Cash, Cash Equivalents, Restricted Cash and Borrowings

6 Months Ended

Mar. 28, 2020

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 28, 2020		September 28, 2019
Cash and cash equivalents	$	14,339	$	5,418
Restricted cash included in:
Other current assets	1		26
Other assets	38		11

Total cash, cash equivalents and restricted cash in the statement of cash flows	$	14,378	$	5,455

Borrowings

During the six months ended March 28, 2020, the Company’s borrowing activity was as follows:


	September 28, 2019		Borrowings		Payments		Other Activity		March 28, 2020
Commercial paper with original maturities less than three months⁽¹⁾	$	1,934	$	1,598	$	—	$	(11)	$	3,521
Commercial paper with original maturities greater than three months	3,408		5,920		(4,380)		14		4,962
U.S. dollar denominated notes	39,424		5,981		(1,008)		(108)		44,289


Asia Theme Parks borrowings	1,114		39		—		32		1,185
Foreign currency denominated debt and other⁽²⁾	1,106		51		(40)		372		1,489
	$	46,986	$	13,589	$	(5,428)	$	299	$	55,446

⁽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. In March 2020, the Company refinanced two bank facilities with previously committed capacity of $6.0 billion and $2.25 billion, which were scheduled to expire in March 2020 and March 2021, respectively. The new bank facilities are for $5.25 billion and $3.0 billion and are scheduled to expire in March 2021 and 2025, respectively. At March 28, 2020, the Company’s bank facilities were as follows:


	Committed Capacity		Capacity Used		Unused Capacity
Facility expiring March 2021	$	5,250	$	—	$	5,250
Facility expiring March 2023	4,000		—		4,000
Facility expiring March 2025	3,000		—		3,000
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 bank facilities specifically exclude certain entities, including the Asia Theme Parks, from any representations, covenants or events of default. The bank facilities contain only one financial covenant, which is interest coverage of three times earnings before interest, taxes, depreciation and amortization, including both intangible amortization and amortization of our film and television production and programming costs. On March 28, 2020 the financial covenant was met 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 28, 2020, the Company has $1.0 billion of outstanding letters of credit, of which none were issued under this facility.

In April 2020, the Company entered into an additional $5.0 billion bank facility expiring in April 2021 with substantially similar terms as the Company’s other bank facilities. The facility allows for borrowings at LIBOR-based rates plus a spread that ranges between 1.025% and 1.800%.

Foreign Currency Denominated Debt

Subsequent to March 28, 2020, the Company issued Canadian $1.3 billion ($925 million) of fixed rate senior notes, which bear interest at 3.057% and mature in March 2027.

Cruise Ship Credit Facilities

The Company has credit facilities to finance three new cruise ships, which were to be delivered in 2021, 2022 and 2023 although delays are now expected as a result of the COVID-19 impact on the shipyard. 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, $1.1 billion is available beginning in May 2022 and $1.1 billion is available beginning in April 2023. Each tranche of financing may be utilized for a period of 18 months from the initial availability date. 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 (net of amounts capitalized), interest and investment income, and net periodic pension and postretirement benefit costs (other than service costs) (see Note 10) are reported net in the Condensed Consolidated Statements of Income and consist of the following:


	Quarter Ended						Six Months Ended
	March 28, 2020		March 30, 2019		March 28, 2020		March 30, 2019
Interest expense	$	(365)	$	(198)	$	(727)	$	(361)
Interest and investment income	63		30		139		105
Net periodic pension and postretirement benefit costs (other than service costs)	2		25		5		50
Interest expense, net	$	(300)	$	(143)	$	(583)	$	(206)

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