Debt

3 Months Ended

Dec. 28, 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 December 28, 2019 and September 28, 2019, the Company had $5.0 billion and $6.0 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 1.88% and 2.24% as of December 28, 2019 and September 28, 2019, respectively. The following table provides a summary of cash flows associated with the issuance and maturities of Commercial Paper for the three months ended December 28, 2019 and December 29, 2018 (in millions):



	Three Months Ended
	December 28, 2019			December 29, 2018
Maturities 90 days or less:
Proceeds from/(Repayments of) commercial paper, net	$	(175	)	$	2,011

Maturities greater than 90 days:
Proceeds from commercial paper	1,317			2,166
Repayments of commercial paper	(2,121		)	(4,171		)
Repayments of commercial paper, net	(804		)	(2,005		)

Total proceeds from/(repayments of) commercial paper, net	$	(979	)	$	6

Term Debt

As of December 28, 2019, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $103.1 billion (collectively the “Notes”). The Notes are senior unsecured obligations and interest is payable in arrears. The following table provides a summary of the Company’s term debt as of December 28, 2019 and September 28, 2019:



	Maturities (calendar year)			December 28, 2019								September 28, 2019
	Maturities (calendar year)			Amount (in millions)			Effective Interest Rate					Amount (in millions)			Effective Interest Rate
2013 – 2019 debt issuances:
Floating-rate notes	2020	–	2022	$	4,250			1.97%	–	3.04	%	$	4,250			2.25%	–	3.28	%
Fixed-rate 0.350% – 4.650% notes	2020	–	2049	96,610				0.28%	–	4.78	%	97,429				0.28%	–	4.78	%

First quarter 2020 debt issuance of €2.0 billion:
Fixed-rate 0.000% – 0.500% notes	2025	–	2031	2,226				0.03%	–	0.56	%	—						—	%
Total term debt				103,086								101,679

Unamortized premium/(discount) and issuance costs, net				(229		)						(224		)
Hedge accounting fair value adjustments				445								612
Less: Current portion of term debt				(10,224		)						(10,260		)
Total non-current portion of term debt				$	93,078							$	91,807

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 December 28, 2019 and September 28, 2019, the carrying value of the debt designated as a net investment hedge was $1.2 billion and $1.0 billion, 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 $757 million and $809 million of interest cost on its term debt for the three months ended December 28, 2019 and December 29, 2018, respectively.

As of December 28, 2019 and September 28, 2019, the fair value of the Company’s Notes, based on Level 2 inputs, was $109.1 billion and $107.5 billion, respectively.