What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-02-05 compared with 2024-08-07 · 292 added, 482 removed, 646 unchanged (55% of the section changed)

1 unchanged sentence

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

in millions, except per share data)

Quarter Ended Nine Months Ended

2023 June 29,

Quarter Ended

2024 December 30,

Services $ 22,048 $ 20,975

10 unchanged sentences

Restructuring and impairment charges ( 143 ) —

Other income (expense), net

( 65 ) ( 11 ) ( 65 ) 96

Interest expense, net ( 367 ) ( 246 )

Equity in the income of investees 92 181

Income (loss) before income taxes

3,093 ( 134 ) 6,621 3,762

( 251 ) ( 19 ) ( 1,412 ) ( 1,066 )

Net income (loss)

Income before income taxes 3,660 2,871

( 1,016 ) ( 720 )

Net income 2,644 2,151

Net income attributable to noncontrolling interests

( 90 ) ( 240 )

Net income (loss) attributable to The Walt Disney Company (Disney)

Net income attributable to The Walt Disney Company (Disney)

$ 2,554 $ 1,911

Earnings (loss) per share attributable to Disney:

Earnings per share attributable to Disney:

Diluted $ 1.40 $ 1.04

5 unchanged sentences

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Quarter Ended Nine Months Ended

2023 June 29,

Net income (loss) $ 2,842 $ ( 153 ) $ 5,209 $ 2,696

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Quarter Ended

2024 December 30,

Net income $ 2,644 $ 2,151

Other comprehensive income (loss), net of tax:

1 unchanged sentence

Pension and postretirement medical plan adjustments

( 20 ) 1 ( 65 ) 58

Foreign currency translation and other

( 32 ) ( 101 ) 23 241

Other comprehensive income (loss) 939 ( 166 )

Comprehensive income (loss)

2,888 ( 243 ) 5,061 2,381

Comprehensive income 3,583 1,985

Net income attributable to noncontrolling interests

1 unchanged sentence

Other comprehensive income (loss) attributable to noncontrolling interests

9 66 ( 14 ) 21

Comprehensive income (loss) attributable to Disney

$ 2,676 $ ( 484 ) $ 4,350 $ 1,796

Comprehensive income attributable to Disney $ 3,565 $ 1,701

See Notes to Condensed Consolidated Financial Statements

33 unchanged sentences

Commitments and contingencies (Note 13)

Redeemable noncontrolling interests — 9,055

Preferred stock

Common stock, $0.01 par value, Authorized – 4.6 billion shares, Issued – 1.9 billion shares at June 29, 2024 and 1.8 billion shares at September 30, 2023

Common stock, $0.01 par value, Authorized – 4.6 billion shares, Issued – 1.9 billion shares

58,868 58,592

1 unchanged sentence

Accumulated other comprehensive loss ( 2,688 ) ( 3,699 )

Treasury stock, at cost, 42 million shares at June 29, 2024 and 19 million shares at September 30, 2023

Treasury stock, at cost, 54 million shares at December 28, 2024 and 47 million shares at September 28, 2024

( 4,715 ) ( 3,919 )

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

Quarter Ended

2024 December 30,

OPERATING ACTIVITIES

1 unchanged sentence

Depreciation and amortization 1,276 1,243

Goodwill impairment and impairment of produced and licensed content

Deferred income taxes 25 ( 51 )

13 unchanged sentences

Investments in parks, resorts and other property ( 2,466 ) ( 1,299 )

Proceeds from sale of investments 101 458

Purchase of investments

Other, net ( 109 ) 53

3 unchanged sentences

Commercial paper borrowings, net

( 169 ) 1,046

Borrowings 1,057 —

Reduction of borrowings ( 951 ) ( 309 )

Dividends ( 549 ) —

Repurchases of common stock ( 794 ) —

Contributions from noncontrolling interests

Acquisition of redeemable noncontrolling interests

( 8,610 ) ( 900 )

Other, net ( 140 ) ( 133 )

15 unchanged sentences

Interests (2)

Balance at March 30, 2024 1,826 $ 58,028 $ 46,649 $ ( 3,509 ) $ ( 1,916 ) $ 99,252 $ 4,511 $ 103,763

Balance at September 28, 2024 1,812 $ 58,592 $ 49,722 $ ( 3,699 ) $ ( 3,919 ) $ 100,696 $ 4,826 $ 105,522

Comprehensive income

5 unchanged sentences

Distributions and other — — ( 1 ) — ( 2 ) ( 3 ) ( 38 ) ( 41 )

Balance at June 29, 2024 1,816 $ 58,252 $ 49,273 $ ( 3,454 ) $ ( 3,449 ) $ 100,622 $ 4,681 $ 105,303

Balance at April 1, 2023 1,827 $ 56,919 $ 46,236 $ ( 4,389 ) $ ( 907 ) $ 97,859 $ 3,697 $ 101,556

Comprehensive income (loss)

— — ( 460 ) ( 24 ) — ( 484 ) 168 ( 316 )

Equity compensation activity 3 210 — — — 210 — 210

Contributions — — — — — — 602 602

Distributions and other — 7 18 — — 25 ( 21 ) 4

Balance at July 1, 2023 1,830 $ 57,136 $ 45,794 $ ( 4,413 ) $ ( 907 ) $ 97,610 $ 4,446 $ 102,056

(1) Shares are net of treasury shares.

(2) Excludes redeemable noncontrolling interests.

See Notes to Condensed Consolidated Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Nine Months Ended

Equity Attributable to Disney

Common Stock Retained Earnings

Comprehensive

(Loss) Treasury Stock Total Disney Equity

Non-controlling Interests (2)

Balance at December 28, 2024 1,810 $ 58,868 $ 50,468 $ ( 2,688 ) $ ( 4,715 ) $ 101,933 $ 4,806 $ 106,739

Balance at September 30, 2023 1,830 $ 57,383 $ 46,093 $ ( 3,292 ) $ ( 907 ) $ 99,277 $ 4,680 $ 103,957

Comprehensive income (loss)

Equity compensation activity 9 866 — — — 866 — 866

Dividends — 4 ( 1,370 ) — — ( 1,366 ) — ( 1,366 )

Common stock repurchases

— — 1,911 ( 210 ) — 1,701 129 1,830

Distributions and other — ( 1 ) 38 — ( 19 ) 18 ( 555 ) ( 537 )

Balance at June 29, 2024 1,816 $ 58,252 $ 49,273 $ ( 3,454 ) $ ( 3,449 ) $ 100,622 $ 4,681 $ 105,303

Balance at October 1, 2022 1,824 $ 56,398 $ 43,636 $ ( 4,119 ) $ ( 907 ) $ 95,008 $ 3,871 $ 98,879

Comprehensive income (loss)

— — 2,090 ( 294 ) — 1,796 299 2,095

Equity compensation activity 4 250 — — — 250 — 250

Contributions — — — — — — 789 789

Dividends — — ( 549 ) — — ( 549 ) — ( 549 )

Distributions and other — 7 35 — — 42 ( 29 ) 13

Balance at July 1, 2023 1,830 $ 57,136 $ 45,794 $ ( 4,413 ) $ ( 907 ) $ 97,610 $ 4,446 $ 102,056

Balance at December 30, 2023 1,834 $ 57,640 $ 47,490 $ ( 3,502 ) $ ( 907 ) $ 100,721 $ 4,780 $ 105,501

(1) Shares are net of treasury shares.

8 unchanged sentences

We believe that we have included all normal recurring adjustments necessary for a fair statement of the results for the interim period.

Operating results for the nine months ended June 29, 2024 are not necessarily indicative of the results that may be expected for the year ending September 28, 2024.

Operating results for the quarter ended December 28, 2024 are not necessarily indicative of the results that may be expected for the year ending September 27, 2025.

The terms “Company,” “Disney,” “we,” “us,” and “our” are used in this report to refer collectively to the parent company, The Walt Disney Company, as well as the subsidiaries through which its various businesses are actually conducted.

8 unchanged sentences

Redeemable Noncontrolling Interest

In November 2023, NBC Universal (NBCU) exercised its right to require the Company to purchase NBCU’s 33 % interest in Hulu LLC (Hulu), a direct-to-consumer (DTC) streaming service provider, at a redemption value based on NBCU’s equity ownership percentage of the greater of Hulu’s equity fair value or a guaranteed floor value of $ 27.5 billion.

The Company has a 67 % ownership interest in Hulu LLC (Hulu), a direct-to-consumer (DTC) streaming service provider.

In November 2023, NBC Universal (NBCU) exercised its right to require the Company to purchase NBCU’s 33 % interest in Hulu at a redemption value based on NBCU’s equity ownership percentage of the greater of Hulu’s equity fair value or a guaranteed floor value of $ 27.5 billion.

In connection with the redemption, the Company will pay NBCU 50 % of the future tax benefits from the amortization of the purchase of NBCU’s interest in Hulu as the Company’s cash tax benefits are realized, generally over a 15 -year period.

8 unchanged sentences

Once the arbitration is completed, determination of the final equity fair value will take into account the valuation of a third appraiser pursuant to the appraisal process as resolved by the arbitration.

As such, if the third appraiser’s equity fair value determination were equal to or below the guaranteed floor value, the Company would not be required to pay NBCU any additional amount.

Conversely, if NBCU’s appraisal were deemed to be valid and the third appraiser’s equity fair value determination were consistent with the NBCU’s appraiser’s valuation, the Company would be required to pay NBCU an

If the third appraiser’s equity fair value determination were equal to or below the guaranteed floor value, the Company would not be required to pay NBCU any additional amount.

Conversely, if NBCU’s appraiser’s valuation were deemed to be valid and the third appraiser’s equity fair value determination

THE WALT DISNEY COMPANY

1 unchanged sentence

tabular dollars in millions, except for per share data)

additional amount of approximately $ 5 billion as its share of the difference between the equity fair value and the guaranteed floor value.

were consistent with the NBCU’s appraiser’s valuation, the Company would be required to pay NBCU an additional amount of approximately $ 5 billion as its share of the difference between the equity fair value and the guaranteed floor value.

If the third appraiser’s equity fair value determination were between the valuations of the Company’s and NBCU’s appraisers, the incremental amount would likewise be between zero and approximately $ 5 billion.

Any incremental amount determined to be payable to NBCU to acquire NBCU’s interest in Hulu would be recorded as “Net income attributable to noncontrolling interests” and thus reduce “Net income attributable to Disney” in the Condensed Consolidated Statements of Operations in the period recorded.

In November 2022, the Company purchased Major League Baseball’s (MLB) 15 % redeemable noncontrolling interest in BAMTech LLC (BAMTech), which holds the Company’s domestic DTC sports business, for $ 900 million (MLB buy-out).

