Quarterly report pursuant to Section 13 or 15(d)

Financial Instruments

v3.24.3
Financial Instruments
 9 Months Ended
Sep. 28, 2024
Investments, Debt and Equity Securities [Abstract]  
Fair Value Disclosures Financial Instruments
Fair Value Measurements
The Company’s financial instruments are measured and recorded at fair value on a recurring basis, except for non-marketable equity investments in privately-held companies. These equity investments are generally accounted for under the measurement alternative, defined as cost, less impairments, adjusted for subsequent observable price changes and are periodically assessed for impairment when events or circumstances indicate that a decline in value may have occurred.
Financial Instruments Recorded at Fair Value on a Recurring Basis
September 28, 2024 December 30, 2023
(In millions) Level 1 Level 2
Level 3
 Total Level 1 Level 2 Total
Cash equivalents
Money market funds $ 1,879  $ —  $ —  $ 1,879  $ 969  $ —  $ 969 
Corporate debt securities —  642  —  642  —  753  753 
U.S. government and agency securities 330  —  —  330  1,252  —  1,252 
Non-U.S. government and agency securities —  —  —  —  —  135  135 
Time deposits and certificates of deposits —  132  —  132  —  205  205 
Short-term investments
Corporate debt securities —  271  —  271  —  506  506 
Time deposits and certificates of deposits —  10  —  10  —  9  9 
Asset-backed and mortgage-backed securities —  30  —  30  —  34  34 
U.S. government and agency securities 275  40  —  315  1,209  28  1,237 
Non-U.S. government and agency securities —  21  —  21  —  54  54 
Other non-current assets
Deferred compensation plan and other investments 162  —  25  187  133  —  133 
Total assets measured at fair value $ 2,646  $ 1,146  $ 25  $ 3,817  $ 3,563  $ 1,724  $ 5,287 
Deferred compensation plan and other investments are primarily mutual fund investments held in a Rabbi trust established to maintain the Company’s executive deferred compensation plan.
The following is a summary of cash equivalents and short-term investments:
September 28, 2024 December 30, 2023
Cost/ Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair
Value		 Cost/ Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair
Value
(in millions) (in millions)
Asset-backed and mortgage-backed securities $ 32  $ —  $ (2) $ 30  $ 35  $ —  $ (2) $ 33 
Corporate debt securities 912  1  —  913  1,259  —  —  1,259 
Money market funds 1,879  —  —  1,879  969  —  —  969 
Time deposits and certificates of deposits 142  —  —  142  214  —  —  214 
U.S. government and agency securities 643  2  —  645  2,487  3  —  2,490 
Non-U.S. government and agency securities 21  —  —  21  189  —  —  189 
$ 3,629  $ 3  $ (2) $ 3,630  $ 5,153  $ 3  $ (2) $ 5,154 
As of September 28, 2024 and December 30, 2023, the Company did not have material available-for-sale debt securities which had been in a continuous unrealized loss position of more than twelve months.
The contractual maturities of cash equivalents and investments classified as available-for-sale are as follows:
September 28, 2024 December 30, 2023
Amortized Cost Fair Value Amortized Cost Fair Value
(In millions) (In millions)
Due within 1 year $ 1,472  $ 1,473  $ 3,792  $ 3,792 
Due in 1 year through 5 years 250  252  361  364 
Due in 5 years and later 28  26  32  30 
$ 1,750  $ 1,751  $ 4,185  $ 4,186 
Financial Instruments Not Recorded at Fair Value
The Company carries its financial instruments at fair value except for its debt. The carrying amounts and estimated fair values of the Company’s debt are as follows:
  September 28, 2024 December 30, 2023
  Carrying
Amount		 Estimated
Fair Value		 Carrying
Amount		 Estimated
Fair Value
  (In millions) (In millions)
Current portion of long-term debt, net $ —  $ —  $ 751  $ 741 
Long-term debt, net of current portion $ 1,720  $ 1,644  $ 1,717  $ 1,630 
The estimated fair value of the Company’s long-term debt is based on Level 2 inputs of quoted prices for the Company’s debt and comparable instruments in inactive markets.
The fair value of the Company’s accounts receivable, accounts payable and other short-term obligations approximate their carrying value based on existing terms.
Financial Instruments Measured at Fair Value on a Non-Recurring Basis
The Company’s investments in non-marketable securities in privately-held companies are recorded using a measurement alternative that adjusts the securities to fair value when the Company recognizes an observable price adjustment or an impairment. As of September 28, 2024 and December 30, 2023, the Company had non-marketable securities in privately-held companies of $257 million and $155 million, respectively, that are recorded under Other non-current assets in the balance sheet. Impairment losses or observable price adjustments were not material during the three and nine months ended September 28, 2024 and September 30, 2023.
Hedging Transactions and Derivative Financial Instruments
Foreign Currency Forward Contracts Designated as Accounting Hedges
The Company enters into foreign currency forward contracts to hedge its exposure to foreign currency exchange rate risk related to future forecasted transactions denominated in currencies other than the U.S. Dollar. These contracts generally mature within 24 months and are designated as accounting hedges. As of September 28, 2024 and December 30, 2023, the notional value of the Company’s outstanding foreign currency forward contracts designated as cash flow hedges was $2.2 billion and $2.4 billion, respectively. The fair value of these contracts, recorded as an asset, was $19 million and $6 million as of September 28, 2024 and December 30, 2023, respectively.
Foreign Currency Forward Contracts Not Designated as Accounting Hedges
The Company also enters into foreign currency forward contracts to reduce the short-term effects of foreign currency fluctuations on certain receivables or payables denominated in currencies other than the U.S. Dollar. These forward contracts generally mature within 3 months and are not designated as accounting hedges. As of September 28, 2024 and December 30, 2023, the notional value of these outstanding contracts was $573 million and $568 million, respectively. The fair value of these contracts was not material as of September 28, 2024 and December 30, 2023.