Apple 2014 Annual Report Download - page 69

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Long-Term Debt
In the third quarter of 2014 and 2013, the Company issued $12.0 billion and $17.0 billion of long-term debt, respectively. The
debt issuances included floating- and fixed-rate notes with varying maturities for an aggregate principal amount of $29.0 billion
(collectively the “Notes”). The Notes are senior unsecured obligations, and interest is payable in arrears, quarterly for the
floating-rate notes and semi-annually for the fixed-rate notes.
The following table provides a summary of the Company’s long-term debt as of September 27, 2014 and September 28, 2013:
2014 2013
Amount
(in millions)
Effective
Interest
Rate Amount
(in millions)
Effective
Interest
Rate
Floating-rate notes due 2016 $ 1,000 0.51% $ 1,000 0.51%
Floating-rate notes due 2017 1,000 0.31% 0 0
Floating-rate notes due 2018 2,000 1.10% 2,000 1.10%
Floating-rate notes due 2019 1,000 0.54% 0 0
Fixed-rate 0.45% notes due 2016 1,500 0.51% 1,500 0.51%
Fixed-rate 1.05% notes due 2017 1,500 0.30% 0 0
Fixed-rate 1.00% notes due 2018 4,000 1.08% 4,000 1.08%
Fixed-rate 2.10% notes due 2019 2,000 0.53% 0 0
Fixed-rate 2.85% notes due 2021 3,000 0.79% 0 0
Fixed-rate 2.40% notes due 2023 5,500 2.44% 5,500 2.44%
Fixed-rate 3.45% notes due 2024 2,500 0.90% 0 0
Fixed-rate 3.85% notes due 2043 3,000 3.91% 3,000 3.91%
Fixed-rate 4.45% notes due 2044 1,000 4.48% 0 0
Total borrowings 29,000 17,000
Unamortized discount (52) (40)
Hedge accounting fair value adjustments 39 0
Total long-term debt $28,987 $16,960
The Company has entered, and may enter in the future, into interest rate swaps to manage interest rate risk on the Notes. Such
swaps allow the Company to effectively convert fixed-rate payments into floating-rate payments or floating-rate payments into
fixed-rate payments. In the third quarter of 2014, the Company entered into interest rate swaps with an aggregate notional
amount of $9.0 billion, which effectively converted the fixed-rate notes due 2017, 2019, 2021 and 2024 into floating-rate notes.
In the third quarter of 2013, the Company entered into interest rate swaps with an aggregate notional amount of $3.0 billion,
which effectively converted the floating-rate notes due 2016 and 2018 into fixed-rate notes.
The effective rates for the Notes include the interest on the Notes, amortization of the discount and, if applicable, adjustments
related to hedging. The Company recognized $381 million and $136 million of interest expense on its long-term debt for the
years ended September 27, 2014 and September 28, 2013, respectively. The Company did not have any long-term debt in
2012.
Apple Inc. | 2014 Form 10-K | 67