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 April 1, 2017 and September 24, 2016, the Company had $10.0 billion and $8.1 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 0.80% as of April 1, 2017 and 0.45% as of September 24, 2016.

The following table provides a summary of cash flows associated with the issuance and maturities of Commercial Paper for the six months ended April 1, 2017 and March 26, 2016 (in millions):



	Six Months Ended
	April 1, 2017			March 26, 2016
Maturities less than 90 days:
Proceeds from/(Repayments of) commercial paper, net	$	(1,318	)	$	660

Maturities greater than 90 days:
Proceeds from commercial paper	7,057			669
Repayments of commercial paper	(3,860		)	(1,832		)
Proceeds from/(Repayments of) commercial paper, net	3,197			(1,163		)

Total change in commercial paper, net	$	1,879		$	(503	)

Long-Term Debt

As of April 1, 2017, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $88.9 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 April 1, 2017 and September 24, 2016:



	Maturities			April 1, 2017								September 24, 2016
	Maturities			Amount (in millions)			Effective Interest Rate					Amount (in millions)			Effective Interest Rate
2013 debt issuance of $17.0 billion:
Floating-rate notes	2018		2018	$	2,000			1.10%		1.10	%	$	2,000			1.10%		1.10	%
Fixed-rate 1.000% – 3.850% notes	2018	–	2043	12,500				1.08%	–	3.91	%	12,500				1.08%	–	3.91	%

2014 debt issuance of $12.0 billion:
Floating-rate notes	2017	–	2019	2,000				1.10%	–	1.33	%	2,000				0.86%	–	1.09	%
Fixed-rate 1.050% – 4.450% notes	2017	–	2044	10,000				1.10%	–	4.48	%	10,000				0.85%	–	4.48	%

2015 debt issuances of $27.3 billion:
Floating-rate notes	2017	–	2020	1,785				1.08%	–	1.87	%	1,781				0.87%	–	1.87	%
Fixed-rate 0.350% – 4.375% notes	2017	–	2045	24,668				0.28%	–	4.51	%	25,144				0.28%	–	4.51	%

2016 debt issuances of $24.9 billion:
Floating-rate notes	2019	–	2021	1,350				1.17%	–	2.18	%	1,350				0.91%	–	1.95	%
Fixed-rate 1.100% – 4.650% notes	2018	–	2046	23,616				1.13%	–	4.78	%	23,609				1.13%	–	4.58	%

Second quarter 2017 debt issuance of $10.0 billion:
Floating-rate notes			2019	500						1.12	%	—						—	%
Floating-rate notes			2020	500						1.24	%	—						—	%
Floating-rate notes			2022	1,000						1.54	%	—						—	%
Fixed-rate 1.550% notes			2019	500						1.59	%	—						—	%
Fixed-rate 1.900% notes			2020	1,000						1.24	%	—						—	%
Fixed-rate 2.500% notes			2022	1,500						1.53	%	—						—	%
Fixed-rate 3.000% notes			2024	1,750						1.83	%	—						—	%
Fixed-rate 3.350% notes			2027	2,250						1.98	%	—						—	%
Fixed-rate 4.250% notes			2047	1,000						4.26	%	—						—	%

Second quarter 2017 debt issuance of $1.0 billion:
Fixed-rate 4.300% notes			2047	1,000						4.30	%	—						—	%
Total term debt				88,919								78,384

Unamortized premium/(discount) and issuance costs, net				(184		)						(174		)
Hedge accounting fair value adjustments				(205		)						717
Less: Current portion of long-term debt				(3,999		)						(3,500		)
Total long-term debt				$	84,531							$	75,427

During the second quarter of 2017, the Company issued $10.0 billion of U.S. dollar-denominated notes in the United States and $1.0 billion of U.S. dollar-denominated notes in Taiwan. To manage interest rate risk on the fixed-rate notes maturing in 2020, 2022, 2024 and 2027, the Company entered into interest rate swaps with an aggregate notional amount of $6.5 billion, which effectively converted the fixed interest rates on these notes to floating interest rates.

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. 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 April 1, 2017 and September 24, 2016, the carrying value of the debt designated as a net investment hedge was $1.7 billion and $1.9 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 $507 million and $1.0 billion of interest expense on its term debt for the three- and six-month periods ended April 1, 2017, respectively. The Company recognized $311 million and $582 million of interest expense on its term debt for the three- and six-month periods ended March 26, 2016, respectively.

As of April 1, 2017 and September 24, 2016, the fair value of the Company’s Notes, based on Level 2 inputs, was $89.7 billion and $81.7 billion, respectively.