Leases

12 Months Ended

Oct. 01, 2022

Leases [Abstract]

Leases

Leases

The Company’s operating leases primarily consist of real estate and equipment, including office space for general and administrative purposes, production facilities, land, cruise terminals, retail outlets and distribution centers for consumer products. The Company also has finance leases, primarily for broadcast equipment and land.

Some of our leases include renewal and/or termination options. If it is reasonably certain that a renewal or termination option will be exercised, the exercise of the option is considered in calculating the term of the lease. As of October 1, 2022, our operating leases have a weighted-average remaining lease term of approximately 11 years, and our finance leases have a weighted-average remaining lease term of approximately 29 years. The weighted-average incremental borrowing rate is 2.7% and 6.5%, for our operating leases and finance leases, respectively. At October 1, 2022 total estimated future lease payments for non-cancelable leases agreements that have not commenced of approximately $832 million are excluded from the measurement of the right-of-use asset and lease liability.

The Company’s operating and finance right-of-use assets and lease liabilities are as follows:

	October 1, 2022		October 2, 2021
Right-of-use assets(1)
Operating leases	$	3,966	$	3,895
Finance leases	303		336
Total right-of-use assets	4,269		4,231
Short-term lease liabilities(2)
Operating leases	614		637
Finance leases	37		41
	651		678
Long-term lease liabilities(3)
Operating leases	3,020		2,983
Finance leases	219		246
	3,239		3,229
Total lease liabilities	$	3,890	$	3,907

(1)Included in “Other assets” in the Consolidated Balance Sheet

(2)Included in “Accounts payable and other accrued liabilities” in the Consolidated Balance Sheet

(3)Included in “Other long-term liabilities” in the Consolidated Balance Sheet

The components of lease costs are as follows:

	2022		2021		2020
Finance lease cost
Amortization of right-of-use assets	$	39	$	42	$	37
Interest on lease liabilities	15		20		16
Operating lease cost	796		853		899
Variable fees and other(1)	363		414		491
Total lease cost	$	1,213	$	1,329	$	1,443

(1)Includes variable lease payments related to our operating and finance leases and costs of leases with initial terms of less than one year, net of sublease income

Cash paid during the year for amounts included in the measurement of lease liabilities is as follows:

	2022		2021		2020
Operating cash flows for operating leases	$	736	$	925	$	879
Operating cash flows for finance leases	15		20		16
Financing cash flows for finance leases	48		25		37
Total	$	799	$	970	$	932

Future minimum lease payments, as of October 1, 2022, are as follows:

	Operating		Financing
Fiscal Year:
2023	$	704	$	52
2024	590		43
2025	523		38
2026	384		33
2027	272		27
Thereafter	2,072		423
Total undiscounted future lease payments	4,545		616
Less: Imputed interest	(910)		(360)
Total reported lease liability	$	3,635	$	256

Leases

Leases

The Company’s operating leases primarily consist of real estate and equipment, including office space for general and administrative purposes, production facilities, land, cruise terminals, retail outlets and distribution centers for consumer products. The Company also has finance leases, primarily for broadcast equipment and land.

Some of our leases include renewal and/or termination options. If it is reasonably certain that a renewal or termination option will be exercised, the exercise of the option is considered in calculating the term of the lease. As of October 1, 2022, our operating leases have a weighted-average remaining lease term of approximately 11 years, and our finance leases have a weighted-average remaining lease term of approximately 29 years. The weighted-average incremental borrowing rate is 2.7% and 6.5%, for our operating leases and finance leases, respectively. At October 1, 2022 total estimated future lease payments for non-cancelable leases agreements that have not commenced of approximately $832 million are excluded from the measurement of the right-of-use asset and lease liability.

The Company’s operating and finance right-of-use assets and lease liabilities are as follows:

	October 1, 2022		October 2, 2021
Right-of-use assets(1)
Operating leases	$	3,966	$	3,895
Finance leases	303		336
Total right-of-use assets	4,269		4,231
Short-term lease liabilities(2)
Operating leases	614		637
Finance leases	37		41
	651		678
Long-term lease liabilities(3)
Operating leases	3,020		2,983
Finance leases	219		246
	3,239		3,229
Total lease liabilities	$	3,890	$	3,907

(1)Included in “Other assets” in the Consolidated Balance Sheet

(2)Included in “Accounts payable and other accrued liabilities” in the Consolidated Balance Sheet

(3)Included in “Other long-term liabilities” in the Consolidated Balance Sheet

The components of lease costs are as follows:

	2022		2021		2020
Finance lease cost
Amortization of right-of-use assets	$	39	$	42	$	37
Interest on lease liabilities	15		20		16
Operating lease cost	796		853		899
Variable fees and other(1)	363		414		491
Total lease cost	$	1,213	$	1,329	$	1,443

(1)Includes variable lease payments related to our operating and finance leases and costs of leases with initial terms of less than one year, net of sublease income

Cash paid during the year for amounts included in the measurement of lease liabilities is as follows:

	2022		2021		2020
Operating cash flows for operating leases	$	736	$	925	$	879
Operating cash flows for finance leases	15		20		16
Financing cash flows for finance leases	48		25		37
Total	$	799	$	970	$	932

Future minimum lease payments, as of October 1, 2022, are as follows:

	Operating		Financing
Fiscal Year:
2023	$	704	$	52
2024	590		43
2025	523		38
2026	384		33
2027	272		27
Thereafter	2,072		423
Total undiscounted future lease payments	4,545		616
Less: Imputed interest	(910)		(360)
Total reported lease liability	$	3,635	$	256