MLB’s interest was recorded in the Company’s financial statements at $ 828 million prior to the MLB buy-out.

The $ 72 million difference was recorded as an increase in “Net income attributable to noncontrolling interests” in the Condensed Consolidated Statements of Operations.

During the nine months ended July 1, 2023, Hearst Corporation (Hearst) contributed $ 710 million to the domestic DTC sports business, in part to fund its 20 % share of the MLB buy-out and in part to fund its share of the domestic DTC sports business’s operating cash requirements, which had been funded by the Company through intercompany loans.

Use of Estimates

7 unchanged sentences

Segment operating results reflect earnings before corporate and unallocated shared expenses, restructuring and impairment charges, net other income/expense, net interest expense, income taxes and noncontrolling interests.

Segment operating income includes equity in the income of investees and excludes amortization of intangible assets and the fair value step-up for film and television costs recognized in connection with the acquisition of TFCF Corporation (TFCF) and Hulu in fiscal 2019 (TFCF and Hulu Acquisition Amortization).

Segment operating income generally includes equity in the income of investees and excludes amortization of intangible assets and the fair value step-up for film and television costs recognized in connection with the acquisition of TFCF Corporation (TFCF) and Hulu in fiscal 2019 (TFCF and Hulu Acquisition Amortization).

Corporate and unallocated shared expenses principally consist of corporate functions, executive management and certain unallocated administrative support functions.

Segment operating results include allocations of certain costs, including information technology, pension, legal and other shared services costs, which are allocated based on metrics designed to correlate with consumption.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

Segment revenues and segment operating income are as follows:

Quarter Ended Nine Months Ended

2023 June 29,

Quarter Ended

2024 December 30,

Entertainment

1 unchanged sentence

Intersegment 111 100

10,580 10,127 30,357 31,111

Third parties 4,514 4,536

Intersegment 336 299

4,558 4,335 13,705 13,201

Experiences 9,415 9,132

1 unchanged sentence

Total segment revenues $ 24,690 $ 23,549

Segment operating income:

Segment operating income (loss):

Entertainment $ 1,703 $ 874

3 unchanged sentences

$ 5,060 $ 3,876

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

Equity in the income of investees is included in segment operating income as follows:

Quarter Ended Nine Months Ended

2023 June 29,

Quarter Ended

2024 December 30,

Entertainment $ 118 $ 171

Sports 26 20 45 39

Experiences — — — ( 2 )

Equity in the income of investees included in segment operating income 128 184

Equity in the loss of India joint venture

Amortization of TFCF intangible assets related to an equity investee

( 3 ) ( 3 ) ( 9 ) ( 9 )

Equity in the income of investees, net $ 92 $ 181

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

A reconciliation of segment operating income to income before income taxes is as follows:

Quarter Ended Nine Months Ended

2023 June 29,

Quarter Ended

2024 December 30,

Segment operating income $ 5,060 $ 3,876

Corporate and unallocated shared expenses ( 460 ) ( 308 )

Equity in the loss of India joint venture ( 33 ) —

Restructuring and impairment charges (1)

— ( 2,650 ) ( 2,052 ) ( 2,871 )

Other income (expense), net (2)

( 65 ) ( 11 ) ( 65 ) 96

Interest expense, net ( 367 ) ( 246 )

4 unchanged sentences

(1) See Note 4 for a discussion of amounts in restructuring and impairment charges.

(2) “Other income (expense), net” for the quarter and nine months ended June 29, 2024 reflected a charge of $ 65 million related to a legal ruling.

In the prior-year quarter and nine months ended July 1, 2023, the Company recognized a gain of $ 90 million and $ 169 million, respectively, on its investment in DraftKings, Inc.

(DraftKings Gain), which was sold in the prior-year quarter.

“Other income (expense), net” for the prior-year quarter and nine months ended July 1, 2023 also included a charge of $ 101 million related to a legal ruling.

(2) TFCF and Hulu Acquisition Amortization is as follows:

Quarter Ended Nine Months Ended

2023 June 29,

Quarter Ended

2024 December 30,

Amortization of intangible assets $ 327 $ 380

1 unchanged sentence

Intangibles related to a TFCF equity investee

$ 397 $ 432 $ 1,282 $ 1,569

The following table presents revenues by segment and major source:

Quarter Ended June 29, 2024

Entertainment Sports Experiences Eliminations Total

Subscription fees $ 4,729 $ 414 $ — $ — $ 5,143

Affiliate fees 1,726 2,571 — ( 291 ) 4,006

Advertising 1,941 1,339 — — 3,280

Theme park admissions — — 2,780 — 2,780

Resort and vacations — — 2,115 — 2,115

Retail and wholesale sales of merchandise, food and beverage — — 2,246 — 2,246

Merchandise licensing 143 — 702 — 845

TV/VOD distribution licensing

670 108 — — 778

Theatrical distribution licensing 724 — — — 724

Home entertainment 142 — — — 142

Other 505 126 543 ( 78 ) 1,096

$ 10,580 $ 4,558 $ 8,386 $ ( 369 ) $ 23,155

The changes in the carrying amount of goodwill are as follows:

Entertainment Sports Experiences Total

Balance at September 28, 2024 $ 51,290 $ 16,486 $ 5,550 $ 73,326

Currency translation adjustments and other, net ( 14 ) — — ( 14 )

Balance at December 28, 2024 $ 51,276 $ 16,486 $ 5,550 $ 73,312

THE WALT DISNEY COMPANY

1 unchanged sentence

tabular dollars in millions, except for per share data)

Quarter Ended July 1, 2023

The following table presents revenues by segment and major source:

Quarter Ended December 28, 2024

Entertainment Sports Experiences Eliminations Total

3 unchanged sentences

Theme park admissions — — 3,087 — 3,087

Resort and vacations — — 1,990 — 1,990

Retail and wholesale sales of merchandise, food and beverage — — 2,226 — 2,226

Merchandise licensing 128 — 748 — 876

TV/VOD distribution licensing

572 64 — — 636

Theatrical distribution licensing 838 — — — 838

Home entertainment 252 — — — 252

Other 458 105 502 ( 60 ) 1,005

Resorts and vacations

— — 2,221 — 2,221

Nine Months Ended June 29, 2024

Entertainment Sports Experiences Eliminations Total

Subscription fees $ 14,041 $ 1,246 $ — $ — $ 15,287

Affiliate fees 5,251 7,918 — ( 883 ) 12,286

Advertising 5,709 3,640 — — 9,349

Theme park admissions — — 8,568 — 8,568

Resort and vacations — — 6,334 — 6,334

Retail and wholesale sales of merchandise, food and beverage — — 2,572 — 2,572

Merchandise licensing 165 — 927 — 1,092

TV/VOD distribution licensing

TV/VOD and home entertainment distribution

943 78 — — 1,021

Theatrical distribution licensing 642 — — — 642

Home entertainment 540 — — — 540

Other 504 373 608 ( 126 ) 1,359

$ 10,872 $ 4,850 $ 9,415 $ ( 447 ) $ 24,690

Nine Months Ended July 1, 2023

Quarter Ended December 30, 2023

Entertainment Sports Experiences Eliminations Total

3 unchanged sentences

Theme park admissions — — 2,982 — 2,982

Resort and vacations — — 5,919 — 5,919

Resorts and vacations

— — 2,118 — 2,118

Retail and wholesale sales of merchandise, food and beverage — — 2,477 — 2,477

Merchandise licensing 192 — 967 — 1,159

TV/VOD distribution licensing

TV/VOD and home entertainment distribution

745 57 — — 802

Theatrical distribution licensing 251 — — — 251

Home entertainment 639 — — — 639

Other 523 343 588 ( 106 ) 1,348

$ 9,981 $ 4,835 $ 9,132 $ ( 399 ) $ 23,549

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

The following table presents revenues by segment and primary geographical markets:

Quarter Ended June 29, 2024

Entertainment Sports Experiences Eliminations Total

Americas $ 8,222 $ 4,190 $ 6,250 $ ( 369 ) $ 18,293

Europe 1,427 75 1,070 — 2,572

Asia Pacific 931 293 1,066 — 2,290

Total revenues $ 10,580 $ 4,558 $ 8,386 $ ( 369 ) $ 23,155

Quarter Ended July 1, 2023

Entertainment Sports Experiences Eliminations Total

Americas $ 7,885 $ 3,965 $ 6,245 $ ( 330 ) $ 17,765

Europe 1,316 75 945 — 2,336

Asia Pacific 926 295 1,008 — 2,229

Total revenues $ 10,127 $ 4,335 $ 8,198 $ ( 330 ) $ 22,330

Nine Months Ended June 29, 2024

Quarter Ended December 28, 2024

Entertainment Sports Experiences Eliminations Total

3 unchanged sentences

Total revenues $ 10,872 $ 4,850 $ 9,415 $ ( 447 ) $ 24,690

Nine Months Ended July 1, 2023

Quarter Ended December 30, 2023

Entertainment Sports Experiences Eliminations Total

4 unchanged sentences

Revenues recognized in the current and prior-year periods from performance obligations satisfied (or partially satisfied) in previous reporting periods primarily relate to revenues earned on TV/VOD licenses for titles made available to the licensee in previous reporting periods.

For the quarter ended June 29, 2024, $ 0.3 billion was recognized related to performance obligations satisfied as of March 30, 2024.

For the nine months ended June 29, 2024, $ 0.8 billion was recognized related to performance obligations satisfied as of September 30, 2023.

For the quarter ended July 1, 2023, $ 0.3 billion was recognized related to performance obligations satisfied as of April 1, 2023.

For the nine months ended July 1, 2023, $ 0.7 billion was recognized related to performance obligations satisfied as of October 1, 2022.

As of June 29, 2024, revenue for unsatisfied performance obligations expected to be recognized in the future is $ 15 billion, primarily for IP or advertising time to be made available in the future under existing agreements with merchandise and co-branding licensees and sponsors, television station affiliates, DTC wholesalers, sports sublicensees and advertisers.

Of this amount, we expect to recognize approximately $ 2 billion in the remainder of fiscal 2024, $ 6 billion in fiscal 2025, $ 3 billion in fiscal 2026 and $ 4 billion thereafter.

These amounts include only fixed consideration or minimum guarantees and do not include amounts related to (i) contracts with an original expected term of one year or less (such as most advertising contracts) or (ii) licenses of IP that are solely based on the sales of the licensee.

For the quarter ended December 28, 2024, $ 0.3 billion was recognized related to performance obligations satisfied as of September 28, 2024.

