Quarterly report pursuant to Section 13 or 15(d)

Borrowings

v3.3.0.814
Borrowings
 9 Months Ended
Sep. 26, 2015
Debt Disclosure [Abstract]  
Borrowings [Text Block]
Note 13: Borrowings
Short-Term Debt
Our short-term debt at the end of each period was as follows:
(In Millions)
 
Sep 26,
2015
 
Dec 27,
2014
Drafts payable
 
$
41

 
$
16

Commercial paper
 
—

 
500

Current portion of long-term debt
 
1,096

 
1,088

Less: debt issuance costs associated with the current portion of long-term debt
 
(8
)
 
(8
)
Total short-term debt
 
$
1,129

 
$
1,596


The 2009 debentures are convertible, subject to certain conditions. Holders can surrender the 2009 debentures for conversion if the closing price of Intel common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during the 30 consecutive trading-day period ending on the last trading day of the preceding fiscal quarter.
During the third quarter of 2015, the closing stock price conversion right condition of the 2009 debentures was met and the debentures will be convertible at the option of the holders during the fourth quarter of 2015. As a result of the conversion period during the fourth quarter of 2015, the $1.1 billion carrying amount of the 2009 debentures remained classified as short-term debt on our consolidated condensed balance sheet as of September 26, 2015. The excess of the amount of cash payable if converted over the carrying amount of the 2009 debentures of $905 million remained classified as temporary equity on our consolidated condensed balance sheet as of September 26, 2015. In future periods, if the closing stock price conversion right condition is no longer met, all outstanding 2009 debentures would be reclassified to long-term debt and temporary equity would be reclassified to stockholders’ equity on our consolidated condensed balance sheet.
Long-Term Debt
Our long-term debt at the end of each period was as follows:
(In Millions)
Maturity Date
 
Stated Interest Rate
 
Sep 26,
2015
 
Dec 27,
2014
2015 Senior notes
July 2020
 
2.45%
 
$
1,748

 
$
—

2015 Senior notes
July 2022
 
3.10%
 
1,000

 
—

2015 Senior notes
July 2025
 
3.70%
 
2,247

 
—

2015 Senior notes
July 2045
 
4.90%
 
1,998

 
—

2015 Senior notes
August 2045
 
4.90%
 
1,010

 
—

2012 Senior notes
December 2017
 
1.35%
 
2,998

 
2,998

2012 Senior notes
December 2022
 
2.70%
 
1,495

 
1,495

2012 Senior notes
December 2032
 
4.00%
 
744

 
744

2012 Senior notes
December 2042
 
4.25%
 
924

 
924

2011 Senior notes
October 2016
 
1.95%
 
1,500

 
1,499

2011 Senior notes
October 2021
 
3.30%
 
1,997

 
1,997

2011 Senior notes
October 2041
 
4.80%
 
1,490

 
1,490

2009 Junior subordinated convertible debentures
August 2039
 
3.25%
 
1,096

 
1,088

2005 Junior subordinated convertible debentures
December 2035
 
2.95%
 
975

 
960

Long-term debt
 
 
 
 
$
21,222

 
$
13,195

Less: current portion of long-term debt
 
 
 
 
(1,096
)
 
(1,088
)
Less: debt issuance costs
 
 
 
 
(67
)
 
(48
)
Total long-term debt
 
 
 
 
$
20,059

 
$
12,059


During the third quarter of 2015, we issued a total of $8.0 billion aggregate principal amount of senior unsecured notes. In July of 2015, we issued an aggregate of $7.0 billion of principal amount of notes due in 2020, 2022, 2025, and 2045. In August of 2015, we issued $1.0 billion of principal amount of notes due in 2045. We will pay interest on these notes semi-annually. We may redeem the notes prior to their maturity at our option at specified redemption prices and subject to certain restrictions. The notes rank equally in right of payment with all of our other existing and future senior unsecured indebtedness and will effectively rank junior to all liabilities of our subsidiaries.
We intend to use the net proceeds of these offerings to fund a portion of the cash consideration for our pending acquisition of Altera. If the Altera acquisition does not close for any reason, the net proceeds of the offering will be used for general corporate purposes, which may include refinancing of indebtedness, with the exception of the $2.25 billion principal amount of 2025 notes and $2.0 billion of principal amount of 2045 notes, which are subject to special mandatory redemption at a redemption price of 101% of the principal amount thereof plus accrued and unpaid interest in the event that our acquisition of Altera is not consummated by, or the merger agreement is terminated before, December 31, 2016.
For further information on our debt instruments, see the "Borrowings" note in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 27, 2014 and Form 8-K filed with the SEC on June 5, 2015.