Walt Disney Co 10-Q

Item 1: Financial Statements THE WALT DISNEY COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited; in millions, except per share data) Quarter Ended December 27, 2025 December 28, 2024 Revenues: Services $ 23,206 $ 22,048 Products 2,775 2,642 Total revenues 25,981 24,690 Costs and expenses: Cost of services (exclusive of depreciation and amortization) ( 15,003 ) ( 13,789 ) Cost of products (exclusive of depreciation and amortization) ( 1,666 ) ( 1,617 ) Selling, general, administrative and other ( 4,121 ) ( 3,930 ) Depreciation and amortization ( 1,316 ) ( 1,276 ) Total costs and expenses ( 22,106 ) ( 20,612 ) Restructuring and impairment charges — ( 143 ) Interest expense, net ( 275 ) ( 367 ) Equity in the income of investees 93 92 Income before income taxes 3,693 3,660 Income taxes ( 1,209 ) ( 1,016 ) Net income 2,484 2,644 Net income attributable to noncontrolling interests ( 82 ) ( 90 ) Net income attributable to The Walt Disney Company (Disney) $ 2,402 $ 2,554 Earnings per share attributable to Disney: Diluted $ 1.34 $ 1.40 Basic $ 1.34 $ 1.41 Weighted average number of common and common equivalent shares outstanding: Diluted 1,793 1,818 Basic 1,786 1,812 See Notes to Condensed Consolidated Financial Statements 3 THE WALT DISNEY COMPANY CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited; in millions) Quarter Ended December 27, 2025 December 28, 2024 Net income $ 2,484 $ 2,644 Other comprehensive income (loss), net of tax: Market value adjustments for hedges 31 362 Pension and postretirement medical plan adjustments ( 3 ) 25 Foreign currency translation and other 13 552 Other comprehensive income 41 939 Comprehensive income 2,525 3,583 Net income attributable to noncontrolling interests ( 82 ) ( 90 ) Other comprehensive income (loss) attributable to noncontrolling interests ( 27 ) 72 Comprehensive income attributable to Disney $ 2,416 $ 3,565 See Notes to Condensed Consolidated Financial Statements 4 THE WALT DISNEY COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited; in millions, except per share data) December 27, 2025 September 27, 2025 ASSETS Current assets Cash and cash equivalents $ 5,678 $ 5,695 Receivables, net 15,054 13,217 Inventories 2,157 2,134 Content advances 1,336 2,063 Other current assets 1,241 1,158 Total current assets 25,466 24,267 Produced and licensed content costs 31,114 31,327 Investments 8,052 8,097 Parks, resorts and other property Attractions, buildings and equipment 81,830 82,041 Accumulated depreciation ( 47,228 ) ( 48,889 ) 34,602 33,152 Projects in progress 7,403 6,911 Land 1,193 1,192 43,198 41,255 Intangible assets, net 9,429 9,272 Goodwill 74,743 73,294 Other assets 10,087 10,002 Total assets $ 202,089 $ 197,514 LIABILITIES AND EQUITY Current liabilities Accounts payable and other accrued liabilities $ 20,541 $ 21,203 Current portion of borrowings 10,819 6,711 Deferred revenue and other 6,686 6,248 Total current liabilities 38,046 34,162 Borrowings 35,821 35,315 Deferred income taxes 4,126 3,524 Other long-term liabilities 10,088 9,901 Commitments and contingencies (Note 12) Equity Preferred stock — — Common stock, $0.01 par value, Authorized – 4.6 billion shares, Issued – 1.9 billion shares 60,704 59,814 Retained earnings 60,164 60,410 Accumulated other comprehensive loss ( 2,900 ) ( 2,914 ) Treasury stock, at cost, 97 million shares at December 27, 2025 and 79 million shares at September 27, 2025 ( 9,492 ) ( 7,441 ) Total Disney Shareholders’ equity 108,476 109,869 Noncontrolling interests 5,532 4,743 Total equity 114,008 114,612 Total liabilities and equity $ 202,089 $ 197,514 See Notes to Condensed Consolidated Financial Statements 5 THE WALT DISNEY COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited; in millions) Quarter Ended December 27, 2025 December 28, 2024 OPERATING ACTIVITIES Net income $ 2,484 $ 2,644 Depreciation and amortization 1,316 1,276 Deferred income taxes 525 25 Equity in the income of investees ( 93 ) ( 92 ) Cash distributions received from equity investees 93 33 Net change in produced and licensed content costs and advances 1,153 1,141 Equity-based compensation 332 317 Other, net 9 206 Changes in operating assets and liabilities: Receivables ( 1,806 ) ( 1,277 ) Inventories ( 22 ) 4 Other assets ( 220 ) ( 116 ) Accounts payable and other liabilities ( 1,650 ) ( 1,533 ) Income taxes ( 1,386 ) 577 Cash provided by operations 735 3,205 INVESTING ACTIVITIES Investments in parks, resorts and other property ( 3,013 ) ( 2,466 ) Other, net 276 ( 109 ) Cash used in investing activities ( 2,737 ) ( 2,575 ) FINANCING ACTIVITIES Commercial paper borrowings (payments), net 4,007 ( 169 ) Borrowings 1,062 1,057 Reduction of borrowings ( 887 ) ( 951 ) Repurchases of common stock ( 2,034 ) ( 794 ) Other, net ( 164 ) ( 140 ) Cash provided by (used in) financing activities 1,984 ( 997 ) Impact of exchange rates on cash, cash equivalents and restricted cash 5 ( 153 ) Change in cash, cash equivalents and restricted cash ( 13 ) ( 520 ) Cash, cash equivalents and restricted cash, beginning of period 5,799 6,102 Cash, cash equivalents and restricted cash, end of period $ 5,786 $ 5,582 See Notes to Condensed Consolidated Financial Statements 6 THE WALT DISNEY COMPANY CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (unaudited; in millions) Quarter Ended Equity Attributable to Disney Shares (1) Common Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Disney Equity Non-controlling Interests (2) Total Equity Balance at September 27, 2025 1,791 $ 59,814 $ 60,410 $ ( 2,914 ) $ ( 7,441 ) $ 109,869 $ 4,743 $ 114,612 Comprehensive income — — 2,402 14 — 2,416 109 2,525 Equity compensation activity 3 245 — — — 245 — 245 Dividends — — ( 2,651 ) — — ( 2,651 ) — ( 2,651 ) Common stock repurchases ( 18 ) — — — ( 2,034 ) ( 2,034 ) — ( 2,034 ) Acquisition of Fubo — 646 — — — 646 702 1,348 Distributions and other — ( 1 ) 3 — ( 17 ) ( 15 ) ( 22 ) ( 37 ) Balance at December 27, 2025 1,776 $ 60,704 $ 60,164 $ ( 2,900 ) $ ( 9,492 ) $ 108,476 $ 5,532 $ 114,008 Balance at September 28, 2024 1,812 $ 58,592 $ 49,722 $ ( 3,699 ) $ ( 3,919 ) $ 100,696 $ 4,826 $ 105,522 Comprehensive income — — 2,554 1,011 — 3,565 18 3,583 Equity compensation activity 5 276 — — — 276 — 276 Dividends — — ( 1,807 ) — — ( 1,807 ) — ( 1,807 ) Common stock repurchases ( 7 ) — — — ( 794 ) ( 794 ) — ( 794 ) Distributions and other — — ( 1 ) — ( 2 ) ( 3 ) ( 38 ) ( 41 ) Balance at December 28, 2024 1,810 $ 58,868 $ 50,468 $ ( 2,688 ) $ ( 4,715 ) $ 101,933 $ 4,806 $ 106,739 (1) Shares are net of treasury shares. (2) Excludes redeemable noncontrolling interests. See Notes to Condensed Consolidated Financial Statements 7 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) 1. Basis of Presentation These Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. 