What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-06 compared with 2026-02-02 · 489 added, 153 removed, 391 unchanged (62% of the section changed)

5 unchanged sentences

• Current Quarter Results Compared to Prior-Year Quarter

• Current Six-Month Period Results Compared to Prior-Year Six-Month Period

• Seasonality

8 unchanged sentences

Quarter Ended % Change

(in millions, except per share data) December 27,

2025 December 28,

(Worse) Six Months Ended % Change

(in millions, except per share data) March 28,

2026 March 29,

2025 March 28,

2026 March 29,

Services $ 22,684 $ 21,258 7 % $ 45,890 $ 43,306 6 %

11 unchanged sentences

Income before income taxes 3,367 3,087 9 % 7,060 6,747 5 %

Income taxes ( 1,209 ) ( 1,016 ) (19) %

Income taxes ( 902 ) 314 nm ( 2,111 ) ( 702 ) >(100) %

Net income 2,465 3,401 (28) % 4,949 6,045 (18) %

8 unchanged sentences

and diluted earnings per share (EPS) attributable to Disney decreased to $1.27 compared to $1.81 in the prior-year quarter.

The net income and EPS decreases were due to lower operating income at Entertainment and a higher effective income tax rate.

These decreases were partially offset by higher operating income at Experiences, the comparison to charges taken in connection with the Star India Transaction and a legal settlement in the prior-year quarter and lower intangible amortization and interest expense.

Service revenues for the quarter increased 5%, or $1.2 billion, to $23.2 billion, which included an approximate 1 percentage point increase from the Fubo Transaction and an approximate 1 percentage point decrease from the Star India

The net income and EPS decreases were due to the recognition of a tax benefit in the prior-year quarter related to the resolution of a tax matter.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Aside from these impacts, service revenues increased due to an increase in content sales, growth at our parks and experiences businesses and, to a lesser extent, higher subscription and affiliate fees.

Service revenues for the quarter increased 7%, or $1.4 billion, to $22.7 billion, which included an approximate 2 percentage point increase from the Fubo Transaction and, to a lesser extent, NFL Transaction.

Aside from this impact, service revenues increased due to higher subscription and affiliate fees, growth at our parks and experiences businesses and, to a lesser extent, an increase in content sales.

Product revenues for the quarter increased 5%, or $0.1 billion, to $2.5 billion due to growth at our parks and experiences businesses.

Costs and expenses

Cost of services for the quarter increased 9%, or $1.2 billion, to $15.0 billion, which included an approximate 2 percentage point increase from the Fubo Transaction and an approximate 1 percentage point decrease due to the Star India Transaction.

Aside from these impacts, cost of services increased due to higher programming and production costs and, to a lesser extent, the impact of inflation and increased volumes at our parks and experiences businesses.

Cost of services for the quarter increased 8%, or $1.0 billion, to $14.4 billion, which included an approximate 3 percentage point increase from the Fubo Transaction and, to a lesser extent, NFL Transaction.

Aside from this impact, cost of services increased due to higher programming and production costs and, to a lesser extent, the impact of inflation and increased volumes at our parks and experiences businesses.

Selling, general, administrative and other costs increased 2%, or $0.1 billion, to $4.1 billion due to higher marketing costs.

Depreciation and amortization increased 3% to $1.3 billion driven by higher depreciation at our parks and experiences and Entertainment businesses, partially offset by lower amortization of intangible assets.

Depreciation and amortization increased 6%, or $0.1 billion, to $1.4 billion driven by higher depreciation at Experiences and Entertainment, partially offset by lower amortization of intangible assets.

Restructuring and impairment charges

In the prior-year quarter, the Company recorded a $143 million loss in connection with the Star India Transaction.

Charges in the current quarter were $147 million for an impairment of our investment in A+E Global Media (A+E) and $92 million for severance.

Charges in the prior-year quarter were $109 million for content impairments.

After the current quarter impairment in A+E, our investment has a carrying value of approximately $2 billion.

If the estimated fair value of our investment declines, for example by a decrease in forecasted cash flows or a transaction at an amount that is less than the carrying amount, we would be required to record an impairment charge in earnings, which could be material.

Interest expense, net

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Quarter Ended

(in millions) December 27,

2025 December 28,

(in millions) March 28,

2026 March 29,

2025 % Change

3 unchanged sentences

Interest expense, net $ (240) $ (346) 31 %

The decrease in interest expense was due to lower average debt balances and an increase in capitalized interest.

The increase in interest income, investment income and other was due to a favorable comparison related to pension and postretirement benefit costs, other than service cost.

The increase in interest income, investment income and other was due to a net gain on investments in the current quarter compared to a net loss on investments in the prior-year quarter, and a favorable comparison related to pension and postretirement benefit costs, other than service cost.

Equity in the Income of Investees

Income from equity investees increased $21 million, to $57 million from $36 million, due to a lower loss from the India joint venture.

Quarter Ended

2025 December 28,

2026 March 29,

Income before income taxes

$ 3,367 $ 3,087

Income tax (benefit) expense

Income tax expense (benefit)

Effective income tax rate

26.8 % (10.2) %

The increase in the effective income tax rate in the current quarter compared to the prior-year quarter was due to a non-cash tax charge in the current quarter resulting from the Fubo Transaction and an unfavorable impact in the current quarter for adjustments related to prior years, partially offset by a non-cash tax-charge in the prior-year quarter in connection with the Star India Transaction.

The effective income tax rate was positive 26.8% in the current quarter compared to a negative effective income tax rate of 10.2% in the prior-year quarter.

Significant items impacting the change in the effective income tax rate included the following:

• The current quarter included a non-cash tax charge of approximately 3 percentage points in connection with the NFL Transaction

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

• The prior-year quarter included a favorable impact of approximately 33 percentage points from the resolution of a tax matter

Noncontrolling Interests

Quarter Ended

(in millions) December 27,

2025 December 28,

(in millions) March 28,

2026 March 29,

2025 % Change

2 unchanged sentences

$ (218) $ (126) (73) %

The increase in net income attributable to noncontrolling interests was primarily due to the NFL Transaction and, to a lesser extent, higher results at Shanghai Disney Resort.

Net income attributable to noncontrolling interests is determined on income after royalties and management fees, financing costs and income taxes, as applicable.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Certain Items Impacting Results in the Quarter

Results for the quarter ended December 27, 2025 were impacted by the following:

• Non-cash tax charge of $307 million resulting from the Fubo Transaction

Results for the quarter ended March 28, 2026 were impacted by the following:

• Acquisition Amortization of $313 million

Results for the quarter ended December 28, 2024 were impacted by the following:

• An impairment charge of $143 million recorded in connection with the Star India Transaction.

Tax expense includes a $31 million tax benefit on the impairment charge and a non-cash tax charge of $244 million related to the Star India Transaction

• Restructuring and impairment charges of $239 million

• A non-cash tax charge of $115 million resulting from the NFL Transaction

Results for the quarter ended March 29, 2025 were impacted by the following:

• Resolution of a prior-year tax matter of $1,016 million

• Acquisition Amortization of $396 million

• Restructuring and impairment charges of $109 million

A summary of the impact of these items on EPS is as follows:

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After-Tax Income (Loss) EPS Favorable (Adverse) (2)

Quarter Ended December 27, 2025:

Non-cash tax charge resulting from the Fubo Transaction

Quarter Ended March 28, 2026:

Acquisition Amortization

$ (313) $ 70 $ (243) $ (0.12)

Restructuring and impairment charges (239) 22 (217) (0.12)

Non-cash tax charge resulting from the NFL Transaction

— (115) (115) (0.05)

Total $ (552) $ (23) $ (575) $ (0.30)

Quarter Ended March 29, 2025:

Resolution of a prior-year tax matter $ — $ 1,016 $ 1,016 $ 0.56

Acquisition Amortization

(396) 92 (304) (0.16)

Restructuring and impairment charges (109) 25 (84) (0.05)

Total $ (505) $ 1,133 $ 628 $ 0.35

Quarter Ended December 28, 2024:

Star India Transaction

(1) Tax benefit (expense) amounts are determined using the tax rate applicable to the individual item.

(2) EPS is net of noncontrolling interest share, where applicable.

Total may not equal the sum of the column due to rounding.

CURRENT SIX-MONTH PERIOD RESULTS COMPARED TO PRIOR-YEAR SIX-MONTH PERIOD

Revenues for the current period increased $2.8 billion, to $51.1 billion;

net income attributable to Disney decreased $1.2 billion, to $4.6 billion;

and EPS decreased to $2.61 from $3.21 in the prior-year period.

The net income and EPS decreases were due to the recognition of a tax benefit in the prior-year period related to the resolution of a tax matter and, to a lesser extent, lower operating income at Entertainment.

These decreases were partially offset by higher operating income at Experiences.

Service revenues for the current period increased 6%, or $2.6 billion to $45.9 billion, which included an approximate 1 percentage point net favorable impact from the Fubo, NFL and Star India Transactions.

Aside from this impact, service

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

revenues increased due to growth at our parks and experiences businesses, higher subscription and affiliate fees and, to a lesser extent, an increase in content sales.

Product revenues for the current period increased 5%, or $0.3 billion, to $5.3 billion, due to growth at our parks and experiences businesses.

Costs and expenses

Cost of services for the current period increased 8%, or $2.3 billion, to $29.4 billion, which included an approximate 2 percentage point net favorable impact from the Fubo, NFL and Star India Transactions.

Selling, general, administrative and other costs increased 4%, or $0.3 billion, to $8.2 billion due to higher marketing costs, partially offset by the comparison to a legal settlement in the prior-year period.

Depreciation and amortization increased 5%, or $0.1 billion, to $2.7 billion, driven by higher depreciation at Experiences and Entertainment, partially offset by lower amortization of intangible assets.

Restructuring and impairment charges

Charges in the current period were $147 million for an impairment of our investment in A+E and $92 million for severance.

Charges in t he prior-year period were $143 million for impairment of goodwill in connection with the Star India Transaction and $109 million for content impairments.

Interest expense, net

Interest expense, net is as follows:

Six Months Ended

(in millions) March 28,

2026 March 29,

2025 % Change

Better (Worse)

Interest expense $ (916) $ (958) 4 %

Interest income, investment income and other 401 245 64 %

Interest expense, net $ (515) $ (713) 28 %

The decrease in interest expense was primarily due to lower average rates.

The increase in interest income, investment income and other was due to a favorable comparison of pension and postretirement benefit costs, other than service cost, and a net gain on investments in the current period compared to a net loss on investments in the prior-year period.

Equity in the Income of Investees

Income from equity investees increased $22 million, to $150 million from $128 million, due to a lower loss from the India joint venture, partially offset by a decrease in income from A+E.

Six Months Ended

2026 March 29,

Income before income taxes

$ 7,060 $ 6,747

Income tax expense

Effective income tax rate

29.9 % 10.4 %

The effective income tax rate was 29.9% in the current period compared to 10.4% in the prior-year period.

Significant items impacting the change in the effective income tax rate included the following:

• The current period included non-cash tax charges of approximately 6 percentage points in connection with the Fubo and NFL Transactions and an unfavorable impact of approximately 2 percentage points from adjustments related to prior years

• The prior-year period included a favorable impact of approximately 16 percentage points from adjustments related to prior years and a non-cash tax charge of approximately 4 percentage points in connection with the Star India Transaction

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Noncontrolling Interests

Six Months Ended

(in millions) March 28,

2026 March 29,

2025 % Change

Better (Worse)

Net income attributable to noncontrolling interests

$ (300) $ (216) (39) %

The increase in net income attributable to noncontrolling interests was primarily due to the NFL Transaction and higher results at Shanghai Disney Resort.

Certain Items Impacting Results in the Six Month Period

Results for the six months ended March 28, 2026 were impacted by the following:

• Acquisition Amortization of $613 million

• Non-cash tax charges resulting from the Fubo and NFL Transactions of $307 million and $115 million, respectively

• Restructuring and impairment charges of $239 million

Results for the six months ended March 29, 2025 were impacted by the following:

• Acquisition Amortization of $793 million

• Restructuring and impairment charges of $252 million and a non-cash tax charge of $244 million

• Resolution of a prior-year tax matter of $1,016 million

A summary of the impact of these items on EPS is as follows:

(in millions, except per share data) Pre-Tax Income (Loss) Tax Benefit

(Expense) (1)

After-Tax Income (Loss) EPS Favorable

(Adverse) (2)

Six Months Ended March 28, 2026:

Acquisition Amortization

$ (613) $ 140 $ (473) $ (0.24)

Non-cash tax charges resulting from the Fubo and NFL Transactions

— (422) (422) (0.22)

Restructuring and impairment charges (239) 22 (217) (0.12)

Total $ (852) $ (260) $ (1,112) $ (0.59)

Six Months Ended March 29, 2025:

Acquisition Amortization

$ (793) $ 184 $ (609) $ (0.32)

Restructuring and impairment charges (252) (188) (440) (0.25)

Resolution of a prior-year tax matter — 1,016 1,016 0.56

Total $ (1,045) $ 1,012 $ (33) $ (0.01)

(1) Tax benefit (expense) amounts are determined using the tax rate applicable to the individual item.

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The Company’s businesses are subject to the effects of seasonality.

Consequently, the operating results for the quarter ended December 27, 2025 for each business segment, and for the Company as a whole, are not necessarily indicative of results to be expected for the full year.

Consequently, the operating results for the six months ended March 28, 2026 for each business segment, and for the Company as a whole, are not necessarily indicative of results to be expected for the full year.

Entertainment revenues are subject to seasonal and other cyclical advertising patterns, changes in viewership and subscriber levels, timing and performance of theatrical releases, and the timing of and demand for film and television programs.

In general, domestic advertising revenues are typically somewhat higher during the fall and somewhat lower during the summer months and domestic advertising revenue is typically higher during election cycles.

Affiliate and subscriptions fees vary with the subscriber trends of multi-channel video programming distributors (i.e.

Subscription and affiliate fees vary with the subscriber trends of multi-channel video programming distributors (i.e.

cable, satellite telecommunications and digital over-the-top service providers) and our streaming services.

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Sports revenues are subject to seasonal advertising patterns, changes in viewership and subscriber levels, and the availability of and demand for sports programming.

Advertising revenues generated from sports programming are also impacted by the timing of sports seasons and events, which timing may vary throughout the year or may take place periodically (e.g.

Advertising revenues generated from sports programming and the recognition of sports rights cost amortization are also impacted by the timing of sports seasons and events, which timing may vary throughout the year or may take place periodically (e.g.

biannually, quadrennially).

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Experiences revenues fluctuate with changes in theme park attendance and resort occupancy resulting from the seasonal nature of vacation travel and leisure activities, the opening of new guest offerings and pricing and promotional offers.

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In addition, licensing revenues fluctuate with the timing and performance of theatrical and game releases and direct-to-consumer content.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

BUSINESS SEGMENT RESULTS

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Quarter Ended % Change

(in millions) December 27,

2025 December 28,

(Worse) Six Months Ended % Change

(in millions) March 28,

2026 March 29,

2025 March 28,

2026 March 29,

Entertainment $ 11,715 $ 10,682 10 % $ 23,324 $ 21,554 8 %

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Revenues $ 25,168 $ 23,621 7 % $ 51,149 $ 48,311 6 %

(1) 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 and Fubo and (b) the Entertainment segment to the Sports segment to program certain sports content on ABC Network and Disney+.

(1) Reflects fees paid by (a) the entertainment vMVPD services to the sports and entertainment linear networks for the right to air the networks on the Hulu Live TV and Fubo services and (b) the Entertainment segment to the Sports segment to program certain sports content on ABC Network and Disney+.

The following table presents income from our operating segments and other components of income before income taxes:

Quarter Ended % Change

(in millions) December 27,

2025 December 28,

(Worse) Six Months Ended % Change

(in millions) March 28,

2026 March 29,

2025 March 28,

2026 March 29,

Entertainment operating income $ 1,336 $ 1,258 6 % $ 2,436 $ 2,961 (18) %

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$ 3,367 $ 3,087 9 % $ 7,060 $ 6,747 5 %

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Depreciation expense is as follows:

Quarter Ended % Change

(in millions) December 27,

2025 December 28,

(Worse) Six Months Ended % Change

(in millions) March 28,

2026 March 29,

2025 March 28,

2026 March 29,

Entertainment $ 238 $ 190 (25) % $ 443 $ 355 (25) %

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Total depreciation expense $ 1,116 $ 957 (17) % $ 2,156 $ 1,866 (16) %

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Amortization of intangible assets is as follows:

Quarter Ended % Change

(in millions) December 27,

2025 December 28,

(Worse) Six Months Ended % Change

(in millions) March 28,

2026 March 29,

2025 March 28,

2026 March 29,

Entertainment $ 13 $ 13 — % $ 26 $ 26 — %

1 unchanged sentence

Acquisition amortization - intangible assets

249 327 24 % 485 654 26 %

Total amortization of intangible assets $ 289 $ 367 21 % $ 565 $ 734 23 %

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Quarter Ended % Change

(in millions) December 27,

2025 December 28,

(in millions) March 28,

2026 March 29,

Subscription and affiliate fees $ 7,801 $ 6,858 14 %

9 unchanged sentences

Revenues - Subscription and affiliate fees

Growth in subscription and affiliate fees was due to increases of 4% from higher effective rates, 4% from the Fubo Transaction and 1% from more subscribers, partially offset by decreases of 1% from the Star India Transaction and 1% from the temporary suspension of carriage with an affiliate in the current quarter.

Growth in subscription and affiliate fees was due to increases of 5% from the Fubo Transaction, 5% from higher effective rates, 2% from a favorable foreign exchange impact and 2% from more subscribers.

Revenues - Advertising

The decline in advertising revenue was due to decreases of 5% from the Star India Transaction and 5% from lower rates, partially offset by increases of 3% from higher impressions and 1% from the Fubo Transaction.

Rates and impressions included an impact from less political advertising.

The increase in advertising revenue was primarily attributable to an increase of 8% from higher impressions, partially offset by a decrease of 6% from lower rates.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

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Revenues - Content sales

Content sales revenue increased due to an increase of 25% from theatrical distribution, partially offset by a decrease of 6% from home entertainment distribution.

Higher theatrical distribution revenue was attributable to more significant titles released in the current quarter compared to the prior-year quarter.

The current quarter included Zootopia 2 , Avatar:

Fire and Ash, Predator:

Badlands and Tron:

The prior-year quarter included Moana 2 and Mufasa:

The Lion King.

Higher content sales revenue was due to increases of 8% from theatrical distribution and 4% from a favorable foreign exchange impact, partially offset by a decrease of 2% from TV/VOD and home entertainment distribution.

The increase in theatrical distribution was attributable to the ongoing performance of Avatar:

Fire and Ash and Zootopia 2 and the release of Hoppers in the current quarter compared to the ongoing performance of Mufasa:

The Lion King and Moana 2 and the release of Captain America:

Brave New World in the prior-year quarter .

Revenues - Other

The decrease in other revenue was attributable to the impact of our foreign exchange hedging program.

Operating expenses

Quarter Ended % Change

(in millions) December 27,

2025 December 28,

(in millions) March 28,

2026 March 29,

Programming and production costs $ (6,406) $ (5,691) (13) %

1 unchanged sentence

$ (7,906) $ (7,052) (12) %

The increase in programming and production costs was due to increases of 11% from theatrical distribution, 4% from the Fubo Transaction and 3% from our streaming services.

Higher programming and production costs at our streaming services were primarily due to an increase in subscriber-based license fees.

The increase in other operating expenses was primarily due to higher technology and distribution costs.

Selling, general, administrative and other

Selling, general, administrative and other costs increased $332 million to $2,626 million from $2,294 million due to higher marketing costs at theatrical distribution and our streaming services.

Higher theatrical marketing costs were due to more significant releases in the current quarter.

The increase in programming and production costs was due to increases of 5% from the Fubo Transaction, 5% from streaming services and 3% from theatrical distribution.

The increase in other operating expenses was primarily attributable to higher technology and distribution costs.

Depreciation and amortization

Depreciation and amortization increased $40 million to $218 million from $178 million due to new technology and facilities assets placed in service.

Depreciation and amortization increased $48 million, to $251 million from $203 million, due to a new facility and investments in technology assets.

Equity in the Income of Investees

Income from equity investees decreased $16 million, to $108 million from $124 million, due to lower income from A+E attributable to decreases in advertising and affiliate revenues, partially offset by an increase in program sales income.

Operating Income from Entertainment

Segment operating income decreased $603 million to $1,100 million from $1,703 million due to lower theatrical distribution results.

Segment operating income increased $78 million, to $1,336 million from $1,258 million, due to an increase in subscription and affiliate fees, partially offset by higher programming and production costs.

Items Excluded from Segment Operating Income Related to Entertainment

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Quarter Ended % Change

(in millions) December 27,

2025 December 28,

(in millions) March 28,

2026 March 29,

Acquisition Amortization (1)

$ (289) $ (320) 10 %

Restructuring and impairment charges (2)

(216) (109) (98) %

(1) In the current quarter, amortization of intangible assets was $225 million and amortization of step-up on film and television costs was $64 million.

In the prior-year quarter, amortization of intangible assets was $251 million and amortization of step-up on film and television costs was $66 million.

(2) Charges in the current quarter were $147 million for an impairment of an equity investment and $69 million for severance.

Charges in the prior-year quarter were due to content impairments.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

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Quarter Ended % Change

(in millions) December 27,

2025 December 28,

(in millions) March 28,

2026 March 29,

Subscription and affiliate fees $ 3,251 $ 3,080 6 %

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Operating Income $ 652 $ 687 (5) %

$ 191 $ 247 (23) %

Revenues - Subscription and affiliate fees

Lower subscription and affiliate fees reflected decreases of 4% from fewer subscribers, 3% from the temporary suspension of carriage with an affiliate in the current quarter and 1% from the Star India Transaction, partially offset by an increase of 6% from higher effective rates.

Growth in subscription and affiliate fees reflected increases of 6% from higher effective rates and 3% from the NFL Transaction, partially offset by a decrease of 3% from fewer subscribers.

Revenues - Advertising

Advertising revenue growth was primarily due to an increase of 8% from higher rates.

Lower advertising revenue was due to a decrease of 4% attributable to fewer impressions.

Revenues - Other

The decrease in other revenue was primarily due to the comparison to Ultimate Fighting Championship (UFC) pay-per-view revenue in the prior-year quarter.

Operating expenses

Quarter Ended % Change

(in millions) December 27,

2025 December 28,

(in millions) March 28,

2026 March 29,

Programming and production costs $ (3,357) $ (3,267) (3) %

1 unchanged sentence

$ (3,605) $ (3,507) (3) %

Programming and production costs increased in the current quarter compared to the prior-year quarter driven by contractual rate increases and costs for new sports rights, partially offset by the timing of NBA and college sports rights costs under new agreements, including the impact of fewer regular season NBA games.

Programming and production costs increased in the current quarter compared to the prior-year quarter due to contractual rate increases, costs for new sports rights and an impact from the timing of rights costs recognition as a result of contract renewals.

These increases were partially offset by the absence of certain rights costs compared to the prior-year quarter, primarily for UFC content.

The contract renewals resulted in an increase in college sports rights costs and a decrease in NBA rights costs in the current quarter compared to the prior-year quarter.

College sports rights costs shifted from the prior-year fourth quarter and the first quarter to the current quarter and NBA rights costs shifted from the first half of the current year to the third quarter.

Selling, general, administrative and other

Selling, general, administrative and other costs decreased $10 million, to $337 million from $347 million, due to the benefit from a comparison to the write-off of an investment in the prior-year quarter, partially offset by higher sales and marketing costs.

Depreciation and amortization

Depreciation and amortization increased $14 million, to $24 million from $10 million, due to new technology assets placed in service.

Depreciation and amortization increased $17 million, to $28 million from $11 million, due to investments in technology assets.

Operating Income from Sports

Segment operating income decreased $56 million, to $191 million from $247 million, driven by an increase in programming and production costs and a decrease in subscription and affiliate fees, partially offset by higher advertising revenue.

Segment operating income decreased $35 million, to $652 million from $687 million, as an increase in revenues was more than offset by higher programming and production costs.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Items Excluded from Segment Operating Income Related to Sports

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Quarter Ended % Change

(in millions) December 27,

2025 December 28,

(in millions) March 28,

2026 March 29,

Acquisition Amortization (1)

$ (22) $ (74) 70 %

Restructuring and impairment charges

(1) Represents amortization of intangible assets.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Operating results for the Experiences segment are as follows:

Quarter Ended % Change

(in millions) December 27,

2025 December 28,

(in millions) March 28,

2026 March 29,

Theme park admissions $ 3,092 $ 2,919 6 %

9 unchanged sentences

Revenues - Theme park admissions

Theme park admissions revenue growth was due to increases of 4% from higher average per capita ticket revenue and 2% from increased attendance at our international and domestic parks.

Attendance growth at our domestic parks benefited from the comparison to the adverse impact of Hurricane Milton in the prior-year quarter.

Theme park admissions revenue growth was due to increases of 4% from higher average per capita ticket revenue and 1% from a favorable foreign exchange impact.

Revenues - Resorts and vacations

Higher resorts and vacations revenue was primarily attributable to an increase of 6% from additional passenger cruise days, reflecting the launches of the Disney Treasure in December 2024 and the Disney Destiny in November 2025.

Revenues - Park & Experiences merchandise, food and beverage

Parks & Experiences merchandise, food and beverage revenue growth was primarily due to increases of 3% from higher average guest spending and 2% from volume growth.

Higher resorts and vacations revenue was attributable to increases of 7% from additional passenger cruise days, reflecting the launches of the Disney Destiny in November 2025 and the Disney Adventure in March 2026, and 2% from an increase in average daily hotel room rates.

Revenues - Parks & Experiences merchandise, food and beverage

Parks & Experiences merchandise, food and beverage revenue growth was due to increases of 2% from higher average guest spending, 2% from a favorable foreign exchange impact and 1% from volume growth.

Revenues - Merchandise licensing and retail

Higher merchandise licensing and retail revenue was due to increases of 1% from merchandise licensing and 1% from retail.

Revenues - Parks licensing and other

The increase in parks licensing and other revenue was primarily due to an increase in co-branding revenue, the recognition of incentives received in the current quarter and higher sponsorship revenue.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

In addition to revenue, costs and operating income, management uses the following key metrics to analyze trends and evaluate the overall performance of our theme parks and resorts, and we believe these metrics are useful to investors in analyzing the business:

1 unchanged sentence

Quarter Ended Quarter Ended

2025 December 28,

2024 December 27,

2025 December 28,

2026 March 29,

2025 March 28,

2026 March 29,

Increase (decrease)

13 unchanged sentences

Our attendance count includes complimentary entries but excludes entries by children under the age of three.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

(3) Per capita guest spending is used to analyze guest spending trends and is defined as total revenue from ticket sales and sales of food, beverage and merchandise in our theme parks, divided by total theme park attendance.

5 unchanged sentences

Quarter Ended % Change

(in millions) December 27,

2025 December 28,

(in millions) March 28,

2026 March 29,

Operating labor $ (2,355) $ (2,213) (6) %

3 unchanged sentences

$ (4,969) $ (4,669) (6) %

Higher operating labor was due to inflation, an unfavorable foreign exchange impact, new guest offerings and increased operations support.

The increase in infrastructure costs was primarily due to new guest offerings.

Higher cost of goods sold and distribution costs were primarily attributable to volume growth, partially offset by lower third-party royalty expense.

The increase in other operating expense was primarily due to new guest offerings, volume growth and increased operations support costs.

Higher operating labor was due to inflation, new guest offerings and an unfavorable foreign exchange impact.

The increase in cost of goods sold and distribution costs was attributable to volume growth.

Higher other operating expense was primarily due to new guest offerings and an unfavorable foreign exchange impact.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Selling, general, administrative and other

Selling, general, administrative and other costs increased $91 million, to $1,115 million from $1,024 million, primarily due to new guest offerings and inflation.

Depreciation and amortization

Depreciation and amortization increased $80 million, to $759 million from $679 million, due to higher depreciation at our domestic parks and experiences driven by an increase at Disney Cruise Line.

Depreciation and amortization increased $83 million, to $788 million from $705 million, primarily due to higher depreciation at Disney Cruise Line and at our international parks and experiences attributable to an increase at Disneyland Paris.

Operating Income from Experiences

Segment operating income increased $199 million, to $3,309 million from $3,110 million, due to growth at domestic parks and experiences.

Segment operating income increased $124 million, to $2,615 million from $2,491 million, primarily due to growth at domestic parks and experiences.

Supplemental revenue and operating income

1 unchanged sentence

Quarter Ended % Change

(in millions) December 27,

2025 December 28,

(in millions) March 28,

2026 March 29,

Supplemental revenue detail

10 unchanged sentences

$ 2,615 $ 2,491 5 %

Items Excluded from Segment Operating Income Related to Experiences

The following table presents supplemental information for items related to the Experiences segment that are excluded from segment operating income:

Quarter Ended % Change

(in millions) March 28,

2026 March 29,

Restructuring and impairment charges

$ (13) $ — nm

Acquisition Amortization

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

BUSINESS SEGMENT RESULTS - Current Period Six-Month Results Compared to the Prior-Year Six-Month Period

Entertainment

Operating results for Entertainment are as follows:

Six Months Ended % Change

(in millions) March 28,

2026 March 29,

Subscription and affiliate fees $ 15,051 $ 13,578 11 %

Advertising 3,445 3,496 (1) %

Content sales 3,661 3,179 15 %

Other 1,167 1,301 (10) %

Total revenues 23,324 21,554 8 %

Operating expenses (15,689) (13,867) (13) %

Selling, general, administrative and other (4,956) (4,587) (8) %

Depreciation and amortization (469) (381) (23) %

Equity in the income of investees 226 242 (7) %

Operating Income $ 2,436 $ 2,961 (18) %

Revenues - Subscription and affiliate fees

Growth in subscription and affiliate fees was due to increases of 5% from higher effective rates, 5% from the Fubo Transaction, 1% from more subscribers and 1% from a favorable foreign exchange impact.

Revenues - Advertising

The decline in advertising revenue was due to decreases of 4% from lower rates and 3% from the Star India Transaction, partially offset by increases of 4% from higher impressions and 1% from the Fubo Transaction.

Rates and impressions included an impact from less political advertising.

Revenues - Content sales

Higher content sales revenue was due to an increase of 16% from theatrical distribution attributable to the performance of Zootopia 2, Avatar:

Fire and Ash and Hoppers in the current period compared to Moana 2 , Mufasa:

The Lion King and Captain America:

Brave New World in the prior-year period .

Revenues - Other

The decrease in other revenue was attributable to the impact of our foreign exchange hedging program.

Operating expenses

Six Months Ended % Change

(in millions) March 28,

2026 March 29,

Programming and production costs $ (12,720) $ (11,166) (14) %

Other operating expenses (2,969) (2,701) (10) %

$ (15,689) $ (13,867) (13) %

The increase in programming and production costs was due to increases of 7% from theatrical distribution, 4% from the Fubo Transaction and 2% from our streaming services.

The increase in other operating expenses was primarily due to higher technology and distribution costs.

Selling, general, administrative and other

Selling, general, administrative and other costs increased $369 million, to $4,956 million from $4,587 million, due to higher marketing costs at theatrical distribution and our streaming services.

Depreciation and amortization

Depreciation and amortization increased $88 million, to $469 million from $381 million, due to a new facility and investments in technology assets.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Equity in the Income of Investees

Income from equity investees decreased $16 million, to $226 million from $242 million, due to lower income from A+E attributable to decreases in advertising and affiliate revenues, partially offset by an increase in program sales income.

Operating Income from Entertainment

Segment operating income decreased $525 million, to $2,436 million from $2,961 million, driven by increases in programming and production costs and marketing costs, partially offset by an increase in subscription and affiliate fees and higher content sales revenue.

Items Excluded from Segment Operating Income Related to Entertainment

The following table presents supplemental information for items related to the Entertainment segment that are excluded from segment operating income:

Six Months Ended % Change

(in millions) March 28,

2026 March 29,

Acquisition Amortization (1)

$ (587) $ (641) 8 %

Restructuring and impairment charges (2)

(216) (109) (98) %

(1) In the current period, amortization of intangible assets was $459 million and amortization of step-up on film and television costs was $128 million .

In the prior-year period, amortization of intangible assets was $502 million and amortization of step-up on film and television costs was $133 million.

(2) Charges in the current period were $147 million for an impairment of an equity investment and $69 million for severance.

Charges in the prior-year period were due to content impairments.

Operating results for Sports are as follows:

Six Months Ended % Change

(in millions) March 28,

2026 March 29,

Subscription and affiliate fees

$ 6,234 $ 6,137 2 %

Advertising 2,609 2,499 4 %

Other 675 748 (10) %

Total revenues 9,518 9,384 1 %

Operating expenses (7,994) (7,800) (2) %

Selling, general, administrative and other (645) (657) 2 %

Depreciation and amortization (52) (21) >(100) %

Equity in the income of investees 16 28 (43) %

Operating Income $ 843 $ 934 (10) %

Revenues - Subscription and affiliate fees

Growth in subscription and affiliate fees reflected increases of 6% from higher effective rates and 1% from the NFL Transaction, partially offset by decreases of 4% from fewer subscribers and 1% from the temporary suspension of carriage with an affiliate in the current period.

Revenues - Advertising

Advertising revenue growth was due to an increase of 4% from higher rates.

Revenues - Other

The decrease in other revenue was due to a decrease in UFC pay-per-view revenue resulting from the expiration of UFC rights in December 2025.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Operating expenses

Six Months Ended % Change

(in millions) March 28,

2026 March 29,

Programming and production costs $ (7,489) $ (7,310) (2) %

Other operating expenses (505) (490) (3) %

$ (7,994) $ (7,800) (2) %

Programming and production costs increased in the current period compared to the prior-year period primarily due to contractual rate increases and costs for new sports rights.

These increases were partially offset by the absence of certain rights costs, primarily for UFC content, and the timing of rights costs recognition as a result of contract renewals.

The renewals resulted in a decrease in NBA rights costs and an increase in college sports rights costs in the current period compared to the prior-year period.

NBA rights costs shifted from the current period to the third quarter and college sports rights costs shifted from the prior-year fourth quarter to the current period.

Selling, general, administrative and other

Selling, general, administrative and other costs decreased $12 million, to $645 million from $657 million, due to the benefit from a comparison to the write-off of an investment in the prior-year period, offset by higher sales and marketing costs.

Depreciation and amortization

Depreciation and amortization increased $31 million, to $52 million from $21 million, due to investments in technology assets.

Operating Income from Sports

Segment operating income decreased $91 million, to $843 million from $934 million, as an increase in revenues was more than offset by higher programming and production costs.

Items Excluded from Segment Operating Income Related to Sports

The following table presents supplemental information for items related to the Sports segment that are excluded from segment operating income:

Six Months Ended % Change

(in millions) March 28,

2026 March 29,

Acquisition Amortization (1)

$ (22) $ (148) 85 %

Restructuring and impairment charges

(1) Represents amortization of intangible assets.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Operating results for the Experiences segment are as follows:

Six Months Ended % Change

(in millions) March 28,

2026 March 29,

Theme park admissions $ 6,393 $ 6,006 6 %

Resorts and vacations 4,974 4,580 9 %

Parks & Experiences merchandise, food and beverage 4,547 4,282 6 %

Merchandise licensing and retail 2,299 2,255 2 %

Parks licensing and other 1,280 1,181 8 %

Total revenues 19,493 18,304 6 %

Operating expenses (9,945) (9,347) (6) %

Selling, general, administrative and other (2,077) (1,972) (5) %

Depreciation and amortization (1,547) (1,384) (12) %

Operating Income $ 5,924 $ 5,601 6 %

Revenues - Theme park admissions

Theme park admissions revenue growth was due to increases of 4% from higher average per capita ticket revenue, 1% from increased attendance at our international and domestic parks and 1% from a favorable foreign exchange impact.

Attendance growth at our domestic parks benefited from the comparison to the adverse impact of Hurricane Milton in the prior-year period.

Revenues - Resorts and vacations

Higher resorts and vacations revenue was due to increases of 7% from additional passenger cruise days and 2% from an increase in average daily hotel room rates.

The increase in passenger cruise days reflected the launches of the Disney Treasure in December 2024, the Disney Destiny in November 2025 and the Disney Adventure in March 2026.

Revenues - Parks & Experiences merchandise, food and beverage

Parks & Experiences merchandise, food and beverage revenue growth was attributable to increases of 3% from higher average guest spending, 2% from volume growth and 1% from a favorable foreign exchange impact.

Revenues - Merchandise licensing and retail

Higher merchandise licensing and retail revenue was due to an increase of 2% from merchandise licensing.

Revenues - Parks licensing and other

The increase in parks licensing and other revenue was primarily due to an increase in co-branding revenue and higher sponsorship revenue.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Domestic International

Six Months Ended Six Months Ended

2026 March 29,

2025 March 28,

2026 March 29,

Increase (decrease)

Attendance — % — % 5 % (1) %

Per Capita Guest Spending 5 % 4 % 1 % 1 %

Occupancy 88 % 88 % 87 % 87 %

Available Hotel Room Nights (in thousands) 5,102 5,087 1,583 1,584

Change in Per Room Guest Spending 5 % 5 % — % 9 %

Operating expenses

Six Months Ended % Change

(in millions) March 28,

2026 March 29,

Operating labor $ (4,640) $ (4,377) (6) %

Infrastructure costs (1,702) (1,657) (3) %

Cost of goods sold and distribution costs (1,716) (1,652) (4) %

Other operating expense (1,887) (1,661) (14) %

$ (9,945) $ (9,347) (6) %

The increase in operating labor was due to inflation, an unfavorable foreign exchange impact and new guest offerings.

Higher infrastructure costs were attributable to new guest offerings.

The increase in cost of goods sold and distribution costs was due to higher volumes.

Other operating expense increased primarily due to new guest offerings, higher volumes and an unfavorable foreign exchange impact.

Selling, general, administrative and other

Selling, general, administrative and other costs increased $105 million, to $2,077 million from $1,972 million, primarily due to new guest offerings and inflation.

Depreciation and amortization

Depreciation and amortization increased $163 million, to $1,547 million from $1,384 million, primarily due to higher depreciation at Disney Cruise Line and at our international parks and experiences attributable to an increase at Disneyland Paris.

Operating Income from Experiences

Segment operating income increased $323 million, to $5,924 million from $5,601 million, primarily due to growth at domestic parks and experiences.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Supplemental revenue and operating income

The following table presents supplemental revenue and operating income detail for the Experiences segment:

Six Months Ended % Change

(in millions) March 28,

2026 March 29,

Supplemental revenue detail

Parks & Experiences

Domestic $ 13,827 $ 12,931 7 %

International 3,349 3,087 8 %

Consumer Products 2,317 2,286 1 %

$ 19,493 $ 18,304 6 %

Supplemental operating income detail

Parks & Experiences

Domestic $ 4,058 $ 3,805 7 %

International 655 645 2 %

Consumer Products 1,211 1,151 5 %

$ 5,924 $ 5,601 6 %

Items Excluded from Segment Operating Income Related to Experiences

The following table presents supplemental information for items related to the Experiences segment that are excluded from segment operating income:

Six Months Ended % Change

(in millions) March 28,

2026 March 29,

Restructuring and impairment charges $ (13) $ — nm

Acquisition Amortization

CORPORATE AND UNALLOCATED SHARED EXPENSES

Quarter Ended % Change

(in millions) December 27,

2025 December 28,

(Worse) Six Months Ended % Change

(in millions) March 28,

2026 March 29,

2025 March 28,

2026 March 29,

Corporate and unallocated shared expenses $ (380) $ (395) 4 % $ (684) $ (855) 20 %

Corporate and unallocated shared expenses decreased $156 million for the quarter, from $460 million to $304 million, primarily due to the comparison to a legal settlement in the prior-year quarter.

Corporate and unallocated shared expenses for the six-month period decreased $171 million, from $855 million to $684 million, driven by the comparison to a legal settlement in the prior-year period.

FINANCIAL CONDITION

The change in cash and cash equivalents is as follows:

Quarter Ended % Change

(in millions) December 27,

2025 December 28,

Six Months Ended % Change

(in millions) March 28,

2026 March 29,

Cash provided by operations $ 7,649 $ 9,958 (23) %

Cash used in investing activities (5,469) (4,473) (22) %

Cash provided by (used in) financing activities 1,984 (997) nm

Impact of exchange rates on cash, cash equivalents and restricted cash 5 (153) nm

Cash used in financing activities (2,162) (5,553) 61 %

Impact of exchange rates on cash, cash equivalents and restricted cash (28) (76) 63 %

Change in cash, cash equivalents and restricted cash $ (10) $ (144) 93 %

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Operating Activities

Cash provided by operations decreased from $3.2 billion in the prior-year quarter to $0.7 billion for the current quarter due to higher tax payments and, to a lesser extent, an increase in spending on content at Entertainment and Sports.

The current quarter included payment of U.S.

federal and California state income tax liabilities for fiscal 2025 and a portion of fiscal 2024, pursuant to relief related to 2025 wildfires in California.

Cash provided by operations decreased from $10.0 billion in the prior-year period to $7.6 billion for the current period due to higher income tax payments and, to a lesser extent, an increase in spending on content at Entertainment and Sports, partially offset by higher operating cash flows at Experiences.

The current period included payment of U.S.

federal and California state income tax liabilities for fiscal 2025 and a portion of fiscal 2024, which were deferred pursuant to relief related to 2025 wildfires in California.

The increase in operating cash flows at Experiences was due to higher operating cash receipts attributable to higher revenue, partially offset by higher operating cash disbursements attributable to higher operating expenses.

Produced and licensed programming costs

2 unchanged sentences

Production costs also include original content commissioned from third-party studios.

Programming costs include content rights licensed from third parties for use on the Company’s sports and general entertainment networks and DTC streaming services.

Programming costs include content rights licensed from third parties for use on the Company’s sports and general entertainment networks and streaming services.

Programming assets are generally recorded when the programming becomes available to us with a corresponding increase in programming liabilities.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

The Company’s film and television production and programming activity for the quarter ended December 27, 2025 and December 28, 2024 are as follows:

Quarter Ended

(in millions) December 27,

2025 December 28,

The Company’s film and television production and programming activity for the six months ended March 28, 2026 and March 29, 2025 are as follows:

Six Months Ended

(in millions) March 28,

2026 March 29,

Beginning balances:

4 unchanged sentences

Produced film and television content 4,805 4,425

11,611 10,793

Amortization:

3 unchanged sentences

Change in produced and licensed content costs (1,999) (1,889)

Content Impairment (see Note 15 to the Condensed Consolidated Financial Statements)

Other non-cash activity (18) 429

3 unchanged sentences

$ 28,020 $ 29,148

The Company currently expects its fiscal 2026 spend on produced and licensed content, including sports rights, to be approximately $24 billion.

The Company currently expects its fiscal 2026 spend on produced and licensed content, including sports rights, to be approximately $24 billion compared to fiscal 2025 spend on produced and licensed content, including sports rights, of $23 billion.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Investing Activities

Investing activities consist principally of investments in parks, resorts and other property and acquisition and divestiture activity.

The Company’s investing activities for the quarter ended December 27, 2025 and December 28, 2024 are as follows:

Quarter Ended

The Company’s investing activities for the six months ended March 28, 2026 and March 29, 2025 are as follows:

Six Months Ended

(in millions)

2025 December 28,

2026 March 29,

Investments in parks, resorts and other property:

11 unchanged sentences

Capital expenditures at the Entertainment segment primarily reflect investments in technology and in facilities and equipment for expanding and upgrading broadcast centers, production facilities and television station facilities.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Capital expenditures at the Experiences segment are principally for theme park and resort expansion, new attractions, cruise ships, capital improvements and technology.

The increase in the current period compared to the prior-year period was due to higher spend on cruise ship fleet expansion and, to a lesser extent, new theme park attractions.

The increase in the current period compared to the prior-year period was due to higher spend on cruise ship fleet expansion and new theme park attractions.

Capital expenditures at Corporate primarily reflect investments in corporate facilities, technology and equipment.

2 unchanged sentences

The projected increase in capital expenditures is primarily due to higher spending at Experiences, attributable to theme park and resort expansion and new attractions, partially offset by lower spending on cruise ship fleet expansion.

to theme park and resort expansion and new attractions

The increase in cash used in other investing activities is primarily due to the acquisition of equity interests in different investments, partially offset by cash assumed as part of the acquisition of Fubo.

Financing Activities

Financing activities for the quarter ended December 27, 2025 and December 28, 2024 are as follows:

Quarter Ended

(in millions)

2025 December 28,

Financing activities for the six months ended March 28, 2026 and March 29, 2025 are as follows:

Six Months Ended

(in millions) March 28,

2026 March 29,

Change in borrowings

$ 4,989 $ (2,647)

(1,337) (905)

Repurchases of common stock

1 unchanged sentence

Other financing activities, net (1)

Cash provided by (used in) financing activities

Cash used in financing activities

$ (2,162) $ (5,553)

(1) Primarily consists of dividends to noncontrolling interest holders and equity award activity.

See Note 5 to the Condensed Consolidated Financial Statements for a summary of the Company’s borrowing activities during the quarter ended December 27, 2025 and information regarding the Company’s bank facilities.

(1) Primarily consists of equity award activity.

See Note 5 to the Condensed Consolidated Financial Statements for a summary of the Company’s borrowing activities during the six months ended March 28, 2026 and information regarding the Company’s bank facilities.

The Company may use cash balances, operating cash flows, commercial paper borrowings up to the amount of its unused $12.25 billion bank facilities and incremental term debt issuances to retire or refinance other borrowings before or as they come due.

1 unchanged sentence

The Company is targeting $8 billion in share repurchases in fiscal 2026.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

The Company’s operating cash flow and access to the capital markets can be impacted by factors outside of its control.

6 unchanged sentences

The Company’s borrowing costs can also be impacted by short- and long-term debt ratings assigned by nationally recognized rating agencies, which are based, in significant part, on the Company’s performance as measured by certain credit metrics such as leverage and interest coverage ratios.

As of December 27, 2025, Moody’s Ratings’ long- and short-term debt ratings for the Company were A2 and P-1 (Stable), respectively, and S&P Global Ratings’ long- and short-term debt ratings for the Company were A and A-1 (Stable), respectively.

As of March 28, 2026, Moody’s Ratings’ long- and short-term debt ratings for the Company were A2 and P-1 (Stable), respectively, and S&P Global Ratings’ long- and short-term debt ratings for the Company were A and A-1 (Stable), respectively.

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

On March 28, 2026, the Company met this covenant by a significant margin.

The Company’s bank facilities also specifically exclude certain entities, including the Asia Theme Parks and Fubo, from any representations, covenants or events of default.

The Company is exposed to the impact of interest rate changes, foreign currency fluctuations, commodity fluctuations and changes in the market values of its investments.

1 unchanged sentence

In the normal course of business, we employ established policies and procedures to manage the Company’s exposure to changes in interest rates, foreign currencies and commodities using a variety of financial instruments.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Our objectives in managing exposure to interest rate changes are to limit the impact of interest rate volatility on earnings and cash flows and to lower overall borrowing costs.

19 unchanged sentences

The Company does not enter into these transactions or any other hedging transactions for speculative purposes.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

COMMITMENTS AND CONTINGENCIES

3 unchanged sentences

Contractual Commitments

See Note 14 to the Consolidated Financial Statements in the 2025 Annual Report on Form 10-K.

See Note 14 to the Consolidated Financial Statements in the 2025 Annual Report on Form 10-K and Note 12 to the Condensed Consolidated Financial Statements.

OTHER MATTERS

7 unchanged sentences

Legacy Disney and TWDC are collectively referred to as “Obligor Group”, and individually, as a “Guarantor”.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

1933, as amended (the “Securities Act”), pursuant to an Indenture, dated as of March 20, 2019, between TWDC, Legacy Disney, as guarantor, and Citibank, N.A., as trustee (the “TWDC Indenture”) and guaranteed by Legacy Disney.

Concurrent with the close of the TFCF acquisition, $16.8 billion of TFCF’s assumed public debt (which then constituted 96% of such debt) was exchanged for senior notes of TWDC (the “exchange notes”) issued pursuant to an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to an Indenture, dated as of March 20, 2019, between TWDC, Legacy Disney, as guarantor, and Citibank, N.A., as trustee (the “TWDC Indenture”) and guaranteed by Legacy Disney.

On November 26, 2019, $14.0 billion of the outstanding exchange notes were exchanged for new senior notes of TWDC registered under the Securities Act, issued pursuant to the TWDC Indenture and guaranteed by Legacy Disney.

1 unchanged sentence

Other subsidiaries of the Company do not guarantee the registered debt securities of either TWDC or Legacy Disney (such subsidiaries are referred to as the “non-Guarantors”).

The par value and carrying value of total outstanding and guaranteed registered debt securities of the Obligor Group at December 27, 2025 was as follows:

The par value and carrying value of total outstanding and guaranteed registered debt securities of the Obligor Group at March 28, 2026 was as follows:

TWDC Legacy Disney

4 unchanged sentences

In addition, in the case of Legacy Disney’s guarantee of registered debt securities issued by TWDC, Legacy Disney may be released and discharged from its guarantee at any time Legacy Disney is not a borrower, issuer or guarantor under certain material bank facilities or any debt securities.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Operations are conducted almost entirely through the Company’s subsidiaries.

3 unchanged sentences

This summarized financial information has been prepared and presented pursuant to the Securities and Exchange Commission Regulation S-X Rule 13-01, “Financial Disclosures about Guarantors and Issuers of Guaranteed Securities” and is not intended to present the financial position or results of operations of the Obligor Group in accordance with GAAP.

Results of operations (in millions) Quarter Ended December 27, 2025

Results of operations (in millions) Six Months Ended March 28, 2026

Costs and expenses —

1 unchanged sentence

Net income (loss) attributable to TWDC shareholders (1,218)

Balance Sheet (in millions) December 27,

Balance Sheet (in millions) March 28,

2026 September 27,

7 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 2. Management’s Discussion and Analysis