Debt

6 Months Ended

Mar. 28, 2020

Commercial Paper and Repurchase Agreement

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 March 28, 2020 and September 28, 2019, the Company had $7.5 billion and $6.0 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 1.39% and 2.24% as of March 28, 2020 and September 28, 2019, respectively. The following table provides a summary of cash flows associated with the issuance and maturities of Commercial Paper for the six months ended March 28, 2020 and March 30, 2019 (in millions):



	Six Months Ended
	March 28, 2020			March 30, 2019
Maturities 90 days or less:
Proceeds from/(Repayments of) commercial paper, net	$	1,377		$	(2,484	)

Maturities greater than 90 days:
Proceeds from commercial paper	4,797			10,235
Repayments of commercial paper	(4,656		)	(7,787		)
Proceeds from commercial paper, net	141			2,448

Total proceeds from/(repayments of) commercial paper, net	$	1,518		$	(36	)

In the second quarter of 2020, the Company entered into an agreement to sell certain of its marketable securities with a promise to repurchase the securities at a specified time and amount (“Repo”). Due to the Company’s continuing involvement with the marketable securities, the Company accounts for the Repo as a collateralized borrowing. As of March 28, 2020, the Company had a $2.6 billion Repo liability with a maturity of less than six months, and had pledged $2.6 billion of marketable securities as collateral.

Term Debt

As of March 28, 2020, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $98.0 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 March 28, 2020 and September 28, 2019:



	Maturities (calendar year)			March 28, 2020								September 28, 2019
	Maturities (calendar year)			Amount (in millions)			Effective Interest Rate					Amount (in millions)			Effective Interest Rate
2013 – 2019 debt issuances:
Floating-rate notes	2020	–	2022	$	3,250			1.80%	–	2.81	%	$	4,250			2.25%	–	3.28	%
Fixed-rate 0.350% – 4.650% notes	2020	–	2049	92,554				0.28%	–	4.78	%	97,429				0.28%	–	4.78	%

First quarter 2020 debt issuance of €2.0 billion:
Fixed-rate 0.000% – 0.500% notes	2025	–	2031	2,164				0.03%	–	0.56	%	—						—	%
Total term debt				97,968								101,679

Unamortized premium/(discount) and issuance costs, net				(220		)						(224		)
Hedge accounting fair value adjustments				1,730								612
Less: Current portion of term debt				(10,392		)						(10,260		)
Total non-current portion of term debt				$	89,086							$	91,807

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.

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. As of March 28, 2020 and September 28, 2019, the carrying value of the debt designated as a net investment hedge was $663 million and $1.0 billion, respectively. For further discussion regarding the Company’s use of derivative instruments, refer to the Derivative Financial Instruments section of Note 3, “Financial Instruments.”

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 $725 million and $1.5 billion of interest cost on its term debt for the three- and six-month periods ended March 28, 2020, respectively. The Company recognized $828 million and $1.6 billion of interest cost on its term debt for the three- and six-month periods ended March 30, 2019, respectively.

As of March 28, 2020 and September 28, 2019, the fair value of the Company’s Notes, based on Level 2 inputs, was $105.6 billion and $107.5 billion, respectively.