8	Borrowings

The Company’s borrowings at September 29, 2012 and October 1, 2011, including the impact of interest rate and cross-currency swaps, are summarized below:


					2012
							Interest rate and Cross-Currency Swaps ⁽²⁾
	2012		2011		Stated Interest Rate ⁽¹⁾		Pay Floating		Pay Fixed		Effective Interest Rate ⁽³⁾		Swap Maturities
Commercial paper borrowings	$	2,050	$	1,583		0.15%	$	—	$	—		0.15%
U.S. medium-term notes		10,117		8,400		3.80%		3,050		—		3.19%		2015-2018
European medium-term notes		90		91		1.65%		90		—		0.86%		2013
Other foreign currency denominated debt		1,225		1,020		2.53%		1,030		—		2.42%		2013
Capital Cities/ABC debt		112		114		8.75%		—		—		6.09%
Other ⁽⁴⁾		450		458		—		—		—		—

		14,044		11,666		3.17%		4,170		—		2.67%
Disneyland Paris (DLP) and Hong Kong Disneyland Resort (HKDL):
DLP – CDC loans		—		1,440		—		—		—		—
DLP – Other		—		541		—		—		—		—
HKDL – Borrowings		267		330		3.25%		—		—		2.97%

		267		2,311				—		—

Total borrowings		14,311		13,977		3.17%		4,170		—		2.68%

Less current portion		3,614		3,055		1.22%		786		—		1.28%

Total long-term borrowings	$	10,697	$	10,922			$	3,384	$	—

⁽¹⁾	The stated interest rate represents the weighted-average coupon rate for each category of borrowings. For floating rate borrowings, interest rates are based upon the rates at September 29, 2012; these rates are not necessarily an indication of future interest rates.

⁽²⁾	Amounts represent notional values of interest rate and cross-currency swaps as of September 29, 2012.

⁽³⁾

The effective interest rate includes the impact of existing and terminated interest rate and cross-currency swaps on the stated rate of interest. Other adjustments to the stated interest rate such as purchase accounting adjustments and debt issuance discounts and costs did not have a material impact on the overall effective interest rate.

⁽⁴⁾	Includes market value adjustments for debt with qualifying hedges totaling $296 million and $284 million at September 29, 2012 and October 1, 2011, respectively.

Commercial Paper

At September 29, 2012, the Company had $2.1 billion of commercial paper debt outstanding. In June 2012, the Company entered into a new five-year $2.25 billion bank facility with a syndicate of lenders which expires in 2017. This facility replaced an existing three-year $2.25 billion facility which was scheduled to expire in 2013, and in combination with an existing $2.25 billion bank facility that matures in 2015, is used to support commercial paper borrowings. These 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 public rating. The spread above LIBOR can range from 0.26% to 1.93%. The Company also has the ability to issue up to $800 million of letters of credit under the facility expiring in February 2015, which if utilized, reduces available borrowings under this facility. As of September 29, 2012, $258 million of letters of credit had been issued of which none was issued under this facility. The Company’s bank facilities contain only one financial covenant, relating to interest coverage, which the Company met on September 29, 2012 by a significant margin. The Company’s bank facilities also specifically exclude certain entities, including the International Theme Parks, from any representations, covenants, or events of default.

Shelf Registration Statement

At September 29, 2012, the Company had 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 29, 2012, the total debt outstanding under the U.S. medium-term note program was $10.1 billion. The maturities of current outstanding borrowings range from 1 to 81 years and stated interest rates range from 0.15% to 7.55%.

European Medium-Term Note Program

At September 29, 2012, the Company had $90 million outstanding under a $4.0 billion European medium-term note program which provides for the issuance of 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. The remaining capacity under the program is $3.9 billion, subject to market conditions and other factors impacting our borrowing capacity. The remaining capacity under the program replenishes as outstanding debt under the program is repaid. Outstanding borrowings under the program mature in 2013 and are denominated in Japanese yen (JPY).

Other Foreign Currency Denominated Debt

In July 2012, the Company refinanced CAD 328 million ($334 million at September 29, 2012 exchange rate) borrowed in connection with the acquisition of Club Penguin Entertainment, Inc. in July 2007. This borrowing bears interest at the Canadian Dealer Offered Rate plus 0.83% (2.12% at September 29, 2012) and matures in 2017.

In July 2008, the Company borrowed JPY 54 billion ($696 million at September 29, 2012 exchange rate). The loan bears interest at Japanese LIBOR plus 0.42% (0.61% at September 29, 2012) and matures in 2013.

In September 2012, the Company refinanced certain UTV borrowings using term loans of 9.4 billion Indian rupees ($177 million at September 29, 2012 exchange rate), with stated interest rates that range from 9.15% to 10.15%, subject to revisions, and which mature in 2015. The Company also arranged for short-term credit facilities of 10.1 billion Indian rupees ($191 million at September 29, 2012 exchange rate) which bear interest rates determined at the time of drawdown. The short-term credit facilities mature in 2013.

Capital Cities/ABC Debt

In connection with the Capital Cities/ABC, Inc. acquisition in 1996, the Company assumed various debt previously issued by Capital Cities/ABC, Inc. At September 29, 2012, the outstanding balance was $112 million, matures in 2021 and has a stated interest rate of 8.75%.

Disneyland Paris Borrowings

As of October 1, 2011, Disneyland Paris had outstanding borrowings of €1.1 billion ($1.4 billion) from Caisse des Dépôts et Consignations (CDC) and €398 million ($541 million) of debt to other third-party lenders. These borrowings had a weighted-average stated interest rate of 4.6% and maturities through 2028. In September 2012, the Company provided Disneyland Paris with €1.3 billion ($1.7 billion) of financing which was used to repay its outstanding third-party bank debt, including the amounts owed to the CDC. The Company incurred a net charge of $24 million on the repayment of the third-party debt which is reported in “Other income/(expense), net” in the fiscal 2012 Consolidated Statement of Income. The repayment of Disneyland Paris third-party debt removed certain of the financial and operating covenants, notably those related to capital expenditures and the payment of royalties and management fees due to the Company.

Hong Kong Disneyland Resort Borrowings

Hong Kong Disneyland Resort has an unsecured loan facility of HK$2.1 billion ($267 million at September 29, 2012 exchange rate) from the HKSAR scheduled to mature on dates through September 12, 2030, however earlier repayment may occur depending on future operations and capital expenditures of the park. The interest rate on this loan is subject to biannual revisions, but is capped at an annual rate of 6.75% (until March 2014), 7.625% (until March 2022) and 8.50% (until September 2030). As of September 29, 2012, the rate on the loans was 3.25%. The reduction in the balance outstanding reflects amounts converted to equity by HKSAR. See Note 6 for further details.

Total borrowings excluding market value adjustments, have the following scheduled maturities:


	Before International Theme Parks Consolidation		International Theme Parks		Total
2013	$	3,611	$	—	$	3,611
2014		1,458		—		1,458
2015		1,223		—		1,223
2016		1,524		23		1,547
2017		1,684		24		1,708
Thereafter		4,248		220		4,468

	$	13,748	$	267	$	14,015

The Company capitalizes interest on assets constructed for its parks, resorts, and other property and on theatrical productions. In 2012, 2011 and 2010, total interest capitalized was $92 million, $91 million and $82 million, respectively. Interest expense, net of capitalized interest, for 2012, 2011 and 2010 was $472 million, $435 million and $456 million, respectively.