Borrowings

The Company’s borrowings at September 30, 2017 and October 1, 2016, including the impact of interest rate and cross-currency swaps, are summarized below:



						2017
	2017			2016		Stated Interest Rate ⁽¹⁾		Pay Floating Interest rate and Cross- Currency Swaps ⁽²⁾		Effective Interest Rate ⁽³⁾		Swap Maturities
Commercial paper	$	2,772		$	1,521	—		$	—	1.24	%
U.S. and European medium-term notes ⁽⁴⁾	19,721			16,827		2.73	%	8,150		2.70	%	2018-2027
BAMTech acquisition payable	1,581			—		1.27	%	—		1.27	%
Capital Cities/ABC debt	105			107		8.75	%	—		6.00	%
Foreign currency denominated debt	13			448		7.65	%	—		7.65	%
Other ⁽⁵⁾	(46		)	180				—
	24,146			19,083		2.35	%	8,150		2.46	%
Asia Theme Parks borrowings	1,145			1,087		1.24	%	—		5.07	%
Total borrowings	25,291			20,170		2.30	%	8,150		2.58	%
Less current portion	6,172			3,687		0.93	%	1,550		1.44	%
Total long-term borrowings	$	19,119		$	16,483			$	6,600


⁽¹⁾	The stated interest rate represents the weighted-average coupon rate for each category of borrowings. For floating rate borrowings, interest rates are the rates in effect at September 30, 2017; these rates are not necessarily an indication of future interest rates.


⁽²⁾	Amounts represent notional values of interest rate and cross-currency swaps outstanding as of September 30, 2017.


⁽³⁾	The effective interest rate includes the impact of existing and terminated interest rate and cross-currency swaps, purchase accounting adjustments and debt issuance premiums, discounts and costs.


⁽⁴⁾	Includes net debt issuance premiums, discounts and costs totaling $138 million and $132 million at September 30, 2017 and October 1, 2016, respectively.


⁽⁵⁾	Includes market value adjustments for debt with qualifying hedges, which reduce borrowings by $73 million and increase borrowings by $146 million at September 30, 2017 and October 1, 2016, respectively.

Commercial Paper

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 2018	$	2,500	$	—	$	2,500
Facility expiring March 2019	2,250		—		2,250
Facility expiring March 2021	2,250		—		2,250
Total	$	7,000	$	—	$	7,000

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 and Poor’s. The spread above LIBOR can range from 0.23% to 1.63%. The Company also has the ability to issue up to $800 million of letters of credit under the facility expiring in March 2019, which if utilized, reduces available borrowings under this facility. As of September 30, 2017, the Company has $181 million of outstanding letters of credit, of which none were issued under this facility. The facilities specifically exclude certain entities, including the International 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 September 30, 2017 by a significant margin.

Commercial paper activity is as follows:



	Commercial paper with original maturities less than three months, net ⁽¹⁾			Commercial paper with original maturities greater than three months			Total
Balance at Oct. 3, 2015	$	2,330		$	100		$	2,430
Additions	—			4,794			4,794
Payments	(1,559		)	(4,155		)	(5,714		)
Other Activity	6			5			11
Balance at Oct. 1, 2016	$	777		$	744		$	1,521
Additions	372			6,364			6,736
Payments	—			(5,489		)	(5,489		)
Other Activity	2			2			4
Balance at Sept. 30, 2017	$	1,151		$	1,621		$	2,772

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

Shelf Registration Statement

The Company has a shelf registration statement in place, which allows the Company to issue various types of debt instruments, such as fixed or floating rate notes, U.S. dollar or foreign currency denominated notes, redeemable notes, global notes, and dual currency or other indexed notes. Issuances under the shelf registration will require the filing of a prospectus supplement identifying the amount and terms of the securities to be issued. Our ability to issue debt is subject to market conditions and other factors impacting our borrowing capacity.

U.S. Medium-Term Note Program

At September 30, 2017, the total debt outstanding under the U.S. medium-term note program was $19.2 billion with maturities ranging from 1 to 76 years. The debt outstanding includes $17.2 billion of fixed rate notes, which have stated interest rates that range from 0.88% to 7.55% and $2.0 billion of floating rate notes that bear interest at U.S. LIBOR plus or minus a spread. At September 30, 2017, the effective rate on floating rate notes was 1.66%.

