Debt

6 Months Ended

Mar. 30, 2019

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 March 30, 2019 and September 29, 2018, the Company had $11.9 billion and $12.0 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 2.56% as of March 30, 2019 and 2.18% as of September 29, 2018. The following table provides a summary of cash flows associated with the issuance and maturities of Commercial Paper for the six months ended March 30, 2019 and March 31, 2018 (in millions):



	Six Months Ended
	March 30, 2019			March 31, 2018
Maturities 90 days or less:
Proceeds from/(Repayments of) commercial paper, net	$	(2,484	)	$	4,070

Maturities greater than 90 days:
Proceeds from commercial paper	10,235			5,550
Repayments of commercial paper	(7,787		)	(9,619		)
Proceeds from/(Repayments of) commercial paper, net	2,448			(4,069		)

Total proceeds from/(repayments of) commercial paper, net	$	(36	)	$	1

Term Debt

As of March 30, 2019, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $101.2 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 March 30, 2019 and September 29, 2018:



	Maturities (calendar year)			March 30, 2019								September 29, 2018
	Maturities (calendar year)			Amount (in millions)			Effective Interest Rate					Amount (in millions)			Effective Interest Rate
2013 debt issuance of $17.0 billion:
Fixed-rate 2.400% – 3.850% notes	2023	–	2043	$	8,500			2.44%	–	3.91	%	$	8,500			2.44%	–	3.91	%

2014 debt issuance of $12.0 billion:
Floating-rate notes			2019	1,000						3.03	%	1,000						2.64	%
Fixed-rate 2.100% – 4.450% notes	2019	–	2044	8,500				3.03%	–	4.48	%	8,500				2.64%	–	4.48	%

2015 debt issuances of $27.3 billion:
Floating-rate notes	2019	–	2020	1,497				1.87%	–	2.99	%	1,507				1.87%	–	2.64	%
Fixed-rate 0.350% – 4.375% notes	2019	–	2045	24,178				0.28%	–	4.51	%	24,410				0.28%	–	4.51	%

2016 debt issuances of $24.9 billion:
Floating-rate notes	2019	–	2021	850				2.88%	–	3.78	%	1,350				2.48%	–	3.44	%
Fixed-rate 1.100% – 4.650% notes	2019	–	2046	22,038				1.13%	–	4.78	%	23,059				1.13%	–	4.78	%

2017 debt issuances of $28.7 billion:
Floating-rate notes	2020	–	2022	2,750				2.77%	–	3.20	%	3,250				2.41%	–	2.84	%
Fixed-rate 0.875% – 4.300% notes	2019	–	2047	24,929				1.54%	–	4.30	%	25,617				1.54%	–	4.30	%

2018 debt issuance of $7.0 billion:
Fixed-rate 1.800% – 3.750% notes	2019	–	2047	7,000				1.83%	–	3.80	%	7,000				1.83%	–	3.80	%
Total term debt				101,242								104,193

Unamortized premium/(discount) and issuance costs, net				(202		)						(218		)
Hedge accounting fair value adjustments				(334		)						(1,456		)
Less: Current portion of term debt				(10,505		)						(8,784		)
Total non-current portion of term debt				$	90,201							$	93,735

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 March 30, 2019 and September 29, 2018, the carrying value of the debt designated as a net investment hedge was $1.1 billion and $811 million, respectively. For further discussion regarding the Company’s use of derivative instruments, refer to the Derivative Financial Instruments section of Note 3, “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 $828 million and $1.6 billion of interest expense on its term debt for the three- and six-month periods ended March 30, 2019, respectively. The Company recognized $742 million and $1.4 billion of interest expense on its term debt for the three- and six-month periods ended March 31, 2018, respectively.

As of March 30, 2019 and September 29, 2018, the fair value of the Company’s Notes, based on Level 2 inputs, was $103.3 billion and $103.2 billion, respectively.