
10.	Borrowings


(a)	Short-Term Debt

The following table summarizes the Company’s short-term debt (in millions, except percentages):



	January 25, 2014				July 27, 2013
	Amount		Weighted-Average Interest Rate		Amount		Weighted-Average Interest Rate
Current portion of long-term debt	$	3,752	0.93	%	$	3,273	0.63	%
Commercial paper	1,000		0.12	%	—		—
Other notes and borrowings	10		2.55	%	10		2.52	%
Total short-term debt	$	4,762			$	3,283

In fiscal 2011, the Company established a short-term debt financing program of up to $3.0 billion through the issuance of commercial paper notes. The Company uses the proceeds from the issuance of commercial paper notes for general corporate purposes. The outstanding commercial paper as of January 25, 2014 had a maturity date of three months or less.

Other notes and borrowings consist of the short-term portion of secured borrowings associated with customer financing arrangements. These notes and credit facilities were subject to various terms and foreign currency market interest rates pursuant to individual financial arrangements between the financing institution and the applicable foreign subsidiary.

As of January 25, 2014, the estimated fair value of the short-term debt approximates its carrying value due to the short maturities.


(b)	Long-Term Debt

The following table summarizes the Company’s long-term debt (in millions, except percentages):



	January 25, 2014				July 27, 2013
	Amount			Effective Rate	Amount			Effective Rate
Senior Notes:
Floating-rate notes, due 2014	$	1,250		0.58%	$	1,250		0.62%
1.625% fixed-rate notes, due 2014	2,000			0.61%	2,000			0.64%
2.90% fixed-rate notes, due 2014	500			3.11%	500			3.11%
5.50% fixed-rate notes, due 2016	3,000			3.05%	3,000			3.07%
3.15% fixed-rate notes, due 2017	750			0.81%	750			0.84%
4.95% fixed-rate notes, due 2019	2,000			4.69%	2,000			4.70%
4.45% fixed-rate notes, due 2020	2,500			3.37%	2,500			4.15%
5.90% fixed-rate notes, due 2039	2,000			6.11%	2,000			6.11%
5.50% fixed-rate notes, due 2040	2,000			5.67%	2,000			5.67%
Other long-term debt	6			2.58%	21			1.46%
Total	16,006				16,021
Unaccreted discount	(62		)		(65		)
Hedge accounting fair value adjustments	193				245
Total	$	16,137			$	16,201

Reported as:
Current portion of long-term debt	$	3,752			$	3,273
Long-term debt	12,385				12,928
Total	$	16,137			$	16,201

To achieve its interest rate risk management objectives, the Company has entered into interest rate swaps with an aggregate notional amount of $6.25 billion designated as fair value hedges of certain of its fixed-rate senior notes. In effect, these swaps convert the fixed interest rates of the fixed-rate notes to floating interest rates based on the London InterBank Offered Rate (LIBOR). The gains and losses related to changes in the fair value of the interest rate swaps substantially offset changes in the fair value of the hedged portion of the underlying debt that are attributable to the changes in market interest rates. For additional information, see Note 11.

The effective rates for the fixed-rate debt include the interest on the notes, the accretion of the discount and, if applicable, adjustments related to hedging. Interest is payable semiannually on each class of the senior fixed-rate notes and payable quarterly on the floating-rate notes. Each of the senior fixed-rate notes is redeemable by the Company at any time, subject to a make-whole premium.

The senior notes rank at par with the commercial paper notes that may be issued in the future pursuant to the Company’s short-term debt financing program, as discussed above under “(a) Short-Term Debt.” As of January 25, 2014, the Company was in compliance with all debt covenants.

As of January 25, 2014, future principal payments for long-term debt, including the current portion, are summarized as follows (in millions):



Fiscal Year	Amount
2014 (remaining six months)	$	3,250
2015	503
2016	3,003
2017	750
2018	—
Thereafter	8,500
Total	$	16,006


(c)	Credit Facility

On February 17, 2012, the Company entered into a credit agreement with certain institutional lenders that provides for a $3.0 billion unsecured revolving credit facility that is scheduled to expire on February 17, 2017. Any advances under the credit agreement will accrue interest at rates that are equal to, based on certain conditions, either (i) the higher of the Federal Funds rate plus 0.50%, Bank of America’s “prime rate” as announced from time to time, or one-month LIBOR plus 1.00%, or (ii) LIBOR plus a margin that is based on the Company’s senior debt credit ratings as published by Standard & Poor’s Financial Services, LLC and Moody’s Investors Service, Inc. The credit agreement requires the Company to comply with certain covenants, including that it maintain an interest coverage ratio as defined in the agreement. As of January 25, 2014, the Company was in compliance with the required interest coverage ratio and the other covenants, and the Company had not borrowed any funds under the credit facility.

The Company may also, upon the agreement of either the existing lenders or additional lenders not currently parties to the agreement, increase the commitments under the credit facility by up to an additional $2.0 billion and/or extend the expiration date of the credit facility by up to two additional years, or up to February 17, 2019.