Derivative Instruments

3 Months Ended

Nov. 28, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]


	Notional or Contractual Amount		Fair Value(1) of
			Assets(2)		Liabilities(3)

As of November 28, 2024
Derivative instruments with hedge accounting designation
Cash flow currency hedges	$	3,676	$	1	$	(120)
Cash flow commodity hedges	492		9		(18)
Fair value currency hedges	2,260		7		(8)
Fair value interest rate hedges	900		—		(72)

Derivative instruments without hedge accounting designation
Non-designated currency hedges	2,921		6		(25)
			$	23	$	(243)

As of August 29, 2024
Derivative instruments with hedge accounting designation
Cash flow currency hedges	$	3,724	$	57	$	(71)
Cash flow commodity hedges	471		20		(7)
Fair value currency hedges	2,511		—		(41)
Fair value interest rate hedges	900		—		(60)

Derivative instruments without hedge accounting designation
Non-designated currency hedges	2,393		18		(3)
			$	95	$	(182)

(1)Forward and swap contracts are measured at fair value based on market-based observable inputs including market spot and forward rates, interest rates, and credit-risk spreads (Level 2).

(2)Included in receivables and other noncurrent assets.

(3)Included in accounts payable and accrued expenses and other noncurrent liabilities.

Derivative Instruments with Hedge Accounting Designation

Cash Flow Hedges: We utilize forward and swap contracts that generally mature within two years designated as cash flow hedges to minimize our exposure to changes in currency exchange rates or commodity prices for certain capital expenditures and manufacturing costs.

The effects of cash flow hedging activities were as follows:


Three months ended	November 28, 2024		November 30, 2023

Gain (loss) from cash flow hedges in accumulated other comprehensive income (loss)	$	(133)	$	2
Gain (loss) excluded from effectiveness testing in cost of goods sold	(29)		(36)
Gain (loss) reclassified from accumulated other comprehensive income (loss) to earnings, primarily to cost of goods sold	(40)		(44)

As of November 28, 2024, we expect to reclassify $116 million of pre-tax losses related to cash flow hedges from accumulated other comprehensive income (loss) into earnings in the next 12 months.

Fair Value Hedges: We utilize currency forward contracts that generally mature within one year designated as fair value hedges to minimize our exposure to changes in currency exchange rates for non-U.S.-dollar-denominated cash and investments in debt securities. The fair value of our hedged cash and investments in debt securities was $2.26 billion as of November 28, 2024. The changes in the fair values of derivatives designated as fair value hedges and the offsetting changes in the underlying fair values of the hedged items are both recognized in earnings.

We recognized gains of $96 million for changes in the fair values of our fair value currency hedges and offsetting losses of $97 million for changes in the underlying fair values of the hedged items in other non-operating income (expense) for the first quarter of 2025. The effects of the fair value currency hedges and the hedged items were not significant for the first quarter of 2024.

We also utilize fixed-to-floating interest rate swaps designated as fair value hedges to minimize certain exposures to changes in the fair value of fixed-rate debt that result from fluctuations in benchmark interest rates. The effects of fair value hedges on our consolidated statements of operations, recognized in interest expense, were not significant for the periods presented.

Derivative Instruments without Hedge Accounting Designation

Currency Derivatives: We generally utilize a rolling hedge strategy with currency forward contracts that mature within three months to hedge our exposures of monetary assets and liabilities from changes in currency exchange rates. At the end of each reporting period, monetary assets and liabilities denominated in currencies other than the U.S. dollar are remeasured into U.S. dollars and the associated outstanding forward contracts are marked to market. Realized and unrealized gains and losses on derivative instruments without hedge accounting designation as well as the changes in the underlying monetary assets and liabilities from changes in currency exchange rates are included in other non-operating income (expense), net.

We recognized losses of $56 million for derivative instruments without hedge accounting designation for the first quarter of 2025. The amounts recognized for the first quarter of 2024 were not significant. We do not use derivative instruments for speculative purposes.