Financial Instruments (Tables)

3 Months Ended

Dec. 31, 2016

Investments, Debt and Equity Securities [Abstract]

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 31, 2016 and September 24, 2016 (in millions):



	December 31, 2016
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	9,359	$	—	$	—		$	9,359	$	9,359	$	—	$	—

Level 1 ⁽¹⁾:
Money market funds	4,640		—		—			4,640		4,640		—		—
Mutual funds	1,004		—		(137		)	867		—		867		—
Subtotal	5,644		—		(137		)	5,507		4,640		867		—

Level 2 ⁽²⁾:
U.S. Treasury securities	48,431		47		(333		)	48,145		1,022		13,074		34,049
U.S. agency securities	4,284		4		(10		)	4,278		404		1,999		1,875
Non-U.S. government securities	7,574		79		(136		)	7,517		—		408		7,109
Certificates of deposit and time deposits	5,893		—		—			5,893		334		4,089		1,470
Commercial paper	3,750		—		—			3,750		536		3,214		—
Corporate securities	140,697		469		(737		)	140,429		76		20,283		120,070
Municipal securities	955		—		(9		)	946		—		111		835
Mortgage- and asset-backed securities	20,486		23		(243		)	20,266		—		36		20,230
Subtotal	232,070		622		(1,468		)	231,224		2,372		43,214		185,638

Total	$	247,073	$	622	$	(1,605	)	$	246,090	$	16,371	$	44,081	$	185,638



	September 24, 2016
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	8,601	$	—	$	—		$	8,601	$	8,601	$	—	$	—

Level 1 ⁽¹⁾:
Money market funds	3,666		—		—			3,666		3,666		—		—
Mutual funds	1,407		—		(146		)	1,261		—		1,261		—
Subtotal	5,073		—		(146		)	4,927		3,666		1,261		—

Level 2 ⁽²⁾:
U.S. Treasury securities	41,697		319		(4		)	42,012		1,527		13,492		26,993
U.S. agency securities	7,543		16		—			7,559		2,762		2,441		2,356
Non-U.S. government securities	7,609		259		(27		)	7,841		110		818		6,913
Certificates of deposit and time deposits	6,598		—		—			6,598		1,108		3,897		1,593
Commercial paper	7,433		—		—			7,433		2,468		4,965		—
Corporate securities	131,166		1,409		(206		)	132,369		242		19,599		112,528
Municipal securities	956		5		—			961		—		167		794
Mortgage- and asset-backed securities	19,134		178		(28		)	19,284		—		31		19,253
Subtotal	222,136		2,186		(265		)	224,057		8,217		45,410		170,430

Total	$	235,810	$	2,186	$	(411	)	$	237,585	$	20,484	$	46,671	$	170,430


(1)	Level 1 fair value estimates are based on quoted prices in active markets for identical assets or liabilities.


(2)	Level 2 fair value estimates are 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 31, 2016
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	9,359	$	—	$	—		$	9,359	$	9,359	$	—	$	—

Level 1 ⁽¹⁾:
Money market funds	4,640		—		—			4,640		4,640		—		—
Mutual funds	1,004		—		(137		)	867		—		867		—
Subtotal	5,644		—		(137		)	5,507		4,640		867		—

Level 2 ⁽²⁾:
U.S. Treasury securities	48,431		47		(333		)	48,145		1,022		13,074		34,049
U.S. agency securities	4,284		4		(10		)	4,278		404		1,999		1,875
Non-U.S. government securities	7,574		79		(136		)	7,517		—		408		7,109
Certificates of deposit and time deposits	5,893		—		—			5,893		334		4,089		1,470
Commercial paper	3,750		—		—			3,750		536		3,214		—
Corporate securities	140,697		469		(737		)	140,429		76		20,283		120,070
Municipal securities	955		—		(9		)	946		—		111		835
Mortgage- and asset-backed securities	20,486		23		(243		)	20,266		—		36		20,230
Subtotal	232,070		622		(1,468		)	231,224		2,372		43,214		185,638