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 quarter ended December 27, 2025 are not necessarily indicative of the results that may be expected for the year ending October 3, 2026. 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. These financial statements should be read in conjunction with the Company’s 2025 Annual Report on Form 10-K. Effective October 29, 2025, the Company included FuboTV Inc. (Fubo), a publicly traded virtual multi-channel video programming distributor (vMVPD), in the Company’s Condensed Consolidated Financial Statements. See Note 4 for additional information. On November 14, 2024, the Company and Reliance Industries Limited (RIL) formed a joint venture (India joint venture) that combined the Company’s Star-branded and other general entertainment and sports television channels and Disney+ Hotstar streaming service in India (Star India) with certain media and entertainment businesses controlled by RIL (the Star India Transaction). The Company has a 37 % interest in the India joint venture and recognizes its share of the joint venture’s results in “Equity in the income of investees.” Star India’s results through November 14, 2024 were consolidated in the Company’s financial results. Variable Interest Entities The Company enters into relationships with or makes investments in other entities that may be variable interest entities (VIE). A VIE is consolidated in our financial statements if the Company has the power to direct activities that most significantly impact the economic performance of the VIE and has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant (as defined by ASC 810-10-25-38) to the VIE. Hong Kong Disneyland Resort and Shanghai Disney Resort (together the Asia Theme Parks, see Note 6) are VIEs in which the Company has less than 50% equity ownership. Company subsidiaries (the Management Companies) have management agreements with the Asia Theme Parks, which provide the Management Companies, subject to certain protective rights of joint venture partners, with the ability to direct the day-to-day operating activities and the development of business strategies that we believe most significantly impact the economic performance of the Asia Theme Parks. In addition, the Management Companies receive management fees under these arrangements that we believe could be significant to the Asia Theme Parks. Therefore, the Company has consolidated the Asia Theme Parks in its financial statements. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results may differ from those estimates. Reclassifications Certain reclassifications have been made in the fiscal 2025 financial statements and notes to conform to the fiscal 2026 presentation. 2. Segment Information The Company’s operations are reported in three segments: Entertainment, Sports and Experiences, for which separate financial information, including segment revenue and operating income, is evaluated regularly by the Chief Executive Officer, the Chief Operating Decision Maker, to allocate resources and assess performance. 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 8 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) generally includes equity in the income of investees, except for our India joint venture, and excludes amortization of intangible assets and impacts from fair value adjustments recognized in connection with the fiscal 2019 acquisition of TFCF Corporation (TFCF) and Hulu LLC (Hulu) and business acquisitions occurring after fiscal 2025 (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. Segment revenues, segment operating income and significant segment expenses are as follows: Quarter Ended December 27, 2025 December 28, 2024 Revenues: Entertainment Third parties $ 11,454 $ 10,761 Amounts eliminated in consolidation 155 111 11,609 10,872 Sports Third parties 4,521 4,514 Amounts eliminated in consolidation 388 336 4,909 4,850 Experiences 10,006 9,415 Eliminations ( 543 ) ( 447 ) Total segment revenues $ 25,981 $ 24,690 Segment operating income: Entertainment $ 1,100 $ 1,703 Sports 191 247 Experiences 3,309 3,110 Total segment operating income (1) $ 4,600 $ 5,060 (1) Equity in the income of investees is included in segment operating income as follows: Quarter Ended December 27, 2025 December 28, 2024 Entertainment $ 118 $ 118 Sports 3 10 Equity in the income of investees included in segment operating income 121 128 Equity in the loss of India joint venture ( 28 ) ( 33 ) Acquisition Amortization related to an equity investee — ( 3 ) Equity in the income of investees $ 93 $ 92 9 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) Quarter Ended Information about significant segment expenses December 27, 2025 December 28, 2024 Entertainment Programming and production costs $ 6,314 $ 5,475 Other segment operating expenses (1) 1,469 1,340 Selling, general, administrative and other 2,626 2,294 Depreciation and amortization 218 178 Total Entertainment costs and expenses 10,627 9,287 Sports Programming and production costs 4,132 4,043 Other segment operating expenses (2) 257 250 Selling, general, administrative and other 308 310 Depreciation and amortization 24 10 Total Sports costs and expenses 4,721 4,613 Experiences Operating labor 2,285 2,164 Infrastructure costs 846 801 Costs of goods sold and distribution costs 943 929 Other segment operating expenses (3) 902 784 Selling, general, administrative and other 962 948 Depreciation and amortization 759 679 Total Experiences costs and expenses 6,697 6,305 Eliminations (4) ( 543 ) ( 447 ) Corporate and unallocated shared expenses 304 460 Acquisition Amortization (5) 300 394 Total costs and expenses $ 22,106 $ 20,612 (1) Other operating expenses of Entertainment include technology support costs, distribution costs and costs of goods sold. (2) Other operating expenses of Sports include technology support costs and distribution costs. (3) Other operating expenses of Experiences include costs for supplies, processing fees and entertainment offerings. (4) Reflects fees paid by (a) the Entertainment vMVPD services to ESPN and the Entertainment linear networks for the right to air the networks on Hulu Live TV and Fubo and (b) the Entertainment segment to the Sports segment to program certain sports content on ABC Network and Disney+. The offset is included in Entertainment programming and production costs. (5) Excludes Acquisition Amortization of intangible assets related to equity investees. 10 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; 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 December 27, 2025 December 28, 2024 Segment operating income $ 4,600 $ 5,060 Corporate and unallocated shared expenses ( 304 ) ( 460 ) Equity in the loss of India joint venture ( 28 ) ( 33 ) Restructuring and impairment charges (1) — ( 143 ) Interest expense, net ( 275 ) ( 367 ) Acquisition Amortization (2) ( 300 ) ( 397 ) Income before income taxes $ 3,693 $ 3,660 (1) In the prior-year quarter, the Company recorded a $ 143 million loss in connection with the Star India Transaction. (2) Acquisition Amortization is as follows: Quarter Ended December 27, 2025 December 28, 2024 Amortization of intangible assets $ 236 $ 327 Step-up of film and television costs 64 67 Intangibles related to an equity investee — 3 $ 300 $ 397 3. Revenues The following table presents revenues by segment and major source: Quarter Ended December 27, 2025 Entertainment Sports Experiences Eliminations Total Subscription and affiliate fees $ 7,250 $ 2,983 $ — $ ( 416 ) $ 9,817 Advertising 1,775 1,477 — — 3,252 Theme park admissions — — 3,301 — 3,301 Resorts and vacations — — 2,410 — 2,410 Retail and wholesale sales of merchandise, food and beverage — — 2,741 — 2,741 Merchandise licensing 193 — 944 — 1,137 Content sales 1,936 60 — — 1,996 Other 455 389 610 ( 127 ) 1,327 $ 11,609 $ 4,909 $ 10,006 $ ( 543 ) $ 25,981 Quarter Ended December 28, 2024 Entertainment Sports Experiences Eliminations Total Subscription and affiliate fees $ 6,720 $ 3,057 $ — $ ( 321 ) $ 9,456 Advertising 1,898 1,342 — — 3,240 Theme park admissions — — 3,087 — 3,087 Resorts and vacations — — 2,221 — 2,221 Retail and wholesale sales of merchandise, food and beverage — — 2,572 — 2,572 Merchandise licensing 165 — 927 — 1,092 Content sales 1,585 78 — — 1,663 Other 504 373 608 ( 126 ) 1,359 $ 10,872 $ 4,850 $ 9,415 $ ( 447 ) $ 24,690 11 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) The following table presents revenues by segment and primary geographical markets: Quarter Ended December 27, 2025 Entertainment Sports Experiences Eliminations Total Americas $ 9,022 $ 4,813 $ 7,570 $ ( 543 ) $ 20,862 Europe 1,776 75 1,228 — 3,079 Asia Pacific 811 21 1,208 — 2,040 Total revenues $ 11,609 $ 4,909 $ 10,006 $ ( 543 ) $ 25,981 Quarter Ended December 28, 2024 Entertainment Sports Experiences Eliminations Total Americas $ 8,492 $ 4,716 $ 7,121 $ ( 447 ) $ 19,882 Europe 1,651 77 1,127 — 2,855 Asia Pacific 729 57 1,167 — 1,953 Total revenues $ 10,872 $ 4,850 $ 9,415 $ ( 447 ) $ 24,690 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 content made available to distributors and licensees in previous reporting periods. For the quarter ended December 27, 2025, $ 0.3 billion was recognized related to performance obligations satisfied as of September 27, 2025. For the quarter ended December 28, 2024, $ 0.3 billion was recognized related to performance obligations satisfied as of September 28, 2024. As of December 27, 2025, revenue for unsatisfied performance obligations expected to be recognized in the future is $ 16 billion, primarily for IP to be made available in the future under existing agreements with merchandise and co-branding licensees and sponsors, wholesalers of SVOD streaming services, television station affiliates and sports sublicensees. Of this amount, we expect to recognize approximately $ 5 billion in the remainder of fiscal 2026, $ 4 billion in fiscal 2027, $ 3 billion in fiscal 2028 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 or (ii) licenses of IP that are solely based on the sales of the licensee. Accounts receivable and deferred revenues from contracts with customers are as follows: December 27, 2025 September 27, 2025 Accounts receivable Current $ 12,450 $ 10,544 Non-current 997 985 Allowance for credit losses ( 135 ) ( 126 ) Deferred revenues Current 6,123 5,689 Non-current 731 785 For the quarter ended December 27, 2025, the Company recognized revenue of $ 3.6 billion that was included in the September 27, 2025 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. Amounts deferred generally relate to theme park admissions and vacation packages, subscriptions to streaming services and advances related to merchandise and TV/VOD licenses. 4. Acquisitions and Dispositions NFL media assets In January 2026, ESPN acquired NFL Network and certain other media assets owned and controlled by NFL Enterprises LLC, including the NFL RedZone channel’s pay TV distribution and NFL Fantasy (collectively the Specified Assets), from NFL Enterprises LLC in exchange for a 10 % noncontrolling interest of ESPN (the NFL Transaction). This transaction will allow the Company to expand audience reach, increase accessibility and flexibility for consumers, drive innovation, and offer more high-quality content at competitive prices. As a result of the NFL Transaction, the Company has an effective 72 % interest in ESPN, with Hearst Corporation (Hearst) and NFL Enterprises LLC holding 18 % and 10 %, respectively. After July 2034, 12 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) based on the performance of the Specified Assets, the Company may have the right to reacquire (the Exchange Right) the NFL’s interest in ESPN in exchange for a ten-year note at 70 % of the then fair market value of the NFL’s interest in ESPN. Alternatively, on a similar time frame, the NFL may have the right to acquire up to a 4 % additional equity interest in ESPN at a purchase price equal to 70 % of the then fair market value of ESPN. The estimated fair value of the NFL Transaction is approximately $ 3 billion. A significant portion of the transaction value will be deferred until late fiscal 2033 and amortized as an expense thereafter, or, in the case that the Company exercises its Exchange Right, would be charged to equity. The Company is in the process of finalizing the valuation of the assets acquired, liabilities assumed and noncontrolling interests. FuboTV Inc. On October 29, 2025, the Company and Fubo combined certain Hulu Live TV 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). The Company has a 70 % economic interest in the combined operations, a 