Cash, Cash Equivalents, Restricted Cash and Borrowings

9 Months Ended

Jun. 27, 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.

	June 27, 2020		September 28, 2019
Cash and cash equivalents	$	23,115	$	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	$	23,154	$	5,455

Borrowings

During the nine months ended June 27, 2020, the Company’s borrowing activity was as follows: 

	September 28, 2019		Borrowings		Payments		Other Activity		June 27, 2020
Commercial paper with original maturities less than three months(1)	$	1,934	$	—	$	(1,613)	$	29	$	350
Commercial paper with original maturities greater than three months	3,408		10,591		(7,605)		(9)		6,385
U.S. dollar denominated notes(2)	39,424		16,968		(2,257)		(219)		53,916
Asia Theme Parks borrowings	1,114		85		—		43		1,242
Foreign currency denominated debt and other(3)	1,106		977		(40)		485		2,528
	$	46,986	$	28,621	$	(11,515)	$	329	$	64,421

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

⁽²⁾The other activity is primarily due to the amortization of purchase price adjustments on debt assumed in the TFCF acquisition and debt issuance fees.

⁽³⁾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.

At June 27, 2020, the Company’s bank facilities, which are with a syndicate of lenders, were as follows:

	Committed Capacity		Capacity Used		Unused Capacity
Facility expiring March 2021	$	5,250	$	—	$	5,250
Facility expiring April 2021	5,000		—		5,000
Facility expiring March 2023	4,000		—		4,000
Facility expiring March 2025	3,000		—		3,000
Total	$	17,250	$	—	$	17,250

These bank facilities (other than the facility expiring April 2021) support commercial paper borrowings. All of the facilities allow for borrowings at LIBOR-based rates plus a spread depending on the credit default swap spread applicable to the Company’s debt, or a fixed spread in the case of the facility expiring in April 2021, 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 1.80%. 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 June 27, 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 June 27, 2020, the Company has $943 million of outstanding letters of credit, of which none were issued under this facility.

U.S. Dollar Denominated Notes

On March 19, 2020, the Company issued $6.0 billion of fixed rate senior notes, with maturities ranging from 5 years to 30 years, stated interest rates ranging from 3.35% to 4.70% and a weighted average stated rate of 4.03%.

On May 11, 2020, the Company issued $11.0 billion of fixed rate senior notes, with maturities ranging from 6 years to 40 years, stated interest rates ranging from 1.75% to 3.80% and a weighted average stated rate of 3.02%.

Foreign Currency Denominated Debt

On March 30, 2020, the Company issued Canadian $1.3 billion ($953 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 originally scheduled to be delivered in calendar 2021, 2022 and 2023. The impact of COVID-19 on the shipyard has resulted in an expected delay to the delivery of the cruise ships. The credit facilities 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				Nine Months Ended
	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Interest expense	$	(456)	$	(472)	$	(1,183)	$	(833)
Interest and investment income	41		34		180		139
Net periodic pension and postretirement benefit costs (other than service costs)	3		27		8		77
Interest expense, net	$	(412)	$	(411)	$	(995)	$	(617)

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.