Walt Disney Co. (NYSE:DIS)

The analysis of the reported debt data over the specified periods reveals several key trends and shifts in the company's financial obligations.

Short-term finance lease liabilities

These liabilities increased significantly from 5 million US dollars in 2019 to a peak of 41 million in 2021, followed by a slight decrease to 30 million by 2024. This indicates an initial growth in short-term leasing commitments, with a gradual reduction in the most recent years.

Current portion of borrowings

There is a clear decline from 8,857 million in 2019 to 3,070 million by 2022, indicating a reduction in short-term borrowings or reclassification of debt. However, this trend reverses with an increase to 6,845 million in 2024, suggesting a renewed increase in borrowings due within one year.

Borrowings, excluding current portion

Long-term borrowings show a peak in 2020 at 52,917 million, followed by a steady decrease to 38,970 million in 2024. This trend suggests a deliberate reduction in long-term debt over the recent years, possibly reflecting debt repayments or refinancings.

Long-term finance lease liabilities

These liabilities exhibited growth from 146 million in 2019 to a peak of 271 million in 2020, then consistently declined to 160 million by 2024. This pattern aligns with the company's overall strategy to reduce long-term lease commitments after 2020.

Total borrowings and finance lease liabilities (carrying amount)

The total carrying amount of borrowings and finance lease liabilities rose from 47,137 million in 2019 to a maximum of 58,936 million in 2020 before diminishing steadily to 46,005 million in 2024. This indicates an overall reduction in the company's debt load since 2020, returning close to the 2019 level by 2024.

In summary, the data reflects a peak in both short-term and long-term liabilities around 2020 followed by a general downward trend in total borrowings and lease liabilities through 2024. While short-term borrowings showed a temporary decline post-2019, they have increased again recently. The consistent reduction in long-term borrowings and finance lease liabilities after 2020 suggests a focus on lowering longer-term financial obligations over the period analyzed.

Interest Expense, Net of Capitalized Interest

This figure shows an overall increasing trend from 1246 million USD in 2019 to 2070 million USD in 2024, indicating a rising net interest burden over the six-year period. There is a significant jump between 2019 and 2020, followed by a slight dip in 2021 and 2022. Afterward, it increases again, peaking in 2024 at the highest reported value.

Interest Capitalized

The amount of interest capitalized exhibits a generally upward trajectory over the years, starting at 222 million USD in 2019 and increasing steadily to 386 million USD by 2024. Notably, the increase becomes more pronounced after 2021, with substantial growth from 261 million USD in 2022 to 386 million USD in 2024.

Interest Costs Incurred

Total interest costs incurred also show a clear rising pattern, growing from 1468 million USD in 2019 to 2456 million USD in 2024. This aggregate measure combines the effects of both capitalized and expensed interest costs, reflecting the cumulative interest burden. The growth is relatively steady with a sharper increase seen between 2022 and 2023, where the costs jump by more than 500 million USD.

Overall Analysis

The data depicts an escalating cost environment for interest expenses over the six years under review. Both net interest expense and interest capitalized are contributing to the rising interest costs incurred, with capitalized interest showing a stronger upward acceleration in recent years. The increase in interest capitalized may imply greater investment in capital projects or changes in capitalization policies. The steady climb in net interest expense, despite minor fluctuations, suggests either higher debt levels or increased borrowing costs over time. The sharp increments observed in 2023 and 2024 warrant attention as they could impact future profitability and cash flows.

Interest Coverage Ratio (without capitalized interest)

The interest coverage ratio shows a significant decline from 12.19 in September 2019 to a negative value of -0.06 in October 2020, indicating a period of financial stress or insufficient earnings to cover interest expenses. Following this low point, the ratio gradually recovers over the subsequent years, reaching 2.66 in 2021, then increasing further to 4.41 in 2022. However, there is a slight decline to 3.42 in 2023 before a recovery to 4.66 in 2024. Overall, the trend suggests an initial severe weakening in interest coverage followed by a steady improvement, though the ratio remains below the pre-2019 level.

Adjusted Interest Coverage Ratio (with capitalized interest)

The adjusted ratio, which accounts for capitalized interest, follows a pattern similar to the unadjusted ratio but with slightly lower values throughout the period. It declines sharply from 10.35 in 2019 to -0.05 in 2020, mirroring the negative interest coverage situation. From 2020 onward, the ratio rises progressively to 2.37 in 2021 and then to 3.78 in 2022. The recovery trend temporarily dips to 2.88 in 2023 before improving again to 3.92 in 2024. This adjusted ratio confirms the period of financial difficulty around 2020, with gradual strengthening in subsequent years, although the adjusted figures suggest somewhat less robust coverage when capitalized interest is considered.