For the quarter ended December 30, 2023, $ 0.3 billion was recognized related to performance obligations satisfied as of September 30, 2023.

As of December 28, 2024, revenue for unsatisfied performance obligations expected to be recognized in the future is $ 15 billion, primarily for IP to be made available in the future under existing agreements with merchandise and co-branding licensees and sponsors, television station affiliates, DTC wholesalers and sports sublicensees.

Of this amount, we expect to

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

recognize approximately $ 5 billion in the remainder of fiscal 2025, $ 4 billion in fiscal 2026, $ 3 billion in fiscal 2027 and $ 3 billion thereafter.

These amounts include only fixed consideration or minimum guarantees and do not include amounts related to (i) contracts with an original expected term of one year or less or (ii) licenses of IP that are solely based on the sales of the licensee.

When the timing of the Company’s revenue recognition is different from the timing of customer payments, the Company recognizes either a contract asset (customer payment is subsequent to revenue recognition and subject to the Company satisfying additional performance obligations) or deferred revenue (customer payment precedes the Company satisfying the performance obligations).

2 unchanged sentences

The Company’s contract assets and activity for the current and prior-year periods were not material.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

Accounts receivable and deferred revenues from contracts with customers are as follows:

7 unchanged sentences

Non-current 884 858

For the quarter and nine months ended June 29, 2024, the Company recognized revenue of $ 0.5 billion and $ 4.8 billion, respectively, that was included in the September 30, 2023 deferred revenue balance.

For the quarter and nine months ended July 1, 2023, the Company recognized revenue of $ 0.5 billion and $ 4.7 billion, respectively, that was included in the October 1, 2022 deferred revenue balance.

For the quarter ended December 28, 2024, the Company recognized revenue of $ 3.6 billion that was included in the September 28, 2024 deferred revenue balance.

For the quarter ended December 30, 2023, the Company recognized revenue of $ 3.4 billion that was included in the September 30, 2023 deferred revenue balance.

Amounts deferred generally relate to theme park admissions and vacation packages, DTC subscriptions and advances related to merchandise and TV/VOD licenses.

1 unchanged sentence

In times of economic turmoil, our estimates and judgments with respect to the collectability of our receivables are subject to greater uncertainty than in more stable periods.

The Company has accounts receivable with original maturities greater than one year related to the sale of film and television program rights (TV/VOD licensing) and vacation club properties.

These receivables are discounted to present value at contract inception and the related revenues are recognized at the discounted amount.

The balance of TV/VOD licensing receivables recorded in other non-current assets was $ 0.4 billion at June 29, 2024 and $ 0.6 billion at September 30, 2023.

The balance of vacation club receivables recorded in other non-current assets was $ 0.7 billion at both June 29, 2024 and September 30, 2023.

The allowance for credit losses for TV/VOD licensing and vacation club receivables and related activity for the periods ended June 29, 2024 and September 30, 2023 were not material.

On February 28, 2024, Star India Private Limited (Star India), a subsidiary of the Company, entered into a binding definitive agreement with Reliance Industries Limited (RIL) and Viacom 18 Media Private Limited (Viacom 18), which is majority owned and controlled by RIL, to form a joint venture that will combine the businesses of Viacom18 and Star India consisting of entertainment and sports pay TV and free-to-air networks, DTC services, film and television content library and certain production businesses (the Star India Transaction).

RIL will have an effective 56 % controlling interest in the joint venture with 37 % held by the Company, and 7 % by Bodhi Tree Systems, a third party investment company.

The Star India Transaction is expected to close in the first half of 2025, subject to customary closing conditions, including regulatory approvals and government consents.

If closing has not occurred by February 28, 2026, Star India or RIL may terminate the transaction.

Star India’s assets and liabilities (see table that follows) are presented as held for sale in the Condensed Consolidated Balance Sheet as of June 29, 2024.

To reflect Star India at its fair value less costs to sell, we recognized a non-cash goodwill impairment charge of $ 1.3 billion in “Restructuring and impairment charges” in the second quarter of fiscal 2024.

The measurement of this impairment charge included non-cash cumulative foreign currency translation losses of approximately $ 0.8 billion.

The Company has accounts receivable with original maturities greater than one year related to the sale of vacation club properties and film and television program rights (TV/VOD licensing).

The balance of vacation club receivables recorded in other non-current assets was $ 0.7 billion at both December 28, 2024 and September 28, 2024.

The balance of TV/VOD licensing receivables recorded in other non-current assets was $ 0.3 billion at both December 28, 2024 and September 28, 2024.

The allowance for credit losses for vacation club and TV/VOD licensing receivables and related activity for the periods ended December 28, 2024 and September 28, 2024 were not material.

Acquisitions and Dispositions

On January 6, 2025, the Company and fuboTV Inc.

(Fubo), a publicly traded virtual multichannel video distributor (vMVPD), entered into a definitive agreement to combine certain of Hulu Live TV’s assets, including its carriage agreements, subscription agreements and related data, advertising and sponsorship agreements and intellectual property exclusively related to the “Live TV” brand, with Fubo (the Fubo Transaction).

As a result, the Company will have a 70 % interest in Fubo and the right to appoint a majority of Fubo’s Board of Directors, with the remaining 30 % interest retained by Fubo shareholders.

The Fubo Transaction is expected to close in the first half of calendar year 2026, subject to customary closing conditions, including regulatory approvals and approval by Fubo shareholders.

If closing has not occurred by April 2026 (extended to October 2026 if all other closing conditions, except those relating to regulatory approvals, have been satisfied), the Company or Fubo may terminate the transaction.

A $ 130 million termination fee will be payable by the Company to Fubo if the transaction is terminated under certain circumstances, including due to the Company’s breach of the definitive agreement or the failure to obtain certain regulatory approvals.

A $ 50 million termination fee will be payable by Fubo to the Company if the transaction is terminated under certain other circumstances, including if Fubo shareholders do not approve the transaction under certain conditions.

THE WALT DISNEY COMPANY

1 unchanged sentence

tabular dollars in millions, except for per share data)

Assets and liabilities of Star India are classified as held for sale in the Condensed Consolidated Balance Sheets as of June 29, 2024 as follows:

Receivables and other current assets $ 992

Content advances 404

Total current assets 1,396

Produced and licensed content costs 574

Property and equipment, net 81

Intangible assets, net 760

Goodwill 1,110

Other assets 747

Total assets (1)

Accounts payable and other accrued liabilities $ 803

Deferred revenue and other 74

Total current liabilities 877

Other long-term liabilities 363

Total liabilities (1)

(1) Total current assets and non-current assets held for sale are included in “Other current assets” and “Other assets,” respectively, in the Condensed Consolidated Balance Sheets.

Total current liabilities and non-current liabilities held for sale are included in “Deferred revenue and other” and “Other long-term liabilities” in the Condensed Consolidated Balance Sheets.

These assets and liabilities are subject to change through closing.

The changes in the carrying amount of goodwill are as follows:

Entertainment Sports Experiences Star India Total

Balance at September 30, 2023 $ 55,031 $ 16,486 $ 5,550 $ — $ 77,067

Allocation to Star India ( 2,445 ) — — 2,445 —

Impairment (1)

( 703 ) — — ( 1,335 ) ( 2,038 )

Reclassification to held for sale — — — ( 1,110 ) ( 1,110 )

Currency translation adjustments and other, net ( 5 ) — — — ( 5 )

Balance at June 29, 2024 $ 51,878 $ 16,486 $ 5,550 $ — $ 73,914

(1) Reflects impairments related to entertainment linear networks and Star India (see Note 16).

Upon completion of the Fubo Transaction, the Company will be the exclusive distributor of the Hulu Live TV service under a five year distribution agreement and will pay a wholesale fee to Fubo based on Fubo’s cost to program Hulu Live TV.

In addition, the Company will sell advertising for the Hulu Live TV service and Fubo platform and pay Fubo a share of the advertising revenue.

In addition, the Company, Fox Corporation (Fox) and Warner Bros.

Discovery, Inc.

(WBD) reached a settlement with Fubo related to Fubo’s antitrust claims (See Note 13 for additional detail) and collectively paid $ 220 million to Fubo in January 2025.

Fox and WBD have also agreed to reimburse a portion of the $ 130 million termination fee to the Company if it becomes payable.

Further, the Company agreed to provide Fubo a senior unsecured term loan of up to $ 145 million (expected to be funded in January 2026) (the Fubo Term Loan).

If the Company funds the Fubo Term Loan and the Fubo Transaction is not consummated, Fox and WBD will participate in a portion of the Fubo Term Loan by providing loans to the Company with substantially the same economic terms as the Fubo Term Loan.

On November 14, 2024, the Company and Reliance Industries Limited (RIL) completed their transaction to form a joint venture (India joint venture) that combines the Company’s Star-branded and other general entertainment and sports television channels and direct-to-consumer Disney+ Hotstar service in India (Star India) and certain media and entertainment businesses controlled by RIL (the Star India Transaction).

RIL has an effective 56 % controlling interest in the joint venture with 37 % held by the Company and 7 % by Bodhi Tree Systems, a third party investment company.

Star India’s assets and liabilities were deconsolidated on November 14, 2024, and the Company recognized the fair value of its interest in the India joint venture as an equity method investment.

We recorded non-cash impairment charges of $ 0.1 billion and $ 1.5 billion in “Restructuring and impairment charges” in the first quarter of fiscal 2025 and in fiscal 2024, respectively, to reflect Star India’s assets and liabilities at fair value less costs to sell.

The measurement of these impairment charges included non-cash cumulative foreign currency translation losses of $ 0.8 billion net of tax.

In addition, we recognized a non-cash tax charge of $ 0.2 billion in the first quarter of fiscal 2025 in connection with the close of the transaction.

Cash, Cash Equivalents, Restricted Cash and Borrowings

5 unchanged sentences

Total cash, cash equivalents and restricted cash in the statement of cash flows $ 5,582 $ 6,102

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

During the nine months ended June 29, 2024, the Company’s borrowing activity was as follows:

During the quarter ended December 28, 2024, the Company’s borrowing activity was as follows:

September 28,

2024 Borrowings Payments Other

Activity June 29,

Activity December 28,

Commercial paper with original maturities less than three months (1)

1 unchanged sentence

Commercial paper with original maturities greater than three months 2,313 49 ( 1,501 ) ( 19 ) 842

dollar denominated notes

dollar denominated borrowings

40,496 1,057 — ( 70 ) 41,483

1 unchanged sentence

1,292 — ( 26 ) ( 107 ) 1,159

Foreign currency denominated debt and other (2)

Foreign currency denominated borrowings and other (2)

987 — ( 925 ) ( 252 ) ( 190 )

2 unchanged sentences

(2) The other activity is attributable to market value adjustments for debt with qualifying hedges.

