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 March 26, 2016 and September 26, 2015 (in millions):


	March 26, 2016
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	10,199	$	0	$	0		$	10,199	$	10,199	$	0	$	0

Level 1 ⁽¹⁾:
Money market funds		2,798		0		0			2,798		2,798		0		0
Mutual funds		1,772		0		(203	)		1,569		0		1,569		0

Subtotal		4,570		0		(203	)		4,367		2,798		1,569		0


Level 2 ⁽²⁾:
U.S. Treasury securities		47,883		207		(24	)		48,066		3,753		10,614		33,699
U.S. agency securities		6,641		12		(2	)		6,651		465		2,703		3,483
Non-U.S. government securities		6,873		91		(121	)		6,843		0		696		6,147
Certificates of deposit and time deposits		4,169		0		0			4,169		1,529		660		1,980
Commercial paper		4,500		0		0			4,500		2,681		1,819		0
Corporate securities		129,394		543		(1,074	)		128,863		89		15,553		113,221
Municipal securities		952		6		0			958		0		72		886
Mortgage- and asset-backed securities		18,268		86		(42	)		18,312		0		83		18,229

Subtotal		218,680		945		(1,263	)		218,362		8,517		32,200		177,645


Total	$	233,449	$	945	$	(1,466	)	$	232,928	$	21,514	$	33,769	$	177,645


	September 26, 2015
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	11,389	$	0	$	0		$	11,389	$	11,389	$	0	$	0

Level 1 ⁽¹⁾:
Money market funds		1,798		0		0			1,798		1,798		0		0
Mutual funds		1,772		0		(144	)		1,628		0		1,628		0

Subtotal		3,570		0		(144	)		3,426		1,798		1,628		0


Level 2 ⁽²⁾:
U.S. Treasury securities		34,902		181		(1	)		35,082		0		3,498		31,584
U.S. agency securities		5,864		14		0			5,878		841		767		4,270
Non-U.S. government securities		6,356		45		(167	)		6,234		43		135		6,056
Certificates of deposit and time deposits		4,347		0		0			4,347		2,065		1,405		877
Commercial paper		6,016		0		0			6,016		4,981		1,035		0
Corporate securities		116,908		242		(985	)		116,165		3		11,948		104,214
Municipal securities		947		5		0			952		0		48		904
Mortgage- and asset-backed securities		16,121		87		(31	)		16,177		0		17		16,160

Subtotal		191,461		574		(1,184	)		190,851		7,933		18,853		164,065


Total	$	206,420	$	574	$	(1,328	)	$	205,666	$	21,120	$	20,481	$	164,065

⁽¹⁾

The fair value of Level 1 securities is estimated based on quoted prices in active markets for identical assets or liabilities.

⁽²⁾

The fair value of Level 2 securities is estimated 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.


	March 26, 2016
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	10,199	$	0	$	0		$	10,199	$	10,199	$	0	$	0

Level 1 ⁽¹⁾:
Money market funds		2,798		0		0			2,798		2,798		0		0
Mutual funds		1,772		0		(203	)		1,569		0		1,569		0

Subtotal		4,570		0		(203	)		4,367		2,798		1,569		0


Level 2 ⁽²⁾:
U.S. Treasury securities		47,883		207		(24	)		48,066		3,753		10,614		33,699
U.S. agency securities		6,641		12		(2	)		6,651		465		2,703		3,483
Non-U.S. government securities		6,873		91		(121	)		6,843		0		696		6,147
Certificates of deposit and time deposits		4,169		0		0			4,169		1,529		660		1,980
Commercial paper		4,500		0		0			4,500		2,681		1,819		0
Corporate securities		129,394		543		(1,074	)		128,863		89		15,553		113,221
Municipal securities		952		6		0			958		0		72		886
Mortgage- and asset-backed securities		18,268		86		(42	)		18,312		0		83		18,229

Subtotal		218,680		945		(1,263	)		218,362		8,517		32,200		177,645


Total	$	233,449	$	945	$	(1,466	)	$	232,928	$	21,514	$	33,769	$	177,645


	September 26, 2015
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash Equivalents		Short-Term Marketable Securities		Long-Term Marketable Securities
Cash	$	11,389	$	0	$	0		$	11,389	$	11,389	$	0	$	0

