Financial Instruments (Tables)

3 Months Ended

Dec. 26, 2015

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 26, 2015 and September 26, 2015 (in millions):


	December 26, 2015
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	11,152	$	0	$	0		$	11,152	$	11,152	$	0	$	0

Level 1 ⁽¹⁾:
Money market funds		3,517		0		0			3,517		3,517		0		0
Mutual funds		1,772		0		(206	)		1,566		0		1,566		0

Subtotal		5,289		0		(206	)		5,083		3,517		1,566		0


Level 2 ⁽²⁾:
U.S. Treasury securities		40,739		43		(108	)		40,674		203		1,602		38,869
U.S. agency securities		5,307		2		(10	)		5,299		469		865		3,965
Non-U.S. government securities		6,530		31		(201	)		6,360		0		454		5,906
Certificates of deposit and time deposits		2,986		0		0			2,986		258		1,424		1,304
Commercial paper		2,236		0		0			2,236		1,089		895		252
Corporate securities		125,000		132		(1,684	)		123,448		1		14,463		108,984
Municipal securities		946		3		(1	)		948		0		28		920
Mortgage- and asset-backed securities		17,635		23		(105	)		17,553		0		88		17,465

Subtotal		201,379		234		(2,109	)		199,504		2,020		19,819		177,665


Total	$	217,820	$	234	$	(2,315	)	$	215,739	$	16,689	$	21,385	$	177,665


	September 26, 2015
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	11,389	$	0	$	0		$	11,389	$	11,389	$	0	$	0

Level 1 ⁽¹⁾:
Money market funds		1,798		0		0			1,798		1,798		0		0
Mutual funds		1,772		0		(144	)		1,628		0		1,628		0

Subtotal		3,570		0		(144	)		3,426		1,798		1,628		0


Level 2 ⁽²⁾:
U.S. Treasury securities		34,902		181		(1	)		35,082		0		3,498		31,584
U.S. agency securities		5,864		14		0			5,878		841		767		4,270
Non-U.S. government securities		6,356		45		(167	)		6,234		43		135		6,056
Certificates of deposit and time deposits		4,347		0		0			4,347		2,065		1,405		877
Commercial paper		6,016		0		0			6,016		4,981		1,035		0
Corporate securities		116,908		242		(985	)		116,165		3		11,948		104,214
Municipal securities		947		5		0			952		0		48		904
Mortgage- and asset-backed securities		16,121		87		(31	)		16,177		0		17		16,160

Subtotal		191,461		574		(1,184	)		190,851		7,933		18,853		164,065


Total	$	206,420	$	574	$	(1,328	)	$	205,666	$	21,120	$	20,481	$	164,065

⁽¹⁾

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

⁽²⁾

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.


	December 26, 2015
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	11,152	$	0	$	0		$	11,152	$	11,152	$	0	$	0

Level 1 ⁽¹⁾:
Money market funds		3,517		0		0			3,517		3,517		0		0
Mutual funds		1,772		0		(206	)		1,566		0		1,566		0

Subtotal		5,289		0		(206	)		5,083		3,517		1,566		0


Level 2 ⁽²⁾:
U.S. Treasury securities		40,739		43		(108	)		40,674		203		1,602		38,869
U.S. agency securities		5,307		2		(10	)		5,299		469		865		3,965
Non-U.S. government securities		6,530		31		(201	)		6,360		0		454		5,906
Certificates of deposit and time deposits		2,986		0		0			2,986		258		1,424		1,304
Commercial paper		2,236		0		0			2,236		1,089		895		252
Corporate securities		125,000		132		(1,684	)		123,448		1		14,463		108,984
Municipal securities		946		3		(1	)		948		0		28		920
Mortgage- and asset-backed securities		17,635		23		(105	)		17,553		0		88		17,465

Subtotal		201,379		234		(2,109	)		199,504		2,020		19,819		177,665


Total	$	217,820	$	234	$	(2,315	)	$	215,739	$	16,689	$	21,385	$	177,665


	September 26, 2015
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	11,389	$	0	$	0		$	11,389	$	11,389	$	0	$	0

Level 1 ⁽¹⁾:
Money market funds		1,798		0		0			1,798		1,798		0		0
Mutual funds		1,772		0		(144	)		1,628		0		1,628		0

Subtotal		3,570		0		(144	)		3,426		1,798		1,628		0


Level 2 ⁽²⁾:
U.S. Treasury securities		34,902		181		(1	)		35,082		0		3,498		31,584
U.S. agency securities		5,864		14		0			5,878		841		767		4,270
Non-U.S. government securities		6,356		45		(167	)		6,234		43		135		6,056
Certificates of deposit and time deposits		4,347		0		0			4,347		2,065		1,405		877
Commercial paper		6,016		0		0			6,016		4,981		1,035		0
Corporate securities		116,908		242		(985	)		116,165		3		11,948		104,214
Municipal securities		947		5		0			952		0		48		904
Mortgage- and asset-backed securities		16,121		87		(31	)		16,177		0		17		16,160

Subtotal		191,461		574		(1,184	)		190,851		7,933		18,853		164,065


Total	$	206,420	$	574	$	(1,328	)	$	205,666	$	21,120	$	20,481	$	164,065

⁽¹⁾

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

⁽²⁾

Derivative Instruments at Gross Fair Value

The following tables show the Company’s derivative instruments at gross fair value as of December 26, 2015 and September 26, 2015 (in millions):


	December 26, 2015
	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	$	1,021	$	275	$	1,296
Interest rate contracts	$	313	$	0	$	313

Derivative liabilities ⁽²⁾:
Foreign exchange contracts	$	877	$	157	$	1,034
Interest rate contracts	$	30	$	0	$	30


	September 26, 2015
	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	$	1,442	$	109	$	1,551
Interest rate contracts	$	394	$	0	$	394

Derivative liabilities ⁽²⁾:
Foreign exchange contracts	$	905	$	94	$	999
Interest rate contracts	$	13	$	0	$	13

⁽¹⁾

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.

⁽²⁾

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 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 on OCI and the Condensed Consolidated Statements of Operations for the three months ended December 26, 2015 and December 27, 2014 (in millions):


	December 26, 2015			December 27, 2014
Gains/(Losses) recognized in OCI – effective portion:
Cash flow hedges:
Foreign exchange contracts	$	326		$	2,501
Interest rate contracts		8			(4	)

Total	$	334		$	2,497


Net investment hedges:
Foreign exchange contracts	$	0		$	118
Foreign currency debt		10			0

Total	$	10		$	118


Gains/(Losses) reclassified from AOCI into net income – effective portion:
Cash flow hedges:
Foreign exchange contracts	$	515		$	667
Interest rate contracts		(4	)		(4	)

Total	$	511		$	663


Gains/(Losses) on derivative instruments:
Fair value hedges:
Interest rate contracts	$	(111	)	$	117


Gains/(Losses) related to hedged items:
Fair value hedges:
Interest rate contracts	$	111		$	(117	)

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 December 26, 2015 and September 26, 2015 (in millions):


	December 26, 2015				September 26, 2015
	Notional Amount		Credit Risk Amount		Notional Amount		Credit Risk Amount
Instruments designated as accounting hedges:
Foreign exchange contracts	$	59,305	$	1,021	$	70,054	$	1,385
Interest rate contracts	$	18,750	$	313	$	18,750	$	394

Instruments not designated as accounting hedges:
Foreign exchange contracts	$	48,365	$	275	$	49,190	$	109

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

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