v3.25.1
Derivative Instruments
 6 Months Ended
Mar. 29, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments
The Company manages its exposure to various risks relating to its ongoing business operations according to a risk management policy. The primary risks managed with derivative instruments are interest rate risk and foreign exchange risk.
The Company’s derivative positions measured at fair value (see Note 14) are summarized in the following tables:
 As of March 29, 2025
 Current
Assets		Investments/
Other Assets		Other Current
Liabilities		Other Long-
Term
Liabilities
Derivatives designated as hedges
Foreign exchange$350 $230 $(137)$(72)
Interest rate— — (953)— 
Other—    —    (3)   —    
Derivatives not designated as hedges
Foreign exchange95 1 (129)(92)
Other— 82 — — 
Gross fair value of derivatives445 313 (1,222)(164)
Counterparty netting(391)(204)447 148 
Cash collateral (received) paid(8)— 548 — 
Net derivative positions $46 $109 $(227)$(16)
 As of September 28, 2024
 Current
Assets		Investments/
Other Assets		Other Current
Liabilities		Other Long-
Term
Liabilities
Derivatives designated as hedges
Foreign exchange$273 $184 $(164)$(149)
Interest rate— — (983)— 
Other—    —    (7)   (1)   
Derivatives not designated as hedges
Foreign exchange110 2 (273)(2)
Other18 94 — — 
Gross fair value of derivatives401 280 (1,427)(152)
Counterparty netting(330)(182)396 116 
Cash collateral (received) paid(27)— 679 — 
Net derivative positions $44 $98 $(352)$(36)
Interest Rate Risk Management
The Company is exposed to the impact of interest rate changes primarily through its borrowing activities. The Company’s objective is to mitigate the impact of interest rate changes on earnings and cash flows and on the market value of its borrowings. In accordance with its policy, the Company targets its fixed-rate debt as a percentage of its net debt between a minimum and maximum percentage. The Company primarily uses pay-floating and pay-fixed interest rate swaps to facilitate its interest rate risk management activities.
The Company designates pay-floating interest rate swaps as fair value hedges of fixed-rate borrowings effectively converting fixed-rate borrowings to variable-rate borrowings. The total notional amount of the Company’s pay-floating interest rate swaps at both March 29, 2025 and September 28, 2024 was $10.5 billion and $12.0 billion, respectively.
The following table summarizes fair value hedge adjustments to hedged borrowings:
Carrying Amount of Hedged BorrowingsFair Value Adjustments Included
in Hedged Borrowings
March 29,
2025		September 28,
2024		March 29,
2025		September 28,
2024
Borrowings:
Current$1,943    $1,414    $(55)   $(10)   
Long-term8,128 10,128 (867)(913)
$10,071 $11,542 $(922)$(923)
The following amounts are included in “Interest expense, net” in the Condensed Consolidated Statements of Operations:
 Quarter EndedSix Months Ended
 March 29,
2025		March 30,
2024		March 29,
2025		March 30,
2024
Gain (loss) on:
Pay-floating swaps$187 $(89)$(8)$343 
Borrowings hedged with pay-floating swaps(187)  89   8   (343)  
Expense associated with interest accruals on pay-floating swaps
(98)(153)(209)(307)
The Company may designate pay-fixed interest rate swaps as cash flow hedges of interest payments on floating-rate borrowings. Pay-fixed interest rate swaps effectively convert floating-rate borrowings to fixed-rate borrowings. The unrealized gains or losses from these cash flow hedges are deferred in AOCI and recognized in interest expense as the interest payments occur. The Company did not have pay-fixed interest rate swaps that were designated as cash flow hedges of interest payments at March 29, 2025 or at September 28, 2024, and gains and losses related to pay-fixed interest rate swaps recognized in earnings were not material for the quarters and six-month periods ended March 29, 2025 and March 30, 2024.
Foreign Exchange Risk Management
The Company transacts business globally and is subject to risks associated with foreign currency exchange rates. The Company’s objective is to reduce earnings and cash flow fluctuations associated with changes in foreign currency exchange rates, enabling management to focus on core business operations.
The Company enters into option and forward contracts to protect the value of its existing foreign currency assets, liabilities, firm commitments and forecasted but not firmly committed foreign currency transactions. In accordance with policy, the Company hedges its forecasted foreign currency transactions for periods generally not to exceed four years within an established minimum and maximum range of annual exposure. The gains and losses on these contracts offset changes in the U.S. dollar equivalent value of the related forecasted transaction, asset, liability or firm commitment. The principal currencies hedged are the euro, British pound, Japanese yen, Chinese yuan and Canadian dollar. Cross-currency swaps are used to effectively convert foreign currency denominated borrowings into U.S. dollar denominated borrowings.
The Company designates foreign exchange forward and option contracts as cash flow hedges of firmly committed and forecasted foreign currency transactions. As of March 29, 2025 and September 28, 2024, the notional amounts of the Company’s net foreign exchange cash flow hedges were $8.2 billion and $9.9 billion, respectively. Mark-to-market gains and losses on these contracts are deferred in AOCI and are recognized in earnings when the hedged transactions occur, offsetting changes in the value of the foreign currency transactions. Net deferred gains recorded in AOCI for contracts that will mature in
the next twelve months total $240 million. The following table summarizes the effect of foreign exchange cash flow hedges on AOCI:
Quarter EndedSix Months Ended
March 29,
2025		March 30,
2024		March 29,
2025		March 30,
2024
Gain (loss) recognized in Other Comprehensive Income$(210)$237 $352 $(27)
Gain reclassified from AOCI into the Statements of Operations(1)
121    93    210    234    
(1)Primarily recorded in revenue.
The Company may designate cross currency swaps as fair value hedges of foreign currency denominated borrowings. The impact from the change in foreign currency on both the cross currency swap and borrowing is recorded to “Interest expense, net.” The impact from interest rate changes is recorded in AOCI and is amortized over the life of the cross currency swap. As of March 29, 2025 and September 28, 2024, the total notional amount of the Company’s designated cross currency swaps was Canadian $1.3 billion ($0.9 billion) and Canadian $1.3 billion ($1.0 billion), respectively. The related gains or losses recognized in earnings for the quarters and six-month periods ended March 29, 2025 and March 30, 2024 were not material.
Foreign exchange risk management contracts with respect to foreign currency denominated assets and liabilities are not designated as hedges and do not qualify for hedge accounting. The net notional amount of these foreign exchange contracts at March 29, 2025 and September 28, 2024 were $3.2 billion and $3.4 billion, respectively. The related gains or losses recognized in costs and expenses on foreign exchange contracts that mitigated our exposure with respect to foreign currency denominated assets and liabilities for the quarters and six-month periods ended March 29, 2025 and March 30, 2024 were not material.
Commodity Price Risk Management
The Company is subject to the volatility of commodities prices and the Company designates certain commodity forward contracts as cash flow hedges of forecasted commodity purchases. Mark-to-market gains and losses on these contracts are deferred in AOCI and are recognized in earnings when the hedged transactions occur, offsetting changes in the value of commodity purchases. The notional amount of these commodities contracts at March 29, 2025 and September 28, 2024 and related gains or losses recognized in earnings for the quarters and six-month periods ended March 29, 2025 and March 30, 2024 were not material.
Risk Management – Other Derivatives Not Designated as Hedges
The Company enters into certain other risk management contracts that are not designated as hedges and do not qualify for hedge accounting. These contracts, which include certain total return swap contracts, are intended to offset economic exposures of the Company and are carried at market value with any changes in value recorded in earnings. The notional amounts of these contracts at March 29, 2025 and September 28, 2024 were $0.6 billion and $0.5 billion, respectively. The related gains or losses recognized in earnings for the quarters and six-month periods ended March 29, 2025 and March 30, 2024 were not material.
Contingent Features and Cash Collateral
The Company has master netting arrangements by counterparty with respect to certain derivative financial instrument contracts. The Company may be required to post collateral in the event that a net liability position with a counterparty exceeds limits defined by contract and that vary with the Company’s credit rating. In addition, these contracts may require a counterparty to post collateral to the Company in the event that a net receivable position with a counterparty exceeds limits defined by contract and that vary with the counterparty’s credit rating. If the Company’s or the counterparty’s credit ratings were to fall below investment grade, such counterparties or the Company would also have the right to terminate our derivative contracts, which could lead to a net payment to or from the Company for the aggregate net value by counterparty of our derivative contracts. The aggregate fair values of derivative instruments with credit-risk-related contingent features in a net liability position by counterparty were $0.8 billion and $1.1 billion at March 29, 2025 and September 28, 2024.