Acquisitions

3 Months Ended

Dec. 28, 2019

TFCF Corporation

On March 20, 2019, the Company acquired the outstanding capital stock of TFCF, a diversified global media and entertainment company.

The Company is required to allocate the TFCF purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values. The excess of the purchase price over those fair values is recorded as goodwill. As of December 28, 2019, the Company has generally completed its allocation of the TFCF purchase price. The principal open

items relate to the valuation of certain income tax matters. The Company is still obtaining information related to the evaluation of the income tax impact of certain pre-acquisition transactions of TFCF. Estimates have been recorded as of the acquisition date and updates to these estimates may increase or decrease goodwill.

The following table summarizes our current allocation of the March 20, 2019 purchase price:


	Initial Allocation⁽¹⁾		Valuation Adjustments		Updated Allocation
Cash and cash equivalents	$	25,666	$	35	$	25,701
Receivables	4,746		471		5,217
Film and television costs	20,120		(2,304)		17,816
Investments	1,471		(509)		962
Intangible assets	20,385		(2,504)		17,881
Net assets held for sale	11,704		(295)		11,409
Accounts payable and other liabilities	(10,753)		(1,705)		(12,458)
Borrowings	(21,723)		—		(21,723)
Deferred income taxes	(6,497)		1,240		(5,257)
Other net liabilities acquired	(3,865)		(144)		(4,009)
Noncontrolling interests	(10,638)		230		(10,408)
Goodwill	43,751		5,362		49,113
Fair value of net assets acquired	74,367		(123)		74,244
Less: Disney’s previously held 30% interest in Hulu	(4,860)		123		(4,737)
Total purchase price	$	69,507	$	—	$	69,507

⁽¹⁾As reported in our March 30, 2019 Form 10-Q.

These adjustments to the initial allocation are based on more detailed information obtained about the specific assets acquired and liabilities assumed. The adjustments made to the initial allocation during the current quarter did not result in any material net changes to amortization expense recorded in prior quarters.

The following table summarizes the revenues and net loss from continuing operations (including purchase accounting amortization and excluding restructuring and impairment charges and interest income and expense) of TFCF and Hulu included in the Company’s Condensed Consolidated Statement of Income for the quarter ended December 28, 2019. In addition, the table provides the impact of intercompany eliminations of transactions between the Company, TFCF and Hulu:



TFCF (before intercompany eliminations):
Revenues	$	3,370
Net loss from continuing operations	(35)
Hulu (before intercompany eliminations):
Revenues	$	1,625
Net loss from continuing operations	(316)
Intercompany eliminations:
Revenues	$	(599)
Net loss from continuing operations	(48)

Goodwill

The changes in the carrying amount of goodwill for the quarter ended December 28, 2019 are as follows:


	Media Networks		Parks, Experiences and Products		Studio Entertainment					Direct-to-Consumer & International			Total




Balance at September 28, 2019	$	33,423	$	5,535		$	17,797	$	23,538		$	80,293

Acquisitions ⁽¹⁾	17		2			1		7			27

Other, net	—		—			—		(6)			(6)
Balance at December 28, 2019	$	33,440	$	5,537		$	17,798	$	23,539		$	80,314

(1) Reflects updates to allocation of purchase price for the acquisition of TFCF.