Annual report pursuant to Section 13 and 15(d)

Derivative Financial Instruments

v3.24.4
Derivative Financial Instruments
12 Months Ended
Dec. 28, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments [Text Block]
Note 16 : Derivative Financial Instruments
Volume of Derivative Activity
The total gross notional amounts for outstanding derivatives (recorded at fair value) at the end of each period were as follows:
Years Ended (In Millions)
Dec 28, 2024 Dec 30, 2023 Dec 31, 2022
Foreign currency contracts $ 25,472  $ 30,064  $ 31,603 
Interest rate contracts 17,899  18,363  16,011 
Other 2,593  2,103  2,094 
Total $ 45,964  $ 50,530  $ 49,708 
The total notional amount of outstanding pay-variable, receive-fixed interest rate swaps was $12.0 billion as of December 28, 2024 and as of December 30, 2023.
Fair Value of Derivative Instruments in the Consolidated Balance Sheets
December 28, 2024 December 30, 2023
(In Millions)
Assets1
Liabilities2
Assets1
Liabilities2
Derivatives designated as hedging instruments:
Foreign currency contracts3
$ 40  $ 405  $ 255  $ 142 
Interest rate contracts —  582  —  578 
Total derivatives designated as hedging instruments 40  987  255  720 
Derivatives not designated as hedging instruments:
Foreign currency contracts3
510  100  314  363 
Interest rate contracts 184  25  261  36 
Equity contracts 348  —  366  — 
Other4
—  755  —  — 
Total derivatives not designated as hedging instruments 1,042  880  941  399 
Total derivatives $ 1,082  $ 1,867  $ 1,196  $ 1,119 
1Derivative assets are recorded as other assets, current and long-term.
2Derivative liabilities are recorded as other liabilities, current and long-term.
3A substantial majority of these instruments mature within 12 months.
4Embedded derivative related to our Ireland SCIP arrangement.

Amounts Offset in the Consolidated Balance Sheets
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:
December 28, 2024
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 $ 948  $ —  $ 948  $ (269) $ (679) $ — 
Reverse repurchase agreements 2,654  —  2,654  —  (2,654) — 
Total assets $ 3,602  $   $ 3,602  $ (269) $ (3,333) $  
Liabilities:
Derivative liabilities subject to master netting arrangements 1,084  —  1,084  (269) (745) 70 
Total liabilities $ 1,084  $   $ 1,084  $ (269) $ (745) $ 70 
December 30, 2023
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 $ 1,047  $ —  $ 1,047  $ (617) $ (430) $ — 
Reverse repurchase agreements 2,554  —  2,554  —  (2,554) — 
Total assets $ 3,601  $   $ 3,601  $ (617) $ (2,984) $  
Liabilities:
Derivative liabilities subject to master netting arrangements 1,111  —  1,111  (617) (399) 95 
Total liabilities $ 1,111  $   $ 1,111  $ (617) $ (399) $ 95 
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 the effective portion of cash flow hedges recognized in other comprehensive income (loss) were $652 million net losses in 2024 ($3 million net gains in 2023 and $910 million net losses in 2022). Substantially all of our cash flow hedges are foreign currency contracts for all periods presented.
Amounts excluded from effectiveness testing were $205 million net losses in 2024 ($221 million net losses in 2023 and $117 million net losses in 2022).
For information on the unrealized holding gains (losses) on derivatives reclassified out of accumulated other comprehensive income (loss) into the Consolidated Statements of Operations, see "Note 15: Other Comprehensive Income (Loss)" within Notes to Consolidated Financial Statements.
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) on Derivatives Recognized in Consolidated Statements of Operations
Years Ended (In Millions) Dec 28, 2024 Dec 30, 2023 Dec 31, 2022
Interest rate contracts $ (4) $ 198  $ (1,551)
Hedged items (198) 1,551 
Total $   $   $  
The amounts recorded on the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges for each period were as follows:
Line Items in the Consolidated Balance Sheets in Which the Hedged Item Is Included Carrying Amount of the Hedged Item Assets/(Liabilities) Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount Assets/(Liabilities)
Years Ended (In Millions)
Dec 28, 2024 Dec 30, 2023 Dec 28, 2024 Dec 30, 2023
Long-term debt $ (9,201) $ (11,419) $ 546  $ 578 
Short-term debt (2,214) —  36  — 
Total $ (11,415) $ (11,419) $ 582  $ 578 
Derivatives Not Designated as Hedging Instruments
The effects of derivative instruments not designated as hedging instruments on the Consolidated Statements of Operations for each period were as follows:
Years Ended (In Millions) Location of Gains (Losses)
Recognized in Income on Derivatives
Dec 28, 2024 Dec 30, 2023 Dec 31, 2022
Foreign currency contracts Interest and other, net $ 651  $ 106  $ 1,492 
Interest rate contracts Interest and other, net 182  50  309 
Other Various (411) 325  (502)
Total $ 422  $ 481  $ 1,299 
Our Ireland SCIP agreement with Apollo contains construction-related liquidated damage provisions that meet the definition of an embedded derivative that is not clearly and closely related to the relevant host contract, thus requiring bifurcation and separate accounting as a derivative liability. As of December 28, 2024, we assessed the probability of paying damages to Apollo and recognized a loss of $755 million in 2024 within Interest and other, net, and a derivative liability within Other long-term liabilities. We will periodically reassess the probability of paying such liquidated damages and recognize changes in the fair value of the underlying liability through Interest and other, net.