Total	$	247,073	$	622	$	(1,605	)	$	246,090	$	16,371	$	44,081	$	185,638



	September 24, 2016
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	8,601	$	—	$	—		$	8,601	$	8,601	$	—	$	—

Level 1 ⁽¹⁾:
Money market funds	3,666		—		—			3,666		3,666		—		—
Mutual funds	1,407		—		(146		)	1,261		—		1,261		—
Subtotal	5,073		—		(146		)	4,927		3,666		1,261		—

Level 2 ⁽²⁾:
U.S. Treasury securities	41,697		319		(4		)	42,012		1,527		13,492		26,993
U.S. agency securities	7,543		16		—			7,559		2,762		2,441		2,356
Non-U.S. government securities	7,609		259		(27		)	7,841		110		818		6,913
Certificates of deposit and time deposits	6,598		—		—			6,598		1,108		3,897		1,593
Commercial paper	7,433		—		—			7,433		2,468		4,965		—
Corporate securities	131,166		1,409		(206		)	132,369		242		19,599		112,528
Municipal securities	956		5		—			961		—		167		794
Mortgage- and asset-backed securities	19,134		178		(28		)	19,284		—		31		19,253
Subtotal	222,136		2,186		(265		)	224,057		8,217		45,410		170,430

Total	$	235,810	$	2,186	$	(411	)	$	237,585	$	20,484	$	46,671	$	170,430


(1)	Level 1 fair value estimates are based on quoted prices in active markets for identical assets or liabilities.


(2)	Level 2 fair value estimates are 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.

Derivative Instruments at Gross Fair Value

The following tables show the Company’s derivative instruments at gross fair value as of December 31, 2016 and September 24, 2016 (in millions):



	December 31, 2016
	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	$	1,453	$	1,104	$	2,557
Interest rate contracts	$	186	$	—	$	186

Derivative liabilities ⁽²⁾:
Foreign exchange contracts	$	977	$	536	$	1,513
Interest rate contracts	$	331	$	—	$	331



	September 24, 2016
	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	$	518	$	153	$	671
Interest rate contracts	$	728	$	—	$	728

Derivative liabilities ⁽²⁾:
Foreign exchange contracts	$	935	$	134	$	1,069
Interest rate contracts	$	7	$	—	$	7


(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 in OCI and the Condensed Consolidated Statements of Operations for the three months ended December 31, 2016 and December 26, 2015 (in millions):



	Three Months Ended
	December 31, 2016			December 26, 2015
Gains/(Losses) recognized in OCI – effective portion:
Cash flow hedges:
Foreign exchange contracts	$	1,727		$	326
Interest rate contracts	7			8
Total	$	1,734		$	334

Net investment hedges:
Foreign exchange contracts	$	—		$	—
Foreign currency debt	122			10
Total	$	122		$	10

Gains/(Losses) reclassified from AOCI into net income – effective portion:
Cash flow hedges:
Foreign exchange contracts	$	(511	)	$	515
Interest rate contracts	(1		)	(4		)
Total	$	(512	)	$	511

Gains/(Losses) on derivative instruments:
Fair value hedges:
Interest rate contracts	$	(872	)	$	(111	)

Gains/(Losses) related to hedged items:
Fair value hedges:
Interest rate contracts	$	872		$	111

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 31, 2016 and September 24, 2016 (in millions):



	December 31, 2016				September 24, 2016
	Notional Amount		Credit Risk Amount		Notional Amount		Credit Risk Amount
Instruments designated as accounting hedges:
Foreign exchange contracts	$	40,526	$	1,453	$	44,678	$	518
Interest rate contracts	$	24,500	$	186	$	24,500	$	728

Instruments not designated as accounting hedges:
Foreign exchange contracts	$	57,144	$	1,104	$	54,305	$	153

- 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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