70 % voting interest in Fubo on a fully diluted basis and the right to appoint a majority of Fubo’s Board of Directors. The remaining 30 % equity interest in Fubo is retained by Fubo public shareholders. Based on the closing price of Fubo common stock of $ 3.69 on October 29, 2025, the estimated fair value of Fubo was $ 1.3 billion, which was primarily allocated to goodwill of $ 1.5 billion and identifiable intangible assets of $ 0.4 billion, partially offset by debt of $ 0.4 billion. Goodwill reflects the synergies expected from enhancing and expanding the Company’s vMVPD offerings with more high-quality offerings, choice and increased flexibility. The Company has included Fubo’s financial results in the Company’s Condensed Consolidated Financial Statements effective from October 29, 2025. The revenue of the acquired Fubo operations included in the Company’s Condensed Consolidated Statement of Income for the quarter ended December 27, 2025 was approximately $ 0.3 billion. Net income of the acquired Fubo operations included in the Company’s Condensed Consolidated Statement of Income for the quarter ended December 27, 2025, was not significant. Pursuant to an agreement entered into as part of the Fubo Transaction, the Company is the exclusive distributor of the Hulu Live TV service for five years (renewable for an additional five-year term by mutual agreement) and pays a wholesale fee to Fubo based on Fubo’s cost to program Hulu Live TV. Under the same agreement, the Company manages the marketing for Hulu Live TV and sells advertising for Hulu Live TV and Fubo for a fee. Goodwill The changes in the carrying amount of goodwill are as follows: Entertainment Sports Experiences Total Balance at September 27, 2025 $ 51,258 $ 16,486 $ 5,550 $ 73,294 Fubo Transaction 1,459 — — 1,459 Currency translation adjustments and other, net ( 10 ) — — ( 10 ) Balance at December 27, 2025 $ 52,707 $ 16,486 $ 5,550 $ 74,743 5. Cash, Cash Equivalents, Restricted Cash and Borrowings Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets to the total of the amounts reported in the Condensed Consolidated Statements of Cash Flows. December 27, 2025 September 27, 2025 Cash and cash equivalents $ 5,678 $ 5,695 Restricted cash included in other assets 108 104 Total cash, cash equivalents and restricted cash in the statement of cash flows $ 5,786 $ 5,799 13 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) Borrowings During the quarter ended December 27, 2025, the Company’s borrowing activity was as follows: September 27, 2025 Borrowings Payments Other Activity December 27, 2025 Commercial paper with original maturities less than three months (1) $ 1,963 $ — $ ( 577 ) $ ( 5 ) $ 1,381 Commercial paper with original maturities greater than three months 99 4,584 — 38 4,721 U.S. dollar denominated borrowings (2) 38,658 1,062 ( 887 ) 311 39,144 Asia Theme Parks borrowings 1,075 — — ( 2 ) 1,073 Foreign currency denominated borrowings and other (3) 231 — — 90 321 $ 42,026 $ 5,646 $ ( 1,464 ) $ 432 $ 46,640 (1) Borrowings and reductions of borrowings are reported net. (2) The other activity includes borrowings assumed in the acquisition of Fubo. (3) The other activity is attributable to market value adjustments for debt with qualifying hedges. At December 27, 2025, the Company’s bank facilities, which are with a syndicate of lenders and support our commercial paper borrowings, were as follows: Committed Capacity Capacity Used Unused Capacity Facility expiring February 2026 $ 5,250 $ — $ 5,250 Facility expiring March 2027 4,000 — 4,000 Facility expiring March 2029 3,000 — 3,000 Total $ 12,250 $ — $ 12,250 The Company’s bank 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 Ratings and S&P Global Ratings ranging from 0.63% to 1.10%. 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 December 27, 2025, 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 December 27, 2025, the Company has $ 0.4 billion of outstanding letters of credit, of which none were issued under this facility. Cruise Ship Credit Facilities In October 2025, in connection with the delivery of the Disney Destiny , the Company borrowed $ 1.1 billion with a fixed interest rate of 3.74 %. Payments are due 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 8) are reported net in the Condensed Consolidated Statements of Income and consist of the following: Quarter Ended December 27, 2025 December 28, 2024 Interest expense $ ( 443 ) $ ( 487 ) Interest and investment income 52 54 Net periodic pension and postretirement benefit costs (other than service costs) 116 66 Interest expense, net $ ( 275 ) $ ( 367 ) 14 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) Interest and investment income includes gains and losses on certain publicly traded and non-public investments, investment impairments and interest earned on cash and cash equivalents and certain receivables. 6. International Theme Parks The Company has a 48 % ownership interest in the operations of Hong Kong Disneyland Resort and a 43 % ownership interest in the operations of Shanghai Disney Resort. The Asia Theme Parks together with Disneyland Paris are collectively referred to as the International Theme Parks. The following table summarizes the carrying amounts of the Asia Theme Parks’ assets and liabilities included in the Company’s Condensed Consolidated Balance Sheets: December 27, 2025 September 27, 2025 Cash and cash equivalents $ 486 $ 428 Other current assets 219 184 Total current assets 705 612 Parks, resorts and other property 6,183 6,060 Other assets 286 287 Total assets $ 7,174 $ 6,959 Current liabilities $ 799 $ 734 Long-term borrowings 1,073 1,075 Other long-term liabilities 497 489 Total liabilities $ 2,369 $ 2,298 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 27, 2025: Revenues $ 1,635 Costs and expenses ( 1,291 ) Asia Theme Parks’ royalty and management fees of $ 86 million for the quarter ended December 27, 2025 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 27, 2025 were $ 404 million provided by operating activities, $ 355 million used in investing activities and $ 7 million provided by financing activities. 15 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) 7. Produced and Acquired/Licensed Content Costs and Advances Total capitalized produced and licensed content by predominant monetization strategy is as follows: As of December 27, 2025 As of September 27, 2025 Predominantly Monetized Individually Predominantly Monetized as a Group Total Predominantly Monetized Individually Predominantly Monetized as a Group Total Produced content Released, less amortization $ 5,395 $ 14,158 $ 19,553 $ 4,624 $ 14,288 $ 18,912 Completed, not released 345 1,150 1,495 313 1,061 1,374 In-process 2,608 3,821 6,429 4,082 3,633 7,715 In development or pre-production 425 117 542 386 182 568 $ 8,773 $ 19,246 28,019 $ 9,405 $ 19,164 28,569 Licensed content - Television programming rights and advances 4,431 4,821 Total produced and licensed content $ 32,450 $ 33,390 Current portion $ 1,336 $ 2,063 Non-current portion $ 31,114 $ 31,327 Amortization of produced and licensed content is as follows: Quarter Ended December 27, 2025 December 28, 2024 Produced content Predominantly monetized individually $ 1,354 $ 696 Predominantly monetized as a group 1,614 1,813 2,968 2,509 Licensed programming rights and advances 4,246 4,097 Total produced and licensed content costs (1) $ 7,214 $ 6,606 (1) Primarily included in “Costs of services” in the Condensed Consolidated Statements of Income 8. Pension and Other Benefit Programs The components of net periodic benefit cost (income) are as follows: Pension Plans Postretirement Medical Plans Quarter Ended Quarter Ended December 27, 2025 December 28, 2024 December 27, 2025 December 28, 2024 Service costs $ 61 $ 65 $ — $ — Other costs (benefits): Interest costs 199 195 11 11 Expected return on plan assets ( 306 ) ( 290 ) ( 16 ) ( 15 ) Amortization of previously deferred service costs (credits) 1 — ( 22 ) ( 22 ) Recognized net actuarial loss (gain) 24 62 ( 7 ) ( 7 ) Total other costs (benefits) ( 82 ) ( 33 ) ( 34 ) ( 33 ) Net periodic benefit cost (income) $ ( 21 ) $ 32 $ ( 34 ) $ ( 33 ) 16 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) 9. Earnings Per Share Diluted earnings per share amounts are based upon the weighted average number of common and common equivalent shares outstanding during the period and are calculated using the treasury stock method for equity-based compensation awards (Awards). 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 December 27, 2025 December 28, 2024 Shares (in millions): Weighted average number of common and common equivalent shares outstanding (basic) 1,786 1,812 Weighted average dilutive impact of Awards 7 6 Weighted average number of common and common equivalent shares outstanding (diluted) 1,793 1,818 Awards excluded from diluted earnings per share 13 16 10. Equity The Company declared the following dividends in fiscal 2026 and 2025: Per Share Amount Payment Date $ 0.75 $1.3 billion (1) July 22, 2026 $ 0.75 $ 1.3 billion January 15, 2026 $ 0.50 $ 0.9 billion July 23, 2025 $ 0.50 $ 0.9 billion January 16, 2025 (1) Amount represents our estimate of the dividends that will be paid on July 22, 2026. The actual amount will be determined based on shareholders of record at the record date. 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 27, 2025, the Company repurchased 18 million shares of its common stock for $ 2.0 billion. During the quarter ended December 28, 2024, the Company repurchased 7 million shares of its common stock for $ 0.8 billion. As of December 27, 2025, the Company had remaining authorization in place to repurchase approximately 321 million additional shares. The repurchase program does not have an expiration date. 17 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) 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: Market Value Adjustments for Hedges Unrecognized Pension and Postretirement Medical Expense Foreign Currency Translation and Other AOCI AOCI, before tax First quarter of fiscal 2026 Balance at September 27, 2025 $ ( 549 ) $ ( 1,901 ) $ ( 1,085 ) $ ( 3,535 ) Quarter Ended December 27, 2025: Unrealized gains (losses) arising during the period ( 21 ) — ( 13 ) ( 34 ) Reclassifications of realized net (gains) losses to net income 63 ( 4 ) — 59 Balance at December 27, 2025 $ ( 507 ) $ ( 1,905 ) $ ( 1,098 ) $ ( 3,510 ) First quarter of fiscal 2025 Balance at September 28, 2024 $ ( 319 ) $ ( 2,243 ) $ ( 1,855 ) $ ( 4,417 ) 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 ) Star India Transaction — — 904 904 Balance at December 28, 2024 $ 152 $ ( 2,210 ) $ ( 1,197 ) $ ( 3,255 ) Market Value Adjustments for Hedges Unrecognized Pension and Postretirement Medical Expense Foreign Currency Translation and Other AOCI Tax on AOCI First quarter of fiscal 2026 Balance at September 27, 2025 $ 120 $ 446 $ 55 $ 621 Quarter Ended December 27, 2025: Unrealized gains (losses) arising during the period 3 — ( 1 ) 2 Reclassifications of realized net (gains) losses to net income ( 14 ) 1 — ( 13 ) Balance at December 27, 2025 $ 109 $ 447 $ 54 $ 610 First quarter of fiscal 2025 Balance at September 28, 2024 $ 71 $ 531 $ 116 $ 718 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 Star India Transaction — — ( 58 ) ( 58 ) Balance at December 28, 2024 $ ( 38 ) $ 523 $ 82 $ 567 18 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) Market Value Adjustments for Hedges Unrecognized Pension and Postretirement Medical Expense Foreign Currency Translation and Other AOCI AOCI, after tax First quarter of fiscal 2026 Balance at September 27, 2025 $ ( 429 ) $ ( 1,455 ) $ ( 1,030 ) $ ( 2,914 ) Quarter Ended December 27, 2025: Unrealized gains (losses) arising during the period ( 18 ) — ( 14 ) ( 32 ) Reclassifications of realized net (gains) losses to net income 49 ( 3 ) — 46 Balance at December 27, 2025 $ ( 398 ) $ ( 1,458 ) $ ( 1,044 ) $ ( 2,900 ) First quarter of fiscal 2025 Balance at September 28, 2024 $ ( 248 ) $ ( 1,712 ) $ ( 1,739 ) $ ( 3,699 ) 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 ) Star India Transaction — — 846 846 Balance at December 28, 2024 $ 114 $ ( 1,687 ) $ ( 1,115 ) $ ( 2,688 ) Details about AOCI components reclassified to net income are as follows: Gain (loss) in net income: Affected line item in the Condensed Consolidated Statements of Income: Quarter Ended December 27, 2025 December 28, 2024 Market value adjustments, primarily cash flow hedges Primarily revenue $ ( 63 ) $ 88 Estimated tax Income taxes 14 ( 21 ) ( 49 ) 67 Pension and postretirement medical expense Interest expense, net 4 ( 33 ) Estimated tax Income taxes ( 1 ) 8 3 ( 25 ) Total reclassifications for the period $ ( 46 ) $ 42 11. Equity-Based Compensation Equity-based compensation expense related to stock options and restricted stock units (RSU’s) for the quarters ended December 27, 2025 and December 28, 2024 was $ 332 million and $ 317 million, respectively. Equity-based compensation capitalized during the quarters ended December 27, 2025 and December 28, 2024 was $ 49 million and $ 44 million, respectively. Unrecognized compensation cost related to unvested stock options and RSUs was $ 0.1 billion and $ 1.6 billion, respectively, as of December 27, 2025. Each fiscal year, generally in December and 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 fiscal 2026 Annual Grant was issued in January 2026 and consisted of 2.6 million stock options and 15.2 million RSUs with weighted average grant date fair values of $ 37.11 and $ 113.25 , respectively. The fiscal 2025 Annual Grant weighted average grant date fair values for stock options and RSUs were $ 37.98 and $ 109.20 , respectively. 19 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) 12. Commitments and Contingencies Legal Matters Securities Actions On May 12, 2023, a private securities class action lawsuit was filed in the U.S. District Court for the Central District of California against the Company, its former Chief Executive Officer, Robert Chapek, its former Chief Financial Officer, Christine M. McCarthy, and the former Chairman of the Disney Media and Entertainment Distribution segment, Kareem Daniel on behalf of certain purchasers of securities of the Company (the Securities Class Action). 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, 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. Plaintiffs seek unspecified damages, plus interest and costs and fees. The Company intends to defend against the lawsuit vigorously. The Company filed a motion to dismiss the complaint for failure to state a claim on December 21, 2023, which was granted in part (dismissing the Section 20A claim against Iger) and otherwise denied on February 19, 2025. On March 28, 2025, the Company filed a motion for judgment on the pleadings, which was denied on May 21, 2025. The Company filed a petition for a writ of mandamus to the Ninth Circuit Court of Appeals, which was denied on July 18, 2025. The district court has set trial for August 17, 2027, and discovery is currently in progress. At this time we cannot reasonably estimate the amount of any possible loss. On December 8, 2025, a private securities lawsuit was filed in the U.S. District Court for the Central District of California against the Company and certain former officers by Union Asset Management Holding AG and GIC Private Limited (the Union Asset Action). The Union Asset Action asserts the same claims and is based on substantially the same factual allegations and time period as the Securities Class Action, and seeks unspecified monetary damages. On January 2, 2026, the parties filed a joint stipulation to stay the Union Asset Action until the Securities Class Action concludes. The Company intends to defend against this lawsuit vigorously. The lawsuit is in the early stages, and at this time we cannot reasonably estimate the amount of any possible loss. Derivative Actions Six shareholder derivative complaints have been filed against the Company and certain current and former officers and directors. Each of these actions asserts various claims including breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste, insider selling, and violations of federal securities laws based on substantially similar factual allegations as those asserted in the pending Securities Class Action. • On August 4, 2023, and December 15, 2023, two shareholder derivative complaints were filed in the U.S. District Court for the Central District of California by Hugues Gervat and Audrey McAdams, respectively. On April 29, 2024, these actions were consolidated (the Consolidated Derivative Action). The Consolidated Derivative Action is currently stayed until August 21, 2026. • On August 23, 2023, Stourbridge Investments LLC filed a shareholder derivative complaint in the U.S. District Court for the District of Delaware. On October 24, 2023, the action was voluntarily dismissed and, on November 16, 2023, refiled in the Delaware Court of Chancery. The Stourbridge action is currently stayed until the court in the Securities Class Action rules upon any motion for summary judgment. • On June 27, 2025, Thomas Payne filed a shareholder derivative complaint in the Delaware Court of Chancery. The Payne action is currently stayed until the court in the Securities Class Action rules upon any motion for summary judgment. • On November 5, 2025, Martin Siegel filed a shareholder derivative complaint in the Delaware Court of Chancery. The Siegel action is currently stayed until the court in the Securities Class Action rules upon any motion for summary judgment. • On November 14, 2025, Balraj Paul, the Montini Family Trust, and Dorothy Keto filed a shareholder derivative complaint in the U.S. District Court for the Central District of California. On January 14, 2026, the Paul action was consolidated into the Consolidated Derivative Action, which is stayed until August 21, 2026. The actions seek declarative and injunctive relief, an award of unspecified damages to The Walt Disney Company and other costs and fees. The Company intends to defend against these lawsuits vigorously. The lawsuits are in the early stages, and at this time we cannot reasonabl y estimate the amount of any possible loss. 20 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) Antitrust and Other Actions On November 18, 2022, a 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 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 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), 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. 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 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 and consumer protection 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 filed a motion to dismiss the Consolidated Complaint for failure to state a claim on December 1, 2023. 