You're confusing liabilities with loans. Those are trusts, taxes and other unpaid dues, of which $3.3 billion is to be a creditor to Paris including unpaid royalties, $9 billion is for AP and $4 billion is in deferred taxes. It's just accounting. Of course Disney has revolving credit, but none of it correlates with their ability to fund a project. For projects like building HKDL, Paris and parts of Shanghai, they're having someone else assume the liability and accrue that interest- but it's not on Disney's books. Even the extra money being dumped into Shanghai isn't a loan from a bank...
In fact, Disney made more money on interest with it's creditor status than it paid in interest to it's creditors.
You said Disney doesn't borrow. Disney says they do. I can assure you that I am not confused about accounting.
The March 10-Q discloses total liabilities of $36 billion, of which $7 billion is AP and $4 billion is deferred taxes (you got one right). And $15 billion is borrowings.
I agree with you that Disney has the resources to fund any project they want. In addition to the borrowings disclosed, they have committed revolving availability of $6 billion, plus the ability (not contractually, but logically) to get much more. And you are right that Disney only funds a small portion of HKDL and Shanghai. Nonetheless, there are $15 billion of borrowings. You know..the kind that require the payment of interest.
Description of the borrowings from the 10-K:
U.S. Medium-Term Note Program
At September 27, 2014, the total debt outstanding under the U.S. medium-term note program was $13.7 billion. The maturities of current outstanding borrowings range from 1 to 79 years. The debt outstanding includes $12.6 billion of fixed rate notes, which have stated interest rates that range from 0.45% to 7.55% and $1.1 billion of floating rate notes that bear interest at U.S. LIBOR plus or minus a spread. At September 27, 2014, the effective rate on floating rate notes was 0.38%.
European Medium-Term Note Program
At September 27, 2014, the Company had 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. The Company had no outstanding borrowings under the program at September 27, 2014.
Foreign Currency Denominated Debt
At September 27, 2014, the Company had CAD 328 million ($294 million) of debt outstanding, which was 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% (2.10% at September 27, 2014) and matures in 2017.
In July 2008, the Company borrowed JPY 54 billion ($538 million) of floating rate loans that had an interest rate of Japanese LIBOR plus 0.42% and which matured in 2013.
In September 2014, the Company renewed short-term credit facilities of Indian Rupee (INR) 11.4 billion ($185 million), which bears interest at rates determined at the time of drawdown and expire in 2015. At September 27, 2014, the Company has borrowed INR 5.4 billion ($88 million) under the short-term credit facilities, which bears interest at an average rate of 9.73%. Additionally, the Company had INR 9.1 billion ($148 million) of borrowings outstanding at September 27, 2014, which bears interest at an average rate of 10.49%, subject to annual revisions, and matures in September 2015.
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 27, 2014, the outstanding balance was $110 million, matures in2021 and has a stated interest rate of 8.75%.
