Derivative Financial Instruments

9 Months Ended

Oct. 01, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Note 11 : Derivative Financial Instruments

Volume of Derivative Activity

Total gross notional amounts for outstanding derivatives at the end of each period were as follows: 

(In Millions)	Oct 1, 2022		Dec 25, 2021
Foreign currency contracts	$	32,561	$	38,024
Interest rate contracts	16,760		15,209
Other	2,055		2,517
Total	$	51,376	$	55,750

Fair Value of Derivative Instruments

	Oct 1, 2022				Dec 25, 2021
(In Millions)	Assets1		Liabilities2		Assets1		Liabilities2
Derivatives designated as hedging instruments:
Foreign currency contracts3	$	1	$	1,164	$	80	$	163
Interest rate contracts	—		762		774		—
Total derivatives designated as hedging instruments	1		1,926		854		163
Derivatives not designated as hedging instruments:
Foreign currency contracts3	1,703		215		475		297
Interest rate contracts	309		23		26		65
Equity contracts	—		151		80		4
Total derivatives not designated as hedging instruments	2,012		389		581		366
Total derivatives	$	2,013	$	2,315	$	1,435	$	529

1Derivative assets are recorded as other assets, current and long-term.

2Derivative liabilities are recorded as other liabilities, current and long-term.

3The majority of these instruments mature within 12 months.

Amounts Offset in the Consolidated Condensed Balance Sheets

The gross amounts of our derivative instruments and reverse repurchase agreements subject to master netting arrangements with various counterparties, and cash and non-cash collateral posted under such agreements at the end of each period were as follows:

	Oct 1, 2022
							Gross Amounts Not Offset in the Balance Sheet
(In Millions)	Gross Amounts Recognized		Gross Amounts Offset in the Balance Sheet		Net Amounts Presented in the Balance Sheet		Financial Instruments		Cash and Non-Cash Collateral Received or Pledged		Net Amount
Assets:
Derivative assets subject to master netting arrangements	$	1,965	$	—	$	1,965	$	(653)	$	(1,300)	$	12
Reverse repurchase agreements	2,150		—		2,150		—		(2,150)		—
Total assets	4,115		—		4,115		(653)		(3,450)		12
Liabilities:
Derivative liabilities subject to master netting arrangements	2,237		—		2,237		(653)		(1,350)		234
Total liabilities	$	2,237	$	—	$	2,237	$	(653)	$	(1,350)	$	234

	Dec 25, 2021
							Gross Amounts Not Offset in the Balance Sheet
(In Millions)	Gross Amounts Recognized		Gross Amounts Offset in the Balance Sheet		Net Amounts Presented in the Balance Sheet		Financial Instruments		Cash and Non-Cash Collateral Received or Pledged		Net Amount
Assets:
Derivative assets subject to master netting arrangements	$	1,427	$	—	$	1,427	$	(332)	$	(986)	$	109
Reverse repurchase agreements	1,595		—		1,595		—		(1,595)		—
Total assets	3,022		—		3,022		(332)		(2,581)		109
Liabilities:
Derivative liabilities subject to master netting arrangements	392		—		392		(332)		(60)		—
Total liabilities	$	392	$	—	$	392	$	(332)	$	(60)	$	—

We obtain and secure available collateral from counterparties against obligations, including securities lending transactions and reverse repurchase agreements, when we deem it appropriate.

Derivatives in Cash Flow Hedging Relationships

The before-tax net gains or losses attributed to cash flow hedges recognized in other comprehensive income (loss) were $678 million net losses in the third quarter of 2022 and $1.6 billion net losses in the first nine months of 2022 ($28 million net losses in the third quarter of 2021 and $313 million net losses in the first nine months of 2021). Substantially all of our cash flow hedges were foreign currency contracts for all periods presented.

During the first nine months of 2022 and 2021, the amounts excluded from effectiveness testing were insignificant.

Derivatives in Fair Value Hedging Relationships    

The effects of derivative instruments designated as fair value hedges, recognized in Interest and other, net for each period were as follows:

	Gains (Losses) Recognized in Consolidated Condensed Statements of Income on Derivatives
	Three Months Ended				Nine Months Ended
(In Millions)	Oct 1, 2022		Sep 25, 2021		Oct 1, 2022		Sep 25, 2021
Interest rate contracts	$	(589)	$	(55)	$	(1,536)	$	(532)
Hedged items	589		55		1,536		532
Total	$	—	$	—	$	—	$	—

The amounts recorded on the Consolidated Condensed Balance Sheets related to cumulative basis adjustments for fair value hedges for each period were as follows:

Line Item in the Consolidated Condensed Balance Sheets in Which the Hedged Item is Included	Carrying Amount of the Hedged Item Asset/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount Assets/(Liabilities)
(In Millions)	Oct 1, 2022		Dec 25, 2021		Oct 1, 2022		Dec 25, 2021
Long-term debt	$	(11,236)	$	(12,772)	$	761	$	(775)

The total notional amount of pay-variable and receive-fixed interest rate swaps was $12.0 billion as of October 1, 2022 and $12.0 billion as of December 25, 2021.

Derivatives Not Designated as Hedging Instruments

The effects of derivative instruments not designated as hedging instruments on the Consolidated Condensed Statements of Income for each period were as follows:

		Three Months Ended				Nine Months Ended
(In Millions)	Location of Gains (Losses) Recognized in Income on Derivatives	Oct 1, 2022		Sep 25, 2021		Oct 1, 2022		Sep 25, 2021
Foreign currency contracts	Interest and other, net	$	771	$	170	$	1,952	$	382
Interest rate contracts	Interest and other, net	164		(7)		289		14
Other	Various	(97)		84		(562)		279
Total		$	838	$	247	$	1,679	$	675