Level 1 ⁽¹⁾:
Money market funds		1,798		0		0			1,798		1,798		0		0
Mutual funds		1,772		0		(144	)		1,628		0		1,628		0

Subtotal		3,570		0		(144	)		3,426		1,798		1,628		0


Level 2 ⁽²⁾:
U.S. Treasury securities		34,902		181		(1	)		35,082		0		3,498		31,584
U.S. agency securities		5,864		14		0			5,878		841		767		4,270
Non-U.S. government securities		6,356		45		(167	)		6,234		43		135		6,056
Certificates of deposit and time deposits		4,347		0		0			4,347		2,065		1,405		877
Commercial paper		6,016		0		0			6,016		4,981		1,035		0
Corporate securities		116,908		242		(985	)		116,165		3		11,948		104,214
Municipal securities		947		5		0			952		0		48		904
Mortgage- and asset-backed securities		16,121		87		(31	)		16,177		0		17		16,160

Subtotal		191,461		574		(1,184	)		190,851		7,933		18,853		164,065


Total	$	206,420	$	574	$	(1,328	)	$	205,666	$	21,120	$	20,481	$	164,065

⁽¹⁾

The fair value of Level 1 securities is estimated based on quoted prices in active markets for identical assets or liabilities.

⁽²⁾

The following tables show the Company’s derivative instruments at gross fair value as of March 26, 2016 and September 26, 2015 (in millions):


	March 26, 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	$	564	$	69	$	633
Interest rate contracts	$	557	$	0	$	557

Derivative liabilities ⁽²⁾:
Foreign exchange contracts	$	1,033	$	243	$	1,276
Interest rate contracts	$	36	$	0	$	36


	September 26, 2015
	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	$	1,442	$	109	$	1,551
Interest rate contracts	$	394	$	0	$	394

Derivative liabilities ⁽²⁾:
Foreign exchange contracts	$	905	$	94	$	999
Interest rate contracts	$	13	$	0	$	13

⁽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.

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 on OCI and the Condensed Consolidated Statements of Operations for the three- and six-month periods ended March 26, 2016 and March 28, 2015 (in millions):


	Three Months Ended						Six Months Ended
	March 26, 2016			March 28, 2015			March 26, 2016			March 28, 2015
Gains/(Losses) recognized in OCI – effective portion:
Cash flow hedges:
Foreign exchange contracts	$	(138	)	$	1,249		$	188		$	3,750
Interest rate contracts		(50	)		(87	)		(42	)		(91	)

Total	$	(188	)	$	1,162		$	146		$	3,659


Net investment hedges:
Foreign exchange contracts	$	0		$	(6	)	$	0		$	112
Foreign currency debt		(87	)		0			(77	)		0

Total	$	(87	)	$	(6	)	$	(77	)	$	112


Gains/(Losses) reclassified from AOCI into net income – effective portion:
Cash flow hedges:
Foreign exchange contracts	$	668		$	818		$	1,183		$	1,485
Interest rate contracts		(3	)		(5	)		(7	)		(9	)

Total	$	665		$	813		$	1,176		$	1,476


Gains/(Losses) on derivative instruments:
Fair value hedges:
Interest rate contracts	$	250		$	122		$	139		$	239


Gains/(Losses) related to hedged items:
Fair value hedges:
Interest rate contracts	$	(250	)	$	(122	)	$	(139	)	$	(239	)

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 March 26, 2016 and September 26, 2015 (in millions):


	March 26, 2016				September 26, 2015
	Notional Amount		Credit Risk Amount		Notional Amount		Credit Risk Amount
Instruments designated as accounting hedges:
Foreign exchange contracts	$	41,996	$	564	$	70,054	$	1,385
Interest rate contracts	$	23,750	$	557	$	18,750	$	394

Instruments not designated as accounting hedges:
Foreign exchange contracts	$	30,573	$	69	$	49,190	$	109

- 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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