Question

Fair Value Measurements The fair values of our financial assets and liabilities as of December 26, 2015 and December 27, 2014 are categorized as follows: 2015 2014 Assets(a) Liabilities(a) Assets(a) Liabilities(a) Available-for-sale securities: Equity securities (b) $ 127 $ - $ 124 $ Debt securities (c) 7,231 - 3,167 $ 7,358 $ - $ 3,291 $ Short-term investments (d) $ 193 $ - $ 197 $ - Prepaid forward contracts (e) $ 27 $ - $ 26 $ Deferred compensation (1) $ - $ 474 $ - $ 504 Derivatives designated as fair value hedging instruments: Interest rate (g) $ 129 $ 12 $ 140 $ - Derivatives designated as cash flow hedging instruments: Foreign exchange (h) $ 76 $ 6 $ 76 $ 12 Interest rate (9) 311 1 117 Commodity 0 7 3 10 $ 324 $ 80 $ 139 Derivatives not designated as hedging instruments: Foreign exchange (h) 8 $ 10 $ 12 $ 13 Interest rate (g) . 44 56 57 75 Commodity - 12 141 18 166 $ 64 $ 207 $ 87 $ 254 Total derivatives at fair value) $ 269 $ 543 $ 307 $ 393 Total $ 7,847 $ 1,017 $ 3,821 $ 897 (a) Unless otherwise noted, financial assets are classified on our Consolidated Balance Sheet within prepaid expenses and other current assets and other assets. Financial liabilities are classified on our Consolidated Balance Sheet within accounts payable and other current liabilities and other liabilities. Unless specifically indicated, all financial assets and liabilities are categorized as Level 2 assets or liabilities. (b) Based on the price of common stock. Categorized as a Level 1 asset. These equity securities are classified as investments in non-controlled affiliates.

Answer 1

Fair value hedge -

A fair value hedge indicates an hedging instrument which hedges risk associated with change in value of a hedged asset or liability. A simple example could be - if a company owns a large stock portfolio, one can buy put options on the stocks in the portfolio. How that works - When the value of stocks fall, the value of put options would increase, thus, is an effective hedging technique

LIBOR -

London Inter Bank Offer Rate. This is a benchmark interest rate at which major global banks lend to one another in the international inter bank market for short-term loans

Currencies in LIBOR -

US dollar, Euro, British pound, Japanese yen, and Swiss Franc

Gain/loss reported in earning for -

a) Fair value/non-designated hedges - $221 million

b) Cash flow hedges - $97 million

c) Indicate if it is a net gain or loss- Net loss