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 June 25, 2016 and September 26, 2015, the Company had $12.5 billion and $8.5 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 0.42% as of June 25, 2016 and 0.14% as of September 26, 2015.

The following table provides a summary of cash flows associated with the issuance and maturities of Commercial Paper for the nine months ended June 25, 2016 and June 27, 2015 (in millions):



	Nine Months Ended
	June 25, 2016			June 27, 2015
Maturities less than 90 days:
Proceeds from (repayments of) commercial paper, net	$	4,154		$	579

Maturities greater than 90 days:
Proceeds from commercial paper	1,846			2,601
Repayments of commercial paper	(2,008		)	(4,988		)
Proceeds from (repayments of) commercial paper, net	(162		)	(2,387		)

Total change in commercial paper, net	$	3,992		$	(1,808	)

Long-Term Debt

As of June 25, 2016, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $71.6 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 and Japanese yen-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 June 25, 2016 and September 26, 2015:



	Maturities	June 25, 2016					September 26, 2015
	Maturities	Amount (in millions)			Effective Interest Rate		Amount (in millions)			Effective Interest Rate
2013 debt issuance of $17.0 billion:
Floating-rate notes	2018	$	2,000		1.10%		$	3,000		0.51% - 1.10%
Fixed-rate 1.00% - 3.85% notes	2018 - 2043	12,500			1.08% - 3.91%		14,000			0.51% - 3.91%

2014 debt issuance of $12.0 billion:
Floating-rate notes	2017 - 2019	2,000			0.70% - 0.93%		2,000			0.37% - 0.60%
Fixed-rate 1.05% - 4.45% notes	2017 - 2044	10,000			0.70% - 4.48%		10,000			0.37% - 4.48%

2015 debt issuances of $27.3 billion:
Floating-rate notes	2017 - 2020	1,774			0.68% - 1.87%		1,743			0.36% - 1.87%
Fixed-rate 0.35% - 4.375% notes	2017 - 2045	25,347			0.28% - 4.51%		24,958			0.28% - 4.51%

Second quarter 2016 debt issuance of $15.5 billion:
Floating-rate notes	2019	500			1.47	%	—			—
Floating-rate notes	2021	500			1.78	%	—			—
Fixed-rate 1.30% notes	2018	500			1.32	%	—			—
Fixed-rate 1.70% notes	2019	1,000			1.71	%	—			—
Fixed-rate 2.25% notes	2021	3,000			1.80	%	—			—
Fixed-rate 2.85% notes	2023	1,500			2.50	%	—			—
Fixed-rate 3.25% notes	2026	3,250			2.40	%	—			—
Fixed-rate 4.50% notes	2036	1,250			4.54	%	—			—
Fixed-rate 4.65% notes	2046	4,000			4.58	%	—			—

Third quarter 2016 Australian dollar-denominated debt issuance of A$1.4 billion:
Fixed-rate 2.65% notes	2020	487			1.92	%	—			—
Fixed-rate 3.35% notes	2024	337			2.61	%	—			—
Fixed-rate 3.60% notes	2026	243			2.84	%	—			—

Third quarter 2016 debt issuance of $1.4 billion:
Fixed-rate 4.15% notes	2046	1,377			4.15	%	—			—
Total term debt		71,565					55,701

Unamortized premium/(discount)		14					(114		)
Hedge accounting fair value adjustments		860					376
Less: Current portion of long-term debt		(3,500		)			(2,500		)
Total long-term debt		$	68,939				$	53,463

During the third quarter of 2016, the Company issued $1.4 billion U.S. dollar-denominated notes in Taiwan and A$1.4 billion Australian dollar-denominated notes. To manage foreign currency risk associated with the Australian dollar-denominated notes, the Company entered into currency swaps with an aggregate notional amount of $1.0 billion, which effectively converted these notes to U.S. dollar-denominated notes.

During the second quarter of 2016, the Company issued $15.5 billion U.S. dollar-denominated notes. To manage interest rate risk on the fixed-rate notes maturing in 2021, 2023 and 2026, the Company entered into interest rate swaps with an aggregate notional amount of $5.0 billion, which effectively converted a portion of the fixed interest rates on these notes to a floating interest rate.

As of June 25, 2016, ¥191.0 billion of Japanese yen-denominated notes was designated as a hedge of the foreign currency exposure of its net investment in a foreign operation. The foreign currency transaction gain or loss on the Japanese yen-denominated debt designated as a hedge is recorded in OCI as a part of the cumulative translation adjustment. As of June 25, 2016 and September 26, 2015, the carrying value of the debt designated as a net investment hedge was $1.8 billion and $2.1 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 and, if applicable, adjustments related to hedging. The Company recognized $393 million and $975 million of interest expense on its term debt for the three- and nine-month periods ended June 25, 2016, respectively. The Company recognized $197 million and $486 million of interest expense on its term debt for the three- and nine-month periods ended June 27, 2015, respectively.

As of June 25, 2016 and September 26, 2015, the fair value of the Company’s Notes, based on Level 2 inputs, was $74.1 billion and $54.9 billion, respectively.