At June 29, 2024, the Company’s bank facilities, which are with a syndicate of lenders and support our commercial paper borrowings, were as follows:

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

At December 28, 2024, the Company’s bank facilities, which are with a syndicate of lenders and support our commercial paper borrowings, were as follows:

Capacity Capacity

6 unchanged sentences

These facilities allow for borrowings at rates based on the Secured Overnight Financing Rate (SOFR) and at other variable rates for non-U.S.

dollar denominated borrowings, plus a fixed spread that varies with the Company’s debt ratings assigned by Moody’s Investors Service and Standard and Poor’s ranging from 0.655% to 1.225%.

dollar denominated borrowings, plus a fixed spread that varies with the Company’s debt ratings assigned by Moody’s Ratings and S&P Global Ratings ranging from 0.655% to 1.225%.

The bank facilities contain only one financial covenant relating to interest coverage of three times earnings before interest, taxes, depreciation and amortization, including both intangible amortization and amortization of our film and television production and programming costs.

On June 29, 2024, the Company met this covenant by a significant margin.

On December 28, 2024, the Company met this covenant by a significant margin.

The bank facilities specifically exclude certain entities, including the Asia Theme Parks, from any representations, covenants or events of default.

The Company also has the ability to issue up to $ 500 million of letters of credit under the facility expiring in March 2027, which if utilized, reduces available borrowings under this facility.

As of June 29, 2024, the Company has $ 1.7 billion of outstanding letters of credit, of which none were issued under this facility.

As of December 28, 2024, the Company has $ 0.4 billion of outstanding letters of credit, of which none were issued under this facility.

Outstanding letters of credit at Star India totaling $ 1.3 billion at December 28, 2024 that were entered into prior to the Star India Transaction are guaranteed by the Company through calendar 2025.

Cruise Ship Credit Facilities

The Company has credit facilities to finance a significant portion of the contract price of two new cruise ships, which are scheduled to be delivered in fiscal 2025 and fiscal 2026.

Under the facilities, $ 1.1 billion became available in August 2023 and $ 1.1 billion became available in August 2024.

Each tranche of financing may be utilized within a period of 18 months from the initial availability date.

If utilized, the interest rates will be fixed at 3.80 % and 3.74 %, respectively, and the loan and interest will be payable semi-annually over a 12-year period from the borrowing date.

Early repayment is permitted subject to cancellation fees .

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

In November 2024, in connection with the delivery of the Disney Treasure , the Company borrowed $ 1.1 billion with a fixed interest rate of 3.80 %.

Payments are due semi-annually over a 12-year term.

The Company has a credit facility for $ 1.1 billion that may be utilized to finance a significant portion of the contract price of the Disney Destiny , which is currently scheduled to be delivered in 2026.

If utilized, the loan will have a fixed interest rate of 3.74 %, payable semi-annually over a 12-year term.

Interest expense, net

Interest expense (net of amounts capitalized), interest and investment income, and net periodic pension and postretirement benefit costs (other than service costs) (see Note 9) are reported net in the Condensed Consolidated Statements of Operations and consist of the following:

Quarter Ended Nine Months Ended

2023 June 29,

Quarter Ended

2024 December 30,

Interest expense $ ( 487 ) $ ( 528 )

6 unchanged sentences

The Asia Theme Parks together with Disneyland Paris are collectively referred to as the International Theme Parks.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

The following table summarizes the carrying amounts of the Asia Theme Parks’ assets and liabilities included in the Company’s Condensed Consolidated Balance Sheets:

10 unchanged sentences

Total liabilities $ 2,312 $ 2,396

The following table summarizes the International Theme Parks’ revenues and costs and expenses included in the Company’s Condensed Consolidated Statements of Operations for the nine months ended June 29, 2024:

The following table summarizes the International Theme Parks’ revenues and costs and expenses included in the Company’s Condensed Consolidated Statements of Income for the quarter ended December 28, 2024:

Revenues $ 1,531

Costs and expenses ( 1,199 )

Asia Theme Parks’ royalty and management fees of $ 232 million for the nine months ended June 29, 2024 are eliminated in consolidation, but are considered in calculating earnings attributable to noncontrolling interests.

International Theme Parks’ cash flows included in the Company’s Condensed Consolidated Statements of Cash Flows for the nine months ended June 29, 2024 were $ 1,219 million provided by operating activities, $ 705 million used in investing activities and $ 11 million used in financing activities.

Asia Theme Parks’ royalty and management fees of $ 69 million for the quarter ended December 28, 2024 are eliminated in consolidation, but are considered in calculating earnings attributable to noncontrolling interests.

International Theme Parks’ cash flows included in the Company’s Condensed Consolidated Statements of Cash Flows for the quarter ended December 28, 2024 were $ 511 million provided by operating activities, $ 288 million used in investing activities and $ 24 million used in financing activities.

Hong Kong Disneyland Resort

The Government of the Hong Kong Special Administrative Region (HKSAR) and the Company have a 52 % and a 48 % equity interest in Hong Kong Disneyland Resort, respectively.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

The Company and HKSAR have provided loans to Hong Kong Disneyland Resort with outstanding balances of $ 64 million and $ 43 million, respectively.

The interest rate on both loans is three month HIBOR plus 2 %, and the scheduled maturity date is September 2025.

The interest rate on both loans is three month HIBOR (Hong Kong Interbank Offered Rate) plus 2 %, and the scheduled maturity date is September 2025.

The Company’s loan is eliminated in consolidation.

The Company has provided Hong Kong Disneyland Resort with a revolving credit facility of HK $ 2.7 billion ($ 346 million) that bears interest at a rate of three month HIBOR plus 1.25 % and matures in December 2028.

The Company has provided Hong Kong Disneyland Resort with a revolving credit facility of HK $ 2.7 billion ($ 348 million), which bears interest at a rate of three month HIBOR plus 1.25 % and matures in 2028.

The line of credit does not have a balance outstanding.

2 unchanged sentences

A management company, in which the Company has a 70 % interest and Shendi a 30 % interest, operates Shanghai Disney Resort.

The Company has provided Shanghai Disney Resort with loans totaling $ 993 million, bearing interest at rates up to 8 % and maturing in 2036, with early repayment permitted.

The Company has provided Shanghai Disney Resort with loans totaling $ 929 million bearing interest at 8 % and are scheduled to mature in 2036 with earlier payments required based on available cash flows.

In addition, early repayment is permitted.

The loan is eliminated in consolidation.

The Company has also provided Shanghai Disney Resort with a 1.9 billion yuan (approximately $ 0.3 billion) line of credit bearing interest at 8 %.

The Company has also provided Shanghai Disney Resort with a 1.9 billion yuan (approximately $ 0.3 billion) line of credit bearing interest at 8 % and matures in 2033.

The line of credit does not have a balance outstanding.

Shendi has provided Shanghai Disney Resort with loans totaling 9.0 billion yuan (approximately $ 1.2 billion), bearing interest at rates up to 8 % and maturing in 2036, with early repayment permitted.

Shendi has also provided Shanghai Disney Resort with a 2.6 billion yuan (approximately $ 0.4 billion) line of credit bearing interest at 8 %.

Shendi has provided Shanghai Disney Resort with loans totaling 8.2 billion yuan (approximately $ 1.1 billion), bearing interest at 8 % and are scheduled to mature in 2036 with earlier payments required based on available cash flows.

In addition, early repayment is permitted.

Shendi has also provided Shanghai Disney Resort with a 2.6 billion yuan (approximately $ 0.4 billion) line of credit bearing interest at 8 % and matures in 2033.

The line of credit does not have a balance outstanding.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

Produced and Acquired/Licensed Content Costs and Advances

6 unchanged sentences

Total capitalized produced and licensed content by predominant monetization strategy is as follows:

As of June 29, 2024 As of September 30, 2023

As of December 28, 2024 As of September 28, 2024

Predominantly

13 unchanged sentences

Non-current portion $ 32,505 $ 32,312

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

Amortization of produced and licensed content is as follows:

Quarter Ended Nine Months Ended

2023 June 29,

Quarter Ended

2024 December 30,

Produced content

1 unchanged sentence

Predominantly monetized as a group 1,813 1,794

2,588 2,952 7,513 9,227

Licensed programming rights and advances 4,097 4,590

1 unchanged sentence

$ 6,606 $ 7,152

(1) Primarily included in “Costs of services” in the Condensed Consolidated Statements of Operations.

(1) Primarily included in “Costs of services” in the Condensed Consolidated Statements of Income

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

Deferred Tax Assets and Liabilities

The Company records deferred income tax assets and liabilities with respect to temporary differences in accounting treatment of items for financial reporting purposes and income tax purposes.

The Company’s deferred tax assets and liabilities by major category as of June 29, 2024 and September 30, 2023 were as follows:

The Company’s deferred tax assets and liabilities by major category as of December 28, 2024 and September 28, 2024 were as follows:

2024 September 28,

9 unchanged sentences

Depreciable, amortizable and other property 6,128 6,584

Investment in subsidiaries / equity investees (2)

Investment in U.S.

Right-of-use lease assets

Investment in foreign entities 727 465

Total deferred tax liabilities 8,666 8,921

3 unchanged sentences

$ 5,762 $ 5,622

(1) Balances at June 29, 2024 and September 30, 2023 include approximately $ 1.5 billion and $ 1.6 billion, respectively, of International Theme Park net operating losses.

The International Theme Park net operating losses are primarily in France and, to a lesser extent, Hong Kong and China.

Losses in France and Hong Kong have an indefinite carryforward period and losses in China have a five-year carryforward period.

China theme park net operating losses of $ 0.1 billion, if not used, expire between fiscal 2025 and fiscal 2028.

Balances at both June 29, 2024 and September 30, 2023 also include approximately $ 1.0 billion of foreign tax credits in the U.S., which have a ten-year carryforward period and, if not used, expire beginning in fiscal 2028.

(2) Amounts related to Investment in subsidiaries / equity investees are, in part, due to the tax status of these entities.

If the tax status of certain legal entities changes, a significant portion of this balance may reverse.

(1) Further details on our net operating losses and tax credit carryforwards are as follows:

December 28, 2024

International Theme Park net operating losses

foreign tax credits ( 810 )

State net operating losses and tax credit carryforwards ( 563 )

Other ( 379 )

Total net operating losses and tax credit carryforwards (a)

(a) Approximately $ 2.0 billion of these carryforwards do not expire.

