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Financial Instruments (Tables)
 8 Months Ended
Sep. 03, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Fair Values of Financial Assets and Liabilities
Fair Value Measurements
The fair values of our financial assets and liabilities as of September 3, 2016 and December 26, 2015 are categorized as follows:
 
9/3/2016
 
12/26/2015
 
Assets (a)
 
Liabilities (a)
 
Assets (a)
 
Liabilities (a)
Available-for-sale securities:


 


 


 


Equity securities (b)
$
100

 
$
—

 
$
127

 
$
—

Debt securities (c)
9,976

 
—

 
7,231

 
—

 
$
10,076

 
$
—

 
$
7,358

 
$
—

Short-term investments (d)
$
194

 
$
—

 
$
193

 
$
—

Prepaid forward contracts (e)
$
29

 
$
—

 
$
27

 
$
—

Deferred compensation (f)
$
—

 
$
470

 
$
—

 
$
474

Derivatives designated as fair value hedging instruments:
 
 
 
 
 
 
 
Interest rate (g)
$
159

 
$
5

 
$
129

 
$
12

Derivatives designated as cash flow hedging instruments:
 
 
 
 
 
 
 
Foreign exchange (h)
$
35

 
$
15

 
$
76

 
$
6

Interest rate (g)
—

 
344

 
—

 
311

Commodity (i)
1

 
5

 
—

 
7

 
$
36

 
$
364

 
$
76

 
$
324

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Foreign exchange (h)
$
4

 
$
41

 
$
8

 
$
10

Interest rate (g)
38

 
47

 
44

 
56

Commodity (i)
30

 
56

 
12

 
141

 
$
72

 
$
144

 
$
64

 
$
207

Total derivatives at fair value (j)
$
267

 
$
513

 
$
269

 
$
543

Total
$
10,566

 
$
983

 
$
7,847

 
$
1,017

(a)
Unless otherwise noted, financial assets are classified on our Condensed Consolidated Balance Sheet within prepaid expenses and other current assets and other assets. Financial liabilities are classified on our Condensed Consolidated Balance Sheet within accounts payable and other current liabilities and other liabilities. Unless specifically indicated, all financial assets and liabilities are categorized as Level 2 assets or liabilities.
(b)
Based on the price of common stock. Categorized as a Level 1 asset. These equity securities are classified as investments in noncontrolled affiliates.
(c)
Based on quoted broker prices or other significant inputs derived from or corroborated by observable market data. As of September 3, 2016, $5.7 billion and $4.3 billion of debt securities were classified as cash equivalents and short-term investments, respectively. As of December 26, 2015, $4.5 billion and $2.7 billion of debt securities were classified as cash equivalents and short-term investments, respectively. All of our available-for-sale debt securities have maturities of one year or less.
(d)
Based on the price of index funds. Categorized as a Level 1 asset. These investments are classified as short-term investments and are used to manage a portion of market risk arising from our deferred compensation liability.
(e)
Based primarily on the price of our common stock.
(f)
Based on the fair value of investments corresponding to employees’ investment elections.
(g)
Based on LIBOR forward rates. As of September 3, 2016 and December 26, 2015, amounts related to non-designated instruments are presented on a net basis on our Condensed Consolidated Balance Sheet.
(h)
Based on recently reported market transactions of spot and forward rates.
(i)
Based on recently reported market transactions, primarily swap arrangements.
(j)
Unless otherwise noted, derivative assets and liabilities are presented on a gross basis on our Condensed Consolidated Balance Sheet. Amounts subject to enforceable master netting arrangements or similar agreements which are not offset on the Condensed Consolidated Balance Sheet as of September 3, 2016 and December 26, 2015 were not material. Collateral received against any of our asset positions was not material.
The carrying amounts of our cash and cash equivalents and short-term investments approximate fair value due to their short-term maturity. The fair value of our debt obligations as of September 3, 2016 and December 26, 2015 was $39 billion and $35 billion, respectively, based upon prices of similar instruments in the marketplace, which are considered Level 2 inputs.
Effective Portion Of Pre-Tax (Gains)/Losses On Derivative Instruments
osses/(gains) on our hedging instruments are categorized as follows:
 
12 Weeks Ended
 
Fair Value/Non-
designated Hedges
 
Cash Flow and Net Investment Hedges
 
Losses/(Gains)
Recognized in
Income Statement (a)
 
Losses/(Gains)
Recognized in
Accumulated Other
Comprehensive Loss
 
Losses/(Gains)
Reclassified from
Accumulated Other
Comprehensive Loss
into Income
Statement (b)
 
9/3/2016

 
9/5/2015

 
9/3/2016

 
9/5/2015

 
9/3/2016

 
9/5/2015

Foreign exchange
$
22

 
$
(28
)
 
$
(31
)
 
$
(52
)
 
$
(4
)
 
$
(17
)
Interest rate
39

 
(37
)
 
36

 
35

 
73

 
21

Commodity
59

 
87

 
9

 
4

 
2

 
2

Net investment
—

 
—

 
8

 
—

 
—

 
—

Total
$
120

 
$
22

 
$
22

 
$
(13
)
 
$
71

 
$
6

 
36 Weeks Ended
 
Fair Value/Non-
designated Hedges

Cash Flow and Net Investment Hedges
 
Losses/(Gains)
Recognized in
Income Statement (a)

Losses/(Gains)
Recognized in
Accumulated Other
Comprehensive Loss

Losses/(Gains)
Reclassified from
Accumulated Other
Comprehensive Loss
into Income
Statement (b)

9/3/2016


9/5/2015


9/3/2016


9/5/2015


9/3/2016


9/5/2015

Foreign exchange
$
60

 
$
(12
)
 
$
9

 
$
(78
)
 
$
(37
)
 
$
(61
)
Interest rate
(40
)
 
(30
)
 
33

 
164

 
71

 
133

Commodity
4

 
154

 
4

 
8

 
8

 
16

Net investment
—

 
—

 
8

 
—

 
—

 
—

Total
$
24

 
$
112

 
$
54

 
$
94

 
$
42

 
$
88


(a)
Foreign exchange derivative losses/gains are primarily included in selling, general and administrative expenses. Interest rate derivative losses/gains are primarily from fair value hedges and are included in interest expense. These losses/gains are substantially offset by decreases/increases in the value of the underlying debt, which are also included in interest expense. Commodity derivative losses/gains are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity.
(b)
Foreign exchange derivative losses/gains are primarily included in cost of sales. Interest rate derivative losses/gains are included in interest expense. Commodity derivative losses/gains are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity.
Based on current market conditions, we expect to reclassify net losses of $10 million related to our cash flow hedges from accumulated other comprehensive loss into net income during the next 12 months.