We use derivative instruments primarily to manage exposures to foreign currency exchange rate, interest rate, and equity price risks. Our primary objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates, interest rates, and equity prices. Our derivatives expose us to credit risk to the extent that the counterparties may be unable to meet the terms of the agreement. We do, however, seek to mitigate such risks by limiting our counterparties to major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored. Management does not expect material losses as a result of defaults by counterparties.



	DERIVATIVE ASSETS					DERIVATIVE LIABILITIES
	Balance Sheet Line Item	April 25, 2020		July 27, 2019		Balance Sheet Line Item	April 25, 2020		July 27, 2019
Derivatives designated as hedging instruments:
Foreign currency derivatives	Other current assets	$	16	$	5	Other current liabilities	$	3	$	8
Interest rate derivatives	Other current assets	9		—		Other current liabilities	—		1
Interest rate derivatives	Other assets	170		75		Other long-term liabilities	—		—
Total		195		80			3		9
Derivatives not designated as hedging instruments:
Foreign currency derivatives	Other current assets	5		9		Other current liabilities	18		6
Equity derivatives	Other current assets	—		—		Other current liabilities	1		—
Total		5		9			19		6
Total		$	200	$	89		$	22	$	15



	CARRYING AMOUNT OF THE HEDGED ASSETS/(LIABILITIES)						CUMULATIVE AMOUNT OF FAIR VALUE HEDGING ADJUSTMENT INCLUDED IN THE CARRYING AMOUNT OF THE HEDGED ASSETS/LIABILITIES
Balance Sheet Line Item of Hedged Item	April 25, 2020			July 27, 2019			April 25, 2020			July 27, 2019
Short-term debt	$	(508	)	$	(2,000	)	$	(8	)	$	—
Long-term debt	$	(2,160	)	$	(2,565	)	$	(166	)	$	(73	)



	April 25, 2020
	Three Months Ended									Nine Months Ended
	Revenue		Cost of sales		Operating expenses		Interest and other income (loss), net			Revenue			Cost of sales		Operating expenses		Interest and other income (loss), net
Total amounts presented in the Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded	$	11,983	$	4,212	$	4,357	$	30		$	37,147		$	13,148	$	13,626	$	291

The effects of fair value and cash flow hedging:
Gains (losses) on fair value hedging relationships:
Interest rate derivatives
Hedged items	—		—		—		(87		)	—			—		—		(101		)
Derivatives designated as hedging instruments	—		—		—		89			—			—		—		105
Gains (losses) on cash flow hedging relationships:
Foreign currency derivatives
Amount of gains (losses) reclassified from AOCI to income	1		—		—		—			(4		)	1		2		—
Total gains (losses)	$	1	$	—	$	—	$	2		$	(4	)	$	1	$	2	$	4



	April 27, 2019
	Three Months Ended									Nine Months Ended
	Revenue		Cost of sales		Operating expenses		Interest and other income (loss), net			Revenue		Cost of sales			Operating expenses			Interest and other income (loss), net
Total amounts presented in the Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded	$	12,958	$	4,785	$	4,660	$	102		$	38,476	$	14,384		$	13,563		$	338

The effects of fair value and cash flow hedging:
Gains (losses) on fair value hedging relationships:
Interest rate derivatives
Hedged items	—		—		—		(31		)	—		—			—			(83		)
Derivatives designated as hedging instruments	—		—		—		33			—		—			—			88
Gains (losses) on cash flow hedging relationships:
Foreign currency derivatives
Amount of gains (losses) reclassified from AOCI to income	—		—		—		—			3		(1		)	(1		)	—
Total gains (losses)	$	—	$	—	$	—	$	2		$	3	$	(1	)	$	(1	)	$	5



