Debt

9 Months Ended

Jun. 26, 2021

Commercial Paper and Repurchase Agreements

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 June 26, 2021 and September 26, 2020, the Company had $8.0 billion and $5.0 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 0.04% and 0.62% as of June 26, 2021 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 nine months ended June 26, 2021 and June 27, 2020 (in millions):


	Nine Months Ended
	June 26, 2021		June 27, 2020
Maturities 90 days or less:
Proceeds from commercial paper, net	$	2,745	$	401

Maturities greater than 90 days:
Proceeds from commercial paper	3,993		5,373
Repayments of commercial paper	(3,716)		(5,743)
Proceeds from/(Repayments of) commercial paper, net	277		(370)

Total proceeds from commercial paper, net	$	3,022	$	31

In 2020, the Company entered into agreements to sell certain of its marketable securities with a promise to repurchase the securities at a specified time and amount (“Repos”). Due to the Company’s continuing involvement with the marketable securities, the Company accounted for its Repos as collateralized borrowings. As of September 26, 2020, the Repos had been settled.

Term Debt

As of June 26, 2021, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $113.2 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 June 26, 2021 and September 26, 2020:


	Maturities (calendar year)	June 26, 2021			September 26, 2020
		Amount (in millions)		Effective Interest Rate	Amount (in millions)		Effective Interest Rate
2013 – 2020 debt issuances:
Floating-rate notes	2022	$	1,750	0.51% – 0.66%	$	2,250	0.60% – 1.39%
Fixed-rate 0.000% – 4.650% notes	2021 – 2060	97,443		0.03% – 4.78%	103,828		0.03% – 4.78%

2021 debt issuance:
Fixed-rate 0.700% – 2.800% notes	2026 – 2061	14,000		0.75% – 2.81%	—		—	%
Total term debt		113,193			106,078

Unamortized premium/(discount) and issuance costs, net		(360)			(314)
Hedge accounting fair value adjustments		958			1,676
Less: Current portion of term debt		(8,039)			(8,773)
Total non-current portion of term debt		$	105,752		$	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 $657 million and $1.9 billion of interest cost on its term debt for the three- and nine-month periods ended June 26, 2021, respectively. The Company recognized $664 million and $2.1 billion of interest cost on its term debt for the three- and nine-month periods ended June 27, 2020, respectively.

As of June 26, 2021 and September 26, 2020, the fair value of the Company’s Notes, based on Level 2 inputs, was $120.3 billion and $117.1 billion, respectively.