Debt

6 Months Ended

Mar. 27, 2021

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 both March 27, 2021 and September 26, 2020, the Company had $5.0 billion of Commercial Paper outstanding, with maturities generally less than nine months. The weighted-average interest rate of the Company’s Commercial Paper was 0.06% and 0.62% as of March 27, 2021 and September 26, 2020, 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 27, 2021 and March 28, 2020 (in millions):


	Six Months Ended
	March 27, 2021		March 28, 2020
Maturities 90 days or less:
Proceeds from commercial paper, net	$	2,008	$	1,377

Maturities greater than 90 days:
Proceeds from commercial paper	1,368		4,797
Repayments of commercial paper	(3,354)		(4,656)
Proceeds from/(Repayments of) commercial paper, net	(1,986)		141

Total proceeds from commercial paper, net	$	22	$	1,518

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 accounted for the Repo as a collateralized borrowing. As of September 26, 2020, the Repo had been settled.

Term Debt

As of March 27, 2021, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $116.0 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 27, 2021 and September 26, 2020:


	Maturities (calendar year)	March 27, 2021			September 26, 2020
		Amount (in millions)		Effective Interest Rate	Amount (in millions)		Effective Interest Rate
2013 – 2020 debt issuances:
Floating-rate notes	2022	$	1,750	0.55% – 0.69%	$	2,250	0.60% – 1.39%
Fixed-rate 0.000% – 4.650% notes	2021 – 2060	100,255		0.03% – 4.78%	103,828		0.03% – 4.78%

2021 debt issuance:
Fixed-rate 0.700% – 2.800% notes	2026 – 2061	14,000		0.75% – 2.81%	—		—	%
Total term debt		116,005			106,078

Unamortized premium/(discount) and issuance costs, net		(371)			(314)
Hedge accounting fair value adjustments		1,011			1,676
Less: Current portion of term debt		(8,003)			(8,773)
Total non-current portion of term debt		$	108,642		$	98,667

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.

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 $657 million and $1.3 billion of interest cost on its term debt for the three- and six-month periods ended March 27, 2021, respectively. 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.

As of March 27, 2021 and September 26, 2020, the fair value of the Company’s Notes, based on Level 2 inputs, was $121.2 billion and $117.1 billion, respectively.