Condensed Consolidating Financial Information Condensed Consolidating Financial Information

12 Months Ended

Sep. 28, 2019

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidated Financial Statements

Condensed Consolidating Financial Information

On March 20, 2019, the Company completed its acquisition of TFCF (as described in Note 4), and the Company (referred to herein as “Legacy Disney”) and TFCF became subsidiaries of New Disney (referred to herein as “TWDC”). Legacy Disney has outstanding public debt that has been fully and unconditionally guaranteed by TWDC. In addition, Legacy Disney has provided a full and unconditional guarantee of debt held by TWDC. As of March 20, 2019, Legacy Disney is a 100% owned subsidiary of TWDC.

Set forth below are condensed consolidating financial statements presenting the results of operations, financial position and cash flows of TWDC, Legacy Disney and non-guarantor subsidiaries on a combined basis along with eliminations necessary to arrive at the reported information on a consolidated basis. This condensed consolidating financial information has been prepared and presented pursuant to the U.S. Securities and Exchange Commission Regulation S-X Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or being Registered.” This information is not intended to present the financial position, results of operations and cash flows of the individual companies or groups of companies in accordance with U.S. GAAP. Eliminations represent adjustments to eliminate investments in subsidiaries and intercompany balances and transactions.

TWDC was formed in June 2018, was a subsidiary of Legacy Disney until March 20, 2019, and did not have any balances or activities prior to fiscal 2019.

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the Year Ended September 28, 2019

(in millions)

	TWDC			Legacy Disney			Non-Guarantor Subsidiaries			Reclassifications & Eliminations			Total
Revenues	$	—		$	—		$	69,342		$	228		$	69,570
Costs and expenses
Operating expenses				—			(42,018		)	—			(42,018		)
Selling, general, administrative and other	—			(672		)	(10,869		)	—			(11,541		)
Depreciation and amortization	—			(1		)	(4,159		)	—			(4,160		)
Total costs and expenses	—			(673		)	(57,046		)	—			(57,719		)
Restructuring and impairment charges	—			—			(1,183		)	—			(1,183		)
Allocations to non-guarantor subsidiaries	—			652			(652		)	—			—
Other income/(expense), net	(236		)	94			4,727			(228		)	4,357
Interest income/(expense), net	(636		)	(699		)	357			—			(978		)
Equity in the income (loss) of investees, net	—			—			(103		)	—			(103		)
Income from continuing operations before income taxes	(872		)	(626		)	15,442			—			13,944
Income taxes from continuing operations	190			136			(3,357		)	—			(3,031		)
Earnings from subsidiary entities	3,026			12,802			—			(15,828		)	—
Net income from continuing operations	2,344			12,312			12,085			(15,828		)	10,913
Income (loss) from discontinued operations	671			291			671			(962		)	671
Net Income	3,015			12,603			12,756			(16,790		)	11,584
Less: Net income from continuing operations attributable to noncontrolling interests	—			—			(472		)	—			(472		)
Less: Net income from discontinued operations attributable to noncontrolling interests	—			—			(58		)	—			(58		)
Net income excluding noncontrolling interests	3,015			12,603			12,226			(16,790		)	11,054
Comprehensive income excluding noncontrolling interests	$	185		$	9,669		$	11,786		$	(13,400	)	$	8,240

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the Year Ended September 29, 2018

(in millions)

	TWDC		Legacy Disney			Non-Guarantor Subsidiaries			Reclassifications & Eliminations			Total
Revenues	$	—	$	—		$	59,520		$	(86	)	$	59,434
Costs and expenses
Operating expenses	—		—			(32,726		)	—			(32,726		)
Selling, general, administrative and other	—		(615		)	(8,245		)	—			(8,860		)
Depreciation and amortization	—		(1		)	(3,010		)	—			(3,011		)
Total costs and expenses	—		(616		)	(43,981		)	—			(44,597		)
Restructuring and impairment charges	—		—			(33		)	—			(33		)
Allocations to non-guarantor subsidiaries	—		576			(576		)	—			—
Other income, net	—		41			474			86			601
Interest expense, net	—		(698		)	124			—			(574		)
Equity in the income (loss) of investees, net	—		—			(102		)	—			(102		)
Income before taxes	—		(697		)	15,426			—			14,729
Income taxes	—		79			(1,742		)	—			(1,663		)
Earnings from subsidiary entities	—		13,216			—			(13,216		)	—
Consolidated net Income	—		12,598			13,684			(13,216		)	13,066
Less: Net income attributable to noncontrolling interests	—		—			(468		)	—			(468		)
Net income excluding noncontrolling interests	—		12,598			13,216			(13,216		)	12,598
Comprehensive income excluding noncontrolling interests	$	—	$	13,029		$	13,037		$	(13,037	)	$	13,029