		GAINS (LOSSES) FOR THE THREE MONTHS ENDED						GAINS (LOSSES) FOR THE NINE MONTHS ENDED
Derivatives Not Designated as Hedging Instruments	Line Item in Statements of Operations	April 25, 2020			April 27, 2019			April 25, 2020			April 27, 2019
Foreign currency derivatives	Other income (loss), net	$	(47	)	$	(29	)	$	(56	)	$	(57	)
Total return swaps—deferred compensation	Operating expenses	(93		)	42			(49		)	9
	Cost of sales	(9		)	4			(5		)	1
	Other income (loss), net	(2		)	(4		)	(9		)	(12		)
Equity derivatives	Other income (loss), net	(6		)	1			(1		)	2
Total		$	(157	)	$	14		$	(120	)	$	(57	)



	April 25, 2020		July 27, 2019
Derivatives designated as hedging instruments:
Foreign currency derivatives—cash flow hedges	$	610	$	663
Interest rate derivatives	2,500		4,500
Net investment hedging instruments	210		309
Derivatives not designated as hedging instruments:
Foreign currency derivatives	2,645		2,708
Total return swaps—deferred compensation	508		574
Total	$	6,473	$	8,754

We present our derivative instruments at gross fair values in the Consolidated Balance Sheets. However, our master netting and other similar arrangements with the respective counterparties allow for net settlement under certain conditions, which are designed to reduce credit risk by permitting net settlement with the same counterparty. As of April 25, 2020 and July 27, 2019, the potential effects of these rights of set-off associated with the derivative contracts would be a reduction to both derivative assets and derivative liabilities of $18 million and $13 million, respectively.

To further limit credit risk, we also enter into collateral security arrangements related to certain derivative instruments whereby cash is posted as collateral between the counterparties based on the fair market value of the derivative instrument. Under these collateral security arrangements, the net cash collateral received as of April 25, 2020 and July 27, 2019 was $178 million and $76 million, respectively. Including the effects of collateral, this results in a net derivative liability of $2 million as of July 27, 2019.

We conduct business globally in numerous currencies. Therefore, we are exposed to adverse movements in foreign currency exchange rates. To limit the exposure related to foreign currency changes, we enter into foreign currency contracts. We do not enter into such contracts for speculative purposes.

We hedge forecasted foreign currency transactions related to certain revenues, operating expenses and service cost of sales with currency options and forward contracts. These currency options and forward contracts, designated as cash flow hedges, generally have maturities of less than 24 months. The derivative instrument’s gain or loss is initially reported as a component of accumulated other comprehensive income (“AOCI”) and subsequently reclassified into earnings when the hedged exposure affects earnings. During the periods presented, we did not discontinue any cash flow hedges for which it was probable that a forecasted transaction would not occur.

We enter into foreign exchange forward and option contracts to reduce the short-term effects of foreign currency fluctuations on assets and liabilities such as foreign currency receivables, including long-term customer financings, investments, and payables. These derivatives are not designated as hedging instruments. Gains and losses on the contracts are included in other income (loss), net, and substantially offset foreign exchange gains and losses from the remeasurement of intercompany balances or other current assets, investments, or liabilities denominated in currencies other than the functional currency of the reporting entity.

We hedge certain net investments in our foreign operations with forward contracts to reduce the effects of foreign currency fluctuations on our net investment in those foreign subsidiaries. These derivative instruments generally have maturities of up to six months.

Interest Rate Derivatives Designated as Fair Value Hedges, Long-Term Debt We hold interest rate swaps designated as fair value hedges related to fixed-rate senior notes that are due in fiscal 2021 through 2025. Under these interest rate swaps, we receive fixed-rate interest payments and make interest payments based on LIBOR plus a fixed number of basis points. The effect of such swaps is to convert the fixed interest rates of the senior fixed-rate notes to floating interest rates based on LIBOR. The gains and losses related to changes in the fair value of the interest rate swaps are included in interest expense and substantially offset changes in the fair value of the hedged portion of the underlying debt that are attributable to the changes in market interest rates.

We may hold marketable equity securities in our portfolio that are subject to price risk. To diversify our overall portfolio, we also hold equity derivatives that are not designated as accounting hedges. The change in the fair value of each of these investment types are included in other income (loss), net.