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 (Biddle/Fendelander Action). The plaintiffs in the Unger Action also alleged that Disney impermissibly bundles ESPN with other Disney networks and unjustly enriched itself. The Unger Action has since been transferred to the Northern District of California with the court finding it related to the Biddle/Fendelander Action. The Unger plaintiffs filed an amended complaint on April 28, 2025, adding a named plaintiff and alleging essentially the same antitrust theories under the Sherman Act and the antitrust and consumer protection laws of thirty-seven states, the District of Columbia and Puerto Rico. The Unger plaintiffs seek damages and injunctive relief, including an injunction requiring the Company to segregate or divest any interest in Fubo and Hulu, or in the alternative, business assets relating to Fubo and Hulu + Live TV. On May 30, 2025, the plaintiffs in the Biddle/Fendelander Action filed a proposed Second Consolidated Amended Complaint, adding a class of fuboTV subscribers, a Clayton Act § 7 claim challenging the Company’s acquisition of fuboTV on behalf of fuboTV subscribers, and a claim under Sherman Act § 2. On June 5, 2025, the Company and plaintiffs in the Biddle/Fendelander Action reached a settlement in principle to settle all claims on behalf of all YouTube TV, DirecTV Stream and fuboTV subscribers for an amount that is not material for the Company. The settlement was contingent on Plaintiffs’ Counsel in the Biddle/Fendelander Action (Biddle/Fendelander Counsel) obtaining or having authority to settle claims on behalf of all three subscriber classes, Court approval, and other contingencies. On June 10, 2025, the Court issued an order consolidating the Unger Action with the Biddle/Fendelander Action. On July 21, 2025, the Court issued an order appointing Biddle/Fendelander Counsel to serve as interim lead counsel for the putative classes of YouTube TV and DirecTV Stream subscribers, and Unger Counsel to serve as interim lead counsel for the putative class of fuboTV subscribers, thereby resulting in Biddle/Fendelander Counsel not having authority to settle on behalf of the three putative classes of subscribers as required by the settlement in principle. At a joint mediation held on October 3, 2025, the Company and plaintiffs in the Biddle/Fendelander Action reached a settlement in principle to settle all claims on behalf of all YouTube TV and DirecTV Stream subscribers for an amount that is not material for the Company. The settlement is contingent on Biddle/Fendelander Counsel obtaining Court approval and other contingencies. A preliminary approval hearing is scheduled for February 19, 2026. The Company and Unger Counsel did not reach a settlement at the October 3, 2025 mediation. The Company filed a motion to compel arbitration of individual claims and dismiss class claims in the Unger Action on December 19, 2025. A hearing on the motion is set for March 19, 2026. The Company intends to continue to defend against the lawsuit vigorously. At this time, we cannot reasonably estimate the amount of any possible loss in the Unger Action. On January 2, 2026, in litigation filed by the Company on August 28, 2025 asserting breach of contract claims against DISH Network L.L.C. (DISH) in the U.S. District Court for the Southern District of New York, DISH filed antitrust counterclaims against the Company. DISH asserts a tying claim under Sherman Act § 1 and New York’s Donnelly Act challenging certain provisions in the Company’s carriage agreement with DISH; claims under Sherman Act § 1 challenging an ESPN / Fox One bundle, the creation of Fubo Sports, and the Company’s acquisition of a controlling share of Fubo; a claim under Clayton Act § 7 challenging the Company’s acquisition of a controlling share of Fubo; and a claim under Sherman Act § 2 alleging the Company engaged in a pattern of conduct in an attempt to monopolize an alleged market for skinny sports 21 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) bundles. DISH also asserts breach-of-contract counterclaims, contending that Company-affiliated entities violated their obligations under certain most-favored-nation provisions in the operative carriage agreement. The Company’s response to these counterclaims is due on February 20, 2026. The Company intends to prosecute its claims and defend against these counterclaims vigorously. The lawsuit is in its early stages, and at this time we cannot reasonably estimate the amount of any potential loss. The Company, together with, in some instances, certain of its directors and officers, is a defendant in various oth er legal actions incident to the conduct of its businesses, including streaming services which are subject to patent infringement claims and litigation for which adverse results may include payment of substantial licensing fees and monetary awards, as well as orders preventing us from offering or requiring us to change certain features, functionalities or services, which could harm our businesses and in aggregate negatively impact our results of operations. Management does not believe that the Company has incurred a probable material loss by reason of any of those actions. Other The Company entered into license agreements for the sports rights necessary to operate NFL Network and NFL RedZone through 2033. 13. Fair Value Measurements 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 December 27, 2025 Level 1 Level 2 Level 3 Total Assets Investments $ — $ 44 $ — $ 44 Derivatives Foreign exchange — 828 — 828 Other — 8 — 8 Liabilities Derivatives Interest rate — ( 757 ) — ( 757 ) Foreign exchange — ( 923 ) — ( 923 ) Other — ( 2 ) — ( 2 ) Other — ( 727 ) — ( 727 ) Total recorded at fair value $ — $ ( 1,529 ) $ — $ ( 1,529 ) Fair value of borrowings $ — $ 40,179 $ 3,481 $ 43,660 22 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) Fair Value Measurement at September 27, 2025 Level 1 Level 2 Level 3 Total Assets Investments $ — $ 89 $ — $ 89 Derivatives Foreign exchange — 816 — 816 Other — 5 — 5 Liabilities Derivatives Interest rate — ( 762 ) — ( 762 ) Foreign exchange — ( 926 ) — ( 926 ) Other — ( 1 ) — ( 1 ) Other — ( 668 ) — ( 668 ) Total recorded at fair value $ — $ ( 1,447 ) $ — $ ( 1,447 ) Fair value of borrowings $ — $ 36,976 $ 2,111 $ 39,087 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. Counterparty credit risk, which is mitigated by master netting agreements and collateral posting arrangements with certain counterparties, had an impact on derivative fair value estimates that was not material. The Company’s derivative financial instruments are discussed in Note 14. Level 2 other liabilities are primarily arrangements that are valued based on the fair value of underlying investments, which are generally measured using Level 1 and Level 2 fair value techniques. Level 2 borrowings, which include commercial paper, U.S. 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 Parks 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. 