Financial Instruments (Tables)

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 September 27, 2014 and September 28, 2013 (in millions):


	2014
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	10,232	$	0	$	0		$	10,232	$	10,232	$	0	$	0

Level 1:
Money market funds		1,546		0		0			1,546		1,546		0		0
Mutual funds		2,531		1		(132	)		2,400		0		2,400		0

Subtotal		4,077		1		(132	)		3,946		1,546		2,400		0


Level 2:
U.S. Treasury securities		23,140		15		(9	)		23,146		12		607		22,527
U.S. agency securities		7,373		3		(11	)		7,365		652		157		6,556
Non-U.S. government securities		6,925		69		(69	)		6,925		0		204		6,721
Certificates of deposit and time deposits		3,832		0		0			3,832		1,230		1,233		1,369
Commercial paper		475		0		0			475		166		309		0
Corporate securities		85,431		296		(241	)		85,486		6		6,298		79,182
Municipal securities		940		8		0			948		0		0		948
Mortgage- and asset-backed securities		12,907		26		(49	)		12,884		0		25		12,859

Subtotal		141,023		417		(379	)		141,061		2,066		8,833		130,162

Total	$	155,332	$	418	$	(511	)	$	155,239	$	13,844	$	11,233	$	130,162


	2013
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	8,705	$	0	$	0		$	8,705	$	8,705	$	0	$	0

Level 1:
Money market funds		1,793		0		0			1,793		1,793		0		0
Mutual funds		3,999		0		(197	)		3,802		0		3,802		0

Subtotal		5,792		0		(197	)		5,595		1,793		3,802		0


Level 2:
U.S. Treasury securities		27,642		24		(47	)		27,619		431		7,554		19,634
U.S. agency securities		16,878		12		(52	)		16,838		177		3,412		13,249
Non-U.S. government securities		5,545		35		(137	)		5,443		50		313		5,080
Certificates of deposit and time deposits		2,344		0		0			2,344		1,264		844		236
Commercial paper		2,998		0		0			2,998		1,835		1,163		0
Corporate securities		54,586		275		(252	)		54,609		0		8,077		46,532
Municipal securities		6,257		45		(22	)		6,280		4		1,114		5,162
Mortgage- and asset-backed securities		16,396		23		(89	)		16,330		0		8		16,322

Subtotal		132,646		414		(599	)		132,461		3,761		22,485		106,215

Total	$	147,143	$	414	$	(796	)	$	146,761	$	14,259	$	26,287	$	106,215


	2014
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	10,232	$	0	$	0		$	10,232	$	10,232	$	0	$	0

Level 1:
Money market funds		1,546		0		0			1,546		1,546		0		0
Mutual funds		2,531		1		(132	)		2,400		0		2,400		0

Subtotal		4,077		1		(132	)		3,946		1,546		2,400		0


Level 2:
U.S. Treasury securities		23,140		15		(9	)		23,146		12		607		22,527
U.S. agency securities		7,373		3		(11	)		7,365		652		157		6,556
Non-U.S. government securities		6,925		69		(69	)		6,925		0		204		6,721
Certificates of deposit and time deposits		3,832		0		0			3,832		1,230		1,233		1,369
Commercial paper		475		0		0			475		166		309		0
Corporate securities		85,431		296		(241	)		85,486		6		6,298		79,182
Municipal securities		940		8		0			948		0		0		948
Mortgage- and asset-backed securities		12,907		26		(49	)		12,884		0		25		12,859

Subtotal		141,023		417		(379	)		141,061		2,066		8,833		130,162

Total	$	155,332	$	418	$	(511	)	$	155,239	$	13,844	$	11,233	$	130,162


	2013
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	8,705	$	0	$	0		$	8,705	$	8,705	$	0	$	0

Level 1:
Money market funds		1,793		0		0			1,793		1,793		0		0
Mutual funds		3,999		0		(197	)		3,802		0		3,802		0

Subtotal		5,792		0		(197	)		5,595		1,793		3,802		0


Level 2:
U.S. Treasury securities		27,642		24		(47	)		27,619		431		7,554		19,634
U.S. agency securities		16,878		12		(52	)		16,838		177		3,412		13,249
Non-U.S. government securities		5,545		35		(137	)		5,443		50		313		5,080
Certificates of deposit and time deposits		2,344		0		0			2,344		1,264		844		236
Commercial paper		2,998		0		0			2,998		1,835		1,163		0
Corporate securities		54,586		275		(252	)		54,609		0		8,077		46,532
Municipal securities		6,257		45		(22	)		6,280		4		1,114		5,162
Mortgage- and asset-backed securities		16,396		23		(89	)		16,330		0		8		16,322

Subtotal		132,646		414		(599	)		132,461		3,761		22,485		106,215

Total	$	147,143	$	414	$	(796	)	$	146,761	$	14,259	$	26,287	$	106,215

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 September 27, 2014 and September 28, 2013 (in millions):


	2014				2013
	Notional Amount		Credit Risk Amounts		Notional Amount		Credit Risk Amounts
Instruments designated as accounting hedges:
Foreign exchange contracts	$	42,945	$	1,333	$	35,013	$	159
Interest rate contracts	$	12,000	$	89	$	3,000	$	44
Instruments not designated as accounting hedges:
Foreign exchange contracts	$	38,510	$	222	$	16,131	$	25

The following tables show the Company’s derivative instruments at gross fair value as reflected in the Consolidated Balance Sheets as of September 27, 2014 and September 28, 2013 (in millions):


	2014
	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	$	1,332	$	222	$	1,554
Interest rate contracts	$	81	$	0	$	81
Derivative liabilities ⁽²⁾:
Foreign exchange contracts	$	41	$	40	$	81


	2013
	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	$	145	$	25	$	170
Interest rate contracts	$	44	$	0	$	44
Derivative liabilities ⁽²⁾:
Foreign exchange contracts	$	389	$	46	$	435

⁽¹⁾

The fair value of derivative assets is measured using Level 2 fair value inputs and is recorded as other current assets in the 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 Consolidated Balance Sheets.

The following tables show the pre-tax effect of the Company’s derivative instruments designated as cash flow, net investment and fair value hedges on OCI and the Consolidated Statements of Operations for 2014, 2013 and 2012 (in millions):


	Gains/(Losses) Recognized in OCI-Effective Portion								Gains/(Losses) Reclassified from AOCI into Net Income-Effective Portion
	2014			2013		2012			2014			2013			2012
Cash flow hedges:
Foreign exchange contracts	$	1,750		$	891	$	(175	)	$	(154	)	$	676		$	607
Interest rate contracts		(15	)		12		0			(16	)		(6	)		0

Total	$	1,735		$	903	$	(175	)	$	(170	)	$	670		$	607

Net investment hedges:
Foreign exchange contracts	$	53		$	143	$	(5	)	$	0		$	0		$	0


	Gains/(Losses) On Derivative Instruments								Gains/(Losses) Related to Hedged Items
	2014			2013		2012			2014			2013			2012
Fair value hedges:
Interest rate contracts	$	39		$	0	$	0		$	(39	)	$	0		$	0

- 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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