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 June 29, 2024

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

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 class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	DIS	New 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 1,813,587,380 shares of common stock outstanding as of July 31, 2024.

Cautionary Note on Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or our future financial or operating performance and may include statements concerning, among other things, financial results; business plans (including statements regarding new services and products and future expenditures, costs and investments); future liabilities and other obligations; impairments and amortization; estimates of financial impact of certain items, accounting treatment, events or circumstances; competition and seasonality on our businesses and results of operations; and capital allocation, including share repurchases and dividends. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “would,” “should,” “expects,” “plans,” “could,” “intends,” “target,” “projects,” “forecasts,” “believes,” “estimates,” “anticipates,” “potential,” “continue,” “assumption” or “judgment” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These statements reflect our current views with respect to future events and are based on assumptions as of the date of this report. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements.

Such differences may result from actions taken by the Company, including restructuring or strategic initiatives (including capital investments, asset acquisitions or dispositions, new or expanded business lines or cessation of certain operations), our execution of our business plans (including the content we create and intellectual properties (IP) we invest in, our pricing decisions, our cost structure and our management and other personnel decisions), our ability to quickly execute on cost rationalization while preserving revenue, the discovery of additional information or other business decisions, as well as from developments beyond the Company’s control, including:

•the occurrence of subsequent events;

•deterioration in domestic and global economic conditions or failure of conditions to improve as anticipated;

•deterioration in or pressures from competitive conditions, including competition to create or acquire content, competition for talent and competition for advertising revenue;

•consumer preferences and acceptance of our content, offerings, pricing model and price increases, and corresponding subscriber additions and churn, and the market for advertising sales on our direct-to-consumer services and linear networks;

•health concerns and their impact on our businesses and productions;

•international, political or military developments;

•regulatory and legal developments;

•technological developments;

•labor markets and activities, including work stoppages;

•adverse weather conditions or natural disasters; and

•availability of content.

Such developments may further affect entertainment, travel and leisure businesses generally and may, among other things, affect (or further affect, as applicable):

•our operations, business plans or profitability, including direct-to-consumer profitability;

•demand for our products and services;

•the performance of the Company’s content;

•our ability to create or obtain desirable content at or under the value we assign the content;

•the advertising market for programming;

•taxation; and

•performance of some or all Company businesses either directly or through their impact on those who distribute our products.

Additional factors include those described in our 2023 Annual Report on Form 10-K, including under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business,” in our subsequent quarterly reports on Form 10-Q, including under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in our subsequent filings with the Securities and Exchange Commission.

A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances. You should not place undue reliance on the forward-looking statements. Unless required by federal securities laws, we assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made.

2

PART I. FINANCIAL INFORMATION

Item 1: Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited; in millions, except per share data)

	Quarter Ended				Nine Months Ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Revenues:
Services	$	20,836	$	20,008	$	61,568	$	60,591
Products	2,319		2,322		7,219		7,066
Total revenues	23,155		22,330		68,787		67,657
Costs and expenses:
Cost of services (exclusive of depreciation and amortization)	(13,236)		(12,974)		(39,821)		(40,915)
Cost of products (exclusive of depreciation and amortization)	(1,473)		(1,497)		(4,647)		(4,558)
Selling, general, administrative and other	(3,872)		(3,874)		(11,445)		(11,315)
Depreciation and amortization	(1,220)		(1,344)		(3,705)		(3,960)
Total costs and expenses	(19,801)		(19,689)		(59,618)		(60,748)
Restructuring and impairment charges	—		(2,650)		(2,052)		(2,871)
Other income (expense), net	(65)		(11)		(65)		96
Interest expense, net	(342)		(305)		(899)		(927)
Equity in the income of investees	146		191		468		555
Income (loss) before income taxes	3,093		(134)		6,621		3,762
Income taxes	(251)		(19)		(1,412)		(1,066)
Net income (loss)	2,842		(153)		5,209		2,696
Net income attributable to noncontrolling interests	(221)		(307)		(697)		(606)
Net income (loss) attributable to The Walt Disney Company (Disney)	$	2,621	$	(460)	$	4,512	$	2,090
Earnings (loss) per share attributable to Disney:
Diluted	$	1.43	$	(0.25)	$	2.46	$	1.14
Basic	$	1.44	$	(0.25)	$	2.47	$	1.14
Weighted average number of common and common equivalent shares outstanding:
Diluted	1,829		1,829		1,835		1,829
Basic	1,821		1,829		1,829		1,827

