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Analysis of Debt
Difficulty: Advanced
Total Debt (Carrying Amount)
Walt Disney Co., Statement of Financial Position, Debt
USD $ in millions
| Sep 29, 2018 | Sep 30, 2017 | Oct 1, 2016 | Oct 3, 2015 | Sep 27, 2014 | Sep 28, 2013 | ||
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| Current portion of borrowings | |
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| Borrowings, excluding current portion | |
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| Total borrowings (carrying amount) | |
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Based on: 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19), 10-K (filing date: 2013-11-20).
| Item | Description | The company |
|---|---|---|
| Total borrowings (carrying amount) | Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations. | Walt Disney Co.’s total debt increased from 2016 to 2017 but then slightly declined from 2017 to 2018 not reaching 2016 level. |
Total Debt (Fair Value)
| Sep 29, 2018 | |
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| Selected Financial Data (USD $ in millions) | |
| Total borrowings (fair value) | |
| Ratio | |
| Debt, fair value to carrying amount | |
Based on: 10-K (filing date: 2018-11-21).
Weighted-average Interest Rate on Debt
Effective interest rate on borrowings:
| Interest Rate | Debt Amount1 | Interest Rate × Debt Amount | Weighted-average Interest Rate2 | |
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Based on: 10-K (filing date: 2018-11-21).
1 USD $ in millions
2 Weighted-average interest rate = 100 × ÷ =
Interest Costs Incurred
Walt Disney Co.
USD $ in millions
| 12 months ended | Sep 29, 2018 | Sep 30, 2017 | Oct 1, 2016 | Oct 3, 2015 | Sep 27, 2014 | Sep 28, 2013 | |||||||
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| Interest expense, net of capitalized interest | |
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| Interest capitalized | |
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| Interest costs incurred | |
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Based on: 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19), 10-K (filing date: 2013-11-20).
| Item | Description | The company |
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| Interest expense, net of capitalized interest | Amount of the cost of borrowed funds accounted for as interest expense for debt. | Walt Disney Co.’s interest expense, net of capitalized interest increased from 2016 to 2017 and from 2017 to 2018. |
| Interest capitalized | Amount of interest costs capitalized disclosed as an adjusting item to interest costs incurred. | Walt Disney Co.’s interest capitalized declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level. |
| Interest costs incurred | Total interest costs incurred during the period and either capitalized or charged against earnings. | Walt Disney Co.’s interest costs incurred increased from 2016 to 2017 and from 2017 to 2018. |
Adjusted Interest Coverage Ratio
Based on: 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19), 10-K (filing date: 2013-11-20).
2018 Calculations
1 Interest coverage ratio (excluding capitalized interest) = EBIT ÷ Interest expense
= ÷ =
2 Adjusted interest coverage ratio (including capitalized interest) = EBIT ÷ Interest costs incurred
= ÷ =
| Ratio | Description | The company |
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| Adjusted interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest). | Walt Disney Co.’s adjusted interest coverage ratio deteriorated from 2016 to 2017 and from 2017 to 2018. |