Approximately $ 1.1 billion expire between fiscal 2026 and fiscal 2035, primarily consisting of U.S.

foreign tax credits.

(2) Amounts are, in part, due to the tax status of these entities and if the tax status of certain legal entities changes, a significant portion of this balance may reverse.

Valuation Allowance

The Company records deferred income tax assets and liabilities with respect to temporary differences in the accounting treatment of items for financial reporting purposes and for income tax purposes.

Where, based on the weight of available

Where, based on the weight of available evidence, it is more likely than not that some amount of recorded deferred tax assets will not be realized, a valuation allowance is established for the amount that, in management’s judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized.

Unrecognized Tax Benefits

The Company’s gross unrecognized tax benefits (before interest and penalties) decreased $ 0.2 billion, from $ 2.0 billion at September 28, 2024 to $ 1.8 billion at December 28, 2024.

In the next twelve months, it is reasonably possible that our unrecognized tax benefits could change due to resolutions of open tax matters, which would reduce our unrecognized tax benefits by $ 0.8 billion.

THE WALT DISNEY COMPANY

1 unchanged sentence

tabular dollars in millions, except for per share data)

evidence, it is more likely than not that some amount of recorded deferred tax assets will not be realized, a valuation allowance is established for the amount that, in management’s judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized.

Unrecognized Tax Benefits

The Company’s gross unrecognized tax benefits (before interest and penalties) decreased $ 0.5 billion, from $ 2.5 billion at September 30, 2023 to $ 2.0 billion at June 29, 2024.

Pension and Other Benefit Programs

1 unchanged sentence

Pension Plans Postretirement Medical Plans

Quarter Ended Nine Months Ended Quarter Ended Nine Months Ended

Quarter Ended Quarter Ended

2024 December 30,

2023 December 28,

2024 December 30,

Service costs $ 65 $ 62 $ — $ —

2 unchanged sentences

Expected return on plan assets ( 290 ) ( 284 ) ( 15 ) ( 14 )

Amortization of previously deferred service costs 2 2 6 7 ( 22 ) — ( 67 ) —

Recognized net actuarial loss 5 5 15 14 ( 9 ) ( 6 ) ( 27 ) ( 17 )

Amortization of previously deferred service costs (credits)

— 2 ( 22 ) ( 22 )

Recognized net actuarial loss (gain)

62 5 ( 7 ) ( 9 )

Total other costs (benefits) ( 33 ) ( 69 ) ( 33 ) ( 31 )

Net periodic benefit cost (income) $ 32 $ ( 7 ) $ ( 33 ) $ ( 31 )

During the nine months ended June 29, 2024, the Company did not make any material contributions to its pension and postretirement medical plans and does not currently expect to make any material contributions for the remainder of fiscal 2024.

During the quarter ended December 28, 2024, the Company did not make any material contributions to its pension and postretirement medical plans and does not currently expect to make any material contributions for the remainder of fiscal 2025.

Final minimum funding requirements for fiscal 2025 will be determined based on a January 1, 2025 funding actuarial valuation, which is expected to be received in the fourth quarter of fiscal 2025.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

Earnings Per Share

1 unchanged sentence

A reconciliation of the weighted average number of common and common equivalent shares outstanding and the number of Awards excluded from the diluted earnings per share calculation, as they were anti-dilutive, are as follows:

Quarter Ended Nine Months Ended

2023 June 29,

Quarter Ended

2024 December 30,

Shares (in millions):

3 unchanged sentences

Awards excluded from diluted earnings per share 16 39

(1) Amounts exclude all potential common and common equivalent shares for periods when there is a net loss.

On November 30, 2023 , the Board of Directors declared a cash dividend of $ 0.30 per share ($ 0.5 billion) with respect to the second half of fiscal 2023, which was paid in January 2024 to shareholders of record as of December 11, 2023 .

On February 7, 2024 , the Board of Directors declared a cash dividend of $ 0.45 per share ($ 0.8 billion) with respect to the first half of fiscal 2024, which was paid on July 25, 2024 to shareholders of record as of July 8, 2024 .

Share Repurchase Program

Effective February 7, 2024, the Board of Directors authorized a new share repurchase program for the Company to repurchase a total of 400 million shares of its common stock.

During the quarter and nine months ended June 29, 2024, the Company repurchased 14 million and 23 million shares of its common stock for $ 1.5 billion and $ 2.5 billion, respectively (amount excludes the one percent excise tax on stock repurchases imposed by the Inflation Reduction Act of 2022).

As of June 29, 2024, the Company had remaining authorization in place to repurchase approximately 377 million additional shares.

The repurchase program does not have an expiration date.

The Company declared the following dividends in fiscal 2025 and 2024:

$ 0.50 $ 0.9 billion July 23, 2025 (1)

$ 0.50 $ 0.9 billion January 16, 2025

$ 0.45 $ 0.8 billion July 25, 2024

$ 0.30 $ 0.5 billion January 10, 2024

(1) Amount represents our estimate of the dividend that will be paid on July 23, 2025.

The actual amount will be determined based on shareholders of record at June 24, 2025.

THE WALT DISNEY COMPANY

1 unchanged sentence

tabular dollars in millions, except for per share data)

Share Repurchase Program

Effective February 7, 2024, the Board of Directors authorized the Company to repurchase a total of 400 million shares of its common stock.

During the quarter ended December 28, 2024, the Company repurchased 7 million shares of its common stock for $ 0.8 billion (amount excludes the one percent excise tax on stock repurchases imposed by the Inflation Reduction Act of 2022).

As of December 28, 2024, the Company had remaining authorization in place to repurchase approximately 365 million additional shares.

The repurchase program does not have an expiration date.

The following tables summarize the changes in each component of accumulated other comprehensive income (loss) (AOCI) including our proportional share of equity method investee amounts:

4 unchanged sentences

AOCI, before tax

Third quarter of fiscal 2024

Balance at March 30, 2024 $ ( 6 ) $ ( 2,229 ) $ ( 1,944 ) $ ( 4,179 )

Quarter Ended June 29, 2024:

Unrealized gains (losses) arising during the period 235 ( 2 ) ( 22 ) 211

Reclassifications of realized net (gains) losses to net income ( 109 ) ( 24 ) — ( 133 )

Balance at June 29, 2024 $ 120 $ ( 2,255 ) $ ( 1,966 ) $ ( 4,101 )

Third quarter of fiscal 2023

Balance at April 1, 2023 $ 2 $ ( 3,697 ) $ ( 1,701 ) $ ( 5,396 )

Quarter Ended July 1, 2023:

Unrealized gains (losses) arising during the period 85 — ( 44 ) 41

Reclassifications of realized net (gains) losses to net income ( 73 ) 1 — ( 72 )

Balance at July 1, 2023 $ 14 $ ( 3,696 ) $ ( 1,745 ) $ ( 5,427 )

Nine months ended fiscal 2024

First quarter of fiscal 2025

Balance at September 28, 2024 $ ( 319 ) $ ( 2,243 ) $ ( 1,855 ) $ ( 4,417 )

Nine Months Ended June 29, 2024:

Quarter Ended December 28, 2024:

Unrealized gains (losses) arising during the period 559 — ( 246 ) 313

Reclassifications of realized net (gains) losses to net income ( 88 ) 33 — ( 55 )

Balance at June 29, 2024 $ 120 $ ( 2,255 ) $ ( 1,966 ) $ ( 4,101 )

Nine months ended fiscal 2023

Balance at October 1, 2022 $ 804 $ ( 3,770 ) $ ( 2,014 ) $ ( 4,980 )

Nine Months Ended July 1, 2023:

Star India Transaction

Balance at December 28, 2024 $ 152 $ ( 2,210 ) $ ( 1,197 ) $ ( 3,255 )

First quarter of fiscal 2024

Balance at September 30, 2023 $ 259 $ ( 2,172 ) $ ( 1,974 ) $ ( 3,887 )

Quarter Ended December 30, 2023:

Unrealized gains (losses) arising during the period ( 277 ) ( 3 ) 137 ( 143 )

Reclassifications of realized net (gains) losses to net income ( 140 ) ( 24 ) — ( 164 )

Balance at July 1, 2023 $ 14 $ ( 3,696 ) $ ( 1,745 ) $ ( 5,427 )

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

Balance at December 30, 2023 $ ( 158 ) $ ( 2,199 ) $ ( 1,837 ) $ ( 4,194 )

for Hedges Unrecognized

2 unchanged sentences

and Other AOCI

Third quarter of fiscal 2024

Balance at March 30, 2024 $ ( 3 ) $ 529 $ 144 $ 670

Quarter Ended June 29, 2024:

Unrealized gains (losses) arising during the period ( 54 ) — ( 1 ) ( 55 )

Reclassifications of realized net (gains) losses to net income 26 6 — 32

Balance at June 29, 2024 $ ( 31 ) $ 535 $ 143 $ 647

Third quarter of fiscal 2023

Balance at April 1, 2023 $ ( 1 ) $ 885 $ 123 $ 1,007

Quarter Ended July 1, 2023:

Unrealized gains (losses) arising during the period ( 19 ) — 9 ( 10 )

Reclassifications of realized net (gains) losses to net income 17 — — 17

Balance at July 1, 2023 $ ( 3 ) $ 885 $ 132 $ 1,014

Nine months ended fiscal 2024

First quarter of fiscal 2025

Balance at September 28, 2024 $ 71 $ 531 $ 116 $ 718

Nine Months Ended June 29, 2024:

Quarter Ended December 28, 2024:

Unrealized gains (losses) arising during the period ( 130 ) — 24 ( 106 )

Reclassifications of realized net (gains) losses to net income 21 ( 8 ) — 13

Balance at June 29, 2024 $ ( 31 ) $ 535 $ 143 $ 647

Nine months ended fiscal 2023

Balance at October 1, 2022 $ ( 179 ) $ 901 $ 139 $ 861

Nine Months Ended July 1, 2023:

Star India Transaction — — ( 58 ) ( 58 )

Balance at December 28, 2024 $ ( 38 ) $ 523 $ 82 $ 567

First quarter of fiscal 2024

Balance at September 30, 2023 $ ( 64 ) $ 517 $ 142 $ 595

Quarter Ended December 30, 2023:

Unrealized gains (losses) arising during the period 66 — ( 7 ) 59

Reclassifications of realized net (gains) losses to net income 32 6 — 38

Balance at July 1, 2023 $ ( 3 ) $ 885 $ 132 $ 1,014

Balance at December 30, 2023 $ 34 $ 523 $ 135 $ 692

THE WALT DISNEY COMPANY

6 unchanged sentences

AOCI, after tax

Third quarter of fiscal 2024

Balance at March 30, 2024 $ ( 9 ) $ ( 1,700 ) $ ( 1,800 ) $ ( 3,509 )