See Notes to Condensed Consolidated Financial Statements

3

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited; in millions)

	Quarter Ended				Nine Months Ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Net income (loss)	$	2,842	$	(153)	$	5,209	$	2,696
Other comprehensive income (loss), net of tax:
Market value adjustments for hedges	98		10		(106)		(614)
Pension and postretirement medical plan adjustments	(20)		1		(65)		58
Foreign currency translation and other	(32)		(101)		23		241
Other comprehensive income (loss)	46		(90)		(148)		(315)
Comprehensive income (loss)	2,888		(243)		5,061		2,381
Net income attributable to noncontrolling interests	(221)		(307)		(697)		(606)
Other comprehensive income (loss) attributable to noncontrolling interests	9		66		(14)		21
Comprehensive income (loss) attributable to Disney	$	2,676	$	(484)	$	4,350	$	1,796

See Notes to Condensed Consolidated Financial Statements

4

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited; in millions, except per share data)

	June 29, 2024		September 30, 2023
ASSETS
Current assets
Cash and cash equivalents	$	5,954	$	14,182
Receivables, net	12,966		12,330
Inventories	1,984		1,963
Content advances	1,992		3,002
Other current assets	2,597		1,286
Total current assets	25,493		32,763
Produced and licensed content costs	32,799		33,591
Investments	4,632		3,080
Parks, resorts and other property
Attractions, buildings and equipment	73,366		70,090
Accumulated depreciation	(44,720)		(42,610)
	28,646		27,480
Projects in progress	6,223		6,285
Land	1,172		1,176
	36,041		34,941
Intangible assets, net	11,107		13,061
Goodwill	73,914		77,067
Other assets	13,786		11,076
Total assets	$	197,772	$	205,579
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and other accrued liabilities	$	20,216	$	20,671
Current portion of borrowings	8,060		4,330
Deferred revenue and other	7,336		6,138
Total current liabilities	35,612		31,139
Borrowings	39,524		42,101
Deferred income taxes	6,628		7,258
Other long-term liabilities	10,705		12,069
Commitments and contingencies (Note 13)
Redeemable noncontrolling interests	—		9,055
Equity
Preferred stock	—		—
Common stock, $0.01 par value, Authorized – 4.6 billion shares, Issued – 1.9 billion shares at June 29, 2024 and 1.8 billion shares at September 30, 2023	58,252		57,383
Retained earnings	49,273		46,093
Accumulated other comprehensive loss	(3,454)		(3,292)
Treasury stock, at cost, 42 million shares at June 29, 2024 and 19 million shares at September 30, 2023	(3,449)		(907)
Total Disney Shareholders’ equity	100,622		99,277
Noncontrolling interests	4,681		4,680
Total equity	105,303		103,957
Total liabilities and equity	$	197,772	$	205,579

See Notes to Condensed Consolidated Financial Statements

5

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited; in millions)

	Nine Months Ended
	June 29, 2024		July 1, 2023
OPERATING ACTIVITIES
Net income	$	5,209	$	2,696
Depreciation and amortization	3,705		3,960
Goodwill impairment and impairment of produced and licensed content	2,038		2,266
Deferred income taxes	(489)		(899)
Equity in the income of investees	(468)		(555)
Cash distributions received from equity investees	327		531
Net change in produced and licensed content costs and advances	1,121		(1,861)
Equity-based compensation	1,036		861
Other, net	(20)		(347)
Changes in operating assets and liabilities:
Receivables	(1,373)		(744)
Inventories	(2)		(120)
Other assets	74		(64)
Accounts payable and other liabilities	(814)		(1,609)
Income taxes	(1,891)		949
Cash provided by operations	8,453		5,064
INVESTING ACTIVITIES
Investments in parks, resorts and other property	(3,923)		(3,595)
Proceeds from sale of investments	101		458
Purchase of investments	(1,006)		—
Other, net	(75)		(122)
Cash used in investing activities	(4,903)		(3,259)
FINANCING ACTIVITIES
Commercial paper borrowings, net	1,377		40
Borrowings	132		70
Reduction of borrowings	(729)		(1,319)
Dividends	(549)		—
Repurchases of common stock	(2,523)		—
Contributions from noncontrolling interests	—		719
Acquisition of redeemable noncontrolling interests	(8,610)		(900)
Other, net	(820)		(737)
Cash used in financing activities	(11,722)		(2,127)
Impact of exchange rates on cash, cash equivalents and restricted cash	(14)		174
Change in cash, cash equivalents and restricted cash	(8,186)		(148)
Cash, cash equivalents and restricted cash, beginning of period	14,235			11,661
Cash, cash equivalents and restricted cash, end of period	$	6,049	$	11,513

See Notes to Condensed Consolidated Financial Statements

6

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited; in millions)

	Quarter Ended
	Equity Attributable to Disney
	Shares(1)	Common Stock		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Treasury Stock		Total Disney Equity		Non-controlling  Interests(2)		Total Equity
Balance at March 30, 2024	1,826	$	58,028	$	46,649		$	(3,509)	$	(1,916)	$	99,252	$	4,511	$	103,763
Comprehensive income	—	—		2,621			55		—		2,676		246		2,922
Equity compensation activity	4	233		—			—		—		233		—		233
Dividends	—	—		5			—		—		5		—		5
Common stock repurchases	(14)	—		—			—		(1,522)		(1,522)		—		(1,522)
Distributions and other	—	(9)		(2)			—		(11)		(22)		(76)		(98)
Balance at June 29, 2024	1,816	$	58,252	$	49,273		$	(3,454)	$	(3,449)	$	100,622	$	4,681	$	105,303
Balance at April 1, 2023	1,827	$	56,919	$	46,236		$	(4,389)	$	(907)	$	97,859	$	3,697	$	101,556
Comprehensive income (loss)	—	—		(460)			(24)		—		(484)		168		(316)
Equity compensation activity	3	210		—			—		—		210		—		210
Contributions	—	—		—			—		—		—		602		602
Distributions and other	—	7		18			—		—		25		(21)		4
Balance at July 1, 2023	1,830	$	57,136	$	45,794		$	(4,413)	$	(907)	$	97,610	$	4,446	$	102,056

(1)Shares are net of treasury shares.

(2)Excludes redeemable noncontrolling interests.

See Notes to Condensed Consolidated Financial Statements

7

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited; in millions)

 

	Nine Months Ended
	Equity Attributable to Disney
	Shares(1)	Common Stock		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Treasury Stock		Total Disney Equity		Non-controlling Interests(2)		Total Equity
Balance at September 30, 2023	1,830	$	57,383	$	46,093		$	(3,292)	$	(907)	$	99,277	$	4,680	$	103,957
Comprehensive income (loss)	—	—		4,512			(162)		—		4,350		556		4,906
Equity compensation activity	9	866		—			—		—		866		—		866
Dividends	—	4		(1,370)			—		—		(1,366)		—		(1,366)
Common stock repurchases	(23)	—		—			—		(2,523)		(2,523)		—		(2,523)
Distributions and other	—	(1)		38			—		(19)		18		(555)		(537)
Balance at June 29, 2024	1,816	$	58,252	$	49,273		$	(3,454)	$	(3,449)	$	100,622	$	4,681	$	105,303
Balance at October 1, 2022	1,824	$	56,398	$	43,636		$	(4,119)	$	(907)	$	95,008	$	3,871	$	98,879
Comprehensive income (loss)	—	—		2,090			(294)		—		1,796		299		2,095
Equity compensation activity	6	735		—			—		—		735		—		735
Contributions	—	—		—			—		—		—		789		789
Distributions and other	—	3		68			—		—		71		(513)		(442)
Balance at July 1, 2023	1,830	$	57,136	$	45,794		$	(4,413)	$	(907)	$	97,610	$	4,446	$	102,056

(1)Shares are net of treasury shares.

(2)Excludes redeemable noncontrolling interests.

See Notes to Condensed Consolidated Financial Statements

8

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 nine months ended June 29, 2024 are not necessarily indicative of the results that may be expected for the year ending September 28, 2024.

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 2023 Annual Report on Form 10-K.

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 our 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, see Note 6) 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 Interest

Hulu LLC

In November 2023, NBC Universal (NBCU) exercised its right to require the Company to purchase NBCU’s 33% interest in Hulu LLC (Hulu), a direct-to-consumer (DTC) streaming service provider, at a redemption value based on NBCU’s equity ownership percentage of the greater of Hulu’s equity fair value or a guaranteed floor value of $27.5 billion. In connection with the redemption, the Company will pay NBCU 50% of the future tax benefits from the amortization of the purchase of NBCU’s interest in Hulu as the Company’s cash tax benefits are realized, generally over a 15-year period. In December 2023, the Company paid NBCU $8.6 billion, which reflected the guaranteed floor value less NBCU’s unpaid capital call contributions. If Hulu’s equity fair value is determined pursuant to a contractual appraisal process to be higher than the guaranteed floor value, the Company is required to pay NBCU its share of the difference between the equity fair value and the guaranteed floor value.

In May 2024, the Company and NBCU entered into a confidential arbitration to resolve a dispute regarding the contractual appraisal process, in which the parties seek declaratory relief, equitable relief and unspecified damages. The Company expects a decision in that arbitration in fiscal 2025. The outcome of the arbitration is uncertain and we cannot reasonably estimate the impact of the arbitration on the appraisal process, and thus any impact on the determination of Hulu’s equity fair value and any additional amount we may be required to pay to acquire NBCU’s interest in Hulu.

As part of the arbitration the Company disputes the validity of aspects of NBCU’s appraisal and the corresponding process. Consequently, completion of the appraisal process, including the manner of determining any such additional amount payable by the Company, awaits the resolution of the confidential arbitration.

During the initial phase of the appraisal process, the Company’s appraiser arrived at a valuation that falls below the guaranteed floor value, while NBCU’s appraiser arrived at a valuation substantially in excess of the guaranteed floor value. Once the arbitration is completed, determination of the final equity fair value will take into account the valuation of a third appraiser pursuant to the appraisal process as resolved by the arbitration. As such, if the third appraiser’s equity fair value determination were equal to or below the guaranteed floor value, the Company would not be required to pay NBCU any additional amount. Conversely, if NBCU’s appraisal were deemed to be valid and the third appraiser’s equity fair value determination were consistent with the NBCU’s appraiser’s valuation, the Company would be required to pay NBCU an

9

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

additional amount of approximately $5 billion as its share of the difference between the equity fair value and the guaranteed floor value. If the third appraiser’s equity fair value determination were between the valuations of the Company’s and NBCU’s appraisers, the incremental amount would likewise be between zero and approximately $5 billion.

Any incremental amount determined to be payable to NBCU to acquire NBCU’s interest in Hulu would be recorded as “Net income attributable to noncontrolling interests” and thus reduce “Net income attributable to Disney” in the Condensed Consolidated Statements of Operations in the period recorded.

BAMTech LLC

In November 2022, the Company purchased Major League Baseball’s (MLB) 15% redeemable noncontrolling interest in BAMTech LLC (BAMTech), which holds the Company’s domestic DTC sports business, for $900 million (MLB buy-out). MLB’s interest was recorded in the Company’s financial statements at $828 million prior to the MLB buy-out. The $72 million difference was recorded as an increase in “Net income attributable to noncontrolling interests” in the Condensed Consolidated Statements of Operations.

During the nine months ended July 1, 2023, Hearst Corporation (Hearst) contributed $710 million to the domestic DTC sports business, in part to fund its 20% share of the MLB buy-out and in part to fund its share of the domestic DTC sports business’s operating cash requirements, which had been funded by the Company through intercompany loans.

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 2023 financial statements and notes to conform to the fiscal 2024 presentation.

2.Segment Information

The Company’s operations are reported in three segments: Entertainment, Sports and Experiences, for which separate financial information is evaluated regularly by the Chief Executive Officer to allocate resources and assess performance.

Segment operating results reflect earnings before corporate and unallocated shared expenses, restructuring and impairment charges, net other income/expense, net interest expense, income taxes and noncontrolling interests. Segment operating income includes equity in the income of investees and excludes amortization of intangible assets and the fair value step-up for film and television costs recognized in connection with the acquisition of TFCF Corporation (TFCF) and Hulu 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.

10

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 are as follows:

	Quarter Ended				Nine Months Ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Revenues:
Entertainment
Third parties	$	10,478	$	10,031	$	30,050	$	30,827
Intersegment	102		96		307		284
	10,580		10,127		30,357		31,111
Sports
Third parties	4,291		4,101		12,826		12,441
Intersegment	267		234		879		760
	4,558		4,335		13,705		13,201
Experiences	8,386		8,198		25,911		24,389
Eliminations	(369)		(330)		(1,186)		(1,044)
Total segment revenues	$	23,155	$	22,330	$	68,787	$	67,657
Segment operating income:
Entertainment	$	1,201	$	408	$	2,856	$	1,208
Sports	802		854		1,477		1,484
Experiences	2,222		2,297		7,613		7,195
Total segment operating income	$	4,225	$	3,559	$	11,946	$	9,887

Equity in the income of investees is included in segment operating income as follows:

	Quarter Ended				Nine Months Ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Entertainment	$	123	$	174	$	432	$	527
Sports	26		20		45		39
Experiences	—		—		—		(2)
Equity in the income of investees included in segment operating income	149		194		477		564
Amortization of TFCF intangible assets related to an equity investee	(3)		(3)		(9)		(9)
Equity in the income of investees, net	$	146	$	191	$	468	$	555

11

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

A reconciliation of segment operating income to income before income taxes is as follows:

	Quarter Ended				Nine Months Ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Segment operating income	$	4,225	$	3,559	$	11,946	$	9,887
Corporate and unallocated shared expenses	(328)		(295)		(1,027)		(854)
Restructuring and impairment charges(1)	—		(2,650)		(2,052)		(2,871)
Other income (expense), net(2)	(65)		(11)		(65)		96
Interest expense, net	(342)		(305)		(899)		(927)
TFCF and Hulu Acquisition Amortization(3)	(397)		(432)		(1,282)		(1,569)
Income (loss) before income taxes	$	3,093	$	(134)	$	6,621	$	3,762

(1)See Note 16 for a discussion of amounts in restructuring and impairment charges.

(2)“Other income (expense), net” for the quarter and nine months ended June 29, 2024 reflected a charge of $65 million related to a legal ruling. In the prior-year quarter and nine months ended July 1, 2023, the Company recognized a gain of $90 million and $169 million, respectively, on its investment in DraftKings, Inc. (DraftKings Gain), which was sold in the prior-year quarter. “Other income (expense), net” for the prior-year quarter and nine months ended July 1, 2023 also included a charge