Note 6 – 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 March 26, 2016 and September 26, 2015, the Company had $8.0 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 0.39% as of March 26, 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 six months ended March 26, 2016 and March 28, 2015 (in millions):


	Six Months Ended
	March 26, 2016			March 28, 2015
Maturities less than 90 days:
Proceeds from (repayments of) commercial paper, net	$	660		$	985

Maturities greater than 90 days:
Proceeds from commercial paper		669			547
Repayments of commercial paper		(1,832	)		(4,040	)

Proceeds from (repayments of) commercial paper, net		(1,163	)		(3,493	)

Total change in commercial paper, net	$	(503	)	$	(2,508	)

Long-Term Debt

As of March 26, 2016, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $71.3 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 March 26, 2016 and September 26, 2015:


			March, 26, 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		2016 - 2018	$	3,000			0.51% - 1.10%	$	3,000			0.51% - 1.10%
Fixed-rate 0.45% - 3.85% notes		2016 - 2043		14,000			0.51% - 3.91%		14,000			0.51% - 3.91%

2014 debt issuance of $12.0 billion:
Floating-rate notes		2017 - 2019		2,000			0.69% - 0.92%		2,000			0.37% - 0.60%
Fixed-rate 1.05% - 4.45% notes		2017 - 2044		10,000			0.69% - 4.48%		10,000			0.37% - 4.48%

2015 debt issuances of $27.3 billion:
Floating-rate notes		2017 - 2020		1,781			0.67% - 1.87%		1,743			0.36% - 1.87%
Fixed-rate 0.35% - 4.375% notes		2017 - 2045		25,063			0.28% - 4.51%		24,958			0.28% - 4.51%

Second quarter 2016 debt issuance of $15.5 billion:
Floating-rate notes		2019		500			1.44%		0			0
Floating-rate notes		2021		500			1.75%		0			0
Fixed-rate 1.30% notes		2018		500			1.32%		0			0
Fixed-rate 1.70% notes		2019		1,000			1.71%		0			0
Fixed-rate 2.25% notes		2021		3,000			1.80%		0			0
Fixed-rate 2.85% notes		2023		1,500			2.48%		0			0
Fixed-rate 3.25% notes		2026		3,250			2.33%		0			0
Fixed-rate 4.50% notes		2036		1,250			4.54%		0			0
Fixed-rate 4.65% notes		2046		4,000			4.58%		0			0

Total debt issuance				15,500					0

Total term debt				71,344					55,701

Unamortized premium/(discount)				15					(114	)
Hedge accounting fair value adjustments				515					376
Less: Current portion of long-term debt				(2,500	)				(2,500	)

Total long-term debt			$	69,374				$	53,463

During the second quarter of 2016, the Company issued $15.5 billion U.S. dollar-denominated notes. To manage interest rate risk on the U.S. dollar-denominated 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 March 26, 2016, ¥149.3 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 March 26, 2016 and September 26, 2015, the carrying value of the debt designated as a net investment hedge was $1.3 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 $311 million and $582 million of interest expense on its term debt for the three- and six-month periods ended March 26, 2016, respectively. The Company recognized $161 million and $289 million of interest expense on its term debt for the three- and six-month periods ended March 28, 2015, respectively.

As of March 26, 2016 and September 26, 2015, the fair value of the Company’s Notes, based on Level 2 inputs, was $72.4 billion and $54.9 billion, respectively.