Quarter Ended June 29, 2024:

Unrealized gains (losses) arising during the period 181 ( 2 ) ( 23 ) 156

Reclassifications of realized net (gains) losses to net income ( 83 ) ( 18 ) — ( 101 )

Balance at June 29, 2024 $ 89 $ ( 1,720 ) $ ( 1,823 ) $ ( 3,454 )

Third quarter of fiscal 2023

Balance at April 1, 2023 $ 1 $ ( 2,812 ) $ ( 1,578 ) $ ( 4,389 )

Quarter Ended July 1, 2023:

Unrealized gains (losses) arising during the period 66 — ( 35 ) 31

Reclassifications of realized net (gains) losses to net income ( 56 ) 1 — ( 55 )

Balance at July 1, 2023 $ 11 $ ( 2,811 ) $ ( 1,613 ) $ ( 4,413 )

Nine months ended fiscal 2024

First quarter of fiscal 2025

Balance at September 28, 2024 $ ( 248 ) $ ( 1,712 ) $ ( 1,739 ) $ ( 3,699 )

Nine Months Ended June 29, 2024:

Quarter Ended December 28, 2024:

Unrealized gains (losses) arising during the period 429 — ( 222 ) 207

Reclassifications of realized net (gains) losses to net income ( 67 ) 25 — ( 42 )

Balance at June 29, 2024 $ 89 $ ( 1,720 ) $ ( 1,823 ) $ ( 3,454 )

Nine months ended fiscal 2023

Balance at October 1, 2022 $ 625 $ ( 2,869 ) $ ( 1,875 ) $ ( 4,119 )

Nine Months Ended July 1, 2023:

Star India Transaction — — 846 846

Balance at December 28, 2024 $ 114 $ ( 1,687 ) $ ( 1,115 ) $ ( 2,688 )

First quarter of fiscal 2024

Balance at September 30, 2023 $ 195 $ ( 1,655 ) $ ( 1,832 ) $ ( 3,292 )

Quarter Ended December 30, 2023:

Unrealized gains (losses) arising during the period ( 211 ) ( 3 ) 130 ( 84 )

Reclassifications of realized net (gains) losses to net income ( 108 ) ( 18 ) — ( 126 )

Balance at July 1, 2023 $ 11 $ ( 2,811 ) $ ( 1,613 ) $ ( 4,413 )

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

Balance at December 30, 2023 $ ( 124 ) $ ( 1,676 ) $ ( 1,702 ) $ ( 3,502 )

Details about AOCI components reclassified to net income are as follows:

1 unchanged sentence

Affected line item in the Condensed Consolidated Statements of Operations:

Quarter Ended Nine Months Ended

2023 June 29,

Quarter Ended

2024 December 30,

Market value adjustments, primarily cash flow hedges Primarily revenue $ 88 $ 140

Estimated tax Income taxes ( 21 ) ( 32 )

83 56 262 312

Pension and postretirement medical expense Interest expense, net ( 33 ) 24

Estimated tax Income taxes 8 ( 6 )

18 ( 1 ) 54 ( 3 )

Foreign currency translation and other Restructuring and impairment charges — — — ( 42 )

Estimated tax Income taxes — — — 14

Total reclassifications for the period $ 42 $ 126

1 unchanged sentence

Compensation expense related to stock options and restricted stock units (RSUs) is as follows:

Quarter Ended Nine Months Ended

2023 June 29,

Quarter Ended

2024 December 30,

Stock options $ 16 $ 17

RSUs 343 272 981 803

Total equity-based compensation expense (1)

$ 361 $ 291 $ 1,036 $ 861

Equity-based compensation expense capitalized during the period $ 44 $ 44

(1) Equity-based compensation expense is net of capitalized equity-based compensation and estimated forfeitures and excludes amortization of previously capitalized equity-based compensation costs.

Unrecognized compensation cost related to unvested stock options and RSUs was $ 93 million and $ 2.1 billion, respectively, as of June 29, 2024.

During the nine months ended June 29, 2024 and July 1, 2023, the weighted average grant date fair values for options granted were $ 32.10 and $ 34.70 , respectively, and for RSUs were $ 94.28 and $ 91.98 , respectively.

During the nine months ended June 29, 2024, the Company made equity compensation grants consisting of 2.7 million stock options and 16.1 million RSUs.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

Unrecognized compensation cost related to unvested stock options and RSUs was $ 66 million and $ 1.5 billion, respectively, as of December 28, 2024.

Each fiscal year, generally in December or January, the Company awards stock options and restricted stock units to a broad-based group of management, technology and creative personnel (Annual Grant).

Substantially all of the Annual Grant was issued in January 2025.

The Annual Grant consisted of 2.4 million stock options and 14.2 million RSUs with weighted average grant date fair values of $ 37.98 and $ 109.20 , respectively.

During the quarter ended December 30, 2023, the weighted average grant date fair values for stock options and RSUs were $ 32.06 and $ 93.87 , respectively.

Commitments and Contingencies

4 unchanged sentences

On November 6, 2023, a consolidated complaint was filed in the same action, adding Robert Iger, the Company’s Chief Executive Officer, as a defendant.

Claims in the Securities Class Action include (i) violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder against all defendants, (ii) violations of Section 20A of the Exchange Act against Iger and McCarthy,

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

and (iii) violations of Section 20(a) of the Exchange Act against all defendants.

Plaintiffs in the Securities Class Action allege purported misstatements and omissions concerning, and a scheme to conceal, accurate costs and subscriber growth of the Disney+ platform.

1 unchanged sentence

The Company intends to defend against the lawsuit vigorously and filed a motion to dismiss the complaint for failure to state a claim on December 21, 2023.

Plaintiffs filed their opposition on February 5, 2024, and the Company filed its reply brief on March 5, 2024.

A hearing on the motion to dismiss is scheduled for September 10, 2024.

A hearing on the motion to dismiss was held on September 27, 2024.

The lawsuit is in the early stages and at this time we cannot reasonably estimate the amount of any possible loss.

21 unchanged sentences

District Court for the Northern District of California against the Company on behalf of a putative class of certain subscribers to YouTube TV (the “Biddle Action”).

The plaintiffs in the Biddle Action asserted a claim under Section 1 of the Sherman Act based on allegations that Disney uses certain pricing and packaging provisions in its carriage agreements with virtual multichannel video distributors (“vMVPDs”) to increase prices for and reduce output of certain services offered by vMVPDs.

The plaintiffs in the Biddle Action asserted a claim under Section 1 of the Sherman Act based on allegations that Disney uses certain pricing and packaging provisions in its carriage agreements with vMVPDs to increase prices for and reduce output of certain services offered by vMVPDs.

On November 30, 2022, a second private antitrust putative class action lawsuit was filed in the U.S.

District Court for the Northern District of California against the Company on behalf of a putative class of certain subscribers to DirecTV Stream (the “Fendelander Action”).

The plaintiffs in the Fendelander Action asserted a claim under Section 1 of the Sherman Act based on substantially similar allegations as the Biddle Action.

District Court for the Northern District of California against the Company on behalf of a putative class of certain subscribers to DirecTV Stream (the “Fendelander Action”), making similar allegations.

The Company filed motions to dismiss for failure to state a claim in both the Biddle Action and Fendelander Action on January 31, 2023.

The plaintiffs in both cases filed their oppositions on April 7, 2023, the Company filed reply briefs on May 12, 2023, and the court heard oral argument on the Company’s motions to dismiss on July 13, 2023.

On September 30, 2023, the court issued an order granting in part and denying in part the Company’s motions to dismiss both cases and, on October 13, 2023, the court issued an order consolidating both cases.

On October 16, 2023, plaintiffs filed a consolidated amended putative class action complaint (the “Consolidated Complaint”).

The Consolidated Complaint asserts claims under Section 1 of the Sherman Act and certain Arizona, California, Florida, Illinois, Iowa, Massachusetts, Michigan, Nevada, New York, North Carolina, and Tennessee antitrust laws based on substantially similar allegations as the Biddle Action and the Fendelander Action.

The Consolidated Complaint asserts claims under Section 1 of the Sherman Act and certain Arizona, California, Florida, Illinois, Iowa, Massachusetts, Michigan,

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

Nevada, New York, North Carolina, and Tennessee antitrust laws based on substantially similar allegations as the Biddle Action and the Fendelander Action.

The Consolidated Complaint seeks injunctive relief, unspecified money damages and costs and fees.

The Company intends to defend against the lawsuits vigorously and filed a motion to dismiss the Consolidated Complaint for failure to state a claim on December 1, 2023.

The plaintiffs filed their opposition on January 5, 2024, the Company filed its reply brief on February 2, 2024, and the court heard oral argument on the Company’s motion to dismiss on February 15, 2024.

The Company’s motion to dismiss the Consolidated Complaint was granted in part and denied in part on June 25, 2024.

The consolidated lawsuit is in the early stages, and at this time we cannot reasonably estimate the amount of any possible loss.

On September 12, 2024, the Court entered a case management order setting, among other dates, Plaintiffs’ deadline to file their class certification motion on March 27, 2026.

On January 14, 2025, a private antitrust putative class action lawsuit was filed in the U.S.

District Court for the Southern District of New York against the Company on behalf of a putative class of certain subscribers to fuboTV (the “Unger Action”), making similar allegations to those in the now-consolidated Biddle and Fendelander Actions.

The consolidated lawsuit and the Unger Action are in the early stages, and at this time we cannot reasonably estimate the amount of any possible loss.

On February 20, 2024, a private antitrust lawsuit was filed in the U.S.

District Court for the Southern District of New York against the Company (including affiliates ESPN, Inc., ESPN Enterprises, Inc., and Hulu, LLC), Fox Corporation, and Warner Bros.

Discovery, Inc.

(collectively, “Defendants”), by fuboTV Inc.

District Court for the Southern District of New York against the Company (including affiliates ESPN, Inc., ESPN Enterprises, Inc., and Hulu, LLC), Fox, and WBD (collectively, “Defendants”), by fuboTV Inc.

and fuboTV Media Inc.

(together, “Fubo”).

Fubo asserts claims under Section 1 of the Sherman Act, Section 7 of the Clayton Act, and New York antitrust law based on the theories that (a) a planned joint venture between ESPN, Inc., Fox Corporation, and Warner Bros.

