Financial Instruments (Tables)

12 Months Ended

Sep. 24, 2011

Available-for-sale Securities' Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value by Significant Investment Category

The following tables summarize the Company’s cash and available-for-sale securities’ adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short-term or long-term marketable securities as of September 24, 2011 and September 25, 2010 (in millions):

	September 24, 2011
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	2,903	$	0	$	0		$	2,903	$	2,903	$	0	$	0
Level 1:
Money market funds		1,911		0		0			1,911		1,911		0		0
Mutual funds		1,227		0		(34	)		1,193		0		1,193		0
Subtotal		3,138		0		(34	)		3,104		1,911		1,193		0
Level 2:
U.S. Treasury securities		10,717		39		(3	)		10,753		1,250		2,149		7,354
U.S. agency securities		13,467		24		(3	)		13,488		225		1,818		11,445
Non-U.S. government securities		5,559		11		(2	)		5,568		551		1,548		3,469
Certificates of deposit and time deposits		4,175		2		(2	)		4,175		728		977		2,470
Commercial paper		2,853		0		0			2,853		2,237		616		0
Corporate securities		35,241		132		(114	)		35,259		10		7,241		28,008
Municipal securities		3,411		56		0			3,467		0		595		2,872
Subtotal		75,423		264		(124)			75,563		5,001		14,944		55,618
Total	$	81,464	$	264	$	(158	)	$	81,570	$	9,815	$	16,137	$	55,618

	September 25, 2010
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	1,690	$	0	$	0		$	1,690	$	1,690	$	0	$	0
Level 1:
Money market funds		2,753		0		0			2,753		2,753		0		0
Level 2:
U.S. Treasury securities		9,872		42		0			9,914		2,571		2,130		5,213
U.S. agency securities		8,717		10		0			8,727		1,916		4,339		2,472
Non-U.S. government securities		2,648		13		0			2,661		10		865		1,786
Certificates of deposit and time deposits		2,735		5		(1	)		2,739		374		850		1,515
Commercial paper		3,168		0		0			3,168		1,889		1,279		0
Corporate securities		17,349		102		(9	)		17,442		58		4,522		12,862
Municipal securities		1,899		19		(1	)		1,917		0		374		1,543
Subtotal		46,388		191		(11	)		46,568		6,818		14,359		25,391
Total	$	50,831	$	191	$	(11	)	$	51,011	$	11,261	$	14,359	$	25,391

Notional Principal Amounts of Outstanding Derivative Instruments and Credit Risk Amounts of Associated with Outstanding or Unsettled Derivative Instruments

The following table summarizes the notional principal amounts of the Company’s outstanding derivative instruments and credit risk amounts associated with outstanding or unsettled derivative instruments as of September 24, 2011 and September 25, 2010 (in millions):

	2011				2010
	Notional Principal		Credit Risk Amounts		Notional Principal		Credit Risk Amounts
Instruments qualifying as accounting hedges:
Foreign exchange contracts	$	13,705	$	537	$	13,957	$	62
Instruments other than accounting hedges:
Foreign exchange contracts	$	9,891	$	56	$	10,727	$	45

Derivative Instruments Measured at Gross Fair Value as Reflected in the Consolidated Balance Sheets

The following tables summarize the gross fair value of the Company’s derivative instruments as reflected in the Consolidated Balance Sheets as of September 24, 2011 and September 25, 2010 (in millions):

	September 24, 2011
	Fair Value of Derivatives Designated as Hedge Instruments		Fair Value of Derivatives Not Designated as Hedge Instruments		Total Fair Value
Derivative assets (a):
Foreign exchange contracts	$	460	$	56	$	516
Derivative liabilities (b):
Foreign exchange contracts	$	72	$	37	$	109

	September 25, 2010
	Fair Value of Derivatives Designated as Hedge Instruments		Fair Value of Derivatives Not Designated as Hedge Instruments		Total Fair Value
Derivative assets (a):
Foreign exchange contracts	$	62	$	45	$	107
Derivative liabilities (b):
Foreign exchange contracts	$	488	$	118	$	606

(a) The fair value of derivative assets is measured using Level 2 fair value inputs and is recorded as other current assets in the Consolidated Balance Sheets.

(b) The fair value of derivative liabilities is measured using Level 2 fair value inputs and is recorded as accrued expenses in the Consolidated Balance Sheets.

Pre-Tax Effect of Derivative Instruments Designated as Cash Flow and Net Investment Hedges

The following table summarizes the pre-tax effect of the Company’s derivative instruments designated as cash flow and net investment hedges in the consolidated financial statements for the years ended September 24, 2011 and September 25, 2010 (in millions):

	Year Ended
	Gains/(Losses) Recognized in OCI - Effective Portion (c)						Gains/(Losses) Reclassified from AOCI into Income - Effective Portion (c)					Gains/(Losses) Recognized – Ineffective Portion and Amount Excluded from Effectiveness Testing
	September 24, 2011			September 25, 2010			September 24, 2011 (a)			September 25, 2010 (b)		Location	September 24, 2011			September 25, 2010
Cash flow hedges:
Foreign exchange contracts	$	153		$	(267)		$	(704)		$	115	Other income and expense	$	(213)		$	(175)
Net investment hedges:
Foreign exchange contracts		(43	)		(41	)		0			0	Other income and expense		1			1
Total	$	110		$	(308	)	$	(704	)	$	115		$	(212	)	$	(174	)

(a) Includes gains/(losses) reclassified from AOCI into income for the effective portion of cash flow hedges, of which $(349) million and $(355) million were recognized within net sales and cost of sales, respectively, within the Consolidated Statement of Operations for the year ended September 24, 2011. There were no amounts reclassified from AOCI into income for the effective portion of net investment hedges for the year ended September 24, 2011.

(b) Includes gains/(losses) reclassified from AOCI into income for the effective portion of cash flow hedges, of which $158 million and $(43) million were recognized within net sales and cost of sales, respectively, within the Consolidated Statement of Operations for the year ended September 25, 2010. There were no amounts reclassified from AOCI into income for the effective portion of net investment hedges for the year ended September 25, 2010.

(c) Refer to Note 6, “Shareholders’ Equity and Share-based Compensation” of this Form 10-K, which summarizes the activity in AOCI related to derivatives.