European Medium-Term Note Program

The Company has a European medium-term note program, which allows the Company to issue various types of debt instruments such as fixed or floating rate notes, U.S. dollar or foreign currency denominated notes, redeemable notes and index linked or dual currency notes. Capacity under the program is $4.0 billion, subject to market conditions and other factors impacting our borrowing capacity. Capacity under the program replenishes as outstanding debt under the program is repaid. At September 30, 2017, the total debt outstanding under the program was $496 million. The debt has a stated interest rate of 2.13% and matures in September 2022.

BAMTech Acquisition Payable

In September 2017, the Company acquired a 42% interest in BAMTech for $1.6 billion due in January 2018 (see Note 3).

Capital Cities/ABC Debt

In connection with the Capital Cities/ABC, Inc. acquisition in 1996, the Company assumed debt previously issued by Capital Cities/ABC, Inc. At September 30, 2017, the outstanding balance was $105 million, which includes unamortized fair value adjustments recorded in purchase accounting. The debt matures in 2021 and has a stated interest rate of 8.75%.

Foreign Currency Denominated Debt

The Company has short-term credit facilities of Indian rupee (INR) 10.8 billion ($165 million), which bear interest at rates determined at the time of drawdown and expire in 2018. At September 30, 2017, the outstanding balance was INR 840 million ($13 million), which bears interest at an average rate of 7.65%.

Asia Theme Parks Borrowings

As part of financing the construction of a third hotel at Hong Kong Disneyland Resort, HKSAR converted $219 million of a loan to equity during fiscal 2016 and 2015, leaving a balance at September 30, 2017 of HK$0.4 billion ($46 million). The interest rate on this loan is subject to biannual revisions and determined based on the Hong Kong prime rate less 0.875%, but is capped at an annual rate of 7.625% until March 2022. After March 2022, the interest rate is capped at an annual rate of 8.50%. As of September 30, 2017, the rate on the loan was 4.13%. Debt service payments will be made depending on sufficient available funds. Repayment is required by September 30, 2022; however, early repayment is permitted.

In addition, HKSAR provided Hong Kong Disneyland Resort with a loan facility totaling HK$0.8 billion ($104 million) that bears interest at a rate of three month HIBOR plus 2% and matures in 2025; however, earlier repayment is permitted. At September 30, 2017, Hong Kong Disneyland Resort had borrowed HK$0.7 billion ($93 million) under the loan facility, which bears interest at a rate of 2.78%.

Shendi has provided Shanghai Disney Resort with term loans totaling 6.7 billion yuan (approximately $1.0 billion) bearing interest at rates that increase to 8% and maturing in 2036; however, early repayment is permitted. Shendi has also provided Shanghai Disney Resort with a 1.4 billion yuan (approximately $205 million) line of credit bearing interest at 8%. There is no outstanding balance under the line of credit at September 30, 2017.

Credit facility for cruise ships

In October 2016, the Company entered into two credit facilities to finance two new cruise ships, which are expected to be delivered in 2021 and 2023. The financing 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 and $1.1 billion is available beginning in April 2023. If utilized, the interest rates will be fixed at 3.48% and 3.74%, respectively, and payable semi-annually. The loans will be repaid in 24 equal installments over a 12-year period from the borrowing date. Early repayment is permitted subject to cancellation fees.

Subsequent Debt Issuance

On October 3, 2017, the Company issued Canadian $1.3 billion ($997 million) of fixed rate debt, which bears interest at 2.76% and matures in October 2024. The Company also entered into pay-float interest rate and cross currency swaps that effectively convert the borrowing to variable rate U.S. dollar denominated borrowing indexed to LIBOR.

Total borrowings, excluding market value adjustments and debt issuance premiums, discounts and costs, have the following scheduled maturities:



	Before Asia Theme Parks Consolidation		Asia Theme Parks		Total
2018	$	6,169	$	—	$	6,169
2019	2,757		59		2,816
2020	3,000		—		3,000
2021	2,105		—		2,105
2022	1,900		46		1,946
Thereafter	8,426		1,040		9,466
	$	24,357	$	1,145	$	25,502

The Company capitalizes interest on assets constructed for its parks and resorts and on certain film and television productions. In fiscal years 2017, 2016 and 2015, total interest capitalized was $87 million, $139 million and $110 million, respectively. Interest expense, net of capitalized interest, for fiscal years 2017, 2016 and 2015 was $507 million, $354 million and $265 million, respectively.