Discovery, Inc., which will distribute certain of Defendants’ linear networks to consumers (the “Sports Streaming JV”), will harm competition in an alleged market for the licensing of networks that offer live sports content, (b) certain alleged practices by which the Company and Fox

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

Corporation license their networks to vMVPDs as a bundle increase prices and reduce output for services offered by vMVPDs, and (c) certain alleged pricing provisions in Defendants’ carriage agreements with YouTube TV and Hulu + Live TV increase prices for services offered by vMVPDs.

Fubo asserted claims under Section 1 of the Sherman Act, Section 7 of the Clayton Act, and New York antitrust law based on the theories that (a) a then planned joint venture between ESPN, Inc., Fox, and WBD, which would have distributed certain of Defendants’ linear networks to consumers (the “Sports Streaming JV”), would have harmed competition in alleged markets for the licensing of networks that offer live sports content and for streaming live pay television, (b) certain alleged practices by which the Company and Fox license their networks to vMVPDs as a bundle increase prices and reduce output for services offered by vMVPDs, and (c) certain alleged pricing provisions in Defendants’ carriage agreements with YouTube TV and Hulu + Live TV, as well as in Hulu + Live TV’s carriage agreements with non-Defendant programmers, increase prices for services offered by vMVPDs.

On April 8, 2024, Fubo filed a motion for a preliminary injunction against Defendants to prevent the formation of the Sports Streaming JV.

Defendants may file their opposition to Fubo’s motion for preliminary injunction by July 25, 2024, and Fubo may file a reply by August 1, 2024, with the hearing on Fubo’s motion for preliminary injunction scheduled to begin on August 7, 2024.

Fubo further seeks injunctive relief, unspecified money damages and costs and fees.

The Company filed a motion to dismiss Fubo’s complaint on April 10, 2024.

On April 29, 2024, Fubo filed an amended complaint to add allegations of a purported market for “skinny sports bundles”, which Fubo claims the Sports Streaming JV will monopolize after its launch.

The court has stayed the Defendants’ obligation to answer or move to dismiss Fubo’s amended complaint until after resolution of Fubo’s motion for a preliminary injunction.

The Company intends to defend against the lawsuit vigorously.

The lawsuit is in its early stages, and at this time we cannot reasonably estimate the amount of any possible loss.

On April 29, 2024, Fubo filed an amended complaint to add allegations of a purported market for “skinny sports bundles”, which Fubo claimed the Sports Streaming JV would have monopolized after its launch.

After a hearing on Fubo’s motion for preliminary injunction, the district court granted Fubo’s motion on August 16, 2024, and enjoined the launch of the Sports Streaming JV.

On August 19, 2024, Defendants filed a notice of appeal to the United States Court of Appeals for the Second Circuit from the order for a preliminary injunction.

The United States Court of Appeals for the Second Circuit granted Defendants’ motion to expedite the appeal.

Defendants filed their initial appeal brief on September 20, 2024, Fubo filed its brief in opposition on November 4, 2024, and Defendants filed their reply brief on December 9, 2024.

Oral argument was scheduled for January 6, 2025.

Fubo further sought injunctive relief, unspecified money damages and costs and fees.

On September 26, 2024, the Company filed a motion to dismiss Fubo’s claims brought under Section 1 of the Sherman Act and New York antitrust law, unrelated to the joint venture.

The district court denied Defendants’ motions to dismiss on December 13, 2024.

The Defendants reached a settlement with Fubo to resolve this litigation, and on January 6, 2025, filed with the district court a joint stipulation voluntarily dismissing the action with prejudice and extinguishing the preliminary injunction issued on August 16, 2024.

The parties also filed on January 6, 2025 a joint stipulation dismissing the appeal, which the United States Court of Appeals for the Second Circuit so ordered on January 8, 2025.

In May 2024, the Company and NBCU entered into a confidential arbitration to resolve a dispute regarding the contractual appraisal process related to the determination of Hulu’s equity fair value, in which the parties seek declaratory relief, equitable relief and unspecified damages.

2 unchanged sentences

Management does not believe that the Company has incurred a probable material loss by reason of any of those actions.

In April 2024, the Company acquired an incremental 5 % interest in Epic Games, Inc.

(“Epic”), a video game and software developer and publisher, in exchange for $ 1.0 billion.

The Company acquired an additional 2 % interest for $ 0.5 billion in July 2024, which increased the Company’s interest in Epic to approximately 8 %.

In fiscal year 2024, the Company entered into several multi-year contracts with total commitments of approximately $ 42 billion of which the significant majority relates to professional basketball and college football programming and includes, to a lesser extent, fleet expansion.

Payments for these agreements in fiscal 2024 and fiscal 2025 are not significant, and are approximately $ 2 billion, $ 4 billion and $ 4 billion in fiscal 2026, fiscal 2027 and fiscal 2028, respectively .

Fair Value Measurements

9 unchanged sentences

The Company’s assets and liabilities measured at fair value are summarized in the following tables by fair value measurement Level:

Fair Value Measurement at June 29, 2024

Fair Value Measurement at December 28, 2024

Level 1 Level 2 Level 3 Total

Investments $ — $ 100 $ — $ 100

Foreign exchange — 870 — 870

Other — 7 — 7

Derivatives - Foreign exchange

— 1,127 — 1,127

Interest rate — ( 1,239 ) — ( 1,239 )

1 unchanged sentence

Other — ( 17 ) — ( 17 )

Other — ( 634 ) — ( 634 )

Total recorded at fair value $ — $ ( 1,190 ) $ — $ ( 1,190 )

11 unchanged sentences

Fair value of borrowings $ — $ 42,392 $ 1,317 $ 43,709

The fair value of Level 2 investments are primarily determined based on an internal valuation model that uses observable inputs such as stock trading price, volatility and risk free rate.

The fair values of Level 2 investments are primarily determined based on an internal valuation model that uses observable inputs such as stock trading price, volatility and risk free rate.

The fair values of Level 2 derivatives are primarily determined by internal discounted cash flow models that use observable inputs such as interest rates, yield curves and foreign currency exchange rates.

4 unchanged sentences

dollar denominated notes and certain foreign currency denominated borrowings, are valued based on quoted prices for similar instruments in active markets or identical instruments in markets that are not active.

Level 3 borrowings include the Asia Theme Park borrowings, which are valued based on the current borrowing cost and credit risk of the Asia Theme Parks as well as prevailing market interest rates.

Level 3 borrowings include the Asia Theme Park and cruise ship borrowings, which are valued based on the current estimated borrowing costs, prevailing market interest rates and applicable credit risk.

The Company’s financial instruments also include cash, cash equivalents, receivables and accounts payable.

The carrying values of these financial instruments approximate the fair values.

THE WALT DISNEY COMPANY

1 unchanged sentence

tabular dollars in millions, except for per share data)

The Company’s financial instruments also include cash, cash equivalents, receivables and accounts payable.

The carrying values of these financial instruments approximate the fair values.

Non-recurring Fair Value Measure

The Company also has assets that may be required to be recorded at fair value on a non-recurring basis.

These assets are evaluated when certain triggering events occur (including a decrease in estimated future cash flows) that indicate their carrying amounts may not be recoverable.

In the second quarter of fiscal 2024, the Company recorded impairment charges as disclosed in Notes 4 and 16.

Fair value was determined using estimated discounted future cash flows, which is a Level 3 valuation technique (see Note 16 for a discussion of the more significant inputs used in our discounted cash flow analysis).

Derivative Instruments

2 unchanged sentences

The Company’s derivative positions measured at fair value (see Note 14) are summarized in the following tables:

As of June 29, 2024

As of December 28, 2024

Assets Investments/

30 unchanged sentences

The Company’s objective is to mitigate the impact of interest rate changes on earnings and cash flows and on the market value of its borrowings.

In accordance with its policy, the Company targets its fixed-rate debt as a percentage of its net debt between a

In accordance with its policy, the Company targets its fixed-rate debt as a percentage of its net debt between a minimum and maximum percentage.

The Company primarily uses pay-floating and pay-fixed interest rate swaps to facilitate its interest rate risk management activities.

The Company designates pay-floating interest rate swaps as fair value hedges of fixed-rate borrowings effectively converting fixed-rate borrowings to variable-rate borrowings.

The total notional amount of the Company’s pay-floating interest rate swaps at both December 28, 2024 and September 28, 2024 was $ 11.0 billion and $ 12.0 billion, respectively.

THE WALT DISNEY COMPANY

1 unchanged sentence

tabular dollars in millions, except for per share data)

minimum and maximum percentage.

The Company primarily uses pay-floating and pay-fixed interest rate swaps to facilitate its interest rate risk management activities.

The Company designates pay-floating interest rate swaps as fair value hedges of fixed-rate borrowings effectively converting fixed-rate borrowings to variable-rate borrowings.

The total notional amount of the Company’s pay-floating interest rate swaps at both June 29, 2024 and September 30, 2023 was $ 13.5 billion.

The following table summarizes fair value hedge adjustments to hedged borrowings:

2 unchanged sentences

2024 September 28,

2023 June 29,

2024 December 28,

2024 September 28,

2 unchanged sentences

$ 10,369 $ 11,542 $ ( 1,114 ) $ ( 923 )

The following amounts are included in “Interest expense, net” in the Condensed Consolidated Statements of Operations:

Quarter Ended Nine Months Ended

2023 June 29,

The following amounts are included in “Interest expense, net” in the Condensed Consolidated Statements of Income:

Quarter Ended

2024 December 30,

Gain (loss) on:

1 unchanged sentence

Borrowings hedged with pay-floating swaps 195 ( 432 )

Benefit (expense) associated with interest accruals on pay-floating swaps ( 153 ) ( 140 ) ( 460 ) ( 360 )

Expense associated with interest accruals on pay-floating swaps

( 111 ) ( 154 )

The Company may designate pay-fixed interest rate swaps as cash flow hedges of interest payments on floating-rate borrowings.

1 unchanged sentence

The unrealized gains or losses from these cash flow hedges are deferred in AOCI and recognized in interest expense as the interest payments occur.

The Company did not have pay-fixed interest rate swaps that were designated as cash flow hedges of interest payments at June 29, 2024 or at September 30, 2023, and gains and losses related to pay-fixed interest rate swaps recognized in earnings for the quarter and nine-month periods ended June 29, 2024 and July 1, 2023 were not material.

The Company did not have pay-fixed interest rate swaps that were designated as cash flow hedges of interest payments at December 28, 2024 or at September 28, 2024, and gains and losses related to pay-fixed interest rate swaps recognized in earnings were not material for the quarters ended December 28, 2024 and December 30, 2023.

Foreign Exchange Risk Management

9 unchanged sentences

The Company designates foreign exchange forward and option contracts as cash flow hedges of firmly committed and forecasted foreign currency transactions.

