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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
 
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 1, 2022
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission File Number 001-38842
dis-20220101_g1.jpg
Delaware 83-0940635
State or Other Jurisdiction of I.R.S. Employer Identification
Incorporation or Organization
500 South Buena Vista Street
Burbank, California 91521
Address of Principal Executive Offices and Zip Code
(818) 560-1000
Registrant’s Telephone Number, Including Area Code
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueDISNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒Accelerated filer☐
Non-accelerated filer
☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐    No  ☒
There were 1,820,633,408 shares of common stock outstanding as of February 2, 2022.


PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
THE WALT DISNEY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited; in millions, except per share data)
 Quarter Ended
 January 1,
2022		January 2,
2021
Revenues:
Services$19,542 $14,871 
Products2,277 1,378 
Total revenues21,819 16,249 
Costs and expenses:
Cost of services (exclusive of depreciation and amortization)
(13,161)(10,738)
Cost of products (exclusive of depreciation and amortization)
(1,406)(1,037)
Selling, general, administrative and other(3,787)(2,917)
Depreciation and amortization(1,269)(1,298)
Total costs and expenses(19,623)(15,990)
Restructuring and impairment charges— (113)
Other expense, net(436)— 
Interest expense, net(311)(324)
Equity in the income of investees239 224 
Income from continuing operations before income taxes1,688 46 
Income taxes on continuing operations(488)(16)
Net income from continuing operations1,200 30 
Loss from discontinued operations, net of income tax benefit of $14 and $4, respectively(48)(12)   
Net income1,152 18 
Net income from continuing operations attributable to noncontrolling interests
(48)(1)
Net income attributable to Disney$1,104    $17 
Earnings (loss) per share attributable to Disney(1):
Diluted
Continuing operations$0.63 $0.02 
Discontinued operations(0.03)(0.01)
$0.60 $0.01 
Basic
Continuing operations$0.63 $0.02 
Discontinued operations(0.03)(0.01)
$0.61 $0.01 
Weighted average number of common and common equivalent shares outstanding:
Diluted1,828 1,823 
Basic1,819 1,812 
(1)Total may not equal the sum of the column due to rounding.
See Notes to Condensed Consolidated Financial Statements
2

THE WALT DISNEY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited; in millions)
 
 Quarter Ended
 January 1,
2022		January 2,
2021
Net income$1,152 $18 
Other comprehensive income (loss), net of tax:
Market value adjustments for hedges50 (173)
Pension and postretirement medical plan adjustments
155 150    
Foreign currency translation and other
(22)277 
Other comprehensive income183 254 
Comprehensive income1,335 272 
Net income from continuing operations attributable to noncontrolling interests
(48)(1)
Other comprehensive loss attributable to noncontrolling interests(19)(73)
Comprehensive income attributable to Disney$1,268    $198 
See Notes to Condensed Consolidated Financial Statements




3

THE WALT DISNEY COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited; in millions, except per share data)
January 1,
2022		October 2,
2021
ASSETS
Current assets
Cash and cash equivalents$14,444 $15,959 
Receivables, net14,882 13,367 
Inventories1,345 1,331 
Content advances1,125 2,183 
Other current assets1,117 817 
Total current assets32,913 33,657 
Produced and licensed content costs30,669 29,549 
Investments3,549 3,935 
Parks, resorts and other property
Attractions, buildings and equipment65,257    64,892    
Accumulated depreciation(38,505)(37,920)
26,752 26,972 
Projects in progress4,808 4,521 
Land1,121 1,131 
32,681 32,624 
Intangible assets, net16,574 17,115 
Goodwill78,052 78,071 
Other assets8,873 8,658 
Total assets$203,311 $203,609 
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and other accrued liabilities$18,709 $20,894 
Current portion of borrowings6,783 5,866 
Deferred revenue and other4,545 4,317 
Total current liabilities30,037 31,077 
Borrowings47,349 48,540 
Deferred income taxes8,124 7,246 
Other long-term liabilities14,208 14,522 
Commitments and contingencies (Note 13)
Redeemable noncontrolling interests9,283 9,213 
Equity
Preferred stock
— — 
Common stock, $0.01 par value, Authorized – 4.6 billion shares, Issued – 1.8 billion shares
55,500 55,471 
Retained earnings41,547 40,429 
Accumulated other comprehensive loss(6,276)(6,440)
Treasury stock, at cost, 19 million shares
(907)(907)
Total Disney Shareholders’ equity89,864 88,553 
Noncontrolling interests4,446 4,458 
Total equity94,310 93,011 
Total liabilities and equity$203,311 $203,609 
See Notes to Condensed Consolidated Financial Statements
4