23 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) 14. Derivative Instruments The Company’s derivative positions measured at fair value (see Note 13) are summarized in the following tables: As of December 27, 2025 Current Assets Investments/ Other Assets Other Current Liabilities Other Long- Term Liabilities Derivatives designated as hedges Foreign exchange $ 225 $ 389 $ ( 399 ) $ ( 206 ) Interest rate — — ( 757 ) — Other 1 — ( 2 ) — Derivatives not designated as hedges Foreign exchange 56 158 ( 66 ) ( 252 ) Other 7 44 — — Gross fair value of derivatives 289 591 ( 1,224 ) ( 458 ) Counterparty netting ( 276 ) ( 513 ) 391 398 Cash collateral (received) paid — — 570 — Net derivative positions $ 13 $ 78 $ ( 263 ) $ ( 60 ) As of September 27, 2025 Current Assets Investments/ Other Assets Other Current Liabilities Other Long- Term Liabilities Derivatives designated as hedges Foreign exchange $ 233 $ 376 $ ( 407 ) $ ( 208 ) Interest rate — — ( 762 ) — Other 3 2 — — Derivatives not designated as hedges Foreign exchange 39 168 ( 49 ) ( 262 ) Other — 89 ( 1 ) — Gross fair value of derivatives 275 635 ( 1,219 ) ( 470 ) Counterparty netting ( 260 ) ( 517 ) 378 399 Cash collateral (received) paid — — 550 10 Net derivative positions $ 15 $ 118 $ ( 291 ) $ ( 61 ) Interest Rate Risk Management 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 was $ 10.6 billion at both December 27, 2025 and September 27, 2025. The following table summarizes fair value hedge adjustments to hedged borrowings: Carrying Amount of Hedged Borrowings Fair Value Adjustments Included in Hedged Borrowings December 27, 2025 September 27, 2025 December 27, 2025 September 27, 2025 Borrowings: Current $ 2,980 $ 2,954 $ ( 19 ) $ ( 44 ) Long-term 7,413 7,347 ( 634 ) ( 680 ) $ 10,393 $ 10,301 $ ( 653 ) $ ( 724 ) 24 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) The following amounts are included in “Interest expense, net” in the Condensed Consolidated Statements of Income: Quarter Ended December 27, 2025 December 28, 2024 Gain (loss) on: Pay-floating swaps $ 67 $ ( 195 ) Borrowings hedged with pay-floating swaps ( 67 ) 195 Expense associated with interest accruals on pay-floating swaps ( 85 ) ( 111 ) Foreign Exchange Risk Management The Company designates foreign exchange forward and option contracts as cash flow hedges of firmly committed and forecasted foreign currency transactions. As of December 27, 2025 and September 27, 2025, the notional amount of the Company’s net foreign exchange cash flow hedges was $ 10.1 billion and $ 9.3 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 value of the foreign currency transactions. Net deferred losses recorded in AOCI for contracts that will mature in the next twelve months total $ 228 million. The following table summarizes the effect of foreign exchange cash flow hedges on AOCI: Quarter Ended December 27, 2025 December 28, 2024 Gain (loss) recognized in Other Comprehensive Income $ ( 25 ) $ 562 Gain (loss) reclassified from AOCI into the Statements of Operations (1) ( 62 ) 89 (1) Primarily recorded in revenue. 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, 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 27, 2025 and September 27, 2025, the total notional amount of the Company’s designated cross currency swaps was Canadian $ 1.3 billion ($ 1.0 billion) and Canadian $ 1.3 billion ($ 0.9 billion), respectively. The related gains or losses recognized in earnings for the quarters ended December 27, 2025 and December 28, 2024 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 December 27, 2025 and September 27, 2025 was $ 3.2 billion and $ 3.0 billion, respectively. The related gains or losses recognized in costs and expenses on foreign exchange contracts that mitigated our exposure with respect to foreign currency denominated assets and liabilities for the quarters ended December 27, 2025 and December 28, 2024 were not material. Risk Management – Other Derivatives Not Designated as Hedges The Company enters into certain other risk management contracts that are not designated as hedges and do not qualify for hedge accounting. 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 net notional amount of these contracts at December 27, 2025 and September 27, 2025 was $ 0.7 billion and $ 0.6 billion, respectively. The related gains or losses recognized in earnings for the quarters ended December 27, 2025 and December 28, 2024 were not material. Contingent Features and Cash Collateral The Company has master netting arrangements by counterparty with respect to certain derivative financial instrument contracts. The Company may be required to post collateral in the event that a net liability position with a counterparty exceeds limits defined by contract and that vary with the Company’s credit rating. In addition, these contracts may require a counterparty to post collateral to the Company in the event that a net receivable position with a counterparty exceeds limits defined by contract and that vary with the counterparty’s credit rating. 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 value of derivative instruments with credit-risk-related contingent features in a net liability position by counterparty was $ 0.9 billion at December 27, 2025 and September 27, 2025. 25 THE WALT DISNEY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited; tabular dollars in millions, except for per share data) 15. New Accounting Pronouncements Improvements to Income Tax Disclosures In December 2023, the FASB issued guidance to enhance income tax disclosures. The new guidance requires an expanded effective tax rate reconciliation and the disclosure of cash taxes paid segregated between U.S. federal, U.S. state and foreign, with further disaggregation by jurisdiction if certain thresholds are met, and eliminates certain disclosures related to uncertain tax benefits. The new guidance is applicable to annual periods beginning with the Company’s 2026 fiscal year. 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. Accounting for Government Grants In December 2025, the FASB issued guidance that establishes the recognition, measurement and presentation requirements for government grants. The guidance is effective at the beginning of the Company’s 2030 fiscal year (with early adoption permitted). The Company is currently assessing the impact this guidance will have on its financial statements and financial statement disclosures. 26 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS