Financial Instruments (Tables)

3 Months Ended

Dec. 29, 2012

Cash and Available-for-Sale Securities' Adjusted Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value Recorded as Cash and Cash Equivalents or Short-Term or Long-Term Marketable Securities

The following tables show 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- or long-term marketable securities as of December 29, 2012 and September 29, 2012 (in millions):

	December 29, 2012
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	7,080	$	0	$	0		$	7,080	$	7,080	$	0	$	0
Level 1 (a):
Money market funds		3,666		0		0			3,666		3,666		0		0
Mutual funds		3,682		27		(45	)		3,664		0		3,664		0
Subtotal		7,348		27		(45	)		7,330		3,666		3,664		0
Level 2 (b):
U.S. Treasury securities		22,890		21		(2	)		22,909		1,335		6,427		15,147
U.S. agency securities		20,658		45		(3	)		20,700		1,592		3,478		15,630
Non-U.S. government securities		4,684		186		(3	)		4,867		63		741		4,063
Certificates of deposit and time deposits		2,370		1		0			2,371		1,384		224		763
Commercial paper		2,079		0		0			2,079		906		1,029		144
Corporate securities		49,390		554		(15	)		49,929		117		7,407		42,405
Municipal securities		6,053		58		(7	)		6,104		11		695		5,398
Mortgage- and asset-backed securities		13,696		59		(12	)		13,743		0		1		13,742
Subtotal		121,820		924		(42	)		122,702		5,408		20,002		97,292
Total	$	136,248	$	951	$	(87	)	$	137,112	$	16,154	$	23,666	$	97,292

	September 29, 2012
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	3,109	$	0	$	0		$	3,109	$	3,109	$	0	$	0
Level 1 (a):
Money market funds		1,460		0		0			1,460		1,460		0		0
Mutual funds		2,385		79		(2	)		2,462		0		2,462		0
Subtotal		3,845		79		(2	)		3,922		1,460		2,462		0
Level 2 (b):
U.S. Treasury securities		20,088		21		(1	)		20,108		2,608		3,525		13,975
U.S. agency securities		19,540		58		(1	)		19,597		1,460		1,884		16,253
Non-U.S. government securities		5,483		183		(2	)		5,664		84		1,034		4,546
Certificates of deposit and time deposits		2,189		2		0			2,191		1,106		202		883
Commercial paper		2,112		0		0			2,112		909		1,203		0
Corporate securities		46,261		568		(8	)		46,821		10		7,455		39,356
Municipal securities		5,645		74		0			5,719		0		618		5,101
Mortgage- and asset-backed securities		11,948		66		(6	)		12,008		0		0		12,008
Subtotal		113,266		972		(18	)		114,220		6,177		15,921		92,122
Total	$	120,220	$	1,051	$	(20	)	$	121,251	$	10,746	$	18,383	$	92,122

(a) The fair value of Level 1 securities is estimated based on quoted prices in active markets for identical assets or liabilities.

(b) The fair value of Level 2 securities is estimated 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.

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

The following table shows the notional principal amounts of the Company’s outstanding derivative instruments and credit risk amounts associated with outstanding or unsettled derivative instruments as of December 29, 2012 and September 29, 2012 (in millions):

	December 29, 2012				September 29, 2012
	Notional Principal		Credit Risk Amounts		Notional Principal		Credit Risk Amounts
Instruments designated as accounting hedges:
Foreign exchange contracts	$	33,012	$	455	$	41,970	$	140
Instruments not designated as accounting hedges:
Foreign exchange contracts	$	31,241	$	184	$	13,403	$	12

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

The following tables show the Company’s derivative instruments at gross fair value as reflected in the Condensed Consolidated Balance Sheets as of December 29, 2012 and September 29, 2012 (in millions):

	December 29, 2012
	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	$	449	$	184	$	633
Derivative liabilities (b):
Foreign exchange contracts	$	275	$	232	$	507

	September 29, 2012
	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	$	138	$	12	$	150
Derivative liabilities (b):
Foreign exchange contracts	$	516	$	41	$	557

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

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

The following table shows the pre-tax effect of the Company’s derivative instruments designated as cash flow and net investment hedges in the Condensed Consolidated Statements of Operations for the three months ended December 29, 2012 and December 31, 2011 (in millions):

	Three Months Ended
	Gains/(Losses) Recognized in  OCI - Effective Portion				Gains/(Losses) Reclassified  from AOCI into Net Income - Effective Portion					Gains/(Losses) Recognized - Ineffective Portion and Amount Excluded from Effectiveness Testing
	December 29, 2012		December 31, 2011		December 29, 2012 (a)			December 31, 2011 (b)		Location	December 29, 2012		December 31, 2011
Cash flow hedges:
Foreign exchange contracts	$	205	$	135	$	(159	)	$	238	Other income and expense	$	9	$	(69	)
Net investment hedges:
Foreign exchange contracts		36		7		0			0	Other income and expense		0		1
Total	$	241	$	142	$	(159	)	$	238		$	9	$	(68	)

(a) Includes gains/(losses) reclassified from AOCI into net income for the effective portion of cash flow hedges, of which $(9) million and $(150) million were recognized within net sales and cost of sales, respectively, within the Condensed Consolidated Statement of Operations for the three months ended December 29, 2012. There were no amounts reclassified from AOCI into net income for the effective portion of net investment hedges for the three months ended December 29, 2012.

(b) Includes gains/(losses) reclassified from AOCI into net income for the effective portion of cash flow hedges, of which $187 million and $51 million were recognized within net sales and cost of sales, respectively, within the Condensed Consolidated Statement of Operations for the three months ended December 31, 2011. There were no amounts reclassified from AOCI into net income for the effective portion of net investment hedges for the three months ended December 31, 2011.