Financial Instruments (Tables)

12 Months Ended

Sep. 28, 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 September 28, 2019 and September 29, 2018 (in millions):

	2019
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	12,204	$	—	$	—		$	12,204	$	12,204	$	—	$	—
Level 1 (1):
Money market funds	15,897		—		—			15,897		15,897		—		—
Subtotal	15,897		—		—			15,897		15,897		—		—
Level 2 (2):
U.S. Treasury securities	30,293		33		(62		)	30,264		6,165		9,817		14,282
U.S. agency securities	9,767		1		(3		)	9,765		6,489		2,249		1,027
Non-U.S. government securities	19,821		337		(50		)	20,108		749		3,168		16,191
Certificates of deposit and time deposits	4,041		—		—			4,041		2,024		1,922		95
Commercial paper	12,433		—		—			12,433		5,193		7,240		—
Corporate debt securities	85,383		756		(92		)	86,047		123		26,127		59,797
Municipal securities	958		8		(1		)	965		—		68		897
Mortgage- and asset-backed securities	14,180		67		(73		)	14,174		—		1,122		13,052
Subtotal	176,876		1,202		(281		)	177,797		20,743		51,713		105,341
Total (3)	$	204,977	$	1,202	$	(281	)	$	205,898	$	48,844	$	51,713	$	105,341

	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 September 28, 2019 and September 29, 2018, total cash, cash equivalents and marketable securities included $18.9 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 September 28, 2019 and September 29, 2018 (in millions):

	2019
	Continuous Unrealized Losses
	Less than 12 Months			12 Months or Greater			Total
Fair value of marketable debt securities	$	28,151		$	28,167		$	56,318
Unrealized losses	$	(138	)	$	(143	)	$	(281	)

	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 Consolidated Balance Sheet to cash, cash equivalents and restricted cash in the Consolidated Statement of Cash Flows as of September 28, 2019 is as follows (in millions):

	2019
Cash and cash equivalents	$	48,844
Restricted cash included in other current assets	23
Restricted cash included in other non-current assets	1,357
Cash, cash equivalents and restricted cash	$	50,224

Derivative Instruments at Gross Fair Value

The following tables show the Company’s derivative instruments at gross fair value as of September 28, 2019 and September 29, 2018 (in millions):

	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	$	1,798	$	323	$	2,121
Interest rate contracts	$	685	$	—	$	685
Derivative liabilities (2):
Foreign exchange contracts	$	1,341	$	160	$	1,501
Interest rate contracts	$	105	$	—	$	105

	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 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 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 Consolidated Statements of Operations for 2019, 2018 and 2017 (in millions):

	2019			2018			2017
Gains/(Losses) recognized in OCI – effective portion:
Cash flow hedges:
Foreign exchange contracts	$	(959	)	$	682		$	1,797
Interest rate contracts	—			1			7
Total	$	(959	)	$	683		$	1,804
Net investment hedges:
Foreign currency debt	$	(58	)	$	4		$	67
Gains/(Losses) reclassified from AOCI into net income – effective portion:
Cash flow hedges:
Foreign exchange contracts	$	(116	)	$	(482	)	$	1,958
Interest rate contracts	(7		)	1			(2		)
Total	$	(123	)	$	(481	)	$	1,956
Gains/(Losses) on derivative instruments:
Fair value hedges:
Foreign exchange contracts	$	1,020		$	(168	)	$	—
Interest rate contracts	2,068			(1,363		)	(810		)
Total	$	3,088		$	(1,531	)	$	(810	)
Gains/(Losses) related to hedged items:
Fair value hedges:
Marketable securities	$	(1,018	)	$	167		$	—
Fixed-rate debt	(2,068		)	1,363			810
Total	$	(3,086	)	$	1,530		$	810

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 September 28, 2019 and September 29, 2018 (in millions):

	2019				2018
	Notional Amount		Credit Risk Amount		Notional Amount		Credit Risk Amount
Instruments designated as accounting hedges:
Foreign exchange contracts	$	61,795	$	1,798	$	65,368	$	1,015
Interest rate contracts	$	31,250	$	685	$	33,250	$	—
Instruments not designated as accounting hedges:
Foreign exchange contracts	$	76,868	$	323	$	63,062	$	259