As of June 29, 2024 and September 30, 2023, the notional amounts of the Company’s net foreign exchange cash flow hedges were $ 10.7 billion and $ 8.3 billion, respectively.

Mark-to-market gains and losses on these contracts are deferred in AOCI and are recognized in earnings when the hedged transactions occur, offsetting changes in

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

the value of the foreign currency transactions.

As of December 28, 2024 and September 28, 2024, the notional amounts of the Company’s net foreign exchange cash flow hedges were $ 8.4 billion and $ 9.9 billion, respectively.

Mark-to-market gains and losses on these contracts are deferred in AOCI and are recognized in earnings when the hedged transactions occur, offsetting changes in the value of the foreign currency transactions.

Net deferred gains recorded in AOCI for contracts that will mature in the next twelve months total $ 501 million.

The following table summarizes the effect of foreign exchange cash flow hedges on AOCI:

Quarter Ended Nine Months Ended

2023 June 29,

Quarter Ended

2024 December 30,

Gain (loss) recognized in Other Comprehensive Income $ 562 $ ( 264 )

Gain (loss) reclassified from AOCI into the Statements of Operations (1)

111 76 345 414

Gain reclassified from AOCI into the Statements of Operations (1)

(1) Primarily recorded in revenue.

The Company designates cross currency swaps as fair value hedges of foreign currency denominated borrowings.

The impact from the change in foreign currency on both the cross currency swap and borrowing is recorded to “Interest expense, net.” The impact from interest rate changes is recorded in AOCI and is amortized over the life of the cross currency swap.

As of both June 29, 2024 and September 30, 2023, the total notional amount of the Company’s designated cross currency swaps was Canadian $ 1.3 billion ($ 0.9 billion).

The related gains or losses recognized in earnings for the quarter and nine-month periods ended June 29, 2024 and July 1, 2023 were not material .

The Company may designate cross currency swaps as fair value hedges of foreign currency denominated borrowings.

The impact from the change in foreign currency on both the cross currency swap and borrowing is recorded to “Interest expense,

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

net.” The impact from interest rate changes is recorded in AOCI and is amortized over the life of the cross currency swap.

As of December 28, 2024 and September 28, 2024, the total notional amount of the Company’s designated cross currency swaps was Canadian $ 1.3 billion ($ 0.9 billion) and Canadian $ 1.3 billion ($ 1.0 billion), respectively.

The related gains or losses recognized in earnings for the quarters ended December 28, 2024 and December 30, 2023 were not material.

Foreign exchange risk management contracts with respect to foreign currency denominated assets and liabilities are not designated as hedges and do not qualify for hedge accounting.

The net notional amount of these foreign exchange contracts at June 29, 2024 and September 30, 2023 were $ 3.4 billion and $ 3.1 billion, respectively.

The following table summarizes the net foreign exchange gains or losses recognized on foreign currency denominated assets and liabilities and the net foreign exchange gains or losses on the foreign exchange contracts we entered into to mitigate our exposure with respect to foreign currency denominated assets and liabilities by the corresponding line item in which they are recorded in the Condensed Consolidated Statements of Operations:

Costs and expenses

Interest expense, net Income taxes

Quarter Ended:

2023 June 29,

Net gains (losses) on foreign currency denominated assets and liabilities $ ( 89 ) $ ( 61 ) $ 10 $ ( 19 ) $ 17 $ ( 15 )

Net gains (losses) on foreign exchange risk management contracts not designated as hedges 60 — ( 12 ) 17 ( 9 ) 19

Net gains (losses) $ ( 29 ) $ ( 61 ) $ ( 2 ) $ ( 2 ) $ 8 $ 4

Nine Months Ended:

Net gains (losses) on foreign currency denominated assets and liabilities $ ( 157 ) $ 99 $ 8 $ ( 39 ) $ ( 22 ) $ ( 124 )

Net gains (losses) on foreign exchange risk management contracts not designated as hedges 21 ( 260 ) ( 14 ) 36 13 106

Net gains (losses) $ ( 136 ) $ ( 161 ) $ ( 6 ) $ ( 3 ) $ ( 9 ) $ ( 18 )

The net notional amount of these foreign exchange contracts at December 28, 2024 and September 28, 2024 were $ 2.9 billion and $ 3.4 billion, respectively.

The Company recognized net foreign exchange gains of $ 0.2 billion on the foreign exchange contracts in costs and expenses for the quarter ended December 28, 2024 that mitigated our exposure with respect to foreign currency denominated assets and liabilities.

The related gains or losses for the quarter ended December 30, 2023 were not material.

Commodity Price Risk Management

1 unchanged sentence

Mark-to-market gains and losses on these contracts are deferred in AOCI and are recognized in earnings when the hedged transactions occur, offsetting changes in the value of commodity purchases.

The notional amount of these commodities contracts at June 29, 2024 and September 30, 2023 and related gains or losses recognized in earnings for the quarter and nine-month periods ended June 29, 2024 and July 1, 2023 were not material.

The notional amount of these commodities contracts at December 28, 2024 and September 28, 2024 and related gains or losses recognized in earnings for the quarters ended December 28, 2024 and December 30, 2023 were not material.

Risk Management – Other Derivatives Not Designated as Hedges

1 unchanged sentence

These contracts, which include certain total return swap contracts, are intended to offset economic exposures of the Company and are carried at market value with any changes in value recorded in earnings.

The notional amounts of these

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

contracts at June 29, 2024 and September 30, 2023 were $ 0.5 billion and $ 0.4 billion, respectively.

The related gains or losses recognized in earnings for the quarter and nine-month periods ended June 29, 2024 and July 1, 2023 were not material.

The notional amounts of these contracts at December 28, 2024 and September 28, 2024 were $ 0.6 billion and $ 0.5 billion, respectively.

The related gains or losses recognized in earnings for the quarters ended December 28, 2024 and December 30, 2023 were not material.

Contingent Features and Cash Collateral

3 unchanged sentences

If the Company’s or the counterparty’s credit ratings were to fall below investment grade, such counterparties or the Company would also have the right to terminate our derivative contracts, which could lead to a net payment to or from the Company for the aggregate net value by counterparty of our derivative contracts.

The aggregate fair values of derivative instruments with credit-risk-related contingent features in a net liability position by counterparty were $ 1.2 billion and $ 1.6 billion at June 29, 2024 and September 30, 2023.

Restructuring and Impairment Charges

Goodwill Impairments

In the second quarter of fiscal 2024, as a result of Star India assets and liabilities being classified as held for sale (see Note 4), they were removed from the entertainment goodwill reporting units along with a proportional amount of goodwill.

As a result, we evaluated the residual goodwill at our entertainment DTC services and linear networks reporting units for impairment.

Star sports was a standalone reporting unit which did not have any goodwill.

The evaluation resulted in a $ 0.7 billion non-cash goodwill impairment charge at our entertainment linear networks reporting unit in the second quarter of fiscal 2024.

Goodwill was not impaired at the entertainment DTC services reporting unit.

The impairment evaluation compares the reporting unit’s carrying amount to its fair value, which is based on estimated discounted future cash flows.

These future cash flows are based on internal forecasts, which consider projected inflation and other economic indicators, as well as industry growth projections.

Significant judgments and assumptions in the discounted cash flow model relate to future revenues and certain operating expenses, terminal growth rates and discount rates.

Discount rates are determined based on the inherent risks of the underlying operations.

We believe our estimates are consistent with how a marketplace participant would value our reporting units.

In addition, we recorded a $ 1.3 billion non-cash goodwill impairment charge related to the Star India Transaction (see Note 4 for additional information) in the second quarter of fiscal 2024.

Both of these charges are recorded in “Restructuring and impairment charges” in the Condensed Consolidated Statements of Operations.

Content Impairment

As part of the Company’s reorganization announced in February 2023, we reviewed our content for alignment with a strategic change in our approach to content curation, and, during the third quarter of fiscal 2023, we removed content from our DTC services and terminated certain third-party license agreements for the right to use content primarily on our DTC platforms.

Accordingly, we recorded charges of $ 2.4 billion in the quarter ended July 1, 2023 (Content Impairment), of which $ 2.0 billion was related to the write-off of produced content and $ 0.4 billion was related to the termination of the license agreements.

We paid approximately $ 0.3 billion of cash to terminate these third-party license agreements.

The charges were recorded in “Restructuring and impairment charges” in the Condensed Consolidated Statements of Operations.

Other Restructuring

In the prior-year quarter ended July 1, 2023, the Company recognized restructuring charges of $ 210 million primarily for severance costs.

The nine months ended July 1, 2023 included charges of $ 431 million primarily for severance costs and costs related to exiting our businesses in Russia.

These charges are recorded in “Restructuring and impairment charges” in the Condensed Consolidated Statements of Operations.

The aggregate fair values of derivative instruments with credit-risk-related contingent features in a net liability position by counterparty were $ 0.9 billion and $ 1.1 billion at December 28, 2024 and September 28, 2024.

New Accounting Pronouncements and Other Disclosure Rules

2 unchanged sentences

It also requires an explanation of how the CODM uses the segment’s measure of profit or loss to assess segment performance and allocate resources.

The guidance is effective for the Company for annual periods beginning in

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

fiscal year 2025 and for interim periods beginning in fiscal year 2026 and requires retrospective adoption (with early adoption permitted).

The Company is currently assessing the impacts of the new guidance on its financial statement disclosures.

The guidance is effective for the Company for annual periods beginning in fiscal year 2025 and for interim periods beginning in fiscal year 2026 and requires retrospective adoption (with early adoption permitted).

While the guidance will not have an effect on the Company’s Consolidated Statements of Operations or Consolidated Balance Sheets upon adoption, it will affect certain segment reporting disclosures in the Company’s fiscal 2025 annual report.

Improvements to Income Tax Disclosures

3 unchanged sentences

state and foreign, with further disaggregation by jurisdiction if certain thresholds are met and eliminates certain disclosures related to uncertain tax benefits.

The guidance is effective for annual periods beginning with the Company’s 2026 fiscal year (with early adoption permitted).

The Company will adopt the new guidance, including the expanded disclosures, beginning with the Company’s 2026 fiscal year.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tabular dollars in millions, except for per share data)

Disaggregation of Income Statement Expense

In November 2024, the FASB issued guidance that requires the disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement line item.

The guidance also requires disclosure of the total amount of selling expenses and the Company’s definition of selling expenses.

The guidance is effective for the Company for annual periods beginning in fiscal year 2028 and for interim periods beginning in fiscal year 2029.

The Company is currently assessing the impacts of the new guidance on its financial statement disclosures.

10 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements