Throughout the recent economic downturn, Disney has maintained a strong balance sheet and liquidity, allowing the company to borrow at attractive rates and creating value for shareholders by reducing the company’s cost of capital. As of the end of fiscal year 2002, Disney maintained net borrowings of $12.9 billion. While management believes that current debt levels allow for sufficient financial flexibility to borrow should sound business opportunities present themselves, the company still seeks to improve its credit statistics by reducing debt somewhat, in conjunction with an improvement in operating and free cash flow.