		16,675
Certificates of deposit and time deposits	4,838		—		—			4,838		3,495		1,273		70
Commercial paper	5,161		—		—			5,161		4,930		231		—
Corporate debt securities	93,896		550		(173		)	94,273		9		29,027		65,237
Municipal securities	961		9		(1		)	969		—		65		904
Mortgage- and asset-backed securities	15,262		38		(117		)	15,183		—		1,135		14,048
Subtotal	187,546		892		(461		)	187,977		27,897		44,084		115,996
Total (3)	$	210,179	$	892	$	(461	)	$	210,610	$	50,530	$	44,084	$	115,996

	September 29, 2018
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	11,575	$	—	$	—		$	11,575	$	11,575	$	—	$	—
Level 1 (1):
Money market funds	8,083		—		—			8,083		8,083		—		—
Mutual funds	799		—		(116		)	683		—		683		—
Subtotal	8,882		—		(116		)	8,766		8,083		683		—
Level 2 (2):
U.S. Treasury securities	47,296		—		(1,202		)	46,094		1,613		7,606		36,875
U.S. agency securities	4,127		—		(48		)	4,079		1,732		360		1,987
Non-U.S. government securities	21,601		49		(250		)	21,400		—		3,355		18,045
Certificates of deposit and time deposits	3,074		—		—			3,074		1,247		1,330		497
Commercial paper	2,573		—		—			2,573		1,663		910		—
Corporate debt securities	123,001		152		(2,038		)	121,115		—		25,162		95,953
Municipal securities	946		—		(12		)	934		—		178		756
Mortgage- and asset-backed securities	18,105		8		(623		)	17,490		—		804		16,686
Subtotal	220,723		209		(4,173		)	216,759		6,255		39,705		170,799
Total (3)	$	241,180	$	209	$	(4,289	)	$	237,100	$	25,913	$	40,388	$	170,799

(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 June 29, 2019 and September 29, 2018, total cash, cash equivalents and marketable securities included $19.5 billion and $20.3 billion, respectively, that was restricted from general use, related to the State Aid Decision (refer to Note 5, “Income Taxes”) and other agreements.

Marketable Securities in a Continuous Unrealized Loss Position

The following tables show information about the Company’s marketable securities that had been in a continuous unrealized loss position for less than 12 months and for 12 months or greater as of June 29, 2019 and September 29, 2018 (in millions):

	June 29, 2019
	Continuous Unrealized Losses
	Less than 12 Months			12 Months or Greater			Total
Fair value of marketable debt securities	$	11,853		$	71,984		$	83,837
Unrealized losses	$	(44	)	$	(417	)	$	(461	)

	September 29, 2018
	Continuous Unrealized Losses
	Less than 12 Months			12 Months or Greater			Total
Fair value of marketable securities	$	126,238		$	60,599		$	186,837
Unrealized losses	$	(2,400	)	$	(1,889	)	$	(4,289	)

Cash, Cash Equivalents and Restricted Cash Reconciliation

A reconciliation of the Company’s cash and cash equivalents in the Condensed Consolidated Balance Sheet to cash, cash equivalents and restricted cash in the Condensed Consolidated Statement of Cash Flows as of June 29, 2019 is as follows (in millions):

	June 29, 2019
Cash and cash equivalents	$	50,530
Restricted cash included in other current assets	266
Restricted cash included in other non-current assets	1,355
Cash, cash equivalents and restricted cash	$	52,151

Derivative Instruments at Gross Fair Value

The following tables show the Company’s derivative instruments at gross fair value as of June 29, 2019 and September 29, 2018 (in millions):

	June 29, 2019
	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	$	1,179	$	184	$	1,363
Interest rate contracts	$	449	$	—	$	449
Derivative liabilities (2):
Foreign exchange contracts	$	860	$	251	$	1,111
Interest rate contracts	$	112	$	—	$	112

	September 29, 2018
	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	$	1,015	$	259	$	1,274
Derivative liabilities (2):
Foreign exchange contracts	$	543	$	137	$	680
Interest rate contracts	$	1,456	$	—	$	1,456

(1) The fair value of derivative assets is measured using Level 2 fair value inputs and is recorded as other current assets and other non-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 other current liabilities and other non-current liabilities 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 June 29, 2019 and June 30, 2018 (in millions):

	Three Months Ended						Nine Months Ended
	June 29, 2019			June 30, 2018			June 29, 2019			June 30, 2018
Gains/(Losses) recognized in OCI – effective portion:
Cash flow hedges:
Foreign exchange contracts	$	(147	)	$	40		$	(689	)	$	230
Interest rate contracts	—			—			—			1
Total	$	(147	)	$	40		$	(689	)	$	231
Net investment hedges:
Foreign currency debt	$	(32	)	$	13		$	(55	)	$	(18	)
Gains/(Losses) reclassified from AOCI into net income – effective portion:
Cash flow hedges:
Foreign exchange contracts	$	53		$	(1,231	)	$	69		$	(1,068	)
Interest rate contracts	(2		)	—			(5		)	3
Total	$	51		$	(1,231	)	$	64		$	(1,065	)
Gains/(Losses) on derivative instruments:
Fair value hedges:
Foreign exchange contracts	$	(136	)	$	31		$	509		$	31
Interest rate contracts	671			(230		)	1,793			(1,178		)
Total	$	535		$	(199	)	$	2,302		$	(1,147	)
Gains/(Losses) related to hedged items:
Fair value hedges:
Marketable securities	$	136		$	(31	)	$	(508	)	$	(31	)
Fixed-rate debt	(671		)	230			(1,793		)	1,178
Total	$	(535	)	$	199		$	(2,301	)	$	1,147

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 June 29, 2019 and September 29, 2018 (in millions):

	June 29, 2019				September 29, 2018
	Notional Amount		Credit Risk Amount		Notional Amount		Credit Risk Amount
Instruments designated as accounting hedges:
Foreign exchange contracts	$	55,067	$	1,179	$	65,368	$	1,015
Interest rate contracts	$	31,250	$	449	$	33,250	$	—
Instruments not designated as accounting hedges:
Foreign exchange contracts	$	54,744	$	184	$	63,062	$	259