Debt

Commercial Paper

The Company issues unsecured short-term promissory notes (“Commercial Paper”) pursuant to a commercial paper program. The Company uses net proceeds from the commercial paper program for general corporate purposes, including dividends and share repurchases. As of September 24, 2016 and September 26, 2015, the Company had $8.1 billion and $8.5 billion of Commercial Paper outstanding, respectively, with maturities generally less than nine months. The weighted-average interest rate of the Company’s Commercial Paper was 0.45% as of September 24, 2016 and 0.14% as of September 26, 2015.

The following table provides a summary of cash flows associated with the issuance and maturities of Commercial Paper for 2016 and 2015 (in millions):



	2016			2015
Maturities less than 90 days:
Proceeds from (repayments of) commercial paper, net	$	(869	)	$	5,293

Maturities greater than 90 days:
Proceeds from commercial paper	3,632			3,851
Repayments of commercial paper	(3,160		)	(6,953		)
Maturities greater than 90 days, net	472			(3,102		)
Total change in commercial paper, net	$	(397	)	$	2,191

Long-Term Debt

As of September 24, 2016, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $78.4 billion (collectively the “Notes”). The Notes are senior unsecured obligations, and interest is payable in arrears, quarterly for the U.S. dollar-denominated and Australian dollar-denominated floating-rate notes, semi-annually for the U.S. dollar-denominated, Australian dollar-denominated, British pound-denominated and Japanese yen-denominated fixed-rate notes and annually for the euro-denominated and Swiss franc-denominated fixed-rate notes.

The following table provides a summary of the Company’s term debt as of September 24, 2016 and September 26, 2015:



	Maturities	2016					2015
	Maturities	Amount (in millions)			Effective Interest Rate		Amount (in millions)			Effective Interest Rate
2013 debt issuance of $17.0 billion:
Floating-rate notes	2018	$	2,000		1.10%		$	3,000		0.51% - 1.10%
Fixed-rate 1.000% - 3.850% notes	2018 - 2043	12,500			1.08% - 3.91%		14,000			0.51% - 3.91%

2014 debt issuance of $12.0 billion:
Floating-rate notes	2017 - 2019	2,000			0.86% - 1.09%		2,000			0.37% - 0.60%
Fixed-rate 1.050% - 4.450% notes	2017 - 2044	10,000			0.85% - 4.48%		10,000			0.37% - 4.48%

2015 debt issuances of $27.3 billion:
Floating-rate notes	2017 - 2020	1,781			0.87% - 1.87%		1,743			0.36% - 1.87%
Fixed-rate 0.350% - 4.375% notes	2017 - 2045	25,144			0.28% - 4.51%		24,958			0.28% - 4.51%

Second quarter 2016 debt issuance of $15.5 billion:
Floating-rate notes	2019	500			1.64	%	—			—
Floating-rate notes	2021	500			1.95	%	—			—
Fixed-rate 1.300% notes	2018	500			1.32	%	—			—
Fixed-rate 1.700% notes	2019	1,000			1.71	%	—			—
Fixed-rate 2.250% notes	2021	3,000			1.91	%	—			—
Fixed-rate 2.850% notes	2023	1,500			2.58	%	—			—
Fixed-rate 3.250% notes	2026	3,250			2.51	%	—			—
Fixed-rate 4.500% notes	2036	1,250			4.54	%	—			—
Fixed-rate 4.650% notes	2046	4,000			4.58	%	—			—

Third quarter 2016 Australian dollar-denominated debt issuance of A$1.4 billion:
Fixed-rate 2.650% notes	2020	493			1.92	%	—			—
Fixed-rate 3.350% notes	2024	342			2.61	%	—			—
Fixed-rate 3.600% notes	2026	247			2.84	%	—			—

Third quarter 2016 debt issuance of $1.4 billion:
Fixed-rate 4.150% notes	2046	1,377			4.15	%	—			—

Fourth quarter 2016 debt issuance of $7.0 billion:
Floating-rate notes	2019	350			0.91	%	—			—
Fixed-rate 1.100% notes	2019	1,150			1.13	%	—			—
Fixed-rate 1.550% notes	2021	1,250			1.40	%	—			—
Fixed-rate 2.450% notes	2026	2,250			2.15	%	—			—
Fixed-rate 3.850% notes	2046	2,000			3.86	%	—			—
Total term debt		78,384					55,701

Unamortized premium/(discount) and issuance costs, net		(174		)			(248		)
Hedge accounting fair value adjustments		717					376
Less: Current portion of long-term debt, net		(3,500		)			(2,500		)
Total long-term debt		$	75,427				$	53,329

To manage foreign currency risk associated with the Australian dollar-denominated notes issued in the third quarter of 2016, the Company entered into currency swaps with an aggregate notional amount of $1.0 billion, which effectively converted these notes to U.S. dollar-denominated notes.

To manage interest rate risk on the U.S. dollar-denominated fixed-rate notes issued in the second quarter of 2016 and maturing in 2021, 2023 and 2026, the Company entered into interest rate swaps with an aggregate notional amount of $5.0 billion. To manage interest rate risk on the U.S. dollar-denominated fixed-rate notes issued in the fourth quarter of 2016 and maturing in 2021 and 2026, the Company entered into interest rate swaps with an aggregate notional amount of $1.8 billion. These interest rate swaps effectively converted a portion of the U.S. dollar-denominated fixed-rate notes to floating interest rate notes.

As of September 24, 2016, ¥195.5 billion of the Japanese yen-denominated notes was designated as a hedge of the foreign currency exposure of its net investment in a foreign operation. The foreign currency transaction gain or loss on the Japanese yen-denominated debt designated as a hedge is recorded in OCI as a part of the cumulative translation adjustment. As of September 24, 2016, the carrying value of the debt designated as a net investment hedge was $1.9 billion. For further discussion regarding the Company’s use of derivative instruments see the Derivative Financial Instruments section of Note 2, “Financial Instruments.”

The effective interest rates for the Notes include the interest on the Notes, amortization of the discount and, if applicable, adjustments related to hedging. The Company recognized $1.4 billion, $722 million and $381 million of interest expense on its term debt for 2016, 2015 and 2014, respectively.

The future principal payments for the Company’s Notes as of September 24, 2016 are as follows (in millions):



2017	$	3,500
2018	6,500
2019	6,834
2020	6,454
2021	7,750
Thereafter	47,346
Total term debt	$	78,384

As of September 24, 2016 and September 26, 2015, the fair value of the Company’s Notes, based on Level 2 inputs, was $81.7 billion and $54.9 billion, respectively.