Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Notes)

v3.6.0.2
Fair Value Measurements (Notes)
3 Months Ended
Dec. 25, 2016
Notes to Financial Statements [Abstract]  
Fair Value Measurements
Fair Value Measurements
The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at December 25, 2016 (in millions):
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
Cash equivalents
$
2,385

 
$
3,850

 
$

 
$
6,235

Marketable securities
 
 
 
 
 
 
 
U.S. Treasury securities and government-related securities
915

 
975

 

 
1,890

Corporate bonds and notes

 
17,747

 

 
17,747

Mortgage- and asset-backed and auction rate securities

 
1,524

 
42

 
1,566

Equity and preferred securities and equity funds
88

 
476

 

 
564

Debt funds

 
1,133

 

 
1,133

Total marketable securities
1,003

 
21,855

 
42

 
22,900

Derivative instruments

 
11

 

 
11

Other investments
330

 

 

 
330

Total assets measured at fair value
$
3,718

 
$
25,716

 
$
42

 
$
29,476

Liabilities
 
 
 
 
 
 
 
Derivative instruments
$

 
$
21

 
$

 
$
21

Other liabilities
329

 

 

 
329

Total liabilities measured at fair value
$
329

 
$
21

 
$

 
$
350


Activity between Levels of the Fair Value Hierarchy. There were no significant transfers between Level 1 and Level 2 in the three months ended December 25, 2016 and December 27, 2015. When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. The following table includes the activity for mortgage- and asset-backed and auction rate securities classified within Level 3 of the valuation hierarchy (in millions):
 
Three Months Ended
 
December 25,
2016
 
December 27,
2015
Beginning balance of Level 3
$
43

 
$
224

Total realized and unrealized gains or losses:
 
 
 
Included in other comprehensive income (loss)

 
(1
)
Sales

 
(1
)
Settlements
(1
)
 
(36
)
Transfers out of Level 3

 
(12
)
Ending balance of Level 3
$
42

 
$
174


The Company recognizes transfers into and out of levels within the fair value hierarchy at the end of the fiscal month in which the actual event or change in circumstances that caused the transfer occurs. Transfers out of Level 3 in the three months ended December 27, 2015 primarily consisted of debt securities with significant upgrades in credit ratings or for which there were observable inputs.
Nonrecurring Fair Value Measurements. The Company measures certain assets at fair value on a nonrecurring basis. These assets include cost and equity method investments when they are deemed to be other-than-temporarily impaired, assets acquired and liabilities assumed in an acquisition or in a nonmonetary exchange, and property, plant and equipment and intangible assets that are written down to fair value when they are held for sale or determined to be impaired. In the three months ended December 25, 2016 and December 27, 2015, the Company did not have any significant assets or liabilities that were measured at fair value on a nonrecurring basis in periods subsequent to initial recognition.