Debt

The following table presents the components of notes payable at October 3, 2015 and January 3, 2015:



	October 3, 2015				January 3, 2015
(millions)	Principal amount		Effective interest rate		Principal amount		Effective interest rate
U.S. commercial paper	$	1,213	0.41	%	$	681	0.36	%
Europe commercial paper	78		0.02	%	96		0.09	%
Bank borrowings	72				51
Total	$	1,363			$	828

In the third quarter of 2015, the Company entered into interest rate swaps with notional amounts totaling $458 million , which were designated as fair value hedges for (a) $300 million of its 4.15% U.S. Dollar Notes due 2019 and (b) $158 million of its 3.125% U.S. Dollar Notes due 2022.

In the third quarter of 2015, the Company terminated all of its interest rate swaps with notional amounts totaling $2.8 billion which were designated as fair value hedges for (a) $400 million of its 1.75% fixed rate U.S. Dollar Notes due 2017, (b) $400 million of it 3.25% U.S. Dollar Notes due 2018, (c) $800 million of its 4.15% U.S. Dollar Notes due 2019, (d) $700 million of its 4.00% U.S. Dollar Notes due 2020 and (e) $516 million of its 3.125% U.S. Dollar Notes due 2022 (collectively, the Notes). While the interest rate swaps were in place, they effectively converted the interest rate on the Notes from fixed to variable. The gain upon termination of $25 million will be amortized to interest expense over the remaining term of the Notes.

In May 2015, the Company repaid its $350 million 1.125% fixed rate U.S. Dollar Notes due 2015 at maturity with U.S. commercial paper.

In the second quarter of 2015, the Company entered into interest rate swaps with notional amounts totaling $958 million, which were designated as fair value hedges for (a) $500 million of its 4.15% fixed rate U.S. Dollar Notes due 2019, (b) $300 million of its 4.0% fixed rate U.S. Dollar Notes due 2020 and (c) $158 million of its 3.125% fixed rate U.S. Dollar Notes due 2022.

In February 2015, the Company repaid its $250 million floating-rate U.S. Dollar Notes due 2015 at maturity with U.S. commercial paper.

In March 2015, the Company issued €600 million (approximately $673 million USD at October 3, 2015, which reflects the discount and translation adjustments) of ten-year 1.25% Euro Notes due 2025, using the proceeds from these Notes for general corporate purposes, including the repayment of a portion of its commercial paper borrowings. The Notes contain customary covenants that limit the ability of the Company and its restricted subsidiaries (as defined) to incur certain liens or enter into certain sale and lease-back transactions, as well as a change of control provision. The Notes were designated as a net investment hedge of the Company’s investment in its Europe subsidiary when issued.

In the first quarter of 2015, the Company entered into interest rate swaps with notional amounts totaling $558 million, which were designated as fair value hedges for (a) $300 million of its 4.15% fixed rate U.S. Dollar Notes due 2019, (b) $200 million of its 4.0% fixed rate U.S. Dollar Notes due 2020 and (c) $58 million of its 3.125% fixed rate U.S. Dollar Notes due 2022.

In the first quarter of 2015, the Company terminated interest rate swaps with notional amounts totaling $1.5 billion, which were designated as fair value hedges for (a) $800 million of its 4.15% fixed rate U.S. Dollar Notes due 2019, (b) $500 million of its 4.0% fixed rate U.S. Dollar Notes due 2020 and (c) $216 million of its 3.125% fixed rate U.S. Dollar Notes due 2022 (collectively, the Notes). While the interest rate swaps were in place they effectively converted the interest rate on the Notes from fixed to variable and the gain upon termination of $26 million will be amortized to interest expense over the remaining term of the Notes.

The effective interest rates on debt obligations resulting from the Company’s previous interest rate swaps as of October 3, 2015 were as follows: (a) seven-year 4.45% U.S. Dollar Notes due 2016 – 3.84%; (b) five-year 1.875% U.S. Dollar Notes due 2016 – 1.58%; (c) five-year 1.75% U.S. Dollar Notes due 2017 – 1.71%; (d) seven-year 3.25% U.S. Dollar Notes due 2018 – 2.52%; (e) ten-year 4.15% U.S. Dollar Notes due 2019 – 3.52%; (f) ten-year 4.00% U.S. Dollar Notes due 2020 – 2.98%; (g) ten-year 3.125% U.S. Dollar Notes due 2022 – 2.69%.