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the Year Ended September 30, 2017

(in millions)

	TWDC		Legacy Disney			Non-Guarantor Subsidiaries			Reclassifications & Eliminations			Total
Revenues	$	—	$	—		$	54,952		$	185		$	55,137
Costs and expenses
Operating expenses	—		—			(30,306		)	—			(30,306		)
Selling, general, administrative and other	—		(450		)	(7,726		)	—			(8,176		)
Depreciation and amortization	—		(1		)	(2,781		)	—			(2,782		)
Total costs and expenses	—		(451		)	(40,813		)	—			(41,264		)
Restructuring and impairment charges	—		—			(98		)	—			(98		)
Allocations to non-guarantor subsidiaries	—		405			(405		)	—			—
Other income, net	—		163			100			(185		)	78
Interest expense, net	—		(510		)	125			—			(385		)
Equity in the income (loss) of investees, net	—		—			320			—			320
Income before income taxes	—		(393		)	14,181			—			13,788
Income taxes	—		126			(4,548		)	—			(4,422		)
Earnings from subsidiary entities	—		9,247			—			(9,247		)	—
Consolidated net Income	—		8,980			9,633			(9,247		)	9,366
Less: Net income attributable to noncontrolling interests	—		—			(386		)	—			(386		)
Net income excluding noncontrolling interests	—		8,980			9,247			(9,247		)	8,980
Comprehensive income excluding noncontrolling interests	$	—	$	9,431		$	9,153		$	(9,153	)	$	9,431

CONDENSED CONSOLIDATING BALANCE SHEET

As of September 28, 2019

(in millions)

	TWDC		Legacy Disney		Non-Guarantor Subsidiaries		Reclassifications & Eliminations			Total
ASSETS
Current assets
Cash and cash equivalents	$	554	$	—	$	4,864	$	—		$	5,418
Receivables, net	499		1		14,981		—			15,481
Inventories	—		4		1,645		—			1,649
Television costs and advances	—		—		4,597		—			4,597
Other current assets	83		4		898		(6		)	979
Total current assets	1,136		9		26,985		(6		)	28,124
Film and television costs	—		—		22,810		—			22,810
Investments in subsidiaries	125,999		281,041		—		(407,040		)	—
Other investments	—		—		3,224		—			3,224
Parks, resorts and other property, net	—		8		31,595		—			31,603
Intangible assets, net	—		—		23,215		—			23,215
Goodwill	—		—		80,293		—			80,293
Intercompany receivables	—		—		143,574		(143,574		)	—
Other assets	314		1,076		4,541		(1,216		)	4,715
Total assets	$	127,449	$	282,134	$	336,237	$	(551,836	)	$	193,984
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and other accrued liabilities	$	371	$	279	$	17,112	$	—		$	17,762
Current portion of borrowings	5,721		3,007		129		—			8,857
Deferred revenues and other			27		4,701		(6		)	4,722
Total current liabilities	6,092		3,313		21,942		(6		)	31,341
Non-current liabilities
Borrowings	23,182		13,061		1,886		—			38,129
Deferred income taxes	—		—		9,118		(1,216		)	7,902
Other long-term liabilities	859		4,626		8,275		—			13,760
Intercompany payables	8,439		135,135		—		(143,574		)	—
Total non-current liabilities	32,480		152,822		19,279		(144,790		)	59,791
Redeemable noncontrolling interests	—		—		8,963		—			8,963
Total Disney Shareholders’ equity	88,877		125,999		281,041		(407,040		)	88,877
Noncontrolling interests	—		—		5,012		—			5,012
Total equity	88,877		125,999		286,053		(407,040		)	93,889
Total liabilities and equity	$	127,449	$	282,134	$	336,237	$	(551,836	)	$	193,984

CONDENSED CONSOLIDATING BALANCE SHEET

As of September 29, 2018

(in millions)

	TWDC		Legacy Disney		Non-Guarantor Subsidiaries		Reclassifications & Eliminations			Total
ASSETS
Current assets
Cash and cash equivalents	$	—	$	1,367	$	2,783	$	—		$	4,150
Receivables, net	—		155		9,179		—			9,334
Inventories	—		4		1,388		—			1,392
Television costs and advances	—		—		1,314		—			1,314
Other current assets	—		152		483		—			635
Total current assets	—		1,678		15,147		—			16,825
Film and television costs	—		—		7,888		—			7,888
Investments in subsidiaries	—		149,880		—		(149,880		)	—
Other investments	—		—		2,899		—			2,899
Parks, resorts and other property, net	—		12		29,528		—			29,540
Intangible assets, net	—		—		6,812		—			6,812
Goodwill	—		—		31,269		—			31,269
Intercompany receivables	—		—		79,793		(79,793		)	—
Other assets	—		911		3,178		(724		)	3,365
Total assets	$	—	$	152,481	$	176,514	$	(230,397	)	$	98,598
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and other accrued liabilities	$	—	$	688	$	8,791	$	—		$	9,479
Current portion of borrowings	—		3,751		39		—			3,790
Deferred revenues and other	—		115		4,476		—			4,591
Total current liabilities	—		4,554		13,306		—			17,860
Non-current liabilities
Borrowings	—		15,676		1,408		—			17,084
Deferred income taxes	—		—		3,833		(724		)	3,109
Other long-term liabilities	—		3,685		2,905		—			6,590
Intercompany payables	—		79,793		—		(79,793		)	—
Total non-current liabilities	—		99,154		8,146		(80,517		)	26,783
Redeemable noncontrolling interests	—		—		1,123		—			1,123
Total Disney Shareholders’ equity	—		48,773		149,880		(149,880		)	48,773
Noncontrolling interests	—		—		4,059		—			4,059
Total equity	—		48,773		153,939		(149,880		)	52,832
Total liabilities and equity	$	—	$	152,481	$	176,514	$	(230,397	)	$	98,598

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Year Ended September 28, 2019

(in millions)

	TWDC			Legacy Disney			Non-Guarantor Subsidiaries			Reclassifications & Eliminations			Total
OPERATING ACTIVITIES
Cash provided by operations - continuing operations	$	340		$	(1,800	)	$	7,764		$	(320	)	$	5,984
INVESTING ACTIVITIES
Investments in parks, resorts and other property	—			—			(4,876		)	—			(4,876		)
Acquisitions	(35,702		)	—			25,801			—			(9,901		)
Intercompany investing activities, net	20,396			(1		)	(7,507		)	(12,888		)	—
Other	—			—			(319		)	—			(319		)
Cash used in investing activities - continuing operations	(15,306		)	(1		)	13,099			(12,888		)	(15,096		)
FINANCING ACTIVITIES
Commercial paper, net	5,328			(1,010		)	—			—			4,318
Borrowings	37,999			—			241			—			38,240
Reduction of borrowings	(35,100		)	(2,750		)	(1,031		)	—			(38,881		)
Dividends	(1,585		)	(1,470		)	(160		)	320			(2,895		)
Proceeds from exercise of stock options	234			84			—			—			318
Intercompany financing, net	8,712			5,837			(27,437		)	12,888			—
Contributions from / sales of noncontrolling interest holders	—			—			737			—			737
Acquisitions of noncontrolling and redeemable noncontrolling interests	—			—			(1,430		)	—			(1,430		)
Other	(68		)	(257		)	(546		)	—			(871		)
Cash used in financing activities - continuing operations	15,520			434			(29,626		)	13,208			(464		)
Discontinued operations	—			—			10,974			—			10,974
Impact of exchange rates on cash, cash equivalents and restricted cash	—			—			(98		)	—			(98		)
Change in cash, cash equivalents and restricted cash	554			(1,367		)	2,113			—			1,300
Cash, cash equivalents and restricted cash, beginning of year	—			1,367			2,788			—			4,155
Cash, cash equivalents and restricted cash, end of year	$	554		$	—		$	4,901		$	—		$	5,455

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Year Ended September 29, 2018

(in millions)

	TWDC		Legacy Disney			Non-Guarantor Subsidiaries			Reclassifications & Eliminations			Total
OPERATING ACTIVITIES
Cash provided by operations	$	—	$	336		$	14,149		$	(190	)	$	14,295
INVESTING ACTIVITIES
Investments in parks, resorts and other property	—		(3		)	(4,462		)	—			(4,465		)
Acquisitions	—		—			(1,581		)	—			(1,581		)
Intercompany investing activities, net	—		(1,327		)	—			1,327			—
Other	—		—			710			—			710
Cash used in investing activities	—		(1,330		)	(5,333		)	1,327			(5,336		)
FINANCING ACTIVITIES
Commercial paper, net	—		(1,768		)	—			—			(1,768		)
Borrowings	—		997			59			—			1,056
Reduction of borrowings	—		(1,800		)	(71		)	—			(1,871		)
Dividends	—		(2,515		)	(190		)	190			(2,515		)
Repurchases of common stock	—		(3,577		)	—			—			(3,577		)
Proceeds from exercise of stock options	—		210			—			—			210
Intercompany financing, net	—		10,343			(9,016		)	(1,327		)	—
Contributions from noncontrolling interest holders	—		—			399			—			399
Other	—		(222		)	(555		)	—			(777		)
Cash used in financing activities	—		1,668			(9,374		)	(1,137		)	(8,843		)
Impact of exchange rates on cash, cash equivalents and restricted cash	—		—			(25		)	—			(25		)
Change in cash, cash equivalents and restricted cash	—		674			(583		)	—			91
Cash, cash equivalents and restricted cash, beginning of year	—		693			3,371			—			4,064
Cash, cash equivalents and restricted cash, end of year	$	—	$	1,367		$	2,788		$	—		$	4,155

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Year Ended September 30, 2017

(in millions)

	TWDC		Legacy Disney			Non-Guarantor Subsidiaries			Reclassifications & Eliminations			Total
OPERATING ACTIVITIES
Cash provided by operations	$	—	$	753		$	13,461		$	(1,871	)	$	12,343
INVESTING ACTIVITIES
Investments in parks, resorts and other property	—		(7		)	(3,616		)	—			(3,623		)
Acquisitions	—		—			(417		)	—			(417		)
Intercompany investing activities, net	—		(1,856		)	—			1,856			—
Other	—		15			(86		)	—			(71		)
Cash used in investing activities	—		(1,848		)	(4,119		)	1,856			(4,111		)
FINANCING ACTIVITIES
Commercial paper, net	—		1,247			—			—			1,247
Borrowings	—		4,741			79			—			4,820
Reduction of borrowings	—		(1,850		)	(514		)	—			(2,364		)
Dividends	—		(2,445		)	(1,871		)	1,871			(2,445		)
Repurchases of common stock	—		(9,368		)	—			—			(9,368		)
Proceeds from exercise of stock options	—		276			—			—			276
Intercompany financing, net	—		8,394			(6,538		)	(1,856		)	—
Contributions from noncontrolling interest holders	—		—			17			—			17
Other	—		(266		)	(876		)	—			(1,142		)
Cash used in financing activities	—		729			(9,703		)	15			(8,959		)
Impact of exchange rates on cash, cash equivalents and restricted cash	—		—			31			—			31
Change in cash, cash equivalents and restricted cash	—		(366		)	(330		)	—			(696		)
Cash, cash equivalents and restricted cash, beginning of year	—		1,059			3,701			—			4,760
Cash, cash equivalents and restricted cash, end of year	$	—	$	693		$	3,371		$	—		$	4,064