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 30, 2017 and September 24, 2016, the Company had $12.0 billion and $8.1 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 1.20% as of September 30, 2017 and 0.45% as of September 24, 2016.

The following table provides a summary of cash flows associated with the issuance and maturities of Commercial Paper for 2017 and 2016 (in millions):



	2017			2016
Maturities less than 90 days:
Proceeds from/(Repayments of) commercial paper, net	$	(1,782	)	$	(869	)

Maturities greater than 90 days:
Proceeds from commercial paper	17,932			3,632
Repayments of commercial paper	(12,298		)	(3,160		)
Proceeds from/(Repayments of) commercial paper, net	5,634			472

Total change in commercial paper, net	$	3,852		$	(397	)

Term Debt

As of September 30, 2017, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $104.0 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, Japanese yen-denominated and Canadian dollar-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 30, 2017 and September 24, 2016:



	Maturities			2017							2016
	Maturities			Amount (in millions)		Effective Interest Rate					Amount (in millions)		Effective Interest Rate
2013 debt issuance of $17.0 billion:
Floating-rate notes	2018		2018	$	2,000		1.10%		1.10	%	$	2,000		1.10%		1.10	%
Fixed-rate 1.000% – 3.850% notes	2018	–	2043	12,500			1.08%	–	3.91	%	12,500			1.08%	–	3.91	%

2014 debt issuance of $12.0 billion:
Floating-rate notes	2019		2019	1,000			1.61%		1.61	%	2,000			0.86%	–	1.09	%
Fixed-rate 2.100% – 4.450% notes	2019	–	2044	8,500			1.61%	–	4.48	%	10,000			0.85%	–	4.48	%

2015 debt issuances of $27.3 billion:
Floating-rate notes	2019	–	2020	1,549			1.56%	–	1.87	%	1,781			0.87%	–	1.87	%
Fixed-rate 0.350% – 4.375% notes	2019	–	2045	24,522			0.28%	–	4.51	%	25,144			0.28%	–	4.51	%

2016 debt issuances of $24.9 billion:
Floating-rate notes	2019	–	2021	1,350			1.45%	–	2.44	%	1,350			0.91%	–	1.95	%
Fixed-rate 1.100% – 4.650% notes	2018	–	2046	23,645			1.13%	–	4.78	%	23,609			1.13%	–	4.58	%



	Maturities		2017						2016
(Continued)	Maturities		Amount (in millions)			Effective Interest Rate			Amount (in millions)			Effective Interest Rate
Second quarter 2017 debt issuance of $10.0 billion:
Floating-rate notes		2019	500				1.39	%	—				—	%
Floating-rate notes		2020	500				1.51	%	—				—	%
Floating-rate notes		2022	1,000				1.81	%	—				—	%
Fixed-rate 1.550% notes		2019	500				1.59	%	—				—	%
Fixed-rate 1.900% notes		2020	1,000				1.51	%	—				—	%
Fixed-rate 2.500% notes		2022	1,500				1.80	%	—				—	%
Fixed-rate 3.000% notes		2024	1,750				2.11	%	—				—	%
Fixed-rate 3.350% notes		2027	2,250				2.25	%	—				—	%
Fixed-rate 4.250% notes		2047	1,000				4.26	%	—				—	%

Second quarter 2017 debt issuance of $1.0 billion:
Fixed-rate 4.300% notes		2047	1,000				4.30	%	—				—	%

Third quarter 2017 debt issuance of $7.0 billion:
Floating-rate notes		2020	500				1.38	%	—				—	%
Floating-rate notes		2022	750				1.66	%	—				—	%
Fixed-rate 1.800% notes		2020	1,000				1.84	%	—				—	%
Fixed-rate 2.300% notes		2022	1,000				2.34	%	—				—	%
Fixed-rate 2.850% notes		2024	1,750				2.25	%	—				—	%
Fixed-rate 3.200% notes		2027	2,000				2.43	%	—				—	%

Third quarter 2017 euro-denominated debt issuance of €2.5 billion:
Fixed-rate 0.875% notes		2025	1,469				3.03	%	—				—	%
Fixed-rate 1.375% notes		2029	1,469				3.37	%	—				—	%

Third quarter 2017 debt issuance of $1.0 billion:
Fixed-rate 3.000% notes		2027	1,000				3.03	%	—				—	%

Fourth quarter 2017 Canadian dollar-denominated debt issuance of C$2.5 billion:
Fixed-rate 2.513% notes		2024	2,017				2.66	%	—				—	%

Fourth quarter 2017 debt issuance of $5.0 billion:
Fixed-rate 1.500% notes		2019	1,000				1.54	%	—				—	%
Fixed-rate 2.100% notes		2022	1,000				1.92	%	—				—	%
Fixed-rate 2.900% notes		2027	2,000				2.55	%	—				—	%
Fixed-rate 3.750% notes		2047	1,000				3.78	%	—				—	%
Total term debt			104,021						78,384

Unamortized premium/(discount) and issuance costs, net			(225		)				(174		)
Hedge accounting fair value adjustments			(93		)				717
Less: Current portion of long-term debt			(6,496		)				(3,500		)
Total long-term debt			$	97,207					$	75,427

To manage interest rate risk on certain of its U.S. dollar-denominated fixed- or floating-rate notes, the Company has entered into interest rate swaps to effectively convert the fixed interest rates to floating interest rates or the floating interest rates to fixed interest rates on a portion of these notes. Additionally, to manage foreign currency risk on certain of its foreign currency-denominated notes, the Company has entered into foreign currency swaps to effectively convert these notes to U.S. dollar-denominated notes.

A portion of the Company’s Japanese yen-denominated notes is designated as a hedge of the foreign currency exposure of the Company’s net investment in a foreign operation. As of September 30, 2017 and September 24, 2016, the carrying value of the debt designated as a net investment hedge was $1.6 billion and $1.9 billion, respectively.

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 or premium and, if applicable, adjustments related to hedging. The Company recognized $2.2 billion, $1.4 billion and $722 million of interest expense on its term debt for 2017, 2016 and 2015, respectively.

The future principal payments for the Company’s Notes as of September 30, 2017 are as follows (in millions):



2018	$	6,500
2019	8,863
2020	9,220
2021	7,750
2022	10,297
Thereafter	61,391
Total term debt	$	104,021

As of September 30, 2017 and September 24, 2016, the fair value of the Company’s Notes, based on Level 2 inputs, was $106.1 billion and $81.7 billion, respectively.