XML 54 R23.htm IDEA: XBRL DOCUMENT v3.20.1
Financial Instruments (Tables)
 6 Months Ended
Mar. 28, 2020
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 March 28, 2020 and September 28, 2019 (in millions):
 
March 28, 2020
 
Adjusted
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair
Value
 
Cash and
Cash
Equivalents
 
Current
Marketable
Securities
 
Non-Current
Marketable
Securities
Cash
$
24,405

 
$
—

 
$
—

 
$
24,405

 
$
24,405

 
$
—

 
$
—

Level 1 (1):
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
4,473

 
—

 
—

 
4,473

 
4,473

 
—

 
—

Subtotal
4,473

 
—

 
—

 
4,473

 
4,473

 
—

 
—

Level 2 (2):
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury securities
18,755

 
405

 
—

 
19,160

 
1,042

 
6,736

 
11,382

U.S. agency securities
6,079

 
12

 
(9
)
 
6,082

 
129

 
1,478

 
4,475

Non-U.S. government securities
18,548

 
97

 
(693
)
 
17,952

 
652

 
2,348

 
14,952

Certificates of deposit and time deposits
10,616

 
—

 
—

 
10,616

 
3,661

 
6,319

 
636

Commercial paper
15,690

 
—

 
—

 
15,690

 
5,653

 
10,037

 
—

Corporate debt securities
82,153

 
207

 
(2,177
)
 
80,183

 
159

 
25,708

 
54,316

Municipal securities
974

 
9

 
(1
)
 
982

 
—

 
53

 
929

Mortgage- and asset-backed securities
13,066

 
278

 
(43
)
 
13,301

 
—

 
1,198

 
12,103

Subtotal
165,881

 
1,008

 
(2,923
)
 
163,966

 
11,296

 
53,877

 
98,793

Total (3)
$
194,759

 
$
1,008

 
$
(2,923
)
 
$
192,844

 
$
40,174

 
$
53,877

 
$
98,793

 
September 28, 2019
 
Adjusted
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair
Value
 
Cash and
Cash
Equivalents
 
Current
Marketable
Securities
 
Non-Current
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

(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 March 28, 2020 and September 28, 2019, total marketable securities included $17.6 billion and $18.9 billion, respectively, that was restricted from general use, related to the State Aid Decision (refer to Note 5, “Income Taxes”) and other agreements. Additionally, as of March 28, 2020, $2.6 billion of marketable securities were pledged as collateral under a repurchase agreement (refer to Note 6, “Debt”).
Cash, Cash Equivalents and Restricted Cash Reconciliation
A reconciliation of the Company’s cash and cash equivalents in the Condensed Consolidated Balance Sheets to cash, cash equivalents and restricted cash in the Condensed Consolidated Statements of Cash Flows as of March 28, 2020 and September 28, 2019 is as follows (in millions):
 
March 28,
2020
 
September 28,
2019
Cash and cash equivalents
$
40,174

 
$
48,844

Restricted cash included in other current assets
1,077

 
23

Restricted cash included in other non-current assets
1,798

 
1,357

Cash, cash equivalents and restricted cash
$
43,049

 
$
50,224
Derivative Instruments at Gross Fair Value The following tables show the Company’s derivative instruments at gross fair value as of March 28, 2020 and September 28, 2019 (in millions):
 
March 28, 2020
 
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
$
2,803

 
$
1,425

 
$
4,228

Interest rate contracts
$
1,709

 
$
—

 
$
1,709

 
 
 
 
 
 
Derivative liabilities (2):
 
 
 
 
 
Foreign exchange contracts
$
2,645

 
$
1,518

 
$
4,163

Interest rate contracts
$
66

 
$
—

 
$
66

 
September 28, 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

(1)
The fair value of derivative assets is measured using Level 2 fair value inputs and is included in 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 included in 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 and Net Investment Hedges
The following table shows the pre-tax gains and losses of the Company’s derivative and non-derivative instruments designated as cash flow and net investment hedges in OCI and the Condensed Consolidated Statements of Operations for the three- and six-month periods ended March 28, 2020 and March 30, 2019 (in millions):
 
