Cash, Cash Equivalents, Restricted Cash and Borrowings

6 Months Ended

Mar. 30, 2019

Disclosure of Cash, Cash Equivalents, Restricted Cash and Borrowings

Cash, Cash Equivalents, Restricted Cash and Borrowings

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheet to the total of the amounts reported in the Condensed Consolidated Statements of Cash Flows.



	March 30, 2019		September 29, 2018
Cash and cash equivalents	$	10,108	$	4,150
Restricted cash included in:
Other current assets	9		1
Other assets	5		4
Cash included in current assets held for sale	100		—
Total cash, cash equivalents and restricted cash in the statement of cash flows	$	10,222	$	4,155

Borrowings

During the six months ended March 30, 2019, the Company’s borrowing activity was as follows:



	September 29, 2018		Borrowings		Payments			Borrowings Assumed in Acquisition of 21CF		Other Activity			March 30, 2019
Commercial paper with original maturities less than three months⁽¹⁾	$	50	$	440	$	—		$	—	$	8		$	498
Commercial paper with original maturities greater than three months	955		992		(1,056		)	—		7			898
U.S. and European notes	17,942		—		(1,250		)	21,174		(33		)	37,833
Credit facilities to acquire 21CF	—		31,100		(16,100		)	—		—			15,000
Asia Theme Parks borrowings	1,145		—		(48		)	—		54			1,151
Foreign currency denominated debt and other⁽²⁾	782		45		—			549		205			1,581
	20,874		32,577		(18,454		)	21,723		241			56,961
Liabilities held for sale	—		—		—			1,069		—			1,069
	$	20,874	$	32,577	$	(18,454	)	$	22,792	$	241		$	58,030


⁽¹⁾	Borrowings and reductions of borrowings are reported net.


⁽²⁾	The other activity is due to market value adjustments for debt with qualifying hedges, partially offset by the impact of changes in foreign currency exchange rates.

The Company has bank facilities with a syndicate of lenders to support commercial paper borrowings as follows:



	Committed Capacity		Capacity Used		Unused Capacity
Facility expiring March 2020	$	6,000	$	—	$	6,000
Facility expiring March 2021	2,250		—		2,250
Facility expiring March 2023	4,000		—		4,000
Total	$	12,250	$	—	$	12,250

All of the above bank facilities allow for borrowings at LIBOR-based rates plus a spread depending on the credit default swap spread applicable to the Company’s debt, subject to a cap and floor that vary with the Company’s debt rating assigned by Moody’s Investors Service and Standard & Poor’s. The spread above LIBOR can range from 0.18% to 1.63%. The facilities specifically exclude certain entities, including the Asia Theme Parks, from any representations, covenants, or events of default and contain only one financial covenant relating to interest coverage, which the Company met on March 30, 2019 by a significant margin. The Company also has the ability to issue up to $500 million of letters of credit under the facility expiring in March 2023, which if utilized, reduces available borrowings under this facility. As of March 30, 2019, the Company has $1.4 billion of outstanding letters of credit, of which none were issued under this facility. Outstanding letters of credit include letters of credit assumed in the acquisition of 21CF primarily in support of international sports programming rights.

U.S. and European Notes

On March 20, 2019, the Company assumed public debt with a fair value of $21.2 billion (principal balance of $17.4 billion) upon the completion of the 21CF acquisition. The debt has maturities ranging from 1 to 78 years and stated rates ranging from 3.00% to 9.50%. On March 20, 2019, 96% ($16.8 billion) of the assumed debt was exchanged for senior notes of The Walt Disney Company, with essentially the same terms. The exchange was with qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States with investors who are not U.S. persons pursuant to Regulation S under the Securities Act. At March 30, 2019, the weighted-average stated interest rates and effective interest rates were 5.94% and 3.86%, respectively.

Credit Facilities to Acquire 21CF

On March 20, 2019, the Company borrowed $31.1 billion under two 364-day unsecured bridge loan facilities with a bank syndicate to fund the cash component of the 21CF acquisition. On March 21, 2019, the Company repaid one bridge loan facility in the amount of $16.1 billion, utilizing cash acquired in the 21CF transaction, and terminated the facility. The remaining 364-day unsecured bridge loan facility has $15.0 billion outstanding and is anticipated to be paid down with the after-tax net proceeds from the divestiture of the RSNs. The $15.0 billion loan facility bears interest at LIBOR plus 0.875% (3.51% as of March 30, 2019).

Foreign Currency Denominated Debt and Other

On March 20, 2019, the Company assumed a term loan and various unsecured credit facilities with an outstanding balance of $211 million upon the completion of the 21CF acquisition. The term loan and credit facilities have stated rates ranging from 7.80% to 10.05%. At March 30, 2019, the weighted-average stated interest rates was 8.56% and the term loan and unsecured credit facilities have been recorded in current borrowings.

On March 20, 2019, the Company consolidated Hulu and now reports its term loan with an outstanding balance of $338 million. The term loan matures in August 2022 and bears interest at LIBOR plus 0.917% (3.71% as of March 30, 2019). Two-thirds of the loan is guaranteed by the Company and one-third is guaranteed by Comcast Corporation and certain of its subsidiaries.

Liabilities Held for Sale

On March 20, 2019 as part of the 21CF acquisition, the Company assumed debt related to the The Yankees Entertainment and Sports Network (the “Yes Network”). The Yes Network has a $1.6 billion secured revolving credit facility and term loan facility that expires in December 2023. As of March 30, 2019, outstanding borrowings under the term loan facility and secured revolving credit facility were $1.1 billion and $10 million, respectively. The credit facilities bear interest at rates that are reset quarterly and are based on the leverage ratio of the Yes Network. The credit facilities contain restrictive covenants and are collateralized by a substantial portion of assets of the Yes Network. The Yes Network is one of the RSNs that is held for sale (see Note 4).

Cruise Ship Credit Facilities

In October 2016 and December 2017, the Company entered into credit facilities to finance three new cruise ships, which are expected to be delivered in 2021, 2022 and 2023. The financings may be used for up to 80% of the contract price of the

cruise ships. Under the agreements, $1.0 billion in financing is available beginning in April 2021, another $1.1 billion is available beginning in May 2022 and another $1.1 billion is available beginning in April 2023. If utilized, the interest rates will be fixed at 3.48%, 3.72% and 3.74%, respectively, and the loans and interest will be payable semi-annually over a 12-year period from the borrowing date. Early repayment is permitted subject to cancellation fees.

Interest expense, net

Interest expense, interest and investment income, and net periodic pension and postretirement benefit costs (other than service costs) (see Note 9) are reported net in the Condensed Consolidated Statements of Income and consist of the following (net of capitalized interest):



	Quarter Ended						Six Months Ended
	March 30, 2019			March 31, 2018			March 30, 2019			March 31, 2018
Interest expense	$	(198	)	$	(172	)	$	(361	)	$	(318	)
Interest and investment income	30			29			105			46
Net periodic pension and postretirement benefit costs (other than service costs)	25			—			50			—
Interest expense, net	$	(143	)	$	(143	)	$	(206	)	$	(272	)

Interest and investment income includes gains and losses on publicly and non-publicly traded investments, investment impairments and interest earned on cash and cash equivalents and certain receivables.