Debt

3 Months Ended

Dec. 26, 2020

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 both December 26, 2020 and September 26, 2020, the Company had $5.0 billion of Commercial Paper outstanding, with maturities generally less than nine months. The weighted-average interest rate of the Company’s Commercial Paper was 0.10% and 0.62% as of December 26, 2020 and September 26, 2020, 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 26, 2020 and December 28, 2019 (in millions):


	Three Months Ended
	December 26, 2020		December 28, 2019
Maturities 90 days or less:
Proceeds from/(Repayments of) commercial paper, net	$	1,439	$	(175)

Maturities greater than 90 days:
Proceeds from commercial paper	780		1,317
Repayments of commercial paper	(2,197)		(2,121)
Repayments of commercial paper, net	(1,417)		(804)

Total proceeds from/(repayments of) commercial paper, net	$	22	$	(979)

Term Debt

As of December 26, 2020, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $105.9 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 26, 2020 and September 26, 2020:


	Maturities (calendar year)	December 26, 2020			September 26, 2020
		Amount (in millions)		Effective Interest Rate	Amount (in millions)		Effective Interest Rate
2013 – 2020 debt issuances:
Floating-rate notes	2021 – 2022	$	2,250	0.56% – 1.34%	$	2,250	0.60% – 1.39%
Fixed-rate 0.000% – 4.650% notes	2021 – 2060	103,613		0.03% – 4.78%	103,828		0.03% – 4.78%
Total term debt		105,863			106,078

Unamortized premium/(discount) and issuance costs, net		(305)			(314)
Hedge accounting fair value adjustments		1,485			1,676
Less: Current portion of term debt		(7,762)			(8,773)
Total non-current portion of term debt		$	99,281		$	98,667

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.

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 $628 million and $757 million of interest cost on its term debt for the three months ended December 26, 2020 and December 28, 2019, respectively.

As of December 26, 2020 and September 26, 2020, the fair value of the Company’s Notes, based on Level 2 inputs, was $117.2 billion and $117.1 billion, respectively.