Three Months Ended
 
Six Months Ended
 
March 28,
2020
 
March 30,
2019
 
March 28,
2020
 
March 30,
2019
Gains/(Losses) recognized in OCI – included in effectiveness assessment:
 
 
 
 
 
 
 
Cash flow hedges:
 
 
 
 
 
 
 
Foreign exchange contracts
$
(462
)
 
$
(64
)
 
$
(191
)
 
$
(542
)
Interest rate contracts
(66
)
 
—

 
(66
)
 
—

Total
$
(528
)
 
$
(64
)
 
$
(257
)
 
$
(542
)
 
 
 
 
 
 
 
 
Net investment hedges:
 
 
 
 
 
 
 
Foreign currency debt
$
11

 
$
(7
)
 
$
35

 
$
(23
)
 
 
 
 
 
 
 
 
Gains/(Losses) reclassified from AOCI into net income – included in effectiveness assessment:
 
 
 
 
 
 
 
Cash flow hedges:
 
 
 
 
 
 
 
Foreign exchange contracts
$
(817
)
 
$
134

 
$
(326
)
 
$
16

Interest rate contracts
(1
)
 
(2
)
 
(3
)
 
(3
)
Total
$
(818
)
 
$
132

 
$
(329
)
 
$
13
Derivative Instruments Designated as Fair Value Hedges and the Related Hedged Items
The following tables show information about the Company’s derivative instruments designated as fair value hedges and the related hedged items for the three- and six-month periods ended March 28, 2020 and March 30, 2019 and as of March 28, 2020 (in millions):
 
Three Months Ended
 
Six Months Ended
 
March 28,
2020
 
March 30,
2019
 
March 28,
2020
 
March 30,
2019
Gains/(Losses) on derivative instruments (1):
 
 
 
 
 
 
 
Foreign exchange contracts
$
436

 
$
243

 
$
253

 
$
645

Interest rate contracts
1,290

 
465

 
1,128

 
1,122

Total
$
1,726

 
$
708

 
$
1,381

 
$
1,767

 
 
 
 
 
 
 
 
Gains/(Losses) related to hedged items (1):
 
 
 
 
 
 
 
Marketable securities
$
(436
)
 
$
(242
)
 
$
(253
)
 
$
(644
)
Fixed-rate debt
(1,290
)
 
(465
)
 
(1,128
)
 
(1,122
)
Total
$
(1,726
)
 
$
(707
)
 
$
(1,381
)
 
$
(1,766
)
 
March 28,
2020
Carrying amounts of hedged assets/(liabilities):
 
Marketable securities (2)
$
15,080

Fixed-rate debt (3)
$
(27,439
)
 
 
Cumulative hedging adjustments included in the carrying amounts of hedged items:
 
Marketable securities carrying amount increases/(decreases)
$
(877
)
Fixed-rate debt carrying amount (increases)/decreases
$
(1,708
)
(1)
Gains and losses related to fair value hedges are included in OI&E in the Condensed Consolidated Statements of Operations.
(2)
The carrying amounts of marketable securities that are designated as hedged items in fair value hedges are included in current marketable securities and non-current marketable securities in the Condensed Consolidated Balance Sheet.
(3)
The carrying amounts of fixed-rate debt instruments that are designated as hedged items in fair value hedges are included in current term debt and non-current term debt in the Condensed Consolidated Balance Sheet.
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 March 28, 2020 and September 28, 2019 (in millions):
 
March 28, 2020
 
September 28, 2019
 
Notional
Amount
 
Credit Risk
Amount
 
Notional
Amount
 
Credit Risk
Amount
Instruments designated as accounting hedges:
 
 
 
 
 
 
 
Foreign exchange contracts
$
59,198

 
$
2,803

 
$
61,795

 
$
1,798

Interest rate contracts
$
27,350

 
$
1,709

 
$
31,250

 
$
685

 
 
 
 
 
 
 
 
Instruments not designated as accounting hedges:
 
 
 
 
 
 
 
Foreign exchange contracts
$
91,165

 
$
1,425

 
$
76,868

 
$
323