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What changed in Walt Disney Company (The)'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Walt Disney Company (The)'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+475 added−540 removedSource: 10-K (2024-11-14) vs 10-K (2023-11-21)

Top changes in Walt Disney Company (The)'s 2024 10-K

475 paragraphs added · 540 removed · 366 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

108 edited+40 added−30 removed46 unchanged
Biggest changeWe provide: ◦ Healthcare options aimed at improving quality of care while limiting out-of-pocket costs ◦ Family care resources, such as childcare and senior care programs for employees, including access to onsite/community centers, enhanced back-up care choices to include personal caregivers, childcare referral assistance and center discounts, homework help, college preparation, support for students with special needs, a variety of parenting educational resources, long-term care coverage and a family building benefit supporting fertility treatments, adoptions or surrogacy ◦ Free mental health and well-being resources, including onsite and virtual on-demand access to the Employee Assistance Program for employees and their dependents and access to digital applications to manage stress and encourage movement ◦ Two Centers for Living Well facilities that offer convenient, on-demand access to board-certified physicians and counselors ◦ Global Well-Being Week (introduced in 2022), a dedicated week for employees around the world to celebrate, learn and engage in well-being through in-person and virtual events and activities focused on physical, emotional, financial and social well-being ◦ Access to a variety of well-being focused apps and platforms including our newest offering, Thrive Global, which is an innovative app that helps employees create long-term healthy habits and behaviors while improving their overall well-being and productivity • Diversity, Equity and Inclusion (DE&I): Our DE&I objectives are to build teams that reflect the life experiences of our audiences, while employing and supporting a diverse array of voices in our creative and production teams.
Biggest changeThese benefit offerings for eligible employees include: ◦ Healthcare options aimed at improving quality of care while limiting out-of-pocket costs ◦ Retirement and savings programs that help employees adapt to changing needs and unexpected events and drive financial security in the present and the future ◦ Family care resources, such as childcare and senior care programs, long-term care coverage and a family building benefit ◦ Paid time-off programs, including vacation and sick and family care leave ◦ Free mental health and well-being resources ◦ Global well-being programs, including in-person offerings through campus health clubs and virtual and onsite events and activities focused on physical, emotional, financial and social well-being ◦ Two Centers for Living Well in the Orlando area that offer convenient, on-demand access to board-certified physicians and counselors 14 TABLE OF CONTENTS • Diversity, Equity & Inclusion (DEI): Our DEI objectives are to build and sustain teams that reflect the life experiences of our audiences, while employing and supporting a diverse array of voices in our creative and production teams.
Access to individual episodes is also available for electronic purchase shortly after the initial airing in each territory. Disney Theatrical Group Disney Theatrical Group develops, produces and licenses live entertainment events on Broadway and around the world. Productions include The Lion King , Frozen , Aladdin and Beauty and the Beast .
Access to individual episodes is also available for electronic purchase shortly after the initial airing in each territory. Disney Theatrical Group Disney Theatrical Group develops, produces and licenses live entertainment events on Broadway and around the world. Productions include The Lion King , Aladdin , Frozen and Beauty and the Beast .
With respect to the sale of advertising time, we compete with other television networks, independent television stations, MVPDs, other DTC streaming services and other advertising media such as digital content, newspapers, magazines, radio and billboards. Our television and radio stations primarily compete for audiences and advertisers in local market areas. Linear Networks compete with other networks for carriage by MVPDs.
With respect to the sale of advertising time, we compete with other television networks, independent television stations, MVPDs, other DTC streaming services and other advertising media such as digital content, newspapers, magazines, radio and billboards. Our television stations primarily compete for audiences and advertisers in local market areas. Linear Networks compete with other networks for carriage by MVPDs.
The Company’s contractual agreements with MVPDs are renewed or renegotiated from time to time in the ordinary course of business.
The Company’s contractual agreements with MVPDs are renewed or renegotiated from time to time in the ordinary course of business.
Infrastructure costs include technology support costs, repairs and maintenance, property taxes, utilities and fuel, retail occupancy costs, insurance and transportation • Selling, general and administrative costs, including marketing costs • Depreciation and amortization Significant capital investments: • In recent years, the majority of the Company’s capital spend has been at our parks and experiences business, which is principally for theme park and resort expansion, new attractions, cruise ships, capital improvements and systems infrastructure.
Infrastructure costs include technology support costs, repairs and maintenance, utilities and fuel, property taxes, retail occupancy costs, insurance and transportation • Selling, general and administrative costs, including marketing costs • Depreciation and amortization Significant capital investments: • In recent years, the majority of the Company’s capital spend has been at our parks and experiences business, which is principally for theme park and resort expansion, new attractions, cruise ships, capital improvements and systems infrastructure.
The resort includes two theme parks (Tokyo Disneyland and Tokyo DisneySea); five Disney-branded hotels; six other hotels (operated by third parties other than OLC); a retail, dining and entertainment complex (Ikspiari); and Bon Voyage, a Disney-themed merchandise location. Tokyo Disneyland — Tokyo Disneyland consists of seven themed areas: Adventureland, Critter Country, Fantasyland, Tomorrowland, Toontown, Westernland and World Bazaar.
The resort includes two theme parks (Tokyo Disneyland and Tokyo DisneySea); six Disney-branded hotels; six other hotels (operated by third parties other than OLC); a retail, dining and entertainment complex (Ikspiari); and Bon Voyage, a Disney-themed merchandise location. Tokyo Disneyland — Tokyo Disneyland consists of seven themed areas: Adventureland, Critter Country, Fantasyland, Tomorrowland, Toontown, Westernland and World Bazaar.
Resort facilities include 500,000 square feet of conference meeting space and Disney’s Fort Wilderness camping and recreational area, which offers approximately 800 campsites. Disney Springs is an approximately 120-acre retail, dining and entertainment complex and consists of four areas: Marketplace, The Landing, Town Center and West Side.
Resort facilities include 500,000 square feet of conference meeting space and Disney’s Fort Wilderness camping and recreational area, which offers approximately 800 campsites. Disney Springs is an approximately 120 acre themed retail, dining and entertainment complex and consists of four areas: Marketplace, The Landing, Town Center and West Side.
ITEM 1. Business The Walt Disney Company, together with its subsidiaries, is a diversified worldwide entertainment company with operations in three segments: Entertainment, Sports and Experiences. The terms “Company”, “we”, “our” and “us” are used in this report to refer collectively to the parent company and the subsidiaries through which businesses are conducted.
ITEM 1. Business The Walt Disney Company, together with the subsidiaries through which businesses are conducted (the Company), is a diversified worldwide entertainment company with operations in three segments: Entertainment, Sports and Experiences. The terms “Company”, “we”, “our” and “us” are used in this report to refer collectively to the parent company and the subsidiaries through which businesses are conducted.
Advertising revenues at Linear Networks and Direct-to-Consumer are subject to seasonal advertising patterns and changes in viewership levels. In general, domestic advertising revenues are typically somewhat higher during the fall and somewhat lower during the summer months. Affiliate revenues vary with the subscriber trends of MVPDs.
Advertising revenues at Linear Networks and Direct-to-Consumer are subject to seasonal advertising patterns and changes in viewership levels. In general, domestic advertising revenues are typically somewhat higher during the fall and somewhat lower during the summer months. Affiliate revenues vary with the subscriber levels of MVPDs.
FX Channels Branded television channels include: FX; FXM; and FXX (collectively FX Channels), which air a mix of original, library and licensed television series and films. National Geographic Channels Branded television channels include: National Geographic; Nat Geo Wild; and Nat Geo Mundo (collectively National Geographic Channels).
FX Channels Branded television channels include: FX; FXM; and FXX (collectively FX Channels), which air a mix of original and licensed television series and films. National Geographic Channels Branded television channels include: National Geographic; Nat Geo Wild; and Nat Geo Mundo (collectively National Geographic Channels).
Disneyland Paris includes two theme parks (Disneyland Park and Walt Disney Studios Park); seven themed resort hotels; two convention centers; a shopping, dining and entertainment complex (Disney Village); and a 27-hole golf facility. Of the 5,200 acres comprising the site, approximately half have been developed to date, including a planned community (Val d’Europe).
Disneyland Paris includes two theme parks (Disneyland Park and Walt Disney Studios Park); seven themed resort hotels; two convention centers; a retail, dining and entertainment complex (Disney Village); and a 27-hole golf facility. Of the 5,200 acres comprising the site, approximately half have been developed to date, including a planned community (Val d’Europe).
Rights include the National Football League (NFL), college football (including bowl games and the College Football Playoff) and basketball, the National Basketball Association (NBA), mixed martial arts, Major League Baseball (MLB), the National Hockey League (NHL), soccer, Top Rank Boxing, US Open Tennis, the Masters golf tournament, the Wimbledon Championships, the Professional Golfers’ Association (PGA) Championship and the Women’s National Basketball Association (WNBA).
Rights include the National Football League (NFL), college football (including bowl games and the College Football Playoff) and basketball, the National Basketball Association (NBA), mixed martial arts, Major League Baseball (MLB), the National Hockey League (NHL), soccer, Top Rank Boxing, Formula 1, US Open Tennis, the Wimbledon Championships, the Masters golf tournament, the Professional Golfers’ Association (PGA) Championship and the Women’s National Basketball Association (WNBA).
(2) Because Nielsen Media Research does not measure this channel, estimated subscribers are according to SNL Kagan as of December 2022. ESPN+ is a domestic subscription-based DTC service offering thousands of live sporting events, on-demand sports content and other original programming.
(2) Because Nielsen Media Research does not measure this channel, estimated subscribers are according to SNL Kagan as of December 2023. ESPN+ is a domestic subscription-based DTC service offering thousands of live sporting events, on-demand sports content and other original programming.
Consolidation and other market conditions in the cable, satellite and telecommunication distribution industry, including subscriber trends, and other factors may adversely affect the Company’s ability to obtain and maintain contractual terms for the distribution of its various programming services that are as favorable as those currently in place.
Consolidation and other market conditions in the cable, satellite and telecommunication distribution industry, including subscriber levels, and other factors may adversely affect the Company’s ability to obtain and maintain contractual terms for the distribution of its various programming services that are as favorable as those currently in place.
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. biannually, quadrennially). Affiliate revenues vary with the subscriber trends of MVPDs.
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. biannually, quadrennially). Affiliate revenues vary with the subscriber levels of MVPDs.
Consumer Products Licensing The Company’s merchandise licensing operations cover a diverse range of product categories, the most significant of which are: toys, apparel, games, home décor and furnishings, accessories, health and beauty, food, books, stationery, footwear, magazines and consumer electronics.
Consumer Products Licensing The Company’s merchandise licensing operations cover a diverse range of product categories, the most significant of which are: toys, apparel, games, home décor and furnishings, accessories, health and beauty, food, footwear, stationery and consumer electronics.
Programming and production costs include the following: ◦ Amortization of capitalized production costs ◦ Amortization of the costs of licensed programming rights ◦ Subscriber-based fees for programming our Hulu Live service, including fees paid by Hulu to the Sports segment and other Entertainment segment businesses for the right to air their linear networks on Hulu Live ◦ Production costs related to live programming (primarily news) ◦ Amortization of participations and residual obligations ◦ Fees paid to the Sports segment to program ESPN on ABC and certain sports content on Star+ • Selling, general and administrative costs, including marketing costs • Depreciation and amortization Linear Networks The majority of Linear Networks revenue is derived from affiliate fees and advertising.
Programming and production costs include the following: ◦ Amortization of capitalized production costs ◦ Amortization of the costs of licensed programming rights ◦ Subscriber-based fees for programming our Hulu Live service, including fees paid by Hulu to the Sports segment and other Entertainment segment businesses for the right to air their linear networks on Hulu Live ◦ Production costs related to live programming (primarily news) ◦ Participations and residual expenses ◦ Fees paid to the Sports segment to program ESPN on ABC and certain sports content on Disney+ • Selling, general and administrative costs, including marketing costs • Depreciation and amortization Linear Networks The majority of Linear Networks revenue is derived from affiliate fees and advertising.
Disney’s Hollywood Studios — Disney’s Hollywood Studios consists of eight themed areas: Animation Courtyard, Commissary Lane, Echo Lake, Grand Avenue, Hollywood Boulevard, Star Wars : Galaxy’s Edge, Sunset Boulevard and Toy Story Land. The areas provide behind-the-scenes glimpses of Hollywood-style action through various shows and attractions and offer themed food service, merchandise shops and entertainment experiences.
Disney’s Hollywood Studios — Disney’s Hollywood Studios consists of eight themed areas: Animation Courtyard, Commissary Lane, Echo Lake, Grand Avenue, Hollywood Boulevard, Star Wars : Galaxy’s Edge, Sunset Boulevard and Toy Story Land. The areas provide behind-the-scenes glimpses of Hollywood-style action through various shows and attractions and offer themed restaurants, merchandise shops and entertainment experiences.
We are providing the address to our internet site solely for the information of investors. We do not intend the address to be an active link or to otherwise incorporate the contents of the website into this report.
We are providing the address to our website solely for the information of investors. We do not intend our website address to be an active link or to otherwise incorporate the contents of the website into this report.
We also compete with other media and entertainment companies and VOD services for sports rights, creative and performing talent and other programming, advertiser support and production facilities that are essential to the success of our Sports businesses. Advertising revenues are subject to changes in viewership levels and the demand for sports programming.
We also compete with other media and entertainment companies and video-on-demand services for sports rights, creative and performing talent and other programming, advertiser support and production facilities that are essential to the success of our Sports businesses. Advertising revenues are subject to changes in viewership levels and the demand for sports programming.
The Live TV service is available with either of Hulu’s SVOD services and includes live linear streams of cable networks and the major broadcast networks. In addition, Hulu offers subscriptions to premium services such as Max, Cinemax, Starz and Showtime, which can be added to the Hulu service.
The Live TV service is available with either of Hulu’s SVOD services and includes live linear streams of various cable and broadcast networks. In addition, Hulu offers subscriptions to premium services such as Max, Cinemax, Starz and Paramount+ with Showtime, which can be added to the Hulu service.
Cumulatively through September 30, 2023, the Company has released approximately 1,100 full-length live-action films and 100 full-length animated films. In the domestic and most major international markets, we generally distribute and market our films directly. In certain international markets our films are distributed by independent companies. In some territories, certain films may be exclusively distributed on our DTC streaming services.
Cumulatively through September 28, 2024, the Company has released approximately 1,100 full-length live-action films and 100 full-length animated films. In the domestic and most major international markets, we generally distribute and market our films directly. In certain international markets our films are distributed by independent companies. In some territories, certain films may be exclusively distributed on our DTC streaming services.
Content Sales/Licensing businesses compete with all forms of entertainment and a significant number of companies produce and/or distribute theatrical and episodic content, distribute products in the home entertainment market, provide pay TV/VOD services, and produce music and live theater.
Content Sales/Licensing businesses compete with all forms of entertainment and a significant number of companies that produce and/or distribute film and episodic content, distribute products in the home entertainment market, provide pay TV/VOD services, and produce music and live theater.
Disney Theatrical Group also licenses the Company’s IP to Feld Entertainment, the producer of Disney On Ice and Marvel Universe Live! . Disney Music Group The Disney Music Group encompasses all aspects of the Company’s music commercialization and marketing including: recorded music (Walt Disney Records and Hollywood Records); music publishing; and concerts.
Disney Theatrical Group also licenses the Company’s IP to Feld Entertainment, the producer of Disney On Ice . Disney Music Group The Disney Music Group encompasses all aspects of the Company’s music commercialization and marketing including: recorded music (Walt Disney Records and Hollywood Records); music publishing; and concerts.
EXPERIENCES The significant lines of business within Experiences are as follows: • Parks & Experiences: ◦ Domestic: ▪ Theme parks and resorts: • Walt Disney World Resort in Florida • Disneyland Resort in California ▪ Experiences: • Disney Cruise Line • Disney Vacation Club • National Geographic Expeditions (owned 73% by the Company) and Adventures by Disney 11 TABLE OF CONTENTS • Aulani, a Disney Resort & Spa in Hawaii ◦ International: ▪ Theme parks and resorts: • Disneyland Paris • Hong Kong Disneyland Resort (48% ownership interest and consolidated in our financial results) • Shanghai Disney Resort (43% ownership interest and consolidated in our financial results) • In addition, the Company licenses its IP to a third party to operate Tokyo Disney Resort • Consumer Products: ◦ Licensing of our trade names, characters, visual, literary and other IP to various manufacturers, game developers, publishers and retailers throughout the world, for use on merchandise, published materials and games ◦ Sale of branded merchandise through online, retail and wholesale businesses, and development and publishing of books, comic books and magazines (except National Geographic magazine, which is reported in Entertainment) The significant revenues of Experiences are as follows: • Theme park admissions - Sales of tickets for admission to our theme parks and for premium access to certain attractions (e.g.
EXPERIENCES The lines of business within Experiences along with their significant business activities include the following: • Parks & Experiences: ◦ Domestic: ▪ Theme parks and resorts: • Walt Disney World Resort in Florida • Disneyland Resort in California ▪ Experiences: • Disney Cruise Line • Disney Vacation Club • National Geographic Expeditions (owned 73% by the Company) and Adventures by Disney • Aulani, a Disney Resort & Spa in Hawaii ◦ International: ▪ Theme parks and resorts: • Disneyland Paris • Hong Kong Disneyland Resort (48% ownership interest and consolidated in our financial results) • Shanghai Disney Resort (43% ownership interest and consolidated in our financial results) • In addition, the Company licenses its IP to a third party that owns and operates Tokyo Disney Resort • Consumer Products: ◦ Licensing of our trade names, characters, visual, literary and other IP to various manufacturers, game developers, publishers and retailers throughout the world, for use on merchandise, published materials and games ◦ Sale of branded merchandise through online, retail and wholesale businesses, and development and publishing of books, comic books and magazines (except National Geographic magazine, which is reported in Entertainment) 9 TABLE OF CONTENTS The significant revenues of Experiences are as follows: • Theme park admissions - Sales of tickets for admission to our theme parks and for premium access to certain attractions (e.g.
We also compete with other media and entertainment companies, independent production companies and VOD services for creative and performing talent, story properties, show concepts, scripted and other programming, advertiser support, production facilities and exhibition outlets that are essential to the success of our Entertainment businesses.
We also compete with other media and entertainment companies, independent production companies and video-on-demand services for creative and performing talent, story properties, show concepts, scripted and other programming, advertiser support, production facilities and exhibition outlets that are essential to the success of our Entertainment businesses.
Disney California Adventure — Disney California Adventure is adjacent to Disneyland and includes eight themed areas: Avengers Campus, Buena Vista Street, Cars Land, Grizzly Peak, Hollywood Land, Paradise Gardens Park, Pixar Pier and San Fransokyo Square. These areas include themed attractions, restaurants, merchandise shops and entertainment experiences.
Disney California Adventure — Disney California Adventure includes eight themed areas: Avengers Campus, Buena Vista Street, Cars Land, Grizzly Peak, Hollywood Land, Paradise Gardens Park, Pixar Pier and San Fransokyo Square. These areas include themed attractions, restaurants, merchandise shops and entertainment experiences.
Although we have received such renewals and approvals in the past or have been permitted to continue operations when renewal is delayed, there can be no assurance that this will be the case in the future. • Station ownership limits .
Although we have received such renewals and approvals in the past or have been permitted to continue operations when renewal is delayed, there can be no assurance that this will be the case in the future. 15 TABLE OF CONTENTS • Station ownership limits .
The stations we own are as follows: TV Station Market Television Market Ranking (1) WABC New York, NY 1 KABC Los Angeles, CA 2 WLS Chicago, IL 3 WPVI Philadelphia, PA 4 KTRK Houston, TX 7 KGO San Francisco, CA 10 WTVD Raleigh-Durham, NC 23 KFSN Fresno, CA 53 (1) Based on Nielsen Media Research, U.S.
The stations we own are as follows: TV Station Market Television Market Ranking (1) WABC New York, NY 1 KABC Los Angeles, CA 2 WLS Chicago, IL 3 WPVI Philadelphia, PA 4 KTRK Houston, TX 6 KGO San Francisco, CA 10 WTVD Raleigh-Durham, NC 22 KFSN Fresno, CA 52 (1) Based on Nielsen Media Research, U.S.
Hulu Hulu is a domestic subscription-based DTC service with general entertainment content from the Company’s various studios as well as content licensed from third parties. Hulu’s revenue is primarily derived from subscription fees and Advertising. Hulu offers subscription VOD (SVOD) services with or without advertising in addition to a digital OTT MVPD (Live TV) service.
Hulu Hulu is a domestic subscription-based DTC service with general entertainment content from the Company’s various studios as well as content licensed from third parties. Hulu’s revenue is derived from subscription fees and advertising. Hulu offers subscription video-on-demand (SVOD) services with or without advertising in addition to a digital OTT MVPD (Live TV) service.
Magic Kingdom — The Magic Kingdom consists of six themed areas: Adventureland, Fantasyland, Frontierland, Liberty Square, Main Street USA and Tomorrowland. Each land provides a unique guest experience featuring themed attractions, restaurants, merchandise shops and entertainment experiences. 12 TABLE OF CONTENTS EPCOT — EPCOT consists of four major themed areas: World Showcase, World Celebration, World Nature and World Discovery.
Magic Kingdom — The Magic Kingdom consists of six themed areas: Adventureland, Fantasyland, Frontierland, Liberty Square, Main Street USA and Tomorrowland. Each area provides a unique guest experience featuring themed attractions, restaurants, merchandise shops and entertainment experiences. EPCOT — EPCOT consists of four major themed areas: World Showcase, World Celebration, World Nature and World Discovery.
The Company’s share of CTV’s financial results is reported as “Equity in the income (loss) of investees, net” in the Company’s Consolidated Statements of Operations. CTV operates television networks in Canada, including The Sports Networks (TSN) 1-5, Le Réseau des Sports (RDS), RDS2, RDS Info, Discovery Canada, Discovery Science and Animal Planet Canada.
The Company’s share of CTV’s financial results is reported as “Equity in the income of investees” in the Company’s Consolidated Statements of Income. CTV operates television networks in Canada, including The Sports Networks (TSN) 1-5, Le Réseau des Sports (RDS), RDS2, RDS Info, Discovery Canada, Discovery Science and Animal Planet Canada.
Genie+ and Lightning Lane) • Resorts and vacations - Sales of room nights at hotels, sales of cruise and other vacations and sales and rentals of vacation club properties • Parks & Experiences merchandise, food and beverage - Sales of merchandise, food and beverages at our theme parks and resorts and cruise ships • Merchandise licensing and retail: ◦ Merchandise licensing - Royalties from licensing our IP for use on consumer goods ◦ Retail - Sales of merchandise through internet shopping sites (generally branded shopDisney) and at The Disney Store, as well as to wholesalers (including books, comic books and magazines) • Parks licensing and other - Revenues from sponsorships and co-branding opportunities, real estate rent and sales and royalties earned on Tokyo Disney Resort revenues The significant expenses of Experiences are as follows: • Operating expenses, consisting primarily of operating labor, costs of goods sold, infrastructure costs, supplies, commissions and entertainment offerings.
Lightning Lane) • Resorts and vacations - Sales of room nights at hotels, sales of cruise and other vacations and sales and rentals of vacation club properties • Parks & Experiences merchandise, food and beverage - Sales of merchandise, food and beverages at our theme parks and resorts and cruise ships • Merchandise licensing and retail: ◦ Merchandise licensing - Royalties from licensing our IP for use on consumer goods ◦ Retail - Sales of merchandise through internet shopping sites, at The Disney Store and to wholesalers • Parks licensing and other - Revenues from sponsorships and co-branding opportunities, real estate rent and sales and royalties earned on Tokyo Disney Resort revenues The significant expenses of Experiences are as follows: • Operating expenses, consisting primarily of operating labor, infrastructure costs, costs of goods sold and distribution costs, supplies, commissions and entertainment offerings.
Television Household Estimates, January 1, 2023 International Linear Networks International Linear Networks use content from the Company’s various studios, including library titles, as well as content acquired from third parties. The Company operates approximately 285 general entertainment and family channels outside the U.S. in approximately 40 languages and 190 countries/territories.
Television Household Estimates, January 1, 2024 International Linear Networks International Linear Networks use content from the Company’s various studios, including library titles, as well as content acquired from third parties. The Company operates approximately 265 general entertainment and family channels outside the U.S. in approximately 40 languages and 175 countries/territories.
Some of the major properties licensed by the Company include: Mickey and Friends, Star Wars, Spider-Man, Disney Princess, Avengers, Frozen, Toy Story, Winnie the Pooh and Lilo & Stitch. 15 TABLE OF CONTENTS Retail The Company sells Disney-, Marvel-, Pixar- and Lucasfilm-branded products through shopDisney branded internet sites and Disney Store branded retail locations.
Major properties licensed by the Company include: Mickey and Friends, Star Wars, Spider-Man, Disney Princess, Lilo & Stitch, Frozen, Avengers, Winnie the Pooh and Toy Story. Retail The Company sells Disney-, Marvel-, Pixar- and Lucasfilm-branded products through Disney Store branded internet sites and Disney Store branded retail locations.
The Company licenses characters from its film, television and other properties for use on third-party products in these categories and earns royalties, which are usually based on a fixed percentage of the wholesale or retail selling price of the products.
The Company licenses characters from its film, television and other properties for use on third-party products in these categories and earns royalties, which are usually based on a fixed percentage of the wholesale or retail selling price of the products and often include minimum guarantee payments from the licensees.
The resort also has approximately 480 vacation club units. Disneyland Paris Disneyland Paris is located on approximately 5,200-acres in Marne-la-Vallée, approximately 20 miles east of Paris, France. The land is being developed pursuant to a master agreement with French governmental authorities.
Disneyland Paris Disneyland Paris is located approximately 20 miles east of Paris, France in Marne-la-Vallée, on approximately 5,200 acres. The land is being developed pursuant to a master agreement with French governmental authorities.
Linear Networks also generates revenues from fees charged to television stations affiliated with ABC Network. • Subscription fees - Fees charged to customers/subscribers for our DTC streaming services • Advertising - Sales of advertising time/space • TV/VOD distribution - Licensing fees for the right to use our film and episodic content • Theatrical distribution - Rentals from licensing our films to theaters • Home entertainment distribution - Sales and rentals of our film and episodic content to retailers and through distributors • Other revenue - Revenues from licensing our music, ticket sales from stage play performances, fees from licensing our IP for use in stage plays, sales of post-production services and the allocation of consumer products merchandise licensing revenues The significant expenses of Entertainment are as follows: • Operating expenses, consisting primarily of programming and production costs, technology support costs, operating labor, distribution costs and costs of sales.
Linear Networks also generates revenues from fees charged to television stations affiliated with ABC Network. • Theatrical distribution - Rentals from licensing our films to theaters • TV/VOD distribution - Licensing fees for the right to use our film and episodic content 2 TABLE OF CONTENTS • Home entertainment distribution - Electronic sales and rentals of film and episodic content through distributors and royalties from the licensing of physical distribution rights • Other revenue - Revenues from licensing our music, ticket sales from stage play performances, fees from licensing our IP for use in stage plays, sales of post-production services and the allocation of consumer products merchandise licensing revenues The significant expenses of Entertainment are as follows: • Operating expenses, consisting primarily of programming and production costs, technology support costs, operating labor and distribution costs.
The areas are home to more than 150 venues including the 64,000-square-foot World of Disney retail store. Most of the Disney Springs facilities are operated by third parties that pay rent to the Company. Ten independently-operated hotels with approximately 7,000 rooms are situated on property leased from the Company.
The areas are home to approximately 150 venues including the World of Disney retail store, which includes approximately 38,000 square feet of retail space. Most of the Disney Springs facilities are operated by third parties that pay rent to the Company. Ten independently-operated hotels with approximately 7,000 rooms are situated on property leased from the Company.
We also license titles to VOD e-tailers concurrent with physical home entertainment distribution. Distribution of episodic content in the home entertainment window includes electronic sales of season passes that can be purchased prior to, during and after the broadcast season with individual episodes typically available to season pass customers shortly after the initial airing of the show in each territory.
Distribution of episodic content in the home entertainment window includes electronic sales of season passes that can be purchased prior to, during and after the broadcast season with individual episodes typically available to season pass customers shortly after the initial airing of the show in each territory.
Content Production and Acquisition Produced content primarily consists of original films and episodic programs, network news and daytime/nighttime content and licensed content includes acquired episodic programming rights.
Content Production and Acquisition Produced content primarily consists of original films and episodic programs and network news and daytime/late night programming. Licensed content includes acquired episodic programming rights, movies and specials.
At September 30, 2023, the Company owns and operates approximately 40 stores in Japan, 20 stores in North America, two stores in Europe and one store in China. The Company creates, distributes and publishes a variety of products in multiple countries and languages based on the Company’s branded franchises. The products include children’s books and comic books.
At September 28, 2024, the Company operates approximately 40 stores in Japan, 20 stores in North America, two stores in Europe and one store in China. The Company creates, distributes and publishes a variety of products in multiple countries and languages based on the Company’s branded franchises.
In addition, revenue is generated from music distribution, stage plays and post-production services through Industrial Light & Magic and Skywalker Sound. The Company also publishes National Geographic magazine, which is reported with Content Sales/Licensing.
Content Sales/Licensing and Other The majority of Content Sales/Licensing revenue is derived from TV/VOD, theatrical and home entertainment distribution. In addition, revenue is generated from music distribution, stage plays and post-production services through Industrial Light & Magic and Skywalker Sound. The Company also publishes National Geographic magazine, which is reported with Content Sales/Licensing.
The number of subscribers (in millions) for the significant domestic branded channels are as follows: Subscribers ESPN (1) 71 ESPN2 (1) 71 ESPNU (1) 50 ESPNEWS (2) 53 SEC Network (2) 48 ACC Network (2) 46 (1) Based on Nielsen Media Research estimates as of September 2023. Estimates include traditional MVPD and the majority of digital OTT subscriber counts.
The number of subscribers (in millions) for the significant domestic branded channels are as follows: Subscribers ESPN (1) 66 ESPN2 (1) 66 ESPNU (1) 47 ESPNEWS (2) 40 SEC Network (2) 45 ACC Network (2) 44 (1) Based on Nielsen Media Research estimates as of September 2024. Estimates include traditional MVPD and the majority of digital OTT subscriber counts.
The Company incurs significant marketing and advertising costs before and throughout the theatrical release of a film in an effort to generate public awareness of the film, to increase the public’s intent to view the film and to help generate consumer interest in the subsequent home entertainment and other ancillary markets.
During fiscal 2025, we expect to release approximately 15 films. 5 TABLE OF CONTENTS The Company incurs significant marketing and advertising costs before and throughout the theatrical release of a film in an effort to generate public awareness of the film, to increase the public’s intent to view the film and to help generate consumer interest in the subsequent home entertainment and other ancillary markets.
Competition and Seasonality The Company’s theme parks and resorts as well as Disney Cruise Line and Disney Vacation Club compete with other forms of entertainment, lodging, tourism and recreational activities.
The products include children’s books and comic books. 13 TABLE OF CONTENTS Competition and Seasonality The Company’s theme parks and resorts as well as Disney Cruise Line and Disney Vacation Club compete with other forms of entertainment, lodging, tourism and recreational activities.
Programming and production costs include amortization of licensed sports rights and production costs related to live sports and other sports-related programming. • Selling, general and administrative costs, including marketing costs • Depreciation and amortization Domestic ESPN Branded television channels include eight 24-hour domestic television sports channels: ESPN and ESPN2 (both of which are dedicated to professional and college sports as well as sports news and original programming); ESPNU (which is dedicated to college sports); ESPNEWS (which re-airs select ESPN studio shows and airs a variety of other programming); SEC Network (which is dedicated to Southeastern Conference college athletics); ACC Network (which is dedicated to Atlantic Coast Conference college athletics); ESPN Deportes (which airs professional and college sports as well as studio shows in Spanish); and Longhorn Network (which is dedicated to The University of Texas athletics).
Programming and production costs include amortization of licensed sports rights and production costs related to live sports and other sports-related programming. • Selling, general and administrative costs, including marketing costs • Depreciation and amortization Domestic ESPN Branded television channels include seven 24-hour domestic television sports channels: • ESPN and ESPN2 - both dedicated to professional and college sports as well as sports news and original programming • ESPNU - dedicated to college sports • ESPNEWS - re-airs select ESPN studio shows and airs a variety of other programming • SEC Network - dedicated to Southeastern Conference college athletics • ACC Network - dedicated to Atlantic Coast Conference college athletics • ESPN Deportes - airs professional and college sports as well as studio shows in Spanish ESPN programs ESPN on ABC and recognizes the direct revenues and costs for this programming and receives a fee from the ABC Network, which is eliminated in consolidation.
However, prior to the Company’s acquisition of Marvel, Sony Pictures Entertainment licensed from Marvel the rights to produce and distribute Spider-Man films in all windows except for the merchandise rights, which the Company retains. The Company has a significant library of content spanning approximately 100 years of production history as well as acquired libraries.
However, Sony Pictures Entertainment has the rights to produce and distribute Spider-Man films as a result of licensing these rights from Marvel prior to the Company’s acquisition of Marvel. The Company has a significant library of content spanning approximately 100 years of production history as well as acquired libraries.
Hotels, Vacation Club Units and Other Resort Facilities — Disneyland Resort includes three Company owned and operated hotels and vacation club facilities with approximately 2,400 rooms, 180 vacation club units and 180,000 square feet of conference meeting space.
Hotels, Vacation Club Units and Other Resort Facilities — As of September 28, 2024, the Company owned and operated three resort hotels and vacation club properties at the Disneyland Resort, with approximately 2,400 rooms and 180 vacation club units. Resort facilities included 180,000 square feet of conference meeting space.
The Company earns royalties on revenues generated by the Tokyo Disney Resort, which is owned and operated by Oriental Land Co., Ltd. (OLC), a third-party Japanese corporation.
Tokyo Disney Resort Tokyo Disney Resort is located on 494 acres of land, six miles east of downtown Tokyo, Japan. The Company earns royalties on revenues generated by the Tokyo Disney Resort, which is owned and operated by Oriental Land Co., Ltd. (OLC), a third-party Japanese corporation.
Certain programming from ABC Network, Freeform and FX Channels is also available on the Hulu SVOD service one day after the linear airing on these channels. As of September 30, 2023, the estimated number of paid Hulu subscribers, based on internal management reports, was approximately 49 million. The Company has 67% ownership and full operational control of Hulu.
Certain programming from ABC Network, Freeform and FX Channels is also available on the Hulu SVOD service one day after the linear airing on these channels. As of September 28, 2024, the estimated number of paid Hulu subscribers, based on internal management reports, was approximately 52 million.
These costs are expensed as incurred, which may result in a loss on a film in the theatrical markets, including in periods prior to the theatrical release of the film. Home Entertainment Distribution We distribute the Company’s film and episodic content in home entertainment markets on DVD and Blu-ray disc, through electronic home video licenses and VOD rentals globally.
These costs are expensed as incurred, which may result in a loss on a film in the theatrical markets, including in periods prior to the theatrical release of the film. Home Entertainment Distribution The Company’s film and episodic content is sold in both electronic (home video license and video-on-demand rentals) and physical (DVD and Blu-ray disc) formats.
The significant lines of business within Entertainment are as follows: • Linear Networks ◦ Domestic: ABC Television Network (ABC Network); Disney, Freeform, FX and National Geographic (owned 73% by the Company) branded television channels; and eight owned ABC television stations ◦ International: Disney, Fox (which will be rebranded in fiscal 2024, primarily to FX or Star), FX, National Geographic (owned 73% by the Company) and Star branded general entertainment television channels outside of the U.S. ◦ A 50% equity investment in A+E Television Networks (A+E), which operates cable channels including A&E, HISTORY and Lifetime • Direct-to-Consumer ◦ Disney+: a global DTC service that primarily offers general entertainment and family programming.
The lines of business within Entertainment along with their significant business activities include the following: • Linear Networks ◦ Domestic: ABC Television Network (ABC Network); Disney, Freeform, FX and National Geographic (owned 73% by the Company) branded television channels; and eight owned ABC television stations ◦ International: Disney, FX, National Geographic (owned 73% by the Company) and Star branded general entertainment television channels outside of the U.S. ◦ A 50% equity investment in A+E Television Networks (A+E), which operates cable channels including A&E, HISTORY and Lifetime • Direct-to-Consumer ◦ Disney+: a global direct-to-consumer (DTC) service that primarily offers general entertainment and family programming ◦ Disney+ Hotstar: a DTC service primarily in India that offers general entertainment, family and sports programming. ◦ Hulu: a U.S.
DTC service that offers general entertainment and family programming and a digital over-the-top (OTT) service that includes live linear streams of cable networks and the major broadcast networks 3 TABLE OF CONTENTS • Content Sales/Licensing ◦ Sale/licensing of film and episodic content to third-party television and video-on-demand (TV/VOD) services ◦ Theatrical distribution ◦ Home entertainment distribution: DVD and Blu-ray discs, electronic home video licenses and video-on-demand (VOD) rentals ◦ Staging and licensing of live entertainment events on Broadway and around the world (Stage Plays) ◦ Intersegment allocation of revenues from the Experiences segment, which is meant to reflect royalties on consumer products merchandise licensing revenues generated on intellectual property (“IP”) created by the Entertainment segment ◦ Music distribution ◦ Post-production services by Industrial Light & Magic and Skywalker Sound Entertainment also includes the following activities that are reported with Content Sales/Licensing: • National Geographic magazine and online business (owned 73% by the Company) • A 30% ownership interest in Tata Play Limited, which operates a direct-to-home satellite distribution platform in India The significant revenues of Entertainment are as follows: • Affiliate fees - Fees charged to multi-channel video programming distributors (i.e. cable, satellite, telecommunications and digital over-the-top (e.g.
See Note 2 of the Consolidated Financial Statements for information on Hulu ownership. • Content Sales/Licensing ◦ Theatrical distribution ◦ Sale/licensing of film and episodic content to television and video-on-demand (TV/VOD) services ◦ Home entertainment distribution: electronic home video licenses, video-on-demand rentals and sales of DVD/Blu-ray discs ◦ Intersegment allocation of revenues from the Experiences segment, which is meant to reflect royalties on consumer products merchandise licensing revenues generated on intellectual property (IP) created by the Entertainment segment ◦ Staging and licensing of live entertainment events on Broadway and around the world (Stage Plays) ◦ Music distribution ◦ Post-production services by Industrial Light & Magic and Skywalker Sound Entertainment also includes the following activities that are reported with Content Sales/Licensing: • National Geographic magazine and online business (owned 73% by the Company) • A 30% ownership interest in Tata Play Limited, which operates a direct-to-home satellite distribution platform in India The significant revenues of Entertainment are as follows: • Subscription fees - Fees charged to customers/subscribers for our DTC streaming services • Advertising - Sales of advertising time/space • Affiliate fees - Fees charged to multi-channel video programming distributors (i.e. cable, satellite, telecommunications and digital OTT service providers) (MVPDs) for the right to deliver our programming to their customers.
Penalties for broadcasting indecent programming can be over $400,000 per indecent utterance or image per station. Federal legislation and FCC rules also limit the amount of commercial matter that may be shown on broadcast or cable channels during programming designed for children 12 years of age and younger.
Federal legislation and FCC rules also limit the amount of commercial matter that may be shown on broadcast or cable channels during programming designed for children 12 years of age and younger.
As of September 2023, the estimated number of subscribers to Star branded channels, based on internal management reports, was 82 million. Equity Investments The most significant equity investment at Sports is a 30% interest in CTV Specialty Television, Inc. (CTV).
Star has rights to various sports programming, primarily cricket and soccer. As of September 2024, the estimated number of subscribers to Star branded channels, based on internal management reports, was approximately 79 million. Equity Investments The most significant equity investment at Sports is a 30% interest in CTV Specialty Television, Inc. (CTV).
Some of our key programs and initiatives to attract, develop and retain our diverse workforce include: • Health, wellness, family resources and other benefits: Disney’s benefit offerings are designed to meet the varied and evolving needs of a diverse workforce across businesses and geographies while helping our employees care for themselves and their families.
Some of our key programs and initiatives to attract, develop and retain our diverse workforce include: • Health, financial, family resources, well-being and other benefits: Disney’s benefit offerings are designed to meet the varied and evolving needs of our diverse employees and their families.
All areas feature themed attractions, restaurants, merchandise shops and entertainment experiences. Countries represented with pavilions include Canada, China, France, Germany, Italy, Japan, Mexico, Morocco, Norway, the United Kingdom and the U.S. The Journey of Water, inspired by Moana, opened in October 2023 as part of a multi-year transformation at EPCOT.
All areas feature themed attractions, restaurants, merchandise shops and entertainment experiences. Countries represented with pavilions include Canada, China, France, Germany, Italy, Japan, Mexico, Morocco, Norway, the United Kingdom and the U.S. CommuniCore Hall and Plaza opened in June 2024, completing a multi-year transformation at EPCOT.
Program development is carried out in collaboration with writers, producers and creative teams. Costs to produce content are generally capitalized and allocated across Entertainment’s businesses based on the estimated relative value of the distribution windows. Generally, the Company has full production and distribution rights to its IP.
Costs to produce content are generally capitalized and allocated across Entertainment’s businesses based on the estimated relative value of the distribution windows. Generally, the Company has full production and distribution rights to its IP.
As of September 30, 2023, the estimated number of paid Disney+ Hotstar subscribers, based on internal management reports, was approximately 38 million. Disney+ Core and Disney+ Hotstar offer content from the Company’s various studios, including library titles, as well as content acquired from third parties.
Disney+ Hotstar has exclusive streaming rights to certain cricket programming. As of September 28, 2024, the estimated number of paid Disney+ Hotstar subscribers, based on internal management reports, was approximately 36 million. Disney+ and Disney+ Hotstar offer content from the Company’s various studios, including library titles, as well as content acquired from third parties.
Live events available through the service include mixed martial arts, soccer, hockey, boxing, baseball, college sports, golf, tennis and cricket. ESPN+ is currently the exclusive distributor for Ultimate Fighting Championship (UFC) pay-per-view events in the U.S.
Live events available through the service include mixed martial arts, soccer, hockey, boxing, baseball, college sports, golf, tennis and cricket. ESPN+ is currently the exclusive distributor for Ultimate Fighting Championship (UFC) pay-per-view events in the U.S. As of September 28, 2024, the estimated number of paid ESPN+ subscribers, based on internal management reports, was approximately 26 million.
Tokyo DisneySea — Tokyo DisneySea is divided into seven “ports of call,” including American Waterfront, Arabian Coast, Lost River Delta, Mediterranean Harbor, Mermaid Lagoon, Mysterious Island and Port Discovery. OLC is expanding Tokyo DisneySea to include an eighth themed port, Fantasy Springs expected to open in spring 2024.
Tokyo DisneySea — Tokyo DisneySea is divided into eight “ports of call,” including American Waterfront, Arabian Coast, Lost River Delta, Mediterranean Harbor, Mermaid Lagoon, Mysterious Island, Port Discovery and Fantasy Springs, which opened in June 2024.
Original content is generally produced under the following banners: ABC Signature; Disney Branded Television; FX Productions; Lucasfilm; Marvel; National Geographic Studios; Pixar; 8 TABLE OF CONTENTS Searchlight Pictures; Twentieth Century Studios; 20th Television; and Walt Disney Pictures. Original content is also commissioned and produced by various third-party studios.
Original content is generally produced under the following banners: Disney Branded Television; FX Productions; Lucasfilm; Marvel; National Geographic Studios; Pixar; Searchlight Pictures; Twentieth Century Studios; 20th Television; and Walt Disney Pictures. Original content is also commissioned and produced by various third-party studios. Program development is carried out in collaboration with writers, producers and creative teams.
The majority of Disney+ Core and Disney+ Hotstar revenue is derived from subscription fees and, to a lesser extent, Advertising. The Company launched an ad-supported Disney+ service in the U.S. in December 2022 and in select European markets and in Canada in November 2023. The Company plans to launch an ad-supported Disney+ service in additional international markets in calendar 2024.
The majority of Disney+ and Disney+ Hotstar revenue is derived from subscription fees and, to a lesser extent, advertising. The Company offers an ad-supported Disney+ service in the U.S., Canada and select Latin American and European markets.
Val d’Europe is a planned community near Disneyland Paris that is being developed in phases. Val d’Europe currently includes a regional train station, hotels and a town center consisting of a shopping center as well as office, commercial and residential space. Third parties operate these developments on land leased or purchased from the Company.
A number of the Disney Village facilities are operated by third parties that pay rent to the Company. Val d’Europe is a planned community near Disneyland Paris that is being developed in phases. Val d’Europe currently includes a regional train station, hotels and a town center consisting of a shopping center as well as office, commercial and residential space.
The Company’s share of A+E’s financial results are reported as “Equity in the income (loss) of investees, net” in the Company’s Consolidated Statements of Operations. A+E is owned 50% by the Company and 50% by Hearst.
Equity Investments The most significant equity investment at Linear Networks is A+E. The Company’s share of A+E’s financial results are reported as “Equity in the income of investees” in the Company’s Consolidated Statements of Income. A+E is owned 50% by the Company and 50% by Hearst.
These areas each include themed attractions, restaurants, merchandise shops and entertainment experiences. Walt Disney Studios Park is undergoing a multi-year expansion that will include a new themed area based on Frozen. Hotels and Other Facilities — Disneyland Paris operates seven resort hotels, with approximately 5,750 rooms and 250,000 square feet of conference meeting space.
Walt Disney Studios Park is undergoing a multi-year expansion that will include a new themed area based on Frozen , which is planned to open in 2026 and coincide with the renaming of Walt Disney Studios Park to Disney Adventure World. 11 TABLE OF CONTENTS Hotels and Other Facilities — Disneyland Paris operates seven resort hotels, with approximately 5,750 rooms and 250,000 square feet of conference meeting space.
Competition and Seasonality Linear Networks and Direct-to-Consumer compete for viewers’ attention and audience share primarily with other television networks, independent television stations and other media, such as other DTC streaming services, social media and video games.
We also license, acquire or produce local content for use in various countries/territories. 6 TABLE OF CONTENTS Competition and Seasonality Linear Networks and Direct-to-Consumer compete for viewers’ attention and audience share primarily with other television networks, independent television stations and other media, such as other DTC streaming services, social media and video games.
Disney+ (including Star+ in Latin America) Disney+ is a subscription-based DTC service with Disney, Pixar, Marvel, Star Wars and National Geographic branded programming, which are all top-level selections or “tiles” within the Disney+ interface. Outside the U.S. and Latin America, Disney+ also includes a Star branded tile, which features general entertainment programming.
Disney+ and Disney+ Hotstar Disney+ is a subscription-based DTC service with Disney, Pixar, Marvel, Star Wars and National Geographic branded programming, which are all top-level selections or “tiles” within the Disney+ interface. In the U.S., subscribers to both Disney+ and Hulu may access certain Hulu programming through a tile on Disney+.
A number of the attractions and restaurants in the theme parks are sponsored or operated by other companies under multi-year agreements. Disneyland — Disneyland consists of nine themed areas: Adventureland, Critter Country, Fantasyland, Frontierland, Main Street USA, Mickey’s Toontown, New Orleans Square, Star Wars : Galaxy’s Edge and Tomorrowland. These areas feature themed attractions, restaurants, merchandise shops and entertainment experiences.
Disneyland — Disneyland consists of nine themed areas: Adventureland, Bayou Country, Fantasyland, Frontierland, Main Street USA, Mickey’s Toontown, New Orleans Square, Star Wars : Galaxy’s Edge and Tomorrowland. These areas feature themed attractions, restaurants, merchandise shops and entertainment experiences.
Hong Kong Disneyland — Hong Kong Disneyland consists of eight themed areas: Adventureland, Fantasyland, Grizzly Gulch, Main Street USA, Mystic Point, Tomorrowland, Toy Story Land and World of Frozen, which opened in November 2023. These areas feature themed attractions, restaurants, merchandise shops and entertainment experiences.
The Company is entitled to receive royalties and management fees based on the operating performance of Hong Kong Disneyland Resort. Hong Kong Disneyland — Hong Kong Disneyland consists of eight themed areas: Adventureland, Fantasyland, Grizzly Gulch, Main Street USA, Mystic Point, Tomorrowland, Toy Story Land and World of Frozen. These areas feature themed attractions, restaurants, merchandise shops and entertainment experiences.
As of September 2023, the estimated number of subscribers to ESPN branded channels outside the U.S., based on internal management reports, was approximately 59 million. Star The Company operates 10 Star branded sports channels in India, in 4 languages. Star has rights to various sports programming, primarily cricket and soccer.
Rights include various soccer leagues (including English Premier League, LaLiga, Bundesliga and multiple UEFA leagues). As of September 2024, the estimated number of subscribers to ESPN branded channels outside the U.S., based on internal management reports, was approximately 55 million. 8 TABLE OF CONTENTS Star The Company operates 10 Star branded sports channels in India, in 4 languages.
FCC regulations that affect linear channels include the following: • Licensing of television stations . Each of the television stations we own must be licensed by the FCC. These licenses are granted for periods of up to eight years, and we must obtain renewal of licenses as they expire in order to continue operating the stations.
These licenses are granted for periods of up to eight years, and we must obtain renewal of licenses as they expire in order to continue operating the stations.
The Company employed approximately 225,000 people as of September 30, 2023, of which approximately 167,000 were employed in the U.S. and approximately 58,000 were employed outside the U.S. Our global workforce is comprised of approximately 77% full time and 16% part time employees, with another 7% being seasonal employees.
The Company employed approximately 233,000 people as of September 28, 2024, of which approximately 171,000 were employed in the U.S. and approximately 62,000 were employed outside the U.S. Our global workforce comprises approximately 76% full time and 16% part time employees, with another 8% being seasonal employees.
Disney Channel - the Disney Channel airs original series and movie programming 24 hours a day targeted to kids ages 2 to 14. The channel features live-action comedy series, animated programming and preschool series as well as original movies and theatrical films.
Disney Channels air programming 24 hours a day targeted to kids ages 2 to 14 and generally feature live-action comedy series, animated programming and preschool series as well as original movies and theatrical films. Freeform Freeform is a channel targeted to viewers ages 18 to 34 that airs original and licensed television series, films and holiday programming events.
The vast majority of our productions will be distributed on our Linear Networks and/or DTC platforms or theatrically. Programming is also produced for third parties, which typically have domestic linear distribution rights while the Company retains domestic VOD and international distribution rights. We also license, acquire or produce local content for use in various countries/territories.
In fiscal 2025, the Company plans to produce or commission approximately 215 episodic and film titles. The vast majority of our productions will initially be distributed on our Linear Networks and/or DTC platforms or theatrically. Programming is also produced for third parties, which typically have domestic linear distribution rights while the Company retains domestic video-on-demand and international distribution rights.
Shanghai Disneyland — Shanghai Disneyland consists of seven themed areas: Adventure Isle, Fantasyland, Gardens of Imagination, Mickey Avenue, Tomorrowland, Toy Story Land and Treasure Cove. These areas feature themed attractions, shows, restaurants, merchandise shops and entertainment experiences.
Shanghai Disneyland — Shanghai Disneyland consists of eight themed areas: Adventure Isle, Fantasyland, Gardens of Imagination, Mickey Avenue, Tomorrowland, Toy Story Land, Treasure Cove and Zootopia, which opened in December 2023. These areas feature themed attractions, shows, restaurants, merchandise shops and entertainment experiences. Hotels and Other Facilities — Shanghai Disneyland Resort includes two themed hotels with approximately 1,200 rooms.
The significant lines of business within Sports are as follows: • ESPN (generally owned 80% by the Company) ◦ Domestic: ▪ Eight ESPN-branded television channels ▪ ESPN on ABC (sports programmed on the ABC Network by ESPN) ▪ ESPN+ DTC video streaming service 9 TABLE OF CONTENTS ◦ International: ESPN-branded channels outside of the U.S. • Star: Star-branded sports channels in India The significant revenues of Sports are as follows: • Affiliate fees • Advertising • Subscription fees • Other revenue - Fees from the following activities: pay-per-view events on ESPN+, sub-licensing of sports rights, programming ESPN on ABC and licensing the ESPN brand The significant expenses of Sports are as follows: • Operating expenses, consisting primarily of programming and production costs, technology support costs, operating labor and distribution costs.
The significant revenues of Sports are as follows: • Affiliate fees • Advertising • Subscription fees • Other revenue - Fees from the following activities: pay-per-view events on ESPN+, sub-licensing of sports rights, programming ESPN on ABC and licensing the ESPN brand 7 TABLE OF CONTENTS The significant expenses of Sports are as follows: • Operating expenses, consisting primarily of programming and production costs, technology support costs, operating labor and distribution costs.
Most of the Downtown Disney facilities are operated by third parties that pay rent to the Company. 13 TABLE OF CONTENTS Aulani, a Disney Resort & Spa Aulani, a Disney Resort & Spa is a family resort on a 21-acre oceanfront property on Oahu, Hawaii featuring approximately 350 hotel rooms, an 18,000-square-foot spa and 12,000 square feet of conference meeting space.
Aulani, a Disney Resort & Spa Aulani, a Disney Resort & Spa is a family resort on a 21 acre oceanfront property on Oahu, Hawaii featuring approximately 350 hotel rooms, an 18,000-square-foot spa and 12,000 square feet of conference meeting space. The resort also has approximately 480 vacation club units.
The Company’s goals encompass science-based targets for Scope 1, 2 and 3 emissions, water stewardship, waste reduction, sustainable design in construction and use of more sustainable materials in our products. ENTERTAINMENT The Entertainment segment generally encompasses the Company’s non-sports focused global film, television and direct-to-consumer (DTC) video streaming content production and distribution activities.
The Company’s goals encompass science-based targets for Scope 1, 2 and 3 emissions, water stewardship, waste reduction, sustainable design in construction and use of more sustainable materials in our products.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe expect to forgo revenue from traditional sources, particularly as we expand our DTC offerings. To date our DTC streaming services have experienced significant losses. There can be no assurance that the DTC model and other business models we may develop will ultimately be profitable or as profitable as our existing or historic business models.
Biggest changeThere can be no assurance that the DTC model and other business models we may develop will each be or remain profitable or be as profitable over the long term as our historic business models. 18 TABLE OF CONTENTS We face risks relating to misalignment with public and consumer tastes and preferences for entertainment, travel and consumer products, which impact demand for our entertainment offerings and products and the profitability of our businesses.
New technologies affect the demand for our products, the manner in which our products are distributed to consumers, ways we charge for and receive revenue for our entertainment products and the stability of those revenue streams, the sources and nature of competing content offerings, the time and manner in which consumers acquire and view some of our entertainment products and the options available to advertisers for reaching their desired audiences.
New technologies affect the demand for our products, the manner in which our products are distributed to consumers, the ways we charge for and receive revenue for our entertainment products and the stability of those revenue streams, the sources and nature of competing content offerings, the time and manner in which consumers acquire and view some of our entertainment products and the options available to advertisers for reaching their desired audiences.
Although we hedge exposure to certain foreign currency fluctuations, any such hedging activity may not substantially offset the negative financial impact of exchange rate fluctuations and is not expected to offset all such negative financial impact, particularly in periods of sustained U.S. dollar strength relative to multiple foreign currencies.
Although we hedge exposure to fluctuations in certain foreign currencies, any such hedging activity may not substantially offset the negative financial impact of exchange rate fluctuations and is not expected to offset all such negative financial impact, particularly in periods of sustained U.S. dollar strength relative to multiple foreign currencies.
Demand for certain out-of-home entertainment experiences, such as theater-going to watch movies, has not returned to pre-pandemic levels. In addition, many of our businesses increasingly depend on acceptance of our offerings and products by consumers outside the U.S.
Demand for certain out-of-home entertainment experiences, such as theater-going to watch movies, has not returned to pre-pandemic levels. In addition, many of our businesses depend on acceptance of our offerings and products by consumers outside the U.S.
If those laws are drafted or interpreted in ways that limit the extent or duration of our rights, or if existing laws are changed, our ability to generate revenue from our IP may decrease, or the cost of obtaining and maintaining rights may increase.
Where those laws are drafted or interpreted in ways that limit the extent or duration of our rights, or if existing laws are changed, our ability to generate revenue from our IP may decrease, or the cost of obtaining and maintaining rights may increase.
Further, economic or political conditions in countries outside the U.S. also have reduced, and could continue to reduce, our ability to hedge exposure to currency fluctuations in those countries or our ability to repatriate revenue from those countries.
Further, economic or political conditions in certain countries outside the U.S. also have reduced, and could continue to reduce, our ability to hedge exposure to currency fluctuations in those countries or our ability to repatriate revenue from those countries.
A variety of uncontrollable events may disrupt our businesses, reduce demand for or consumption of our products and services, impair our ability to provide our products and services or increase the cost or reduce the profitability of providing our products and services.
A variety of uncontrollable events disrupt our businesses, reduce demand for or consumption of our products and services, impair our ability to provide our products and services or increase the cost or reduce the profitability of providing our products and services.
Such distribution must meet the changing preferences of the broad consumer market and respond to competition from an expanding array of choices facilitated by technological developments in the delivery of content. The success of our theme parks, resorts, cruise ships and experiences, as well as our theatrical releases, depends on demand for public or out-of-home entertainment experiences.
Such distribution must meet the changing preferences of the broad consumer market and respond to competition from an expanding array of choices facilitated by technological developments in the delivery of content. The success of our theme parks, resorts, cruise ships and experiences, as well as our theatrical releases, depends on demand for out-of-home entertainment experiences.
The convergence of computing, communication and entertainment devices, increased broadband internet speed and penetration, increased availability and speed of mobile data transmission and increasingly sophisticated attempts to obtain unauthorized access to data systems have made the unauthorized digital copying and distribution of our films, television productions and other creative works easier and faster and protection and enforcement of IP rights more challenging.
The convergence of computing, communications and entertainment devices, increased broadband internet speed and penetration, increased availability and speed of mobile data transmission and increasingly sophisticated attempts to obtain unauthorized access to data systems have made the unauthorized digital copying and distribution of our films, television productions and other creative works easier and faster and protection and the enforcement of IP rights more challenging.
Technological changes in industries in which the Company operates and extensive patent coverage in those areas may increase the risk of such claims being brought and prevailing.
Technological changes in industries in which the Company operates and extensive patent coverage in those areas increase the risk of such claims being brought and prevailing.
In addition, some of our employees outside the U.S. are represented by works councils, trade unions or other employee associations. Further, the employees of licensees who manufacture and retailers who sell our licensed consumer products, and employees of providers of programming content (such as sports leagues) may be covered by labor agreements with their employers.
In addition, some of our employees outside the U.S. are represented by works councils, trade unions or other employee associations. Further, some employees of licensees who manufacture and retailers who sell our licensed consumer products, and employees of providers of programming content (such as sports leagues) are covered by labor agreements with their employers.
Changes in strategy, such as was the case with the most recent reorganization of our media and entertainment operations, can lead to workforce disruptions. Our new organization and strategies are, among other things, subject to execution risk and may not produce the anticipated benefits, such as supporting our growth strategies and enhancing shareholder value.
Changes in strategy, such as was the case with the most recent reorganization of our media and entertainment operations, can lead to workforce disruptions. Our new business strategies are, among other things, subject to execution risk and may not produce the anticipated benefits, such as supporting our growth strategies and enhancing shareholder value.
Our leverage ratios increased as the result of COVID-19’s impact on financial performance, which caused certain of the credit ratings agencies to downgrade their assessment of our credit ratings. Downgrades to our debt rating may negatively impact our cost of borrowings and/or make it more difficult for us to obtain financing on acceptable terms.
Our leverage ratios increased as the result of COVID-19’s impact on financial performance, which caused certain of the credit ratings agencies to downgrade their assessment of our credit ratings. Downgrades to our credit ratings may negatively impact our cost of borrowings and/or make it more difficult for us to obtain financing on acceptable terms.
Revenues at the Experiences segment also may fluctuate with changes in theme park attendance and resort occupancy resulting from special celebrations or events that may increase demand in the applicable periods and decrease demand in prior or later periods as guests time their vacations to occur during such special celebrations or events.
Revenues at the Experiences segment also sometimes fluctuate with changes in theme park attendance and resort occupancy resulting from special celebrations or events that increase demand in the applicable periods and decrease demand in prior or later periods as guests time their vacations to occur during such special celebrations or events.
With approximately 225,000 employees, the success of our businesses is substantially affected by our ability to attract and retain a workforce with the necessary skills for our varied businesses, including executing successfully on succession planning for the talent at all levels necessary to advance the Company’s key objectives and strategies.
With approximately 233,000 employees, the success of our businesses is substantially affected by our ability to attract and retain a workforce with the necessary skills for our varied businesses, including executing successfully on succession planning for the talent at all levels necessary to advance the Company’s key objectives and strategies.
Further, our profitability is substantially affected by labor costs, including wages and our health, welfare and pension benefits, including the costs of medical benefits for current employees and the costs of postretirement medical benefits for some current employees and retirees. We may experience significant increases in these costs as a result of macroeconomic, regulatory, competitive and other factors.
Further, our profitability is substantially affected by labor costs, including wages and our health, welfare and retirement benefits, including the costs of medical benefits for current employees and the costs of postretirement medical benefits for some current employees and retirees. We may experience significant increases in these costs as a result of macroeconomic, regulatory, competitive and other factors.
We face risks related to costs and expenses in connection with the acquisition of NBCU’s equity interest in Hulu and the TFCF acquisition. On November 1, 2023, NBCU exercised its right to require the Company to purchase NBCU’s equity interest in Hulu under a put/call arrangement between the parties.
We face risks related to costs and expenses in connection with the acquisition of NBC Universal’s (NBCU) equity interest in Hulu and the TFCF acquisition. On November 1, 2023, NBCU exercised its right to require the Company to purchase NBCU’s equity interest in Hulu under a put/call arrangement between the parties.
As these contracts expire, we must renew or renegotiate the contracts, which from time to time has led to service blackouts when distribution contracts expired before renewal terms were agreed, and if we are unable to renew these contracts on acceptable terms, we may lose programming rights or distribution rights.
As these contracts expire, we renew or renegotiate the contracts, which from time to time has led to service blackouts when distribution contracts expired before renewal terms were agreed. We may lose programming rights or distribution rights if we are unable to renew these contracts on acceptable terms.
We maintain information necessary to conduct our business, including confidential and proprietary information as well as personal information regarding our customers and employees, in digital form. We also use computer systems to deliver our products and services and operate our businesses.
We maintain information necessary to conduct our business, including confidential and proprietary information as well as personal information regarding our customers and employees, in digital form. We also use computer and cloud-based systems to deliver our products and services and operate our businesses.
The media entertainment and internet businesses in which we participate increasingly depend on our ability to successfully adapt to new technologies including shifting patterns of content consumption and how entertainment products are generated.
The media entertainment and technology businesses in which we participate increasingly depend on our ability to successfully adapt to new technologies including shifting patterns of content consumption and how entertainment products are generated.
The legal landscape for some new technologies, including some generative AI, remains uncertain, and development of the law in this area could impact our ability to protect against infringing uses.
The legal landscape for some new technologies, including some AI tools, remains uncertain, and development of the law in this area could impact our ability to protect against infringing uses.
Our operations are impacted by our ability to attract and retain employees and costs of employee wages and health, welfare and pension benefits, including postretirement medical benefits for some employees and retirees, may reduce our profitability.
Our operations are impacted by our ability to attract and retain employees and costs of employee wages and health, welfare and retirement benefits, including postretirement medical benefits for some employees and retirees, may reduce our profitability.
Our ability to forecast for new businesses may be impacted by our lack of experience operating in those new businesses, speed with which the competitive landscape changes, volatility beyond our control (such as the events beyond our control noted above) and our ability to obtain or develop the content and rights on which our projections are based.
Our ability to forecast for new businesses is impacted by our lack of experience operating in those new businesses, speed with which the competitive landscape changes, volatility beyond our control (such as the events beyond our control noted above) and our ability to obtain or develop the content and rights on which our projections are based.
Even if these contracts are renewed, the cost of obtaining certain programming rights has increased and may continue to increase (or increase at faster rates than our historical experience) and programming distributors, facing pressures resulting from increased subscription fees and alternative distribution challenges, have demanded and may continue to demand terms (including with respect to the pricing for, and the nature and amount of, programming distributed) that reduce our revenue from distribution of programs (or increase revenue at slower rates than our historical experience).
Even if these contracts are renewed, the cost of obtaining certain programming rights has increased and may continue to increase (or increase at faster rates than our historical experience) and programming distributors, facing pressures resulting from increased subscription fees and alternative distribution channels, demand terms (including with respect to the pricing for, and the nature and amount of, programming distributed) that reduce our revenue from distribution of programs or increase revenue at slower rates than our historical experience.
A decline in economic conditions or a failure of conditions to improve as anticipated could impact 17 TABLE OF CONTENTS implementation or success of our business plans, such as our plans to increase investment in our Experiences segment, the realignment of our cost structure and plans for our DTC ad-supported services, enhancements, pricing structure and price increases.
A decline in economic conditions or a failure of conditions to improve as anticipated could impact implementation or success of our business plans, such as our plans to increase investment in our Experiences segment, the realignment of our cost structure and plans for our DTC ad-supported services, enhancements, pricing structure and price increases.
The profitability of one or more of our businesses could be adversely impacted by the significant contraction of distribution channels for our products and services, including through third-party licensees or sellers of our licensed goods and services. In addition, third-party suppliers provide products and services essential to the operation of a number of our businesses.
The profitability of one or more of our businesses could be adversely impacted by the significant contraction of distribution channels for our products and services, 19 TABLE OF CONTENTS including through third-party licensees or sellers of our licensed goods and services. In addition, third-party suppliers provide products and services essential to the operation of a number of our businesses.
Accordingly, negative impacts on our business occurring during a time of typical high seasonal demand such as our park closures due to COVID-19 restrictions or hurricane damage during the summer travel season or other high seasons, could have a disproportionate effect on the results of that business for the year.
Accordingly, negative impacts on our business occurring during a time of typical high seasonal demand such as our park closures due to hurricane damage during the summer travel season or other high seasons, could have a disproportionate effect on the results of that business for the year.
For example: • Our programming and production operations compete to obtain creative, performing, production and business talent, sports and other programming, story properties, advertiser support, production facilities and market share with traditional and new media platforms, including other studio operators, television networks, VOD providers and other sources of broadband delivered content. • Our television networks and stations and DTC offerings compete for the sale of advertising time with traditional and new media platforms, including other television and VOD services, as well as with newspapers, magazines, billboards and radio stations, and various forms of internet and mobile delivered content, which offer advertising delivery technologies that are more targeted than can be achieved through traditional means. • Our television networks compete for carriage of their programming with other programming providers. • Our theme parks and resorts compete for guests with all other forms of entertainment, lodging, tourism and recreation activities and compete for creative, performing and business talent, including with other theme park and resort operators. • Our content sales/licensing operations compete for customers with all other forms of entertainment. 21 TABLE OF CONTENTS • Our consumer products business competes with other licensors and creators of IP. • Our DTC streaming services compete for customers with an increasing number of competitors’ DTC offerings, all other forms of media and all other forms of entertainment, as well as for technology, creative, performing and business talent and for content.
For example: • Our programming and production operations compete to obtain creative, performing, production and business talent, sports and other programming, story properties, advertiser support, production facilities and market share with traditional and new media platforms, including other video-on-demand services and sources of broadband delivered content, studio operators and television networks. • Our television networks and stations and DTC offerings compete for the sale of advertising time with traditional and new media platforms, including other television and video-on-demand services and various forms of internet and mobile delivered content, which offer advertising delivery technologies that are more targeted than can be achieved through traditional means, as well as with newspapers, magazines, billboards and radio stations. • Our television networks compete for carriage of their programming with other programming providers. • Our theme parks and resorts and experiences compete for guests with all other forms of entertainment, lodging, tourism and recreation activities and compete for technology, creative, performing and business talent, including with other theme park and resort operators. • Our content sales/licensing operations compete for customers with all other forms of entertainment. • Our consumer products business competes with other licensors and creators of IP. • Our DTC streaming services compete for customers with an increasing number of competitors’ DTC offerings, all other forms of media and all other forms of entertainment, as well as for technology, creative, performing and business talent and for content.
There can be no assurance that our DTC offerings, new media offerings and other efforts will successfully respond to technological changes. In addition, declines in certain traditional forms of distribution may increase the cost of content allocable to our DTC offerings, negatively impacting the profitability of our DTC offerings.
There can be no assurance that our DTC offerings, new media offerings and other efforts will successfully respond to technological changes. In addition, declines in certain traditional forms of distribution impacts the cost of content allocable to our DTC offerings, negatively impacting the profitability of our DTC offerings.
Our borrowing costs have been and can be affected by short- and long-term debt ratings assigned by independent ratings agencies that are based, in part, on the Company’s performance as measured by credit metrics such as leverage and interest coverage ratios.
Our borrowing costs have been and can be affected by short- and long-term debt ratings assigned by nationally recognized ratings agencies that are based, in part, on the Company’s performance as measured by credit metrics such as leverage and interest coverage ratios.
In general, domestic general entertainment linear networks advertising revenues are typically somewhat higher during the fall and somewhat lower during the summer months, and sports advertising revenues are impacted by the timing of sports seasons and events, which varies throughout the year or may take place periodically. • Revenues from content sales/licensing fluctuate due to the timing of content releases across various distribution markets.
In general, domestic general entertainment linear networks advertising revenues are typically somewhat higher during the fall and somewhat lower during the summer months, 23 TABLE OF CONTENTS and sports advertising revenues are impacted by the timing of sports seasons and events, which varies throughout the year and/or take place periodically. • Revenues from content sales/licensing fluctuate due to the timing of content releases across various distribution markets.
Even if our strategies are effective in the long term, our new offerings will generally not be profitable in the short term, growth of our new offerings is unlikely to be even quarter over quarter and we may not expand into new markets as or when anticipated.
Even if our strategies are effective in the long term, our new offerings will generally not be profitable in the short term, results of our new offerings are unlikely to be even quarter over quarter and we may not expand into new markets as or when anticipated.
Moreover, our ability to renew these contracts on favorable terms may be affected by a number of factors, such as consolidation in the market for program distribution and the entrance of new participants in the market for distribution of content on digital platforms.
Moreover, our ability to renew these contracts on favorable terms is affected by a number of factors, such as consolidation in the market for program distribution and the entrance of new participants in the market for distribution of content on digital platforms.
Competition for the acquisition of resources can further increase the cost of producing our products and services; change the composition of our offerings, including sports; deprive us of talent needed for our entertainment and experiences businesses, including the talent necessary to produce high quality creative material; increase employee turnover and staffing instability; or increase the cost of compensation for our employees.
Competition for the acquisition of resources can further increase the cost of producing our products and services; change the composition of our offerings, including sports; deprive us of talent needed for our entertainment and experiences businesses, including the talent necessary to produce high quality creative material; increase employee turnover and staffing instability; or increase our labor costs.
Data maintained in digital form is subject to the risk of unauthorized access, modification, exfiltration, destruction or denial of access and our computer systems are subject to cyberattacks that may result in disruptions in service. We use many third-party systems and software, which are also subject to supply chain and other cyberattacks.
Data maintained in digital form is subject to the risk of unauthorized access, modification, exfiltration, destruction or denial of access and our systems are subject to cyberattacks that from time to time result in disruptions in service. We also use many third-party systems and software, which are also subject to supply chain and other cyberattacks.
Accordingly, we may not achieve our forecasted outcomes. Increased competitive pressures impact our revenues and increase our costs. We face substantial competition in each of our businesses from alternative providers of the products and services we offer and from other forms of entertainment, lodging, tourism and recreational activities.
Accordingly, we may not achieve our forecasted outcomes. 20 TABLE OF CONTENTS Increased competitive pressures impact our revenues, increase our costs and impact the profitability of our businesses. We face substantial competition in each of our businesses from alternative providers of the products and services we offer and from other forms of entertainment, lodging, tourism and recreational activities.
Labor disputes disrupt our operations and may adversely affect the profitability of one or more of our businesses. A significant number of employees in various parts of our businesses, including employees of our theme parks, and writers, directors, actors and production personnel for our productions are covered by collective bargaining agreements.
Labor disputes disrupt our operations and adversely affect the profitability of our businesses. A significant number of employees in various parts of our businesses, including employees of our theme parks, and writers, directors, actors and production personnel for our productions are covered by collective bargaining agreements.
In order to respond to the impact of new technologies on our businesses, we regularly consider, and from time to time implement changes to our business models, most recently by developing, investing in and acquiring DTC products, reorganizing our media and entertainment businesses to advance our DTC strategies, and developing new media offerings.
In order to respond to the impact of new technologies on our businesses, we regularly consider, and from time to time implement new initiatives and changes to our business models, including by developing, investing in and acquiring DTC products, reorganizing our media and entertainment businesses to advance our DTC strategies and developing new media offerings.
In addition, ongoing and future developments in international political, trade and security policy may lead to new regulations 22 TABLE OF CONTENTS limiting international trade and investment and disrupting our operations outside the U.S., including our international theme parks and resorts operations in France, mainland China and Hong Kong.
In addition, ongoing and future developments in international political, trade and security policy may lead to new regulations limiting international trade and investment and disrupting our operations outside the U.S., including our international theme parks and resorts operations in France, mainland China and Hong Kong.
These differences can affect our ability to react to changes in our business, and our rights or ability to enforce rights may be different than would be expected under U.S. law.
These differences can affect our ability to react to changes in our business, and our rights or ability to enforce rights are sometimes different than would be expected under U.S. law.
The success of our businesses therefore depends on our ability to successfully predict and adapt to changing consumer tastes and preferences outside as well as inside the U.S.
The success of our businesses therefore depends on our ability to successfully predict and adapt to continually evolving consumer tastes and preferences outside as well as inside the U.S.
Rules governing new technological developments, such as developments in generative artificial intelligence (AI), remain unsettled, and these developments may affect aspects of our existing business model, including revenue streams for the use of our IP and how we create our entertainment products.
Rules governing new technological developments, such as developments in artificial intelligence (AI), including generative AI and large language model tools, remain unsettled, and these developments may affect aspects of our existing business model, including revenue streams for the use of our IP, how we create our entertainment products and the competition we face.
In general, labor disputes and work stoppages involving our employees; persons employed on our productions; athletes or others employed by, or otherwise connected with, sports leagues or organizers; or the employees of our licensees or retailers who sell our licensed consumer products or providers of programming content may disrupt our operations and reduce our revenues.
In general, labor disputes and work stoppages involving our employees; persons employed on our productions; athletes or others employed by, or otherwise connected with, sports leagues or organizers; or the employees of our licensees or retailers who sell our licensed consumer products or providers of programming content may disrupt or lead to closure of certain operations and reduce our revenues and the profitability of our businesses.
Each of these may depend on the availability of content, which varies from time to time throughout the year based on, among other things, sports seasons, content production schedules and sports league work stoppages.
Each of these is sensitive to the availability of content, which varies from time to time throughout the year based on, among other things, sports seasons, content production schedules and sports league work stoppages.
In addition to the factors affecting specific business operations identified in connection with the description of these operations and the financial results of these operations elsewhere in our filings with the SEC, the most significant factors affecting our business include the following: BUSINESS, ECONOMIC, MARKET and OPERATING CONDITION RISKS Declines in U.S., global, and regional economic conditions generally adversely affect the profitability of our businesses.
In addition to the factors affecting specific business operations identified in connection with the description of these operations and the financial results of these operations elsewhere in our filings with the SEC, the most significant factors affecting our business include the following: RISKS RELATED TO OUR BUSINESSES AND INDUSTRY Declines in U.S., global and regional economic conditions adversely affect the profitability of our businesses.
The purchase price for NBCU’s equity interest in Hulu will be determined 25 TABLE OF CONTENTS based on NBCU’s equity ownership percentage of the greater of Hulu’s equity fair value as of September 30, 2023, and a guaranteed floor value.
The purchase price for NBCU’s equity interest in Hulu will be determined based on NBCU’s equity ownership percentage of the greater of Hulu’s equity fair value as of September 30, 2023 based on a contractual appraisal process, and a guaranteed floor value.
Our new organization and strategies could be less successful than our previous organizational structure and strategies. In addition, external events including changing technology, changing consumer purchasing patterns, acceptance of content offerings and changes in macroeconomic conditions may impair the value of our assets.
Over the long term, our new organization and strategies could be less successful than our previous organizational structure and strategies. In addition, changing technology, consumer purchasing patterns and acceptance of content offerings and macroeconomic conditions may impair the value of our assets.
For example, in fiscal 2023, we reorganized our media and entertainment operations, which had been previously reported in one segment, into two segments, Entertainment and Sports; in fiscal 2023 we announced that we would review content, primarily on our DTC services, for alignment with a strategic change in our approach to content curation, resulting in removal of certain content from our platforms and related impairment charges; in fiscal 2022, we announced plans to introduce an ad-supported Disney+ service, new pricing model and price increases and cost realignment; in fiscal 2021, we announced the closure of a substantial number of our Disney-branded retail stores; and we have announced exploration of a number of new types of businesses.
For example, in fiscal 2024, we announced entering into a definitive agreement to transfer Star India into a joint venture and related impairment charges; in fiscal 2023, we reorganized our media and entertainment operations, which had been previously reported in one segment, into two segments, Entertainment and Sports; in fiscal 2023 we announced that we would review content, primarily on our DTC services, for alignment with a strategic change in our approach to content curation, resulting in removal of certain content from our platforms and related impairment charges; in fiscal 2022, we announced plans to introduce an ad-supported Disney+ service, new pricing model and price increases and cost realignment; and we have announced exploration of a number of new types of businesses.
For example, new domestic and international laws and regulations relating to environmental, social and governance matters, including environmental sustainability and climate change, human capital management and cybersecurity, are under consideration or being adopted, which may include specific, target-driven disclosure requirements or obligations.
For example, new domestic and international laws and regulations relating to environmental, social and governance matters, including environmental sustainability, climate change, human rights and human capital management, have been adopted or are under consideration, some of which include specific, target-driven disclosure requirements or obligations.
Damage to our reputation or brands could impact our sales, business opportunities, profitability, recruiting and valuation of our securities. Various risks may impact the success of our DTC streaming services. We may not successfully execute on our DTC strategy.
Damage to our reputation or brands could impact our sales, business opportunities, profitability, recruiting and valuation of our securities. Various risks may impact the success of our DTC streaming services.
For example, on May 2, 2023, members of the Writers Guild of America (WGA) commenced a work stoppage, which lasted for almost five months. On July 14, 2023, members of SAG-AFTRA, the union representing television and movie actors, also commenced a work stoppage, which lasted for almost four months.
For example, in fiscal 2023, members of the Writers Guild of America (WGA) commenced a work stoppage, which lasted for almost five months, and members of SAG-AFTRA, the union representing television and movie actors, also commenced a work stoppage, which lasted for almost four months.
The success of our businesses depends on our ability to consistently create compelling content, which may be distributed, among other ways, through broadcast, cable, theaters, internet or mobile technology, and used in theme park attractions, hotels and other resort facilities and travel experiences and consumer products.
The success of our businesses depends on our ability to consistently produce compelling creative content, which may be distributed, among other ways, through DTC platforms, broadcast, cable, theaters and used in theme park attractions, hotels and other resort facilities and travel experiences and consumer products.
The operation of our businesses and the environment for travel and tourism, as well as demand for and consumption of our other entertainment products, can be significantly adversely affected in the U.S., globally or in specific regions as a result of a variety of factors beyond our control, including: health concerns (including as it has been by COVID-19 and could be by future health outbreaks and pandemics); adverse weather conditions arising from short-term weather patterns or long-term climate change, including longer and more regular excessive heat conditions, catastrophic events or natural disasters (such as excessive heat or rain, hurricanes, typhoons, floods, droughts, tsunamis and earthquakes); international, political or military developments, including trade and other international disputes and social unrest; macroeconomic conditions, including a decline in economic activity, inflation and foreign exchange rates; and terrorist attacks.
The operation of our businesses and the environment for travel and tourism, as well as demand for and consumption of our other entertainment products, is subject to significant adverse impact in the U.S., globally or in specific regions as a result of a variety of factors beyond our control, including: health concerns; adverse weather conditions arising from short-term weather patterns or long-term climate change, including longer and more regular excessive heat conditions, catastrophic events or natural disasters (such as excessive heat or rain, hurricanes, typhoons, floods, droughts, tsunamis and earthquakes); international, political or military developments, including trade and other international disputes and social unrest; macroeconomic conditions, including a decline in economic activity, inflation and foreign exchange rates; and terrorist attacks.
Such competition may also reduce, or limit growth in, prices for our products and services, including advertising rates and subscription fees at our media networks and DTC offerings, parks and resorts admissions and room rates and prices for consumer products from which we derive license revenues.
Competition also reduces, or limits growth in, prices for our products and services, including advertising rates and subscription fees at our linear networks and DTC offerings, parks and resorts admissions and room rates and prices for consumer products from which we derive license revenues.
For example, in the United States and countries that look to the United States copyright term when shorter than their own, the copyright term for early works such as the short film Steamboat Willie (1928), and the specific early versions of characters depicted in those works, expires at the end of the 95th calendar year after the date the copyright was originally secured in the United States.
For example, in the United States and countries that look to the United States copyright term when shorter than their own, the copyright term for early works and the specific early versions of characters depicted in those works expires at the end of the 95th calendar year after the date the copyright was originally 24 TABLE OF CONTENTS secured in the United States.
Our operations outside the U.S. may be adversely affected by the operation of laws in those jurisdictions. Our operations in non-U.S. jurisdictions are in many cases subject to the laws of the jurisdictions in which they operate rather than, or in addition to, U.S. law. Laws in some jurisdictions differ in significant respects from those in the U.S.
Our operations outside the U.S. are in many cases subject to the laws of the jurisdictions in which they operate rather than, or in addition to, U.S. law. Laws in some international jurisdictions differ in significant respects from those in the U.S.
See Item 1 — Federal Regulation - Entertainment and Sports. • Federal, state and foreign privacy and data protection laws and regulations. • Regulation of the safety and supply chain of consumer products and theme park operations, including regulation regarding the sourcing, importation and the sale of goods. • Environmental protection regulations. • U.S. and international anti-corruption laws, sanction programs, trade restrictions and anti-money laundering laws. • Restrictions on the manner in which content is currently licensed and distributed, ownership restrictions or film or television content requirements, investment obligations or quotas. • Domestic and international labor laws, tax laws or currency controls.
See Item 1 — Privacy and Data Protection Regulation. • Regulation of the safety and supply chain of consumer products and theme park operations, including regulation regarding the sourcing, importation and the sale of goods. • Land planning, use and development regulations applicable to our theme parks operations. • Environmental protection regulations. • U.S. and international anti-corruption laws, sanction programs, trade restrictions, anti-money laundering laws or currency controls. • Restrictions on the manner in which content is currently licensed and distributed, ownership restrictions or film or television content requirements, investment obligations or quotas.
The success of our businesses is highly dependent on the existence and maintenance of intellectual property rights in the entertainment products and services we create.
RISKS RELATED TO INTELLECTUAL PROPERTY, CYBERSECURITY AND REGULATORY REQUIREMENTS The success of our businesses is highly dependent on the existence and maintenance of intellectual property rights in the entertainment products and services we create.
Successful challenges to our rights in IP may result in increased costs for obtaining rights or the loss of the opportunity to earn revenue from or utilize the IP that is the subject of challenged rights. From time to time, the Company has been notified that it may be infringing certain IP rights of third parties.
Successful challenges to our rights in IP typically result in increased costs for obtaining rights or the loss of the opportunity to earn revenue from or utilize the IP that is the subject of challenged rights. From time to time, third parties allege that the Company is infringing certain third-party IP rights.
In addition to the content impairment noted above, among other assets, we have impaired goodwill and intangible assets at our linear networks and impaired the value of certain of our retail store assets. We may write down other assets as our strategy evolves to account for the current business environment.
Among other assets, we have impaired the value of our content primarily at our DTC services and goodwill and intangible assets at our linear networks and impaired the value of certain of our retail store assets. We may write down other assets as our strategy evolves to account for the business environment.
There is no assurance that our initiatives will achieve their intended outcomes or that we will achieve any of these goals. Consumer, government and other stakeholder perceptions of our efforts to achieve these objectives often differ widely and present risks to our reputation and brands.
There is no assurance that our initiatives will achieve their intended outcomes or that we will achieve any of these goals. Consumer, government and other stakeholder perceptions of our initiatives often differ widely and present risks to our reputation and brands. In addition, our ability to implement some initiatives or achieve some goals is dependent on external factors.
Our content does not always successfully attract and retain subscribers in the quantities that we expect. Our content is subject to cost pressures and may cost more than we expect. We may not successfully manage our costs to meet our profitability goals.
We have experienced flat subscriber growth or net losses of subscribers in periods. Our content does not always successfully attract and retain subscribers in the quantities that we expect. Our content is subject to cost pressures and may cost more than we expect. We may not successfully manage our costs to meet our profitability goals.
Some of these and future investments may ultimately result in returns that are negative or low, the ultimate business prospects of the businesses related to these investments are uncertain, and these investments may impact the resources available to, and the profitability of, our other businesses.
The ultimate success of these investments is uncertain, some of these and future investments may ultimately result in returns that are negative or lower than anticipated, and these investments may impact the resources available to, and the profitability of, our other businesses.
We enter into long-term contracts for both the acquisition and the distribution of media programming and products, including contracts for the acquisition of programming rights for sporting events and other programs, and contracts for the distribution of our programming to content distributors.
We face risks related to the renewal of long-term programming or distribution contracts on sufficiently favorable terms. We enter into long-term contracts for both the acquisition and the distribution of media programming and products, including contracts for the acquisition of programming rights for sporting events and other programs, and contracts for the distribution of our programming to content distributors.
For example, notwithstanding our announced plans to rationalize costs, the costs of our DTC strategy, and associated losses, may continue to grow or be reduced more slowly than anticipated, which may impact our distribution strategy across businesses/distribution platforms, the types of content we distribute through various businesses/distribution platforms, and the timing and sequencing of content windows.
For example, notwithstanding our continuing efforts to rationalize costs, the cost of executing on our DTC strategy may continue to grow or be reduced more slowly than anticipated, which may impact our distribution strategy across businesses/distribution platforms, the types of content we distribute through various businesses/distribution platforms, the timing and sequencing of content windows and ultimately, the profitability of our DTC products and other businesses/distribution platforms.
As a result, our portfolio of programming rights we acquire and the distributors of our programming and the portfolio of programming rights our distributors acquire have changed and may continue to change over time.
As a result, our portfolio of acquired programming rights, such as sporting events, and the distributors of our programming and the portfolio of programming rights our distributors acquire have changed and will continue to change over time.
Our response will require increased costs to comply, the implementation of new reporting processes, entailing additional compliance risk, a skilled workforce and other incremental investments. In addition, we have undertaken or announced a number of related actions and goals, which will require changes to operations and ongoing investment.
Our response has increased our compliance costs, including from increased investment in technology and appropriate expertise and required the implementation of new reporting processes, entailing additional compliance risk. In addition, we have undertaken or announced a number of related actions and goals, which will require changes to operations and ongoing investment.
In addition, our ability to implement some initiatives or achieve some goals is dependent on external factors. For example, our ability to meet certain environmental sustainability goals or initiatives will depend in part on third-party collaboration, the availability of suppliers that can satisfy new requirements, mitigation innovations and/or the availability of economically feasible solutions at scale.
For example, our ability to meet certain environmental sustainability goals or initiatives will depend in part on third-party collaboration, the availability of suppliers that can satisfy new requirements, mitigation innovations and/or the availability of economically feasible solutions at scale. We face risks related to damage to our reputation or brands.
For example, labor costs in our parks and resorts have increased, and we expect will continue to increase, as a result of collective bargaining agreements and wage laws and regulations where we operate. Future health outbreaks and pandemics may lead to an increase in the cost of medical insurance and expenses.
For example, labor costs in our parks and resorts have increased, and we expect will continue to increase, as a result of collective bargaining agreements and wage laws and regulations where we operate.
In addition, in recent years, other investments have included expansion and renovation of certain of our theme parks, expansion of our fleet of cruise ships, the acquisition of TFCF Corporation (TFCF) and investments related to DTC offerings.
In addition, in recent years, we have made significant investments in our businesses, such as expansion and renovation of certain of our theme parks, additional cruise ships, the acquisition of TFCF Corporation (TFCF) and investments related to DTC offerings.
Generally, our revenues and profitability are adversely impacted when our entertainment offerings and products, as well as our methods to make our offerings and products available to consumers, do not achieve sufficient consumer acceptance.
Generally, revenues from, and profitability of, each of our businesses are adversely impacted when our entertainment offerings and products, as well as our methods to make our offerings and products available to consumers, do not align with constantly evolving consumer preferences and tastes or achieve sufficient consumer acceptance.
The current or continued strength in the value of the U.S. dollar has adversely impacted the U.S. dollar value of revenue we receive and expect to receive from other markets and may reduce international demand for our products and services.
The current or continued strength in the value of the U.S. dollar adversely impacts the U.S. dollar value of revenue we receive and expect to receive from other markets and contributes to reduced international demand for our domestic products and services, including international travel to our domestic parks and resorts.
We also make investments in existing or new businesses, including investments in international expansion of our business and in new business lines. For example, in fiscal 2023, we announced that we are developing plans to accelerate and expand investment in our Experiences segment.
We also make investments in existing or new businesses, including investments in international expansion of our business and in new business lines. For example, in fiscal 2024, we announced plans for additional expansion of our fleet of cruise ships, and in recent years to expand investment in our Experiences segment.
Moreover, we must often invest substantial amounts in content production and acquisition, acquisition of sports rights, launch of new sports-related studio programming, theme park attractions, cruise ships or hotels and other facilities or customer facing platforms before we 18 TABLE OF CONTENTS know the extent to which these products will earn consumer acceptance, and these products may be introduced into a significantly different market or economic or social climate from the one we anticipated at the time of the investment decisions.
Moreover, we must often make substantial investments in content production and acquisition, acquisition of sports and programming rights, theme park attractions, cruise ships or hotels and other facilities or customer facing platforms before we know the extent to which these products will earn consumer acceptance, and the market, economic or social conditions are sometimes significantly different from the ones we anticipated at the time of the investment decisions.
We develop and maintain an information security program to identify and mitigate cyber risks but the development and maintenance of this program is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated.
We have developed and maintain an information security program to assess, identify and manage cyber risks and the continued development and maintenance of this program is costly and requires ongoing monitoring and updating as technologies change, including as a result of the proliferation of AI tools, and efforts to overcome security measures become more sophisticated.
For example, in 2022 the U.S. and other countries implemented a series of sanctions against Russia in response to events in Russia and Ukraine; U.S. agencies have enhanced trade restrictions, including new prohibitions on the importation of goods from certain regions and other jurisdictions are considering similar measures; U.S. state governments have become more active in passing legislation targeted at specific sectors and companies and applying existing laws in novel ways to new technologies, including streaming and online commerce; and in many countries/regions around the world (including but not limited to the EU) regulators are requiring us to broadcast on our linear (or display on our DTC streaming services) programming produced in specific countries as well as invest specified amounts of our revenues in local content productions.
For example, in 2022 the U.S. and other countries implemented a series of sanctions against Russia in response to events in Russia and Ukraine; U.S. agencies have enhanced trade restrictions, including new prohibitions on the importation of goods from certain regions and other jurisdictions are considering similar measures; and U.S. state governments have become more active in passing legislation targeted at specific sectors and companies and applying existing laws in novel ways to new technologies, including streaming and online commerce.
The cost to purchase NBCU’s equity interest in Hulu and related obligations to NBCU and any such other costs could negatively impact the Company’s cash position and result in the Company incurring additional indebtedness. GENERAL RISKS The price of our common stock has been, and may continue to be, volatile.
The cost to purchase NBCU’s equity interest in Hulu and related obligations to NBCU and any such other costs could negatively impact the Company’s cash position and result in the Company incurring additional indebtedness.
When these changes or events occur, we have incurred and may continue to incur costs to change our business strategy and have needed and may in the future need to write-down the value of assets.
We incur costs in connection with changes to our business strategy and have needed and may in the future need to write-down the value of our assets.
The success of our DTC strategy and profitability of our DTC streaming services will be impacted by the success of the reorganization of our media and entertainment business and our ability to advance our DTC strategies, drive subscriber additions and retention based on the attractiveness of our content, 23 TABLE OF CONTENTS manage churn in reaction to price increases, achieve the desired financial impact of the Disney+ ad supported service, pricing model and price increases, our ability to execute on cost realignment and the effects of our determinations with regard to distribution for our creative content across windows.
The success of our DTC strategy and profitability of our DTC streaming services will be impacted by the success of the reorganization of our media and entertainment business and the strategic change in our approach to content curation initiated in fiscal 2023; our ability to drive subscriber additions and retention based on the attractiveness of our content, manage churn, achieve the desired financial impact of our DTC pricing, bundling and distribution determinations, the Disney+ ad supported service, monetization and cost containment strategy and the launch of the ESPN flagship DTC service; and the effects of our determinations with regard to distribution for our creative content across windows.
New laws and regulations, as well as changes in any of these current laws and regulations or regulator activities in any of these areas, or others, may require us to spend additional amounts to comply with the regulations, or may restrict our ability to offer products and services in ways that are profitable, and create an increasingly unpredictable regulatory landscape.
New laws and regulations, as well as changes in any of these current laws and regulations or regulator activities (or, if applicable, private litigation to enforce such laws and regulations) in any of these areas, or others, may require us to incur additional compliance costs, may restrict our ability to execute on our business strategies as planned or offer products and services in ways that are profitable, and create an increasingly unpredictable regulatory landscape.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation Property / Approximate Size Use Business Segment Burbank, CA & surrounding cities (1) Land (201 acres) & Buildings (4,694,000 ft 2 ) Owned Office/Production/Warehouse (includes 240,000 ft 2 leased to third-party tenants) Corporate/Entertainment/Experiences Burbank, CA & surrounding cities (1) Buildings (1,834,000 ft 2 ) Leased Office/Warehouse Corporate/Entertainment/Experiences Los Angeles, CA Land (22 acres) & Buildings (605,000 ft 2 ) Owned Office/Production/Technical Warehouse Corporate/Entertainment Los Angeles, CA Buildings (2,640,000 ft 2 ) Leased Office/Production/Technical/Theater Corporate/Entertainment/Experiences New York, NY Buildings (51,000 ft 2 ) Owned Office Corporate/Entertainment/Sports New York, NY Buildings (2,190,000 ft 2 ) Leased Office/Production/Theater/Warehouse (includes 679,000 ft 2 leased to third-party tenants) Corporate/Entertainment/Sports/Experiences Bristol, CT Land (117 acres) & Buildings (1,174,000 ft 2 ) Owned Office/Production/Technical Sports Bristol, CT Buildings (273,000 ft 2 ) Leased Office/Warehouse/Technical Sports Emeryville, CA Land (20 acres) & Buildings (430,000 ft 2 ) Owned Office/Production/Technical Entertainment Emeryville, CA Buildings (97,000 ft 2 ) Leased Office/Storage Entertainment San Francisco, CA Buildings (517,000 ft 2 ) Leased Office/Production/Technical/Theater (includes 47,000 ft 2 leased to third-party tenants) Corporate/Entertainment USA & Canada Land and Buildings (Multiple sites and sizes) Owned and Leased Office/ Production/Transmitter/Theaters/Warehouse Corporate/Entertainment/Experiences Europe, Asia, Australia & Latin America Buildings (Multiple sites and sizes) Leased Office/Warehouse/Retail/Residential Entertainment/Experiences (1) Surrounding cities include Glendale, CA, North Hollywood, CA and Sun Valley, CA
Biggest changeLocation Property / Approximate Size Use Business Segment Burbank, CA & surrounding cities (1) Land (201 acres) & Buildings (4,733,000 ft 2 ) Owned Office/Production/Warehouse (includes 240,000 ft 2 leased to third-party tenants) Corporate/Entertainment/Experiences Burbank, CA & surrounding cities (1) Buildings (1,760,000 ft 2 ) Leased Office/Warehouse Corporate/Entertainment/Experiences Los Angeles, CA Land (22 acres) & Buildings (599,000 ft 2 ) Owned Office/Production/Technical Warehouse Corporate/Entertainment Los Angeles, CA Buildings (2,434,000 ft 2 ) Leased Office/Production/Technical/Theater Corporate/Entertainment/Experiences New York, NY Buildings (1,104,000 ft 2 ) Owned Office Corporate/Entertainment/Sports New York, NY Buildings (2,202,000 ft 2 ) Leased Office/Production/Theater/Warehouse (includes 696,000 ft 2 leased to third-party tenants) Corporate/Entertainment/Experiences/Sports Bristol, CT Land (117 acres) & Buildings (1,078,000 ft 2 ) Owned Office/Production/Technical Sports Bristol, CT Buildings (273,000 ft 2 ) Leased Office/Warehouse/Technical Sports Emeryville, CA Land (20 acres) & Buildings (430,000 ft 2 ) Owned Office/Production/Technical Entertainment Emeryville, CA Buildings (94,000 ft 2 ) Leased Office/Storage Entertainment San Francisco, CA Buildings (536,000 ft 2 ) Leased Office/Production/Technical/Theater (includes 47,000 ft 2 leased to third-party tenants) Corporate/Entertainment USA & Canada Land and Buildings (Multiple sites and sizes) Owned and Leased Office/ Production/Transmitter/Theaters/Warehouse Corporate/Entertainment/Experiences Europe, Asia, Australia & Latin America Buildings (Multiple sites and sizes) Leased Office/Warehouse/Retail/Residential Entertainment/Experiences (1) Surrounding cities include Glendale, CA, North Hollywood, CA and Sun Valley, CA
Film and television library properties and television stations owned by the Company are described in Item 1 under the caption Entertainment . 26 TABLE OF CONTENTS The Company and its subsidiaries own and lease properties throughout the world.
Film and television library properties and television stations owned by the Company are described in Item 1 under the caption Entertainment . 28 TABLE OF CONTENTS The Company and its subsidiaries own and lease properties throughout the world.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeJohnston, 62, as Senior Executive Vice President and Chief Financial Officer commencing on December 4, 2023. Mr. Johnston currently serves as Executive Vice President and Chief Financial Officer, from 2010, and Vice Chairman, from 2015, of PepsiCo, Inc. (“PepsiCo”). In addition to providing strategic financial leadership for PepsiCo in these roles, Mr.
Biggest changeHe served as Chairman of the Board of Directors from 2012 to 2021. (2) Mr. Johnston was appointed Chief Financial Officer effective December 4, 2023. Prior to joining the Company, he served as Executive Vice President and Chief Financial Officer, from 2010, and Vice Chairman, from 2015 to November 2023 of PepsiCo, Inc. (“PepsiCo”).
Prior to that, he served as Senior Vice President and Chief Financial Officer of PepsiCo Beverages and Foods from 2002 through 2005, and as PepsiCo’s Senior Vice President of Mergers and Acquisitions in 2002. Mr.
Prior to that, he served as Senior Vice President and Chief Financial Officer of PepsiCo Beverages and Foods from 2002 through 2005, and as PepsiCo’s Senior Vice President of Mergers and Acquisitions in 2002.
Johnston’s portfolio has included a variety of responsibilities, including leadership of PepsiCo’s information technology function from 2015, PepsiCo’s global e-commerce business from 2015 to 2019, and the Quaker Foods North America division from 2014 to 2016.
His portfolio included a variety of responsibilities, including leadership of PepsiCo’s information technology function from 2015, PepsiCo’s global e-commerce business from 2015 to 2019, and the Quaker Foods North America division from 2014 to 2016.
Each of the executive officers has been employed by the Company in the position or positions indicated in the list and pertinent notes below. 27 TABLE OF CONTENTS The executive officers of the Company are: Name Age Title Executive Officer Since Robert A. Iger 72 Chief Executive Officer (1) 2022 Kevin A.
Each of the executive officers has been employed by the Company in the position or positions indicated in the list and pertinent notes below. 29 TABLE OF CONTENTS The executive officers of the Company are: Name Age Title Executive Officer Since Robert A. Iger 73 Chief Executive Officer (1) 2022 Hugh F.
Johnston joined PepsiCo in 1987 as a Business Planner and held various finance positions until 1999 when he left to join Merck & Co., Inc. as Vice President, Retail, a position which he held until he rejoined PepsiCo in 2002. 28 TABLE OF CONTENTS PART II
He joined PepsiCo in 1987 as a Business Planner and held various finance positions until 1999 when he left to join Merck & Co., Inc. as Vice President, Retail, a position which he held until he rejoined PepsiCo in 2002. Mr.
Prior to that, she served as Global Communications Director for Instagram, a product of Meta Platforms, Inc., from March 2017 to March 2019, where she oversaw the communications teams in North America, Latin America, Europe and Asia. On November 2, 2023, the Company appointed Hugh F.
Prior to that, she served as Global Communications Director for Instagram, a product of Meta Platforms, Inc., from March 2017 to March 2019, where she oversaw the communications teams in North America, Latin America, Europe and Asia. 30 TABLE OF CONTENTS PART II
Lansberry 60 Interim Chief Financial Officer (2) 2023 Horacio E. Gutierrez 58 Senior Executive Vice President, General Counsel and Chief Compliance Officer (3) 2022 Sonia L. Coleman 51 Senior Executive Vice President and Chief Human Resources Officer (4) 2023 Kristina K. Schake 53 Senior Executive Vice President and Chief Communications Officer (5) 2022 (1) Mr.
Johnston 63 Senior Executive Vice President and Chief Financial Officer (2) 2023 Horacio E. Gutierrez 59 Senior Executive Vice President, Chief Legal and Compliance Officer (3) 2022 Sonia L. Coleman 52 Senior Executive Vice President and Chief Human Resources Officer (4) 2023 Kristina K. Schake 54 Senior Executive Vice President and Chief Communications Officer (5) 2022 (1) Mr.
Iger was appointed Chief Executive Officer effective November 20, 2022. He previously served as Executive Chairman of the Company from February 2020 through December 2021 and as Chief Executive Officer of the Company from September 2005 to February 2020. (2) Mr. Lansberry was appointed Interim Chief Financial Officer effective July 1, 2023.
Iger was appointed Chief Executive Officer effective November 20, 2022. He also serves as a director on the Board of Directors from November 20, 2022. He previously served as Executive Chairman of the Company from February 2020 through December 2021 and as Chief Executive Officer of the Company from September 2005 to February 2020.
Lansberry has held a wide range of roles in the Company’s parks and experiences businesses, including in finance, business development, alliances and operations. (3) Mr. Gutierrez was appointed Senior Executive Vice President and General Counsel effective February 1, 2022 and appointed Chief Compliance Officer effective March 27, 2023.
Gutierrez was appointed Senior Executive Vice President and General Counsel effective February 1, 2022, appointed Senior Executive Vice President, General Counsel and Chief Compliance Officer effective March 27, 2023 and appointed Senior Executive Vice President, Chief Legal and Compliance Officer effective December 21, 2023.
Removed
He was previously Executive Vice President and Chief Financial Officer of the Company’s Parks, Experiences and Products segment from March 2018 and Executive Vice President and Chief Financial Officer, Walt Disney Parks and Resorts from May 2017. Over his more than 35 years with the Company, Mr.
Added
Johnston serves on the board of directors of Microsoft Corporation, which he joined in 2017, and on the board of HCA Healthcare, Inc., which he joined in 2021. (3) Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. Market for the Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is listed on the New York Stock Exchange under the ticker symbol “DIS”. As of September 30, 2023, the approximate number of common shareholders of record was 768,000.
Biggest changeITEM 5. Market for the Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is listed on the New York Stock Exchange under the ticker symbol “DIS”. See Note 11 of the Consolidated Financial Statements for a summary of the Company’s dividends in fiscal 2024.
Added
As of September 28, 2024, the approximate number of common shareholders of record was 734,000.
Added
The following table provides information about Company purchases of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act during the quarter ended September 28, 2024: Period Total Number of Shares Purchased Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2) June 30, 2024 – July 31, 2024 2,732,000 $ 94.70 2,732,000 374 million August 1, 2024 – August 31, 2024 1,536,500 89.18 1,536,500 372 million September 1, 2024 – September 28, 2024 742,500 91.23 742,500 372 million Total 5,011,000 92.49 5,011,000 372 million (1) Amounts exclude the one percent excise tax on stock repurchases imposed by the Inflation Reduction Act of 2022.
Added
(2) Under a share repurchase program implemented effective February 7, 2024, the Company is authorized to repurchase a total of 400 million shares of its common stock. The repurchase program does not have an expiration date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following transactions are recognized in segment revenues and eliminated in total Company revenue: • Fees paid by Hulu to the Sports segment and other Entertainment segment businesses for the right to air their linear networks on Hulu Live • Fees paid by the Entertainment segment to the Sports segment to program ESPN on ABC and certain sports content on Star+ BUSINESS SEGMENT RESULTS - 2023 vs. 2022 The following table presents revenues from our operating segments and other components of revenues: ($ in millions) 2023 2022 % Change Better (Worse) Entertainment $ 40,635 $ 39,569 3 % Sports 17,111 17,270 (1) % Experiences 32,549 28,085 16 % Eliminations (1,397) (1,179) (18) % Content License Early Termination — (1,023) 100 % Revenues $ 88,898 $ 82,722 7 % The following table presents income from our operating segments and other components of income from continuing operations before income taxes: ($ in millions) 2023 2022 % Change Better (Worse) Entertainment operating income $ 1,444 $ 2,126 (32) % Sports operating income 2,465 2,710 (9) % Experiences operating income 8,954 7,285 23 % Content License Early Termination — (1,023) 100 % Corporate and unallocated shared expenses (1,147) (1,159) 1 % Restructuring and impairment charges (1) (3,836) (237) >(100) % Other income (expense), net 96 (667) nm Interest expense, net (1,209) (1,397) 13 % TFCF and Hulu acquisition amortization (1,998) (2,353) 15 % Income from continuing operations before income taxes $ 4,769 $ 5,285 (10) % (1) Includes the A+E gain. 37 TABLE OF CONTENTS Entertainment Revenue and operating results for Entertainment are as follows: ($ in millions) 2023 2022 % Change Better (Worse) Revenues: Linear Networks $ 11,701 $ 12,828 (9) % Direct-to-Consumer 19,886 17,975 11 % Content Sales/Licensing and Other 9,048 8,766 3 % $ 40,635 $ 39,569 3 % Segment operating income (loss): Linear Networks $ 4,119 $ 5,198 (21) % Direct-to-Consumer (2,496) (3,424) 27 % Content Sales/Licensing and Other (179) 352 nm $ 1,444 $ 2,126 (32) % Linear Networks Operating results for Linear Networks are as follows: ($ in millions) 2023 2022 % Change Better (Worse) Revenues Affiliate fees $ 7,369 $ 7,739 (5) % Advertising 4,159 4,877 (15) % Other 173 212 (18) % Total revenues 11,701 12,828 (9) % Operating expenses (5,577) (5,777) 3 % Selling, general, administrative and other (2,641) (2,571) (3) % Depreciation and amortization (54) (65) 17 % Equity in the income of investees 690 783 (12) % Operating Income $ 4,119 $ 5,198 (21) % Revenues Affiliate fees are as follows: ($ in millions) 2023 2022 % Change Better (Worse) Domestic $ 6,136 $ 6,257 (2) % International 1,233 1,482 (17) % $ 7,369 $ 7,739 (5) % The decrease in domestic affiliate fees reflected a decrease of 5% from fewer subscribers, partially offset by an increase of 4% from higher contractual rates.
Biggest changeEliminations The following transactions are recognized in segment revenues and eliminated in total Company revenue: • Fees paid by Hulu to ESPN and the Entertainment linear networks business for the right to air their networks on Hulu Live • Fees paid by ABC Network and Disney+ to ESPN to program ESPN on ABC and certain sports content on Disney+, respectively BUSINESS SEGMENT RESULTS - 2024 vs. 2023 The following table presents revenues from our operating segments: ($ in millions) 2024 2023 % Change Better (Worse) Entertainment $ 41,186 $ 40,635 1 % Sports 17,619 17,111 3 % Experiences 34,151 32,549 5 % Eliminations (1,595) (1,397) (14) % Revenues $ 91,361 $ 88,898 3 % The following table presents income from our operating segments and other components of income from continuing operations before income taxes: ($ in millions) 2024 2023 % Change Better (Worse) Entertainment operating income $ 3,923 $ 1,444 >100 % Sports operating income 2,406 2,465 (2) % Experiences operating income 9,272 8,954 4 % Corporate and unallocated shared expenses (1,435) (1,147) (25) % Restructuring and impairment charges (1) (3,595) (3,836) 6 % Other income (expense), net (65) 96 nm Interest expense, net (1,260) (1,209) (4) % TFCF and Hulu acquisition amortization (1,677) (1,998) 16 % Income from continuing operations before income taxes $ 7,569 $ 4,769 59 % (1) Restructuring and impairment charges in the prior year i nclude the A+E gain. 36 TABLE OF CONTENTS Entertainment Revenue and operating results for the Entertainment segment are as follows: ($ in millions) 2024 2023 % Change Better (Worse) Revenues: Linear Networks $ 10,692 $ 11,701 (9) % Direct-to-Consumer 22,776 19,886 15 % Content Sales/Licensing and Other 7,718 9,048 (15) % $ 41,186 $ 40,635 1 % Segment operating income (loss): Linear Networks $ 3,452 $ 4,119 (16) % Direct-to-Consumer 143 (2,496) nm Content Sales/Licensing and Other 328 (179) nm $ 3,923 $ 1,444 >100 % Revenues The increase in Entertainment revenues was due to subscription revenue growth, partially offset by decreases in theatrical distribution, affiliate and TV/VOD distribution revenues.
The Experiences segment primarily generates revenue from the sale of admissions to theme parks, the sale of food, beverage and merchandise at our theme parks and resorts, charges for room nights at hotels, sales of cruise vacations, sales and rentals of vacation club properties, royalties from licensing our IP for use on consumer goods and the sale of branded merchandise.
Experiences The Experiences segment primarily generates revenue from the sale of admissions to theme parks, the sale of food, beverage and merchandise at our theme parks and resorts, charges for room nights at hotels, sales of cruise vacations, sales and rentals of vacation club properties, royalties from licensing our IP for use on consumer goods and the sale of branded merchandise.
The quantitative assessment compares the fair value of each goodwill reporting unit to its carrying amount, and to the extent the carrying amount exceeds the fair value, an impairment of goodwill is recognized for the excess up to the amount of goodwill allocated to the reporting unit.
The quantitative assessment compares the fair value of each reporting unit to its carrying amount, and to the extent the carrying amount exceeds the fair value, an impairment of goodwill is recognized for the excess up to the amount of goodwill allocated to the reporting unit.
It is possible, however, that future results of operations for any particular quarterly or annual period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to legal proceedings or our assumptions regarding other contingent matters. See Note 14 to the Consolidated Financial Statements for more detailed information on litigation exposure.
It is possible, however, that future results of operations for any particular quarterly or annual period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to legal proceedings or our assumptions regarding other contingent matters. See Note 14 to the Consolidated Financial Statements for more information on litigation exposure.
Revenues are also generated from sponsorships and co-branding opportunities, real estate rent and sales, and royalties from Tokyo Disney Resort. Significant expenses include operating labor, costs of goods sold, infrastructure costs, depreciation and other operating expenses. Infrastructure costs include technology support costs, repairs and maintenance, utilities and fuel, property taxes, retail occupancy costs, insurance and transportation.
Revenues are also generated from sponsorships and co-branding opportunities, real estate rent and sales, and royalties from Tokyo Disney Resort. Significant expenses include operating labor, infrastructure costs, costs of goods sold and distribution costs, depreciation and other operating expenses. Infrastructure costs include technology support costs, repairs and maintenance, utilities and fuel, property taxes, retail occupancy costs, insurance and transportation.
DTC PRODUCT DESCRIPTIONS, KEY DEFINITIONS AND SUPPLEMENTAL INFORMATION Product Offerings In the U.S., Disney+, ESPN+ and Hulu SVOD Only are each offered as a standalone service or together as part of various multi-product offerings. Hulu Live TV + SVOD includes Disney+ and ESPN+. Disney+ is available in more than 150 countries and territories outside the U.S. and Canada.
DTC PRODUCT DESCRIPTIONS, KEY DEFINITIONS AND SUPPLEMENTAL INFORMATION Product Offerings In the U.S., Disney+, ESPN+ and Hulu SVOD Only are each offered as a standalone service or as part of various multi-product offerings. Hulu Live TV + SVOD includes Disney+ and ESPN+. Disney+ is available in more than 150 countries and territories outside the U.S. and Canada.
The tax benefits ultimately realized by the Company may differ from those recognized in our future financial statements based on a number of factors, including the Company’s decision to 65 TABLE OF CONTENTS settle rather than litigate a matter, relevant legal precedent related to similar matters and the Company’s success in supporting its filing positions with taxing authorities.
The tax benefits ultimately realized by the Company may differ from those recognized in our future financial statements based on a number of factors, including the Company’s decision to 54 TABLE OF CONTENTS settle rather than litigate a matter, relevant legal precedent related to similar matters and the Company’s success in supporting its filing positions with taxing authorities.
Revenues also include an intersegment allocation of revenues from the Experiences segment, which is meant to reflect royalties on consumer products merchandise licensing revenues generated on IP created by the Entertainment segment. Operating expenses at the Entertainment segment primarily consist of programming and production costs, technology support costs, operating labor, distribution costs and cost of sales.
Revenues also include an intersegment allocation of revenues from the Experiences segment, which is meant to reflect royalties on consumer products merchandise licensing revenues generated on IP created by the Entertainment segment. Operating expenses at the Entertainment segment primarily consist of programming and production costs, technology support costs, operating labor and distribution costs.
Production costs that are classified as individual are amortized based upon the ratio of the current period’s revenues to the estimated remaining total revenues (Ultimate Revenues). 62 TABLE OF CONTENTS With respect to produced films intended for theatrical release, the most sensitive factor affecting our estimate of Ultimate Revenues is theatrical performance.
Production costs that are classified as individual are amortized based upon the ratio of the current period’s revenues to the estimated remaining total revenues (Ultimate Revenues). 51 TABLE OF CONTENTS With respect to produced films intended for theatrical release, the most sensitive factor affecting our estimate of Ultimate Revenues is theatrical performance.
To determine the expected long-term rate of return on the plan assets, we consider the current and expected asset allocation, as well as historical and expected returns on each plan asset class. Our expected return on plan assets is 7.00%. A lower expected rate of return on plan assets will increase pension and postretirement medical expense.
To determine the expected long-term rate of return on the plan assets, we consider the current and expected asset allocation, as well as historical and expected returns on each plan asset class. Our expected return on plan assets is 7.25%. A lower expected rate of return on plan assets will increase pension and postretirement medical expense.
Subscribers to multi-product offerings in the U.S. are counted as a paid subscriber for each service included in the multi-product offering and subscribers to Hulu Live TV + SVOD are counted as one paid subscriber for each of the Hulu Live TV + SVOD, Disney+ and ESPN+ services.
Subscribers to multi-product offerings in the U.S. are counted as a paid subscriber for each of the Company's services included in the multi-product offering and subscribers to Hulu Live TV + SVOD are counted as one paid subscriber for each of the Hulu Live TV + SVOD, Disney+ and ESPN+ services.
(2) Attendance is used to analyze volume trends at our theme parks and is based on the number of unique daily entries, i.e. a person visiting multiple theme parks in a single day is counted only once. Our attendance count includes 46 TABLE OF CONTENTS complimentary entries but excludes entries by children under the age of three.
(2) Attendance is used to analyze volume trends at our theme parks and is based on the number of unique daily entries, i.e. a person visiting multiple theme parks in a single day is counted only once. Our attendance count includes complimentary entries but excludes entries by children under the age of three.
Alternatively, the Company may bypass the qualitative assessment and perform a quantitative impairment test. The qualitative assessment requires the consideration of factors such as recent market transactions, macroeconomic conditions and changes in projected future cash flows. The quantitative assessment compares the fair value of an indefinite-lived intangible asset to its carrying amount.
Alternatively, the Company may bypass the qualitative assessment and perform a quantitative impairment test. 53 TABLE OF CONTENTS The qualitative assessment requires the consideration of factors such as recent market transactions, macroeconomic conditions and changes in projected future cash flows. The quantitative assessment compares the fair value of an indefinite-lived intangible asset to its carrying amount.
Programming and production costs include the following: • Amortization of capitalized production costs and licensed programming rights • Subscriber-based fees for programming the Hulu Live service, including fees paid by Hulu to the Sports segment and other Entertainment segment businesses for the right to air their linear networks on Hulu Live • Production costs related to live programming (primarily news) • Amortization of participations and residual obligations • Fees paid to the Sports segment to program ESPN on ABC and certain sports content on Star+ Amortization of capitalized production costs and licensed programming rights is generally allocated across Entertainment’s businesses based on the estimated relative value of the distribution windows.
Programming and production costs include the following: • Amortization of capitalized production costs and licensed programming rights • Subscriber-based fees for programming the Hulu Live service, including fees paid by Hulu to the Sports segment and other Entertainment segment businesses for the right to air their linear networks on Hulu Live • Production costs related to live programming (primarily news) • Participations and residual expenses • Fees paid to the Sports segment to program ESPN on ABC and certain sports content on Disney+ Amortization of capitalized production costs and licensed programming rights is generally allocated across Entertainment’s businesses based on the estimated relative value of the distribution windows.
In times of economic turmoil, including COVID-19, our estimates and judgments with respect to the collectability of our receivables are subject to greater uncertainty than in more stable periods. If our estimate of uncollectible accounts is too low, costs and expenses may increase in future periods, and if it is too high, costs and expenses may decrease in future periods.
In times of economic turmoil our estimates and judgments with respect to the collectability of our receivables are subject to greater uncertainty than in more stable periods. If our estimate of uncollectible accounts is too low, costs and expenses may increase in future periods, and if it is too high, costs and expenses may decrease in future periods.
To test other indefinite-lived intangible assets for impairment, the Company first performs a qualitative assessment to determine if it is more likely than not that the carrying amount of each of its indefinite-lived intangible assets exceeds its fair 64 TABLE OF CONTENTS value. If it is, a quantitative assessment is required.
To test other indefinite-lived intangible assets for impairment, the Company first performs a qualitative assessment to determine if it is more likely than not that the carrying amount of each of its indefinite-lived intangible assets exceeds its fair value. If it is, a quantitative assessment is required.
A one percentage point change in the long-term asset return assumption would impact fiscal 2024 annual expense by approximately $170 million. Goodwill, Other Intangible Assets, Long-Lived Assets and Investments The Company is required to test goodwill and other indefinite-lived intangible assets for impairment on an annual basis and if current events or circumstances require, on an interim basis.
A one percentage point change in the long-term asset return assumption would impact fiscal 2025 annual expense by approximately $168 million. Goodwill, Other Intangible Assets, Long-Lived Assets and Investments The Company is required to test goodwill and other indefinite-lived intangible assets for impairment on an annual basis and if current events or circumstances require, on an interim basis.
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 September 30, 2023, the Company met this covenant by a significant margin.
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 September 28, 2024, the Company met this covenant by a significant margin.
Determining whether a long-lived asset is impaired requires various estimates and assumptions, including whether a triggering event has occurred, the identification of asset groups, estimates of future cash flows and the discount rate used to determine fair values. The Company has investments in equity securities.
Determining whether a long-lived asset is impaired requires various estimates and assumptions, including whether a triggering event has occurred, the identification of asset groups, estimates of future cash flows and the discount rate used to determine fair values.
In the current year, the Company revised its method of allocating revenue on the sales of Disneyland Paris vacation packages between hotel room revenue and admissions revenue. The new method resulted in a decrease in the percentage of revenue allocated to hotel rooms.
In the third quarter of the prior fiscal year, the Company revised its method of allocating revenue on the sales of Disneyland Paris vacation packages between hotel room revenue and admissions revenue. The new method resulted in a decrease in the percentage of revenue allocated to hotel rooms.
In India and certain other Southeast Asian countries, the service is branded Disney+ Hotstar. In certain Latin American countries, we offer Disney+ as well as Star+, a general entertainment SVOD service, which is available on a standalone basis or together with Disney+ (Combo+).
In India and certain other Southeast Asian countries, the service is branded Disney+ Hotstar. In certain Latin American countries prior to July 2024, we offered Disney+ as well as Star+, a general entertainment SVOD service, which was available on a standalone basis or together with Disney+ (Combo+).
If we had applied the new method in the prior year, the impact would have been a decrease of approximatel y $50 million i n the prior year.
If we had applied the new method in the first six months of the prior year, the impact would have been a decrease of approximatel y $30 million i n the prior year.
A one percentage point decrease in the assumed discount rate would increase total benefit expense for fiscal 2024 by approximately $200 million and would increase the projected benefit obligation at September 30, 2023 by approximately $2.0 billion.
A one percentage point decrease in the assumed discount rate would increase total benefit expense for fiscal 2025 by approximately $0.2 billion and would increase the projected benefit obligation at September 28, 2024 by approximately $2.4 billion.
A one 63 TABLE OF CONTENTS percentage point increase in the assumed discount rate would decrease total benefit expense and the projected benefit obligation by approximately $45 million and $1.8 billion, respectively.
A one 52 TABLE OF CONTENTS percentage point increase in the assumed discount rate would decrease total benefit expense and the projected benefit obligation by approximately $0.2 billion and $2.1 billion, respectively.
We increased our discount rate to 5.94% at the end of fiscal 2023 from 5.44% at the end of fiscal 2022 to reflect market interest rate conditions at our fiscal 2023 year-end measurement date.
We decreased our discount rate to 5.06% at the end of fiscal 2024 from 5.94% at the end of fiscal 2023 to reflect market interest rate conditions at our fiscal 2024 year-end measurement date.
(2) EPS is net of noncontrolling interest, where applicable. Total may not equal the sum of the column due to rounding. (3) Restructuring and impairment charges include the impact of a content license agreement termination with A+E, which generated a gain at A+E.
(2) EPS is net of noncontrolling interest, where applicable. Total may not equal the sum of the column due to rounding. (3) Includes amortization of intangibles related to TFCF equity investees. (4) Restructuring and impairment charges in the prior year include the impact of a content license agreement termination with A+E, which generated a gain at A+E.
For a summary of our significant accounting policies, including the accounting policies discussed below, see Note 2 to the Consolidated Financial Statements. Produced and Acquired/Licensed Content Costs We amortize and test for impairment capitalized film and television production costs based on whether the content is predominantly monetized individually or as a group.
Produced and Acquired/Licensed Content Costs We amortize and test for impairment capitalized film and television production costs based on whether the content is predominantly monetized individually or as a group. See Note 2 to the Consolidated Financial Statements for further discussion.
Accordingly, the Obligor Group’s cash flow and ability to service its debt, including the public debt, are dependent upon the earnings of the Company’s subsidiaries and the distribution of those earnings to the Obligor Group, whether by dividends, loans or otherwise. Holders of the guaranteed registered debt securities have a direct claim only against the Obligor Group.
Accordingly, the Obligor Group’s cash flow and ability to service its debt, including the public debt, are dependent upon the earnings of the Company’s subsidiaries and the distribution of those earnings to the Obligor Group, whether by dividends, loans or otherwise.
Set forth below are summarized financial information for the Obligor Group on a combined basis after elimination of (i) intercompany transactions and balances between TWDC and Legacy Disney and (ii) equity in the earnings from and investments in any subsidiary that is a non-Guarantor.
Holders of the guaranteed registered debt securities have a direct claim only against the Obligor Group. 56 TABLE OF CONTENTS Set forth below are summarized financial information for the Obligor Group on a combined basis after elimination of (i) intercompany transactions and balances between TWDC and Legacy Disney and (ii) equity in the earnings from and investments in any subsidiary that is a non-Guarantor.
Other Income (expense), net ($ in millions) 2023 2022 % Change Better (Worse) DraftKings gain (loss) $ 169 $ (663) nm Other, net (73) (4) >(100) % Other income (expense), net $ 96 $ (667) nm In fiscal 2023, the Company recognized a gain of $169 million on its investment in DraftKings, Inc.
Other Income (expense), net ($ in millions) 2024 2023 % Change Better (Worse) DraftKings gain $ — $ 169 (100) % Other, net (65) (73) 11 % Other income (expense), net $ (65) $ 96 nm In fiscal 2023, the Company recognized a gain of $169 million on its investment in DraftKings, Inc. (DraftKings), which was sold in fiscal 2023.
Hulu SVOD Only average monthly revenue per paid subscriber decreased from $12.72 to $12.17 due to lower advertising revenue, a higher mix of subscribers to multi-product offerings and lower per-subscriber premium and feature add-on revenue, partially offset by an increase in average retail pricing.
Hulu SVOD Only average monthly revenue per paid subscriber increased from $12.17 to $12.35 due to increases in retail pricing, partially offset by a lower mix of subscribers with premium add-ons and a higher mix of subscribers to multi-product and promotional offerings.
The par value and carrying value of total outstanding and guaranteed registered debt securities of the Obligor Group at September 30, 2023 was as follows: TWDC Legacy Disney ($ in millions) Par Value Carrying Value Par Value Carrying Value Registered debt with unconditional guarantee $ 35,163 $ 35,393 $ 8,121 $ 7,880 The guarantees by TWDC and Legacy Disney are full and unconditional and cover all payment obligations arising under the guaranteed registered debt securities.
The par value and carrying value of total outstanding and guaranteed registered debt securities of the Obligor Group at September 28, 2024 was as follows: TWDC Legacy Disney ($ in millions) Par Value Carrying Value Par Value Carrying Value Registered debt with unconditional guarantee $ 32,360 $ 33,148 $ 8,125 $ 8,024 The guarantees by TWDC and Legacy Disney are full and unconditional and cover all payment obligations arising under the guaranteed registered debt securities.
International Disney+ (excluding Disney+ Hotstar) average monthly revenue per paid subscriber decreased from $6.10 to $5.93 due to a higher mix of subscribers from lower-priced markets and an unfavorable Foreign Exchange Impact, partially offset by an increase in average retail pricing, a lower mix of wholesale subscribers and an increase in wholesale pricing.
International Disney+ (excluding Disney+ Hotstar) average monthly revenue per paid subscriber increased from $5.93 to $6.60 due to increases in retail pricing, partially offset by a higher mix of subscribers to ad-supported and promotional offerings and an unfavorable Foreign Exchange Impact.
See Note 8 to the Consolidated Financial Statements for information regarding the Company’s bank facilities and debt maturities. The Company may use 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.
The Company may use cash balances, operating cash flows, 50 TABLE OF CONTENTS 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.
Average Monthly Revenue Per Paid Subscriber Hulu and ESPN+ average monthly revenue per paid subscriber is calculated based on the average of the monthly average paid subscribers for each month in the period. The monthly average paid subscribers is calculated as the sum of the beginning of the month and end of the month paid subscriber count, divided by two.
The monthly average paid subscribers is calculated as the sum of the beginning of the month and end of the month paid subscriber count, divided by two. Disney+ average monthly revenue per paid subscriber is calculated using a daily average of paid subscribers for the period.
Hulu Live TV + SVOD average monthly revenue per paid subscriber increased from $87.62 to $90.52 due to an increase in average retail pricing, partially offset by lower advertising revenue, a higher mix of subscribers to multi-product offerings and lower per-subscriber premium and feature add-on revenue.
Hulu Live TV + SVOD average monthly revenue per paid subscriber increased from $90.52 to $95.12 due to higher retail pricing, partially offset by lower advertising, a lower mix of subscribers with premium add-ons and a higher mix of subscribers to promotional offerings.
Domestic Disney+ average monthly revenue per paid subscriber increased from $6.34 to $6.97 due to an increase in average retail pricing and higher advertising revenue, partially offset by a higher mix of subscribers to multi-product offerings.
Domestic Disney+ average monthly revenue per paid subscriber increased from $6.97 to $7.89 due to higher retail pricing, partially offset by a higher mix of subscribers to wholesale offerings.
Disney+ Hotstar average monthly revenue per paid subscriber increased from $0.68 to $0.88 driven by higher advertising revenue and increases in retail pricing, partially offset by a higher mix of wholesale subscribers.
Disney+ Hotstar average monthly revenue per paid subscriber increased from $0.66 to $0.96 due to higher retail pricing and higher advertising revenue, partially offset by a higher mix of subscribers in lower-priced markets.
(2) Fiscal 2023 includes $296 million for a goodwill impairment and $50 million for severance. 45 TABLE OF CONTENTS Experiences Operating results for Experiences are as follows: ($ in millions) 2023 2022 % Change Better (Worse) Revenues Theme park admissions $ 10,423 $ 8,602 21 % Resorts and vacations 7,949 6,410 24 % Parks & Experiences merchandise, food and beverage 7,712 6,579 17 % Merchandise licensing and retail 4,358 4,609 (5) % Parks licensing and other 2,107 1,885 12 % Total revenues 32,549 28,085 16 % Operating expenses (17,129) (14,936) (15) % Selling, general, administrative and other (3,675) (3,403) (8) % Depreciation and amortization (2,789) (2,451) (14) % Equity in the loss of investees (2) (10) 80 % Operating Income $ 8,954 $ 7,285 23 % Revenues The increase in theme park admissions revenue was due to increases of 12% from attendance growth and 10% from higher average per capita ticket revenue.
(2) Fiscal 2023 includes $296 million for a goodwill impairment and $50 million for severance. 44 TABLE OF CONTENTS Experiences Operating results for the Experiences segment are as follows: ($ in millions) 2024 2023 % Change Better (Worse) Revenues Theme park admissions $ 11,171 $ 10,423 7 % Resorts and vacations 8,375 7,949 5 % Parks & Experiences merchandise, food and beverage 8,039 7,712 4 % Merchandise licensing and retail 4,307 4,358 (1) % Parks licensing and other 2,259 2,107 7 % Total revenues 34,151 32,549 5 % Operating expenses (18,356) (17,129) (7) % Selling, general, administrative and other (3,944) (3,675) (7) % Depreciation and amortization (2,579) (2,789) 8 % Equity in the loss of investees — (2) 100 % Operating Income $ 9,272 $ 8,954 4 % Revenues - Theme park admissions The increase in theme park admissions revenue was due to increases of 5% from higher average per capita ticket revenue and 2% from attendance growth.
The increase in fiscal 2023 compared to fiscal 2022 was driven by higher technology spending to support our streaming services. Capital expenditures at Experiences are principally for theme park and resort expansion, new attractions, cruise ships, capital improvements and systems infrastructure.
Capital expenditures at Experiences are principally for theme park and resort expansion, new attractions, cruise ships, capital improvements and systems infrastructure. The increase in capital expenditures in fiscal 2024 compared to fiscal 2023 was due to higher spending on cruise ship fleet expansion, theme park and resort expansion and new attractions.
Equity in the Income of Investees Income from equity investees decreased $93 million, to $690 million from $783 million, due to lower income from A+E attributable to decreases in advertising and affiliate revenue, partially offset by higher program sales income.
Equity in the Income of Investees Income from equity investees decreased $151 million, to $539 million from $690 million, due to lower income from A+E attributable to decreases in advertising and affiliate revenue.
The Company tested its indefinite-lived intangible assets, long-lived assets and investments for impairment and recorded non-cash impairment charges of $2.3 billion, $0.2 billion and $0.3 billion in fiscal 2023, 2022 and 2021, respectively. The fiscal 2023 charges primarily related to content impairments resulting from a strategic change in our approach to content curation.
The Company tested its indefinite-lived intangible assets, long-lived assets and investments for impairment and recorded non-cash impairment charges of $0.7 billion and $2.3 billion in fiscal 2024 and 2023, respectively. The fiscal 2024 charges related to impairments of retail assets, content assets, and equity investments.
Legacy Disney and TWDC are collectively referred to as “Obligor Group”, and individually, as a “Guarantor”.
(formerly known as The Walt Disney Company) (“Legacy Disney”). Legacy Disney and TWDC are collectively referred to as “Obligor Group”, and individually, as a “Guarantor”.
The following table provides supplemental revenue and operating income detail for Sports: ($ in millions) 2023 2022 % Change Better (Worse) Supplemental revenue detail ESPN Domestic $ 14,945 $ 14,636 2 % International 1,437 1,434 — % 16,382 16,070 2 % Star (India) 729 1,200 (39) % $ 17,111 $ 17,270 (1) % Supplemental operating income (loss) detail ESPN Domestic $ 2,881 $ 2,814 2 % International (39) 78 nm 2,842 2,892 (2) % Star (India) (432) (237) (82) % Equity in the income of investees 55 55 — % $ 2,465 $ 2,710 (9) % Items Excluded from Segment Operating Income Related to Sports The following table presents supplemental information for items related to Sports that are excluded from segment operating income: ($ in millions) 2023 2022 % Change Better (Worse) TFCF acquisition amortization (1) $ (388) $ (399) 3 % Restructuring and impairment charges (2) (346) (1) >(100) % (1) Represents amortization of intangible assets.
Supplemental revenue and operating income The following table provides supplemental revenue and operating income (loss) detail for the Sports segment: ($ in millions) 2024 2023 % Change Better (Worse) Supplemental revenue detail ESPN Domestic $ 15,339 $ 14,945 3 % International 1,439 1,437 — % 16,778 16,382 2 % Star India 841 729 15 % $ 17,619 $ 17,111 3 % Supplemental operating income (loss) detail ESPN Domestic $ 3,056 $ 2,881 6 % International (72) (39) (85) % 2,984 2,842 5 % Star India (636) (432) (47) % Equity in the income of investees 58 55 5 % $ 2,406 $ 2,465 (2) % Items Excluded from Segment Operating Income Related to Sports The following table presents supplemental information for items related to Sports that are excluded from segment operating income: ($ in millions) 2024 2023 % Change Better (Worse) TFCF acquisition amortization (1) $ (333) $ (388) 14 % Restructuring and impairment charges (2) (12) (346) 97 % (1) Represents amortization of intangible assets.
Interest Expense, net ($ in millions) 2023 2022 % Change Better (Worse) Interest expense $ (1,973) $ (1,549) (27) % Interest income, investment income and other 764 152 >100 % Interest expense, net $ (1,209) $ (1,397) 13 % The increase in interest expense was due to higher average rates, partially offset by lower average debt balances and higher capitalized interest.
Interest Expense, net ($ in millions) 2024 2023 % Change Better (Worse) Interest expense $ (2,070) $ (1,973) (5) % Interest income, investment income and other 810 764 6 % Interest expense, net $ (1,260) $ (1,209) (4) % The increase in interest expense was due to higher average rates, partially offset by lower average debt balances.
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 : Domestic International (1) Total 2023 2022 2023 2022 2023 2022 Parks Increase (decrease) Attendance (2) 6 % >100 % 55 % 54 % 17 % 87 % Per Capita Guest Spending (3) 3 % 13 % 21 % 24 % 2 % 18 % Hotels Occupancy (4) 85 % 82 % 74 % 56 % 83 % 76 % Available Room Nights (in thousands) (5) 10,096 10,073 3,178 3,179 13,274 13,252 Change in Per Room Guest Spending (6) — % 19 % 14 % (7) % 1 % 15 % (1) Per capita guest spending growth rate and per room guest spending growth rate exclude the impact of changes in foreign currency exchange rates.
Revenues - Parks licensing and other The increase in parks licensing and other revenue was attributable to higher sponsorship revenues, a favorable Foreign Exchange Impact and higher royalties from Tokyo Disney Resort. 45 TABLE OF CONTENTS Key Metrics 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 : Domestic International (1) 2024 2023 2024 2023 Parks Increase (decrease) Attendance (2) 1 % 6 % 9 % 55 % Per Capita Guest Spending (3) 3 % 3 % 4 % 21 % Hotels Occupancy (4) 85 % 85 % 82 % 74 % Available Room Nights (in thousands) (5) 10,193 10,096 3,178 3,178 Change in Per Room Guest Spending (6) 3 % — % 2 % 14 % (1) Per capita guest spending growth rate and per room guest spending growth rate exclude the impact of changes in foreign currency exchange rates.
In addition, the Company could undertake other measures to ensure sufficient liquidity, such as continuing to not declare dividends; raising financing; reducing capital spending; reducing film and episodic content investments; or implementing furloughs or reductions in force.
In addition, the Company could undertake other measures to ensure sufficient liquidity, such as raising additional financing, reducing or not declaring future dividends; reducing or stopping share repurchases; reducing capital spending; reducing film and episodic content investments; or implementing further cost-saving initiatives.
Operating expenses are as follows: ($ in millions) 2023 2022 % Change Better (Worse) Programming and production costs $ (5,383) $ (4,688) (15) % Distribution costs and cost of goods sold (897) (820) (9) % $ (6,280) $ (5,508) (14) % The increase in programming and production costs was due to higher production cost amortization attributable to the increase in theatrical revenue, partially offset by a decrease as a result of lower TV/VOD distribution revenues.
Operating expenses ($ in millions) 2024 2023 % Change Better (Worse) Programming and production costs $ (4,135) $ (5,383) 23 % Distribution costs and cost of goods sold (766) (897) 15 % $ (4,901) $ (6,280) 22 % The decrease in programming and production costs was due to lower production cost amortization attributable to the decreases in theatrical and TV/VOD distribution revenues, partially offset by higher film cost impairments.
As of September 30, 2023, Moody’s Investors Service’s long- and short-term debt ratings for the Company were A2 and P-1 (Stable), respectively, Standard and Poor’s long- and short-term debt ratings for the Company were A- and A-2 (Positive), respectively, and Fitch’s long- and short-term debt ratings for the Company were A- and F2 (Stable), respectively.
As of September 28, 2024, Moody’s Ratings’ long- and short-term debt ratings for the Company were A2 and P-1 (Stable), respectively, S&P Global Ratings’ long- and short-term debt ratings for the Company were A- and A-2 (Positive), respectively, and Fitch Ratings’ long- and short-term debt ratings for the Company were A- and F2 (Stable), respectively.
The following table presents supplemental revenue and operating income detail for the Experiences segment: ($ in millions) 2023 2022 % Change Better (Worse) Supplemental revenue detail Parks & Experiences Domestic $ 22,677 $ 20,131 13 % International 5,475 3,297 66 % Consumer Products 4,397 4,657 (6) % $ 32,549 $ 28,085 16 % Supplemental operating income (loss) detail Parks & Experiences Domestic $ 5,876 $ 5,332 10 % International 1,104 (237) nm Consumer Products 1,974 2,190 (10) % $ 8,954 $ 7,285 23 % 47 TABLE OF CONTENTS Items Excluded from Segment Operating Income Related to Experiences The following table presents supplemental information for items related to Experiences that are excluded from segment operating income: ($ in millions) 2023 2022 % Change Better (Worse) Charge related to a legal ruling $ (101) $ — nm Restructuring and impairment charges (1) (25) — nm TFCF acquisition amortization (8) (8) — % (1) Charges for the current year were due to severance.
Supplemental revenue and operating income The following table presents supplemental revenue and operating income detail for the Experiences segment: ($ in millions) 2024 2023 % Change Better (Worse) Supplemental revenue detail Parks & Experiences Domestic $ 23,596 $ 22,677 4 % International 6,183 5,475 13 % Consumer Products 4,372 4,397 (1) % $ 34,151 $ 32,549 5 % Supplemental operating income detail Parks & Experiences Domestic $ 5,878 $ 5,876 — % International 1,354 1,104 23 % Consumer Products 2,040 1,974 3 % $ 9,272 $ 8,954 4 % Items Excluded from Segment Operating Income Related to Experiences The following table presents supplemental information for items related to Experiences that are excluded from segment operating income: ($ in millions) 2024 2023 % Change Better (Worse) Restructuring and impairment charges (1) $ (331) $ (25) >(100) % Charge related to a legal ruling (65) (101) 36 % TFCF acquisition amortization (7) (8) 13 % (1) Charges for the current year were due to an impairment of assets at our retail business.
Below is a discussion of the major revenue and expense categories for our business segments. Costs and expenses for each segment consist of operating expenses, selling, general, administrative and other costs, and depreciation and amortization. Selling, general, administrative and other costs include third-party and internal marketing expenses.
Costs and expenses for each segment consist of operating expenses, selling, general, administrative and other costs, and depreciation and amortization. Selling, general, administrative and other costs include third-party and internal marketing expenses.
In addition, these revenues will be impacted and may be further impacted in the future from the lapse of carriage agreements to certain networks. • Direct-to-Consumer, which primarily generates revenue from subscription fees and advertising • Content Sales/Licensing, which primarily generates revenue from the sale of film and episodic content in the TV/VOD and home entertainment markets, distribution of films in the theatrical market, licensing of our music rights, sales of tickets to stage play performances and licensing of our IP for use in stage plays.
Entertainment The Entertainment segment generates revenue from film, episodic and other content that is produced and distributed across three significant lines of business: • Linear Networks, which primarily generates revenue from affiliate fees and advertising • Direct-to-Consumer, which primarily generates revenue from subscription fees and advertising • Content Sales/Licensing, which primarily generates revenue from the sale of film and episodic content in the TV/VOD and home entertainment markets, distribution of films in the theatrical market, licensing of our music rights, sales of tickets to stage play performances and licensing of our IP for use in stage plays.
Our future cash flows are based on internal forecasts for each reporting unit, which consider projected inflation and other economic indicators, as well as industry growth projections. Discount rates for each reporting unit are determined based on the inherent risks of each reporting unit’s underlying operations.
The discounted cash flow analyses are sensitive to our estimated projected future cash flows as well as the discount rates used to calculate their present value. Our future cash flows are based on internal forecasts for each reporting unit, which consider projected inflation and other economic indicators, as well as industry growth projections.
The following table provides supplemental revenue and operating income detail for Linear Networks: ($ in millions) 2023 2022 % Change Better (Worse) Supplemental revenue detail Domestic $ 9,406 $ 10,073 (7) % International 2,295 2,755 (17) % $ 11,701 $ 12,828 (9) % Supplemental operating income detail Domestic $ 2,735 $ 3,358 (19) % International 694 1,057 (34) % Equity in the income of investees 690 783 (12) % $ 4,119 $ 5,198 (21) % 39 TABLE OF CONTENTS Direct-to-Consumer Operating results for Direct-to-Consumer are as follows: ($ in millions) 2023 2022 % Change Better (Worse) Revenues Subscription fees $ 16,420 $ 14,178 16 % Advertising 3,260 3,614 (10) % Other 206 183 13 % Total revenues 19,886 17,975 11 % Operating expenses (17,859) (15,641) (14) % Selling, general, administrative and other (4,168) (5,395) 23 % Depreciation and amortization (355) (363) 2 % Operating Loss $ (2,496) $ (3,424) 27 % Revenues The increase in subscription fees reflected increases of 11% from more subscribers, due to growth at Disney+ Core and, to a lesser extent, Hulu, and 7% from higher average rates due to increases in retail pricing, partially offset by a decrease of 2% from an unfavorable Foreign Exchange Impact.
Supplemental revenue and operating income The following table provides supplemental revenue and operating income detail for Linear Networks: ($ in millions) 2024 2023 % Change Better (Worse) Supplemental revenue detail Domestic $ 8,621 $ 9,406 (8) % International 2,071 2,295 (10) % $ 10,692 $ 11,701 (9) % Supplemental operating income detail Domestic $ 2,387 $ 2,735 (13) % International 526 694 (24) % Equity in the income of investees 539 690 (22) % $ 3,452 $ 4,119 (16) % 38 TABLE OF CONTENTS Direct-to-Consumer Operating results for Direct-to-Consumer are as follows: ($ in millions) 2024 2023 % Change Better (Worse) Revenues Subscription fees $ 18,796 $ 16,420 14 % Advertising 3,707 3,260 14 % Other 273 206 33 % Total revenues 22,776 19,886 15 % Operating expenses (17,748) (17,859) 1 % Selling, general, administrative and other (4,574) (4,168) (10) % Depreciation and amortization (311) (355) 12 % Operating Income (Loss) $ 143 $ (2,496) nm Revenues - Subscription fees Growth in subscription fees reflected increases of 10% attributable to higher effective rates due to increases in retail pricing and 6% from subscriber growth, partially offset by a decrease of 2% from an unfavorable Foreign Exchange Impact.
Results of operations ($ in millions) 2023 Revenues $ — Costs and expenses — Net income (loss) from continuing operations (2,160) Net income (loss) (2,160) Net income (loss) attributable to TWDC shareholders (2,160) 67 TABLE OF CONTENTS Balance Sheet ($ in millions) September 30, 2023 October 1, 2022 Current assets $ 8,544 $ 5,665 Noncurrent assets 2,927 1,948 Current liabilities 5,746 3,741 Noncurrent liabilities (excluding intercompany to non-Guarantors) 43,307 46,218 Intercompany payables to non-Guarantors 154,018 148,958
Results of operations ($ in millions) 2024 Revenues $ — Costs and expenses — Net income (loss) (2,497) Net income (loss) attributable to TWDC shareholders (2,497) Balance Sheet ($ in millions) September 28, 2024 September 30, 2023 Current assets $ 2,767 $ 8,544 Noncurrent assets 3,336 2,927 Current liabilities 7,640 5,746 Noncurrent liabilities (excluding intercompany to non-Guarantors) 40,608 43,307 Intercompany payables to non-Guarantors 157,925 154,018
Certain Items Impacting Results in the Year Results for fiscal 2023 were impacted by the following: • TFCF and Hulu acquisition amortization of $1,998 million • Other income of $96 million due to the DraftKings gain of $169 million • Restructuring and impairment charges of $3,892 million Results for fiscal 2022 were impacted by the following: • TFCF and Hulu acquisition amortization of $2,353 million • A $1.0 billion reduction in revenue for the Content License Early Termination • Other expense of $667 million due to the DraftKings loss of $663 million • Restructuring and impairment charges of $237 million A summary of the impact of these items on EPS is as follows: ($ in millions, except per share data) Pre-Tax Income (Loss) Tax Benefit (Expense) (1) After-Tax Income (Loss) EPS Favorable (Adverse) (2) Year Ended September 30, 2023: Restructuring and impairment charges (3) $ (3,836) $ 717 $ (3,119) $ (1.69) TFCF and Hulu acquisition amortization (4) (1,998) 465 (1,533) (0.82) Other income (expense), net 96 (13) 83 0.05 Total $ (5,738) $ 1,169 $ (4,569) $ (2.46) Year Ended October 1, 2022: TFCF and Hulu acquisition amortization (4) $ (2,353) $ 549 $ (1,804) $ (0.97) Contract License Early Termination (1,023) 238 (785) (0.43) Other income (expense), net (667) 156 (511) (0.28) Restructuring and impairment charges (237) 55 (182) (0.10) Total $ (4,280) $ 998 $ (3,282) $ (1.78) (1) Tax benefit (expense) is determined using the tax rate applicable to the individual item.
Certain Items Impacting Results in the Year Results for fiscal 2024 were impacted by the following: • Restructuring and impairment charges of $3,595 million • TFCF and Hulu acquisition amortization of $1,677 million • Other expense of $65 million related to a legal ruling • Income Tax Reserve Adjustments of $418 million Results for fiscal 2023 were impacted by the following: • Restructuring and impairment charges of $3,892 million • TFCF and Hulu acquisition amortization of $1,998 million • Other income, net of $96 million, primarily due to the DraftKings gain ($169 million), partially offset by a charge related to a legal ruling ($101 million) 34 TABLE OF CONTENTS A summary of the impact of these items on EPS is as follows: ($ in millions, except per share data) Pre-Tax Income (Loss) Tax Benefit (Expense) (1) After-Tax Income (Loss) EPS Favorable (Adverse) (2) Year Ended September 28, 2024: Restructuring and impairment charges $ (3,595) $ 293 $ (3,302) $ (1.78) TFCF and Hulu acquisition amortization (3) (1,677) 391 (1,286) (0.68) Other expense (65) 11 (54) (0.03) Income Tax Reserve Adjustments — 418 418 0.23 Total $ (5,337) $ 1,113 $ (4,224) $ (2.26) Year Ended September 30, 2023: Restructuring and impairment charges (4) $ (3,836) $ 717 $ (3,119) $ (1.69) TFCF and Hulu acquisition amortization (3) (1,998) 465 (1,533) (0.82) Other income, net 96 (13) 83 0.05 Total $ (5,738) $ 1,169 $ (4,569) $ (2.46) (1) Tax benefit (expense) is determined using the tax rate applicable to the individual item.
International programming and production costs decreased primarily due to a favorable Foreign Exchange Impact and the impact of channel closures. The decrease in other operating expenses was due to the realignment of certain costs primarily to selling, general and administrative costs, lower technology and distribution costs and a favorable Foreign Exchange Impact.
International programming and production costs were comparable to the prior year as the impact of channel closures and a favorable Foreign Exchange Impact were largely offset by inflation. The decrease in other operating expenses was due to lower technology and distribution costs including the impact of international channel closures.
Paid subscribers (1) as of: (in millions) September 30, 2023 October 1, 2022 % Change Better (Worse) Disney+ Domestic (U.S. and Canada) 46.5 46.4 — % International (excluding Disney+ Hotstar) (1) 66.1 56.5 17 % Disney+ Core (2) 112.6 102.9 9 % Disney+ Hotstar 37.6 61.3 (39) % Hulu SVOD Only 43.9 42.8 3 % Live TV + SVOD 4.6 4.4 5 % Total Hulu (2) 48.5 47.2 3 % 40 TABLE OF CONTENTS Average Monthly Revenue Per Paid Subscriber (1) for the fiscal year ended: 2023 2022 % Change Better (Worse) Disney+ Domestic (U.S. and Canada) $ 6.97 $ 6.34 10 % International (excluding Disney+ Hotstar) (1) 5.93 6.10 (3) % Disney+ Core 6.39 6.22 3 % Disney+ Hotstar 0.66 0.88 (25) % Hulu SVOD Only 12.17 12.72 (4) % Live TV + SVOD 90.52 87.62 3 % (1) S ee discussion on page 66 —DTC Product Descriptions, Key Definitions and Supplemental Information (2) Total may not equal the sum of the column due to rounding.
Key Metrics In addition to revenue, costs and operating income, management uses the following key metrics (1) to analyze trends and evaluate the overall performance of Disney+, Disney+ Hotstar and Hulu, and we believe these metrics are useful to investors in analyzing the business: Paid subscribers at: (in millions) September 28, 2024 September 30, 2023 % Change Better (Worse) Disney+ Domestic (U.S. and Canada) 56.0 46.5 20 % International (excluding Disney+ Hotstar) (1) 66.7 66.1 1 % Disney+ Core (2) 122.7 112.6 9 % Disney+ Hotstar 35.9 37.6 (5) % Hulu SVOD Only 47.4 43.9 8 % Live TV + SVOD 4.6 4.6 — % Total Hulu (2) 52.0 48.5 7 % 39 TABLE OF CONTENTS Average Monthly Revenue Per Paid Subscriber for the fiscal year ended: 2024 2023 % Change Better (Worse) Disney+ Domestic (U.S. and Canada) $ 7.89 $ 6.97 13 % International (excluding Disney+ Hotstar) (1) 6.60 5.93 11 % Disney+ Core 7.18 6.39 12 % Disney+ Hotstar 0.96 0.66 45 % Hulu SVOD Only 12.35 12.17 1 % Live TV + SVOD 95.12 90.52 5 % (1) See discussion on page 55 —DTC Product Descriptions, Key Definitions and Supplemental Information (2) Total may not equal the sum of the column due to rounding.
Fiscal 2022 includes impairments of assets related to exiting our businesses in Russia. (2) In fiscal 2023, amortization of step-up on film and television costs was $439 million and amortization of intangible assets was $1,151 million. In fiscal 2022, amortization of step-up on film and television costs was $634 million and amortization of intangible assets was $1,300 million.
(2) In fiscal 2024, amortization of step-up on film and television costs was $271 million and amortization of intangible assets was $1,054 million. In fiscal 2023, amortization of step-up on film and television costs was $439 million and amortization of intangible assets was $1,151 million.
Service revenues reflected an approximate 1 percentage point decrease due to an unfavorable movement of the U.S. dollar against major currencies including the impact of our hedging program (Foreign Exchange Impact).
These increases were partially offset 32 TABLE OF CONTENTS by lower theatrical distribution revenue, a decrease in TV/VOD distribution sales and lower affiliate revenue. Service revenues reflected an approximate 1 percentage point decrease due to an unfavorable movement of the U.S. dollar against major currencies including the impact of our hedging program (Foreign Exchange Impact).
Sports Operating results for Sports are as follows: ($ in millions) 2023 2022 % Change Better (Worse) Revenues Affiliate fees $ 10,590 $ 10,796 (2) % Advertising 3,920 4,370 (10) % Subscription fees 1,517 1,113 36 % Other 1,084 991 9 % Total revenues 17,111 17,270 (1) % Operating expenses (13,314) (13,084) (2) % Selling, general, administrative and other (1,314) (1,441) 9 % Depreciation and amortization (73) (90) 19 % Equity in the income of investees 55 55 — % Operating Income $ 2,465 $ 2,710 (9) % Revenues Affiliate fees are as follows: ($ in millions) 2023 2022 % Change Better (Worse) ESPN Domestic $ 9,267 $ 9,437 (2) % International 1,051 1,084 (3) % 10,318 10,521 (2) % Star (India) 272 275 (1) % $ 10,590 $ 10,796 (2) % The decrease in domestic ESPN affiliate fees was due to decreases of 7% from fewer subscribers and 1% from the temporary suspension of carriage with an affiliate, partially offset by an increase of 5% from higher contractual rates. 43 TABLE OF CONTENTS Lower international ESPN affiliate fees were attributable to decreases of 14% from an unfavorable Foreign Exchange Impact and 3% from fewer subscribers, partially offset by an increase of 14% from higher contractual rates.
Sports Operating results for the Sports segment are as follows: ($ in millions) 2024 2023 % Change Better (Worse) Revenues Affiliate fees $ 10,418 $ 10,590 (2) % Advertising 4,388 3,920 12 % Subscription fees 1,650 1,517 9 % Other 1,163 1,084 7 % Total revenues 17,619 17,111 3 % Operating expenses (13,934) (13,314) (5) % Selling, general, administrative and other (1,298) (1,314) 1 % Depreciation and amortization (39) (73) 47 % Equity in the income of investees 58 55 5 % Operating Income $ 2,406 $ 2,465 (2) % Revenues - Affiliate fees ($ in millions) 2024 2023 % Change Better (Worse) ESPN Domestic $ 9,131 $ 9,267 (1) % International 1,049 1,051 — % 10,180 10,318 (1) % Star India 238 272 (13) % $ 10,418 $ 10,590 (2) % The decrease in domestic ESPN affiliate revenue was due to a decrease of 8% from fewer subscribers, partially offset by an increase of 7% from higher effective rates.
Depending on the market, our services can be purchased on our websites or through third-party platforms/apps or are available via wholesale arrangements. Paid Subscribers Paid subscribers reflect subscribers for which we recognized subscription revenue. Subscribers cease to be a paid subscriber as of their effective cancellation date or as a result of a failed payment method.
At the end of June 2024, we merged these services into a single Disney+ product offering. Depending on the market, our services can be purchased on our websites or through third-party platforms/apps or are available via wholesale arrangements. Paid Subscribers Paid subscribers reflect subscribers for which we recognized subscription revenue.
It includes the following sections: • Consolidated Results and Non-Segment Items • Business Segment Results • Corporate and Unallocated Shared Expenses • Restructuring Activities • Liquidity and Capital Resources • Critical Accounting Policies and Estimates • DTC Product Descriptions, Key Definitions and Supplemental Information • Supplemental Guarantor Financial Information 30 TABLE OF CONTENTS CONSOLIDATED RESULTS AND NON-SEGMENT ITEMS In fiscal 2023, the Company reorganized into three business segments: Entertainment, Sports and Experiences (renamed from Disney Parks, Experiences and Products).
It includes the following sections: • Consolidated Results and Non-Segment Items • Business Segment Results • Corporate and Unallocated Shared Expenses • Liquidity and Capital Resources • Developments and Trends • Critical Accounting Policies and Estimates • DTC Product Descriptions, Key Definitions and Supplemental Information • Supplemental Guarantor Financial Information In Item 7, we discuss fiscal 2024 and 2023 results and comparisons of fiscal 2024 results to fiscal 2023 results.
The decrease in capital expenditures in fiscal 2023 compared to fiscal 2022 was due to lower spending on cruise ship fleet expansion. The increase in capital expenditures in fiscal 2022 compared to fiscal 2021 was due to cruise ship fleet expansion. Capital expenditures at Corporate primarily reflect investments in facilities, information technology infrastructure and equipment.
Capital expenditures at Corporate primarily reflect investments in facilities, information technology infrastructure and equipment. The decrease in fiscal 2024 compared to fiscal 2023 was due to lower spending on facilities. The Company currently expects its fiscal 2025 capital expenditures to total approximately $8 billion compared to fiscal 2024 capital expenditures of $5 billion.
Operating expenses consist primarily of programming and 36 TABLE OF CONTENTS production costs, technology support costs, operating labor and distribution costs. Programming and production costs include amortization of licensed sports rights and production costs related to live sports and other programming.
Sports The Sports segment primarily generates revenue from affiliate fees, advertising, subscription fees, pay-per-view fees and sub-licensing of sports rights. Operating expenses consist primarily of programming and production costs, technology support costs, operating labor and distribution costs. Programming and production costs include amortization of licensed sports rights and production costs related to live sports and other sports-related programming.
Changes to these significant assumptions, market trends, or macroeconomic events could produce test results in the future that differ, and we could be required to record additional impairment charges.
Changes to these assumptions and shifts in market trends or macroeconomic events could impact test results in the future.
Costs and Expenses Operating expenses are as follows: ($ in millions) 2023 2022 % Change Better (Worse) Operating labor $ (7,550) $ (6,577) (15) % Infrastructure costs (3,127) (2,766) (13) % Cost of goods sold and distribution costs (3,357) (2,938) (14) % Other operating expenses (3,095) (2,655) (17) % $ (17,129) $ (14,936) (15) % The increase in operating labor was due to inflation, higher volumes and increased costs for new guest offerings.
Operating expenses ($ in millions) 2024 2023 % Change Better (Worse) Operating labor $ (8,392) $ (7,550) (11) % Infrastructure costs (3,363) (3,127) (8) % Cost of goods sold and distribution costs (3,319) (3,357) 1 % Other operating expenses (3,282) (3,095) (6) % $ (18,356) $ (17,129) (7) % The increase in operating labor was primarily due to inflation and higher volumes.
Lower merchandise licensing and retail revenue was due to decreases of 2% from licensing, 2% from retail and 1% from an unfavorable Foreign Exchange Impact. The decrease in licensing revenue was due to lower sales of merchandise based on Star Wars, Frozen, Toy Story and Mickey and Friends, partially offset by higher minimum guarantee shortfall recognition.
Revenues - Merchandise licensing and retail Lower merchandise licensing and retail revenue was due to decreases of 1% from an unfavorable Foreign Exchange Impact and 1% from retail, partially offset by an increase of 1% from merchandise licensing. Lower retail revenue was due to a decrease in online sales.
To determine the fair value of our reporting units, we generally use a present value technique (discounted cash flows) corroborated by market multiples when available and as appropriate. The discounted cash flow analyses are sensitive to our estimated projected future cash flows as well as the discount rates used to calculate their present value.
For our annual impairment test, we bypassed the qualitative test and performed a quantitative assessment of goodwill for impairment. To determine the fair value of our reporting units, we generally use a present value technique (discounted cash flows) corroborated by market multiples when available and as appropriate.
Advertising revenue is as follows: ($ in millions) 2023 2022 % Change Better (Worse) Domestic $ 3,178 $ 3,716 (14) % International 981 1,161 (16) % $ 4,159 $ 4,877 (15) % 38 TABLE OF CONTENTS The decrease in domestic advertising revenue was due to decreases of 12% from fewer impressions and 2% from lower rates.
Lower international affiliate revenue was attributable to decreases of 8% from fewer subscribers driven by channel closures, 3% from lower effective rates and 3% from an unfavorable Foreign Exchange Impact. 37 TABLE OF CONTENTS Revenues - Advertising ($ in millions) 2024 2023 % Change Better (Worse) Domestic $ 2,705 $ 3,178 (15) % International 971 981 (1) % $ 3,676 $ 4,159 (12) % The decrease in domestic advertising revenue was due to a decrease of 14% from fewer impressions and 2% from lower rates.
Management’s Discussion and Analysis of Financial Condition and Results of Operations CONSOLIDATED RESULTS ($ in millions, except per share data) % Change Better (Worse) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Revenues: Services $ 79,562 $ 74,200 $ 61,768 7 % 20 % Products 9,336 8,522 5,650 10 % 51 % Total revenues 88,898 82,722 67,418 7 % 23 % Costs and expenses: Cost of services (exclusive of depreciation and amortization) (53,139) (48,962) (41,129) (9) % (19) % Cost of products (exclusive of depreciation and amortization) (6,062) (5,439) (4,002) (11) % (36) % Selling, general, administrative and other (15,336) (16,388) (13,517) 6 % (21) % Depreciation and amortization (5,369) (5,163) (5,111) (4) % (1) % Total costs and expenses (79,906) (75,952) (63,759) (5) % (19) % Restructuring and impairment charges (3,892) (237) (654) >(100) % 64 % Other income (expense), net 96 (667) 201 nm nm Interest expense, net (1,209) (1,397) (1,406) 13 % 1 % Equity in the income of investees, net 782 816 761 (4) % 7 % Income from continuing operations before income taxes 4,769 5,285 2,561 (10) % >100 % Income taxes from continuing operations (1,379) (1,732) (25) 20 % >(100) % Net income from continuing operations 3,390 3,553 2,536 (5) % 40 % Loss from discontinued operations, net of income tax benefit of $0, $14 and $9, respectively — (48) (29) 100 % (66) % Net income 3,390 3,505 2,507 (3) % 40 % Net income from continuing operations attributable to noncontrolling and redeemable noncontrolling interests (1,036) (360) (512) >(100) % 30 % Net income attributable to Disney $ 2,354 $ 3,145 $ 1,995 (25) % 58 % Diluted earnings per share attributable to Disney $ 1.29 $ 1.75 $ 1.11 (26) % 58 % Organization of Information Management’s Discussion and Analysis provides a narrative on the Company’s financial performance and condition that should be read in conjunction with the accompanying financial statements.
Management’s Discussion and Analysis of Financial Condition and Results of Operations CONSOLIDATED RESULTS ($ in millions, except per share data) 2024 2023 % Change Better (Worse) Revenues: Services $ 81,841 $ 79,562 3 % Products 9,520 9,336 2 % Total revenues 91,361 88,898 3 % Costs and expenses: Cost of services (exclusive of depreciation and amortization) (52,509) (53,139) 1 % Cost of products (exclusive of depreciation and amortization) (6,189) (6,062) (2) % Selling, general, administrative and other (15,759) (15,336) (3) % Depreciation and amortization (4,990) (5,369) 7 % Total costs and expenses (79,447) (79,906) 1 % Restructuring and impairment charges (3,595) (3,892) 8 % Other income (expense), net (65) 96 nm Interest expense, net (1,260) (1,209) (4) % Equity in the income of investees, net 575 782 (26) % Income before income taxes 7,569 4,769 59 % Income taxes (1,796) (1,379) (30) % Net income 5,773 3,390 70 % Net income attributable to noncontrolling interests (801) (1,036) 23 % Net income attributable to Disney $ 4,972 $ 2,354 >100 % Diluted earnings per share attributable to Disney $ 2.72 $ 1.29 >100 % Organization of Information Management’s Discussion and Analysis provides a narrative on the Company’s financial performance and condition that should be read in conjunction with the accompanying financial statements.
Items Excluded from Segment Operating Income Related to Entertainment The following table presents supplemental information for items related to Entertainment that are excluded from segment operating income: ($ in millions) 2023 2022 % Change Better (Worse) Restructuring and impairment charges (1) $ (3,431) $ (228) >(100) % TFCF and Hulu acquisition amortization (2) (1,602) (1,946) 18 % Content License Early Termination — (1,023) 100 % Gain on sale of a business 28 — nm (1) Fiscal 2023 includes $2,521 million for the Content Impairment Charge (net of the A+E gain), $425 million for a goodwill impairment, $248 million of severance, a $141 million impairment of an equity investment and $96 million primarily related to exiting our businesses in Russia.
Operating Income (Loss) from Content Sales/Licensing and Other Operating results from Content Sales/Licensing and Other increased $507 million, to income of $328 million from a loss of $179 million due to higher theatrical distribution results. 41 TABLE OF CONTENTS Items Excluded from Segment Operating Income Related to Entertainment The following table presents supplemental information for items related to Entertainment that are excluded from segment operating income: ($ in millions) 2024 2023 % Change Better (Worse) Restructuring and impairment charges (1) $ (1,670) $ (3,431) 51 % TFCF and Hulu acquisition amortization (2) (1,337) (1,602) 17 % Gain on sale of a business — 28 (100) % (1) Fiscal 2024 includes $1,287 million for goodwill impairments related to our general entertainment linear networks, $187 million for content impairments, a $158 million impairment of an equity investment and $38 million of severance.
The Company’s production and programming activity for fiscal 2023, 2022 and 2021 are as follows: ($ in millions) 2023 2022 2021 Beginning balances: Production and programming assets $ 37,667 $ 31,732 $ 27,193 Programming liabilities (3,940) (4,113) (4,099) 33,727 27,619 23,094 Spending: Licensed programming and rights 14,851 13,316 12,412 Produced content 12,323 16,611 12,848 27,174 29,927 25,260 Amortization: Licensed programming and rights (13,405) (13,432) (12,784) Produced content (11,861) (10,224) (8,175) (25,266) (23,656) (20,959) Change in production and programming costs 1,908 6,271 4,301 Content Impairment (2,266) — — Other non-cash activity (568) (163) 224 Ending balances: Production and programming assets 36,593 37,667 31,732 Programming liabilities (3,792) (3,940) (4,113) $ 32,801 $ 33,727 $ 27,619 60 TABLE OF CONTENTS The Company currently expects its fiscal 2024 spend on produced and licensed content to be approximately $25 billion, with sports rights expected to account for over 40% of spend.
Programming assets are generally recorded when the programming becomes available to us with a corresponding increase in programming liabilities. 48 TABLE OF CONTENTS The Company’s production and programming activity for fiscal 2024 and 2023 are as follows: ($ in millions) 2024 2023 Beginning balances: Production and programming assets $ 36,593 $ 37,667 Programming liabilities (3,792) (3,940) 32,801 33,727 Spending: Licensed programming and rights 13,619 14,851 Produced content 9,816 12,323 23,435 27,174 Amortization: Licensed programming and rights (14,027) (13,405) Produced content (10,454) (11,861) (24,481) (25,266) Change in production and programming costs (1,046) 1,908 Content impairment (187) (2,266) Produced and licensed content reclassified to assets held for sale (1,084) — Other non-cash activity 233 (568) Ending balances: Production and programming assets 34,409 36,593 Programming liabilities (3,692) (3,792) $ 30,717 $ 32,801 The Company currently expects its fiscal 2025 spend on produced and licensed content to be approximately $24 billion including sports rights but excluding Star India.
Higher cost of goods sold and distribution costs were due to increased volumes, while the increase in infrastructure costs was due to higher operations support costs, increased costs for new guest offerings and higher technology spending. Other operating expenses increased due to higher volumes and inflation.
Higher infrastructure costs were primarily attributable to higher technology spending and an increase in operations support costs. The increase in other operating expenses was primarily due to an unfavorable Foreign Exchange Impact, higher volumes and increased operations support costs.
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, which was a net benefit in fiscal 2022 and an expense in fiscal 2021. This increase was partially offset by investment losses in fiscal 2022 compared to investment gains in fiscal 2021.
The increase in interest income, investment income and other was driven by a larger benefit from pension and postretirement benefit costs, other than service cost, and investments gains in the current year compared to losses in the prior year, partially offset by the impact of lower cash and cash equivalent balances.
The increase in international ESPN advertising revenue was due to an increase of 16% from higher impressions, partially offset by a decrease of 6% from an unfavorable Foreign Exchange Impact. The increase in impressions was attributable to higher average viewership.
The decrease in international ESPN advertising revenue was due to a decrease of 11% from an unfavorable Foreign Exchange Impact, partially offset by increases of 5% from higher rates and 2% from higher average viewership. Higher Star India advertising revenue was attributable to airing two significant ICC cricket tournaments in the current year compared to one in the prior year.
For our entertainment DTC services reporting unit, a 25 basis point increase in the discount rate used to determine fair value would result in an impairment of $0.5 billion, and a 1% reduction in projected cash flows would result in a decrease in the excess fair value over carrying amount by approximately $0.9 billion.
An approximate 40 basis point increase in the discount rate or an approximate 6% reduction in projected annual cash flows used to determine the fair value of the entertainment reporting unit would effectively eliminate the excess fair value over carrying amount.
Parks & Experiences merchandise, food and beverage revenue growth was due to increases of 82% from higher volumes and 9% from higher average guest spending. Merchandise licensing and retail revenue was comparable to the prior year, as a decrease of 8% from retail was offset by an increase of 8% from licensing.
Revenues - Parks & Experiences merchandise, food and beverage Parks & Experiences merchandise, food and beverage revenue growth was due to increases of 2% from higher volumes and 2% from higher average guest spending.
Lower international advertising revenue reflected decreases of 8% from an unfavorable Foreign Exchange Impact and 6% from fewer impressions driven by channel closures, partially offset by an increase of 12% from higher rates.
International advertising revenue decreased modestly compared to the prior year as decreases of 3% from an unfavorable Foreign Exchange Impact and 3% from fewer impressions were partially offset by an increase of 4% from higher rates.
The EPS increase was due to growth at Experiences, partially offset by lower operating results at Entertainment, higher income tax expense and the Content License Early Termination. 33 TABLE OF CONTENTS Revenues Service revenues for fiscal 2022 increased 20%, or $12.4 billion, to $74.2 billion, due to increased revenues at our theme parks and resorts, subscription revenue growth and, to a lesser extent, higher theatrical distribution and advertising revenue.
The EPS increase was due to higher operating income at Entertainment. Revenues Service revenues for fiscal 2024 increased 3%, or $2.3 billion, to $81.8 billion, due to higher subscription revenue, growth at our parks and experiences businesses, and, to a lesser extent, higher advertising revenue.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+2 added−1 removed10 unchanged
Biggest changeThe Company’s computations are based on the interrelationships between movements in various interest rates, currencies, commodities and equity prices (a variance/co-variance technique). These interrelationships were determined by observing interest rate, foreign currency, commodity and equity market changes over the preceding quarter for the calculation of VAR amounts at each fiscal quarter end.
Biggest changeThese interrelationships were determined by observing interest rate, foreign currency, commodity and equity market changes over the preceding quarter for the calculation of VAR amounts at each fiscal quarter end. The model includes all of the Company’s debt, interest rate and foreign exchange, and commodities derivatives, and market sensitive equity investments.
ITEM 8. Financial Statements and Supplementary Data See Index to Financial Statements and Supplemental Data on page 77 . ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
ITEM 8. Financial Statements and Supplementary Data See Index to Financial Statements and Supplemental Data on page 67 . ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
It is the Company’s policy to enter into foreign currency and interest rate derivative transactions and other financial instruments only to the extent considered necessary to meet its objectives as stated above. The Company does not enter into these transactions or any other hedging transactions for speculative purposes. See Note 17 of the Consolidated Financial Statements for additional information.
It is the Company’s policy to enter into foreign currency and interest rate derivative transactions and other financial instruments only to the extent considered necessary to meet its objectives as stated above. The Company does not enter into these transactions or any other hedging transactions for speculative purposes.
Forecasted transactions, firm commitments and accounts receivable and payable denominated in foreign currencies, which certain of these instruments are intended to hedge, were excluded from the model. 68 TABLE OF CONTENTS The VAR model is a risk analysis tool and does not purport to represent actual losses in fair value that will be incurred by the Company, nor does it consider the potential effect of favorable changes in market factors.
The VAR model is a risk analysis tool and does not purport to represent actual losses in fair value that will be incurred by the Company, nor does it consider the potential effect of favorable changes in market factors.
The estimated maximum potential one-day loss in fair value, calculated using the VAR model, is as follows (unaudited, in millions): Fiscal 2023 Interest Rate Sensitive Financial Instruments Currency Sensitive Financial Instruments Equity Sensitive Financial Instruments Commodity Sensitive Financial Instruments Combined Portfolio Year end fiscal 2023 VAR $ 258 $ 45 $ 4 $ 4 $ 284 Average VAR 336 58 13 4 360 Highest VAR 403 76 23 5 425 Lowest VAR 258 45 4 4 284 Year end fiscal 2022 VAR 376 71 20 4 395 The VAR for Hong Kong Disneyland Resort and Shanghai Disney Resort is immaterial as of September 30, 2023 and has been excluded from the above table.
The estimated maximum potential one-day loss in fair value, calculated using the VAR model, is as follows (unaudited, in millions): Fiscal 2024 Interest Rate Sensitive Financial Instruments Currency Sensitive Financial Instruments Equity Sensitive Financial Instruments Commodity Sensitive Financial Instruments Combined Portfolio Year end fiscal 2024 VAR $ 235 $ 40 $ 7 $ 2 $ 255 Average VAR 290 48 5 3 315 Highest VAR 416 57 7 4 444 Lowest VAR 235 40 4 2 255 Year end fiscal 2023 VAR 258 45 4 4 284 The VAR for Asia Theme Parks is immaterial as of September 28, 2024 and has been excluded from the above table.
VAR on a combined basis decreased to $284 million at September 30, 2023 from $395 million at October 1, 2022 due to reduced interest rate volatility and lower sensitivity of our debt portfolio to movement of interest rates.
VAR on a combined basis decreased to $255 million at September 28, 2024 from $284 million at September 30, 2023 due to reduced interest rate volatility.
Value at Risk (VAR) The Company utilizes a VAR model to estimate the maximum potential one-day loss in the fair value of its interest rate, foreign exchange, commodities and market sensitive equity financial instruments. The VAR model estimates were made assuming normal market conditions and a 95% confidence level. Various modeling techniques can be used in a VAR computation.
See Note 17 of the Consolidated Financial Statements for additional information. 57 TABLE OF CONTENTS Value at Risk (VAR) The Company utilizes a VAR model to estimate the maximum potential one-day loss in the fair value of its interest rate, foreign exchange, commodities and market sensitive equity financial instruments.
Removed
The model includes all of the Company’s debt as well as all interest rate and foreign exchange derivative contracts, commodities and market sensitive equity investments.
Added
While various modeling techniques can be used in a VAR computation, the Company’s computations are based on a variance/co-variance technique, which assesses the interrelationships between movements in various interest rates, currencies, commodities and equity prices.
Added
Forecasted transactions, firm commitments and accounts receivable and payable denominated in foreign currencies, which certain of these instruments are intended to hedge, were excluded from the model. The VAR model estimates were made assuming normal market conditions and a 95% confidence level.

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