THE WALT DISNEY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited; in millions)
 Quarter Ended
January 1,
2022		January 2,
2021
OPERATING ACTIVITIES
Net income from continuing operations$1,200 $30 
Depreciation and amortization1,269    1,298 
Net (gain) loss on investments436 (80)
Deferred income taxes726    (105)
Equity in the income of investees(239)(224)
Cash distributions received from equity investees223 193    
Net change in produced and licensed content costs and advances507 771 
Equity-based compensation196 134 
Pension and postretirement medical benefit cost amortization155 194 
Other, net(7)(68)
Changes in operating assets and liabilities:
Receivables(1,401)(1,324)
Inventories(14)94 
Other assets(115)(136)
Accounts payable and other liabilities(2,579)(642)
Income taxes(566)(60)
Cash (used in) provided by operations - continuing operations(209)75 
INVESTING ACTIVITIES
Investments in parks, resorts and other property(981)(760)
Other, net(6)28 
Cash used in investing activities - continuing operations(987)(732)
FINANCING ACTIVITIES
Commercial paper payments, net(124)(179)
Borrowings33 1 
Reduction of borrowings— (139)
Proceeds from exercise of stock options33 209 
Other, net(222)(225)
Cash used in financing activities - continuing operations(280)(333)
CASH FLOWS FROM DISCONTINUED OPERATIONS
Cash provided by operations - discontinued operations8 9 
Cash used in financing activities - discontinued operations(12)— 
Cash (used in) provided by discontinued operations(4)9 
Impact of exchange rates on cash, cash equivalents and restricted cash(35)139 
Change in cash, cash equivalents and restricted cash(1,515)(842)
Cash, cash equivalents and restricted cash, beginning of period16,003 17,954 
Cash, cash equivalents and restricted cash, end of period$14,488 $17,112 
See Notes to Condensed Consolidated Financial Statements
5

THE WALT DISNEY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(unaudited; in millions)


 Quarter Ended
Equity Attributable to Disney
 SharesCommon Stock
Retained Earnings
Accumulated
Other
Comprehensive
Income
(Loss)		Treasury Stock
Total Disney Equity
Non-controlling
 Interests(1)
Total
Equity
Balance at October 2, 20211,818 $55,471 $40,429 $(6,440)$(907)$88,553 $4,458 $93,011 
Comprehensive income— — 1,104 164 — 1,268 (4)1,264 
Equity compensation activity3 29 — — — 29 — 29 
Contributions— — — — — — 29 29 
Distributions and other— — 14 — — 14 (37)(23)
Balance at January 1, 20221,821 $55,500 $41,547 $(6,276)$(907)$89,864 $4,446 $94,310 
Balance at October 3, 20201,810 $54,497 $38,315 $(8,322)$(907)$83,583 $4,680 $88,263 
Comprehensive income— — 17    181— 198 (6)192 
Equity compensation activity4 165 — — — 165 — 165 
Contributions— — — — — — 5 5 
Cumulative effect of accounting change—    —    110 —    — 110    —    110    
Distributions and other— 1 14 — — 15 (22)(7)
Balance at January 2, 20211,814 $54,663 $38,456 $(8,141)$(907)$84,071 $4,657 $88,728 
(1)Excludes redeemable noncontrolling interests.
See Notes to Condensed Consolidated Financial Statements


6

THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)
 
1.Principles of Consolidation
These Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. We believe that we have included all normal recurring adjustments necessary for a fair statement of the results for the interim period. Operating results for the quarter ended January 1, 2022 are not necessarily indicative of the results that may be expected for the year ending October 1, 2022.
The terms “Company,” “Disney,” “we,” “us,” and “our” are used in this report to refer collectively to the parent company, The Walt Disney Company, as well as the subsidiaries through which its various businesses are actually conducted.
These financial statements should be read in conjunction with the Company’s 2021 Annual Report on Form 10-K.
The Fox sports media business in Mexico was sold in November 2021. The Company recognized a $58 million loss on the sale, which is presented as discontinued operations in the Condensed Consolidated Statements of Income. At October 2, 2021, the assets and liabilities of the Fox sports media business in Mexico were not material and were included in other assets and other liabilities in the Condensed Consolidated Balance Sheets.
Variable Interest Entities
The Company enters into relationships with or makes investments in other entities that may be variable interest entities (VIE). A VIE is consolidated in the financial statements if the Company has the power to direct activities that most significantly impact the economic performance of the VIE and has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant (as defined by ASC 810-10-25-38) to the VIE. Hong Kong Disneyland Resort and Shanghai Disney Resort (together the Asia Theme Parks) are VIEs in which the Company has less than 50% equity ownership. Company subsidiaries (the Management Companies) have management agreements with the Asia Theme Parks, which provide the Management Companies, subject to certain protective rights of joint venture partners, with the ability to direct the day-to-day operating activities and the development of business strategies that we believe most significantly impact the economic performance of the Asia Theme Parks. In addition, the Management Companies receive management fees under these arrangements that we believe could be significant to the Asia Theme Parks. Therefore, the Company has consolidated the Asia Theme Parks in its financial statements.
Redeemable Noncontrolling Interests
The Company consolidates the results of certain subsidiaries that are less than 100% owned and for which the noncontrolling interest shareholders have the rights to require the Company to purchase their interests in these subsidiaries. The most significant of these are Hulu LLC (Hulu) and BAMTech LLC (BAMTech).
Hulu provides direct-to-consumer (DTC) streaming services and is owned 67% by the Company and 33% by NBC Universal (NBCU). In May 2019, the Company entered into a put/call agreement with NBCU that provided the Company with full operational control of Hulu. Under the agreement, beginning in January 2024, NBCU has the option to require the Company to purchase NBCU’s interest in Hulu and the Company has the option to require NBCU to sell its interest in Hulu to the Company, in either case at a redemption value based on NBCU’s equity ownership percentage of the greater of Hulu’s then equity fair value or a guaranteed floor value of $27.5 billion.
NBCU’s interest will generally not be allocated its portion of Hulu’s losses as the redeemable noncontrolling interest is required to be carried at a minimum value. The minimum value is equal to the fair value as of the May 2019 agreement date accreted to the January 2024 estimated redemption value. At January 1, 2022, NBCU’s interest in Hulu is recorded in the Company’s financial statements at $8.5 billion.
BAMTech provides streaming technology services to third parties and is owned 85% by the Company and 15% by Major League Baseball (MLB). MLB has the right to sell its interest to the Company and the Company has the right to buy MLB’s interest starting five years from and ending ten years after the Company’s September 25, 2017 acquisition date of BAMTech in either case at a redemption value based on MLB’s equity ownership percentage of the greater of MLB’s then equity fair value or a guaranteed floor value ($563 million accreting at 8% annually for eight years from the date of acquisition).
7
THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)
The MLB interest is required to be carried at a minimum value equal to its acquisition date fair value accreted to its estimated redemption value through the applicable redemption date. Therefore, the MLB interest is generally not allocated its portion of BAMTech losses. As of January 1, 2022, the MLB interest was recorded in the Company’s financial statements at $822 million.
Our estimate of the redemption value of noncontrolling interests requires management to make significant judgments with respect to the future value of the noncontrolling interests. We are accreting the noncontrolling interests of both BAMTech and Hulu to their guaranteed floor values. If our estimate of the future redemption value increased above either of the guaranteed floor values, we would change our rate of accretion, which would generally increase earnings recorded in “Net income from continuing operations attributable to noncontrolling interests” and thus reduce “Net income attributable to Disney” on the Condensed Consolidated Statements of Income.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results may differ from those estimates.
Reclassifications
Certain reclassifications have been made in the fiscal 2021 financial statements and notes to conform to the fiscal 2022 presentation.
2.Segment Information
The Company’s operations are conducted in the Disney Media and Entertainment Distribution (DMED) and Disney Parks, Experiences and Products (DPEP) segments. Our operating segments report separate financial information, which is evaluated regularly by the Chief Executive Officer in order to decide how to allocate resources and to assess performance.
Segment operating results reflect earnings before corporate and unallocated shared expenses, restructuring and impairment charges, net other income, net interest expense, income taxes and noncontrolling interests. Segment operating income includes equity in the income of investees and excludes impairments of certain equity investments and acquisition accounting amortization of TFCF Corporation (TFCF) and Hulu assets (i.e. intangible assets and the fair value step-up for film and television costs) recognized in connection with the TFCF acquisition in fiscal 2019 (TFCF and Hulu acquisition amortization). Corporate and unallocated shared expenses principally consist of corporate functions, executive management and certain unallocated administrative support functions.
Segment operating results include allocations of certain costs, including information technology, pension, legal and other shared services costs, which are allocated based on metrics designed to correlate with consumption.
Impact of COVID-19
Since early 2020, the world has been, and continues to be, impacted by the novel coronavirus (COVID-19) and its variants. COVID-19 and measures to prevent its spread have impacted our segments in a number of ways, most significantly at the DPEP segment where our theme parks and resorts were closed and cruise ship sailings and guided tours were suspended. These operations resumed at various points since May 2020, initially at reduced operating capacities as a result of COVID-19 restrictions. In fiscal 2020 and 2021, we delayed, or in some cases, shortened or cancelled theatrical releases. In addition, we experienced significant disruptions in the production and availability of content, including the delay of key live sports programming during fiscal 2020 and fiscal 2021.
In fiscal 2022, our domestic parks and experiences are generally operating without significant mandatory COVID-19-related capacity restrictions, such as those that were in place during the prior year; however, we continue to manage capacity to address ongoing COVID-19 considerations with respect to guest and cast health and safety. Certain of our international operations continue to be impacted by mandatory COVID-19-related capacity and travel restrictions. At the DMED segment, our film and television productions have generally resumed, although we have seen disruptions of production activities depending on local circumstances. We have generally been able to release our films theatrically in the current quarter, although certain markets continue to impose restrictions on theater openings and capacity.
The impact of these disruptions and the extent of their adverse impact on our financial and operating results will depend on the length of time that such disruptions continue. This will, in turn, depend on the duration and severity of the impacts of COVID-19 and its variants, and among other things, the impact of governmental actions imposed in response to COVID-19 and individuals’ and companies’ risk tolerance regarding health matters going forward. We have incurred and will continue to incur additional costs to address government regulations and the safety of our employees, guests and talent.
8
THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

Segment revenues and segment operating income (loss) are as follows:
 Quarter Ended
 January 1,
2022		January 2,
2021
Revenues:
Disney Media and Entertainment Distribution$14,585 $12,661 
Disney Parks, Experiences and Products7,234 3,588 
Total consolidated revenues$21,819 $16,249 
Segment operating income (loss):
Disney Media and Entertainment Distribution$808 $1,451 
Disney Parks, Experiences and Products2,450 (119)
Total segment operating income(1)
$3,258 $1,332 
(1) Equity in the income of investees is included in segment operating income as follows:
 Quarter Ended
 January 1,
2022		January 2,
2021
Disney Media and Entertainment Distribution$245   $235   
Disney Parks, Experiences and Products(3)(8) 
Equity in the income of investees included in segment operating income242 227 
Amortization of TFCF intangible assets related to equity investees(3)(3)
Equity in the income of investees, net$239 $224 
A reconciliation of segment operating income to income from continuing operations before income taxes is as follows:
 Quarter Ended
 January 1,
2022		January 2,
2021
Segment operating income$3,258 $1,332   
Corporate and unallocated shared expenses(228)  (232)
Restructuring and impairment charges— (113)
Other expense, net(436)— 
Interest expense, net(311)(324)
TFCF and Hulu acquisition amortization(1)
(595)(617)
Income from continuing operations before income taxes$1,688 $46 
(1)For the quarter ended January 1, 2022 amortization of intangible assets, step-up of film and television costs and intangibles related to TFCF equity investees were $435 million, $157 million and $3 million, respectively. For the quarter ended January 2, 2021 amortization of intangible assets, step-up of film and television costs and intangibles related to TFCF equity investees were $447 million, $167 million, and $3 million, respectively.
Goodwill
The changes in the carrying amount of goodwill are as follows:
DMEDDPEPTotal
Balance at October 2, 2021$72,521 $5,550 $78,071 
Currency translation adjustments and other, net(19)— (19)
Balance at January 1, 2022$72,502 $5,550 $78,052 
9
THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

3.Revenues
The following table presents our revenues by segment and major source:
Quarter Ended January 1, 2022Quarter Ended January 2, 2021
DMEDDPEPTotalDMEDDPEPTotal
Affiliate fees$4,371$— $4,371 $4,402 $— $4,402 
Advertising3,8681 3,869 3,763 1 3,764 
Subscription fees3,598— 3,598 2,546 — 2,546 
Theme park admissions—2,152 2,152 — 549 549 
Resort and vacations—1,445 1,445 — 433 433 
Retail and wholesale sales of merchandise, food and beverage—2,089    2,089    —    1,163 1,163 
TV/SVOD distribution licensing1,396— 1,396 1,169 —    1,169    
Theatrical distribution licensing529— 529 31 — 31 
Merchandise licensing—1,119 1,119 5 1,090 1,095 
Home entertainment294— 294 300 — 300 
Other529428 957 445 352 797 
$14,585$7,234 $21,819 $12,661 $3,588 $16,249 
The following table presents our revenues by segment and primary geographical markets:
Quarter Ended January 1, 2022Quarter Ended January 2, 2021
DMEDDPEPTotalDMEDDPEPTotal
Americas$11,830 $5,711 $17,541 $10,291 $2,456 $12,747 
Europe1,538    865    2,403    1,293    487    1,780    
Asia Pacific1,217 658 1,875 1,077 645 1,722 
Total revenues$14,585 $7,234 $21,819 $12,661 $3,588 $16,249 
Revenues recognized in the current and prior-year periods from performance obligations satisfied (or partially satisfied) in previous reporting periods primarily relate to revenues earned on TV/SVOD licenses for titles made available to the licensee in previous reporting periods. For the quarter ended January 1, 2022, $0.4 billion was recognized related to performance obligations satisfied as of October 2, 2021. For the quarter ended January 2, 2021, $0.4 billion was recognized related to performance obligations satisfied as of October 3, 2020.
As of January 1, 2022, revenue for unsatisfied performance obligations expected to be recognized in the future is $14 billion, primarily for content and other intellectual property (IP) to be made available in the future under existing agreements with television station affiliates, merchandise licensees and DTC subscribers. Of this amount, we expect to recognize approximately $5 billion in the remainder of fiscal 2022, $4 billion in fiscal 2023, $2 billion in fiscal 2024 and $3 billion thereafter. These amounts include only fixed consideration or minimum guarantees and do not include amounts related to (i) contracts with an original expected term of one year or less (such as most advertising contracts) or (ii) licenses of IP that are solely based on the sales of the licensee.
When the timing of the Company’s revenue recognition is different from the timing of customer payments, the Company recognizes either a contract asset (customer payment is subsequent to revenue recognition and subject to the Company satisfying additional performance obligations) or deferred revenue (customer payment precedes the Company satisfying the performance obligations). Consideration due under contracts with payment in arrears is recognized as accounts receivable. Deferred revenues are recognized as (or when) the Company performs under the contract.
10
THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

Contract assets, accounts receivable and deferred revenues from contracts with customers are as follows:
January 1,
2022		October 2,
2021
Contract assets$142 $155 
Accounts receivable
Current12,649   11,190   
Non-current1,341 1,359 
Allowance for credit losses(199)(194)
Deferred revenues
Current4,278 4,067 
Non-current575 581 
Contract assets primarily relate to certain multi-season TV/SVOD licensing contracts. Activity for the current and prior-year quarters related to contract assets was not material.
For the quarters ended January 1, 2022 and January 2, 2021, the Company recognized revenues of $1.9 billion and $1.5 billion included in the deferred revenue balance at October 2, 2021 and October 3, 2020, respectively. The revenues recognized in both periods were primarily for DTC subscriptions and advances from merchandise and TV/SVOD licensees.
We evaluate our allowance for credit losses and estimate collectability of current and non-current accounts receivable based on historical bad debt experience, our assessment of the financial condition of individual companies with which we do business, current market conditions, and reasonable and supportable forecasts of future economic conditions. 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.
The Company has accounts receivable with original maturities greater than one year related to the sale of film and television program rights and vacation club properties. These receivables are discounted to present value at contract inception and the related revenues are recognized at the discounted amount.
The balance of film and television program sales receivables recorded in other non-current assets, net of an allowance for credit losses that is not material, was $0.8 billion as of January 1, 2022. The activity in the allowance for credit losses for the quarter ended January 1, 2022 was not material.
The balance of vacation club receivables recorded in other non-current assets, net of an allowance for credit losses that is not material, was $0.6 billion as of January 1, 2022. The activity in the allowance for credit losses for the quarter ended January 1, 2022 was not material.
4.Other Expense, net
Other expense, net is as follows:
 Quarter Ended
 January 1,
2022		January 2,
2021
DraftKings loss$(432)$(186)
fuboTV gain—    186    
Other, net(4)— 
Other income expense, net$(436)$— 
For the quarter ended January 1, 2022 and January 2, 2021, the Company recognized a non-cash loss of $432 million and $186 million, respectively, from the adjustment of its investment in DraftKings, Inc. to fair value (DraftKings loss).
For the quarter ended January 2, 2021, the Company recognized a non-cash gain of $186 million from the adjustment of its investment in fuboTV Inc. to fair value (fuboTV gain).
11
THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

5.Cash, Cash Equivalents, Restricted Cash and Borrowings
Cash, Cash Equivalents and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets to the total of the amounts reported in the Condensed Consolidated Statements of Cash Flows.
January 1,
2022		October 2,
2021
Cash and cash equivalents$14,444 $15,959 
Restricted cash included in:
Other current assets3    3    
Other assets41 41 
Total cash, cash equivalents and restricted cash in the statement of cash flows$14,488 $16,003 
Borrowings
During the quarter ended January 1, 2022, the Company’s borrowing activity was as follows: 
October 2,
2021		BorrowingsPaymentsOther
Activity		January 1,
2022
Commercial paper with original maturities greater than three months$1,992 $200 $(324)$2 $1,870 
U.S. dollar denominated notes(1)
49,090 — — (34)49,056 
Asia Theme Parks borrowings(2)
1,331    33    —    27    1,391    
Foreign currency denominated debt and other(3)
1,993 — — (178)1,815 
$54,406 $233 $(324)$(183)$54,132 
(1)The other activity is primarily due to the amortization of purchase price adjustments on debt assumed in the TFCF acquisition and debt issuance fees.
(2)The other activity is driven by the impact of changes in foreign currency exchange rates.
(3)The other activity is due to market value adjustments for debt with qualifying hedges.
At January 1, 2022, the Company’s bank facilities, which are with a syndicate of lenders and support our commercial paper borrowings, were as follows:
Committed
Capacity		Capacity
Used		Unused
Capacity
Facility expiring March 2022$5,250 $— $5,250 
Facility expiring March 20234,000    —    4,000    
Facility expiring March 20253,000 — 3,000 
Total$12,250 $— $12,250 
The facilities expiring in March 2023 and March 2025 allow for borrowings at LIBOR-based rates plus a spread depending on the credit default swap spread applicable to the Company’s debt, or a fixed spread in the case of the facility expiring in March 2022, subject to a cap and floor that vary with the Company’s debt ratings assigned by Moody’s Investors Service and Standard and Poor’s. The spread above LIBOR can range from 0.18% to 1.63%. The bank facilities specifically exclude certain entities, including the Asia Theme Parks, from any representations, covenants or events of default. The bank facilities contain only one financial covenant, which is 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 January 1, 2022 the financial covenant was met by a significant margin. The Company also has the ability to issue up to $500 million of letters of credit under the facility expiring in March 2023, which if utilized, reduces available borrowings under this facility. As of January 1, 2022, the Company has $1.4 billion of outstanding letters of credit, of which none were issued under this facility.
12
THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

Cruise Ship Credit Facilities
The Company has credit facilities to finance up to 80% of the contract price of three new cruise ships, which are scheduled to be delivered in 2022, 2024 and 2025. Under the facilities, $1.0 billion in financing is available as of October 2021, $1.1 billion is available beginning in August 2023 and $1.1 billion is available beginning in August 2024. Each tranche of financing may be utilized for a period of 18 months from the initial availability date. If utilized, the interest rates will be fixed at 3.48%, 3.80% and 3.74%, respectively, and the loan and interest will be payable semi-annually over a 12-year period from the borrowing date. Early repayment is permitted subject to cancellation fees.
Interest expense, net
Interest expense (net of amounts capitalized), interest and investment income, and net periodic pension and postretirement benefit costs (other than service costs) (see Note 9) are reported net in the Condensed Consolidated Statements of Income and consist of the following:
Quarter Ended
January 1,
2022		January 2,
2021
Interest expense$(361)$(404)
Interest and investment income34    113    
Net periodic pension and postretirement benefit costs (other than service costs)16 (33)
Interest expense, net$(311)$(324)
Interest and investment income includes gains and losses on certain publicly traded and non-public investments, investment impairments and interest earned on cash and cash equivalents and certain receivables.
6.International Theme Parks
The Company has a 48% ownership interest in the operations of Hong Kong Disneyland Resort and a 43% ownership interest in the operations of Shanghai Disney Resort. The Asia Theme Parks together with Disneyland Paris are collectively referred to as the International Theme Parks.
The following table summarizes the carrying amounts of the Asia Theme Parks’ assets and liabilities included in the Company’s Condensed Consolidated Balance Sheets:
 January 1,
2022		October 2, 2021
Cash and cash equivalents$304 $287 
Other current assets104 95 
Total current assets408 382 
Parks, resorts and other property6,947    6,928    
Other assets172 176 
Total assets$7,527 $7,486 
Current liabilities$488 $473 
Long-term borrowings1,358 1,331 
Other long-term liabilities414 422 
Total liabilities$2,260 $2,226 
The following table summarizes the International Theme Parks’ revenues and costs and expenses included in the Company’s Condensed Consolidated Statements of Income for the quarter ended January 1, 2022:
Revenues$792 
Costs and expenses(826)   
Equity in the loss of investees(3)
13
THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

Asia Theme Parks’ royalty and management fees of $26 million for the quarter ended January 1, 2022 are eliminated in consolidation, but are considered in calculating earnings attributable to noncontrolling interests.
International Theme Parks’ cash flows included in the Company’s Condensed Consolidated Statements of Cash Flows for the quarter ended January 1, 2022 were $109 million provided by operating activities, $193 million used in investing activities and $62 million provided by financing activities.
Hong Kong Disneyland Resort
The Government of the Hong Kong Special Administrative Region (HKSAR) and the Company have a 52% and a 48% equity interest in Hong Kong Disneyland Resort, respectively.
The Company and HKSAR have provided loans to Hong Kong Disneyland Resort with outstanding balances of $150 million and $100 million, respectively. The interest rate on both loans is three month HIBOR plus 2%, and the maturity date is September 2025. The Company’s loan is eliminated in consolidation.
The Company has provided Hong Kong Disneyland Resort with a revolving credit facility of HK $2.1 billion ($269 million), which bears interest at a rate of three month HIBOR plus 1.25% and matures in December 2023. The outstanding balance under the line of credit at January 1, 2022 was $124 million. The Company’s line of credit is eliminated in consolidation.
Shanghai Disney Resort
Shanghai Shendi (Group) Co., Ltd (Shendi) and the Company have 57% and