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Note 5. Debt
The following table summarizes components of our debt:
April 3, 2015 March 28, 2014
Amount
Effective
Interest Rate Amount
Effective
Interest Rate
(Dollars in millions)
Senior Notes
2.75% due September 15, 2015 $ 350 2.76 % $ 350 2.76 %
2.75% due June 15, 2017 600 2.79 % 600 2.79 %
4.20% due September 15, 2020 750 4.25 % 750 4.25 %
3.95% due June 15, 2022 400 4.05 % 400 4.05 %
Total principal amount $ 2,100 $ 2,100
Less: unamortized discount (4) (5)
Total debt $ 2,096 $ 2,095
Less: current portion (350) -
Total long-term portion $ 1,746 $ 2,095
The future maturities of debt by fiscal year are as follows:
April 3, 2015
(Dollars in millions)
2016 $ 350
2017 -
2018 600
2019 -
2020 -
Thereafter 1,150
Total $ 2,100
Senior Notes
In fiscal 2013, we issued $1.0 billion of Senior Notes consisting of the 3.95% Senior Notes due in 2022 and
the 2.75% Senior Notes due in 2017. We received proceeds of $996 million, net of an issuance discount. We also
incurred issuance costs of $6 million in fiscal 2013. In fiscal 2011, we issued $1.1 billion of Senior Notes
consisting of the 4.20% Senior Notes due in 2020 and 2.75% Senior Notes due in 2015. We collectively refer to
such debt as our Senior Notes.
Our Senior Notes are senior unsecured obligations that rank equally in right of payment with all of our
existing and future unsecured, unsubordinated obligations and are redeemable by us at any time, subject to a
“make-whole” premium. Interest on our Senior Notes is payable semiannually. Both the discount and issuance
costs are being amortized as incremental interest expense over the respective terms of the Senior Notes.
Contractual interest expense totaled $73 million, $73 million, and $67 million in fiscal years 2015, 2014, and
2013, respectively.
Convertible Senior Notes
In fiscal 2014, the principal balance of our 1.00% Convertible Senior Notes issued in fiscal 2007 matured
and was settled by a cash payment of $1.0 billion, along with the $5 million semiannual interest payment. In
addition, we elected to pay the conversion value above par value in cash in the amount of $189 million.
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