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To manage interest rate risk on the U.S. dollar-denominated fixed-rate notes issued in the second quarter of 2015 and maturing in 2020
and 2022, the Company entered into interest rate swaps with an aggregate notional amount of $2.5 billion. To manage interest rate risk on
the U.S. dollar-denominated fixed-rate notes issued in the third quarter of 2015 and maturing in 2017, 2020, 2022 and 2025, the
Company entered into interest rate swaps with an aggregate notional amount of $4.3 billion. These interest rate swaps effectively
converted the fixed interest rates on the U.S. dollar-denominated notes to a floating interest rate.
As of September 26, 2015, ¥250.0 billion of the 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 September 26, 2015, the carrying value
of the debt designated as a net investment hedge was $2.1 billion.
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 $722 million, $381 million and $136 million of interest expense on its term debt for 2015,
2014 and 2013, respectively.
The future principal payments for the Company’s Notes as of September 26, 2015 are as follows (in millions):
2016 $ 2,500
2017 3,500
2018 6,000
2019 3,775
2020 5,581
Thereafter 34,345
Total term debt $ 55,701
As of September 26, 2015 and September 27, 2014, the fair value of the Company’s Notes, based on Level 2 inputs, was $54.9 billion
and $28.5 billion, respectively.
Note 7 – Shareholders’ Equity
Dividends
The Company declared and paid cash dividends per share during the periods presented as follows:
Dividends
Per Share Amount
(in millions)
2015:
Fourth quarter $ 0.52 $ 2,950
Third quarter 0.52 2,997
Second quarter 0.47 2,734
First quarter 0.47 2,750
Total cash dividends declared and paid $ 1.98 $ 11,431
2014:
Fourth quarter $ 0.47 $ 2,807
Third quarter 0.47 2,830
Second quarter 0.44 2,655
First quarter 0.44 2,739
Total cash dividends declared and paid $ 1.82 $ 11,031
Future dividends are subject to declaration by the Board of Directors.
Apple Inc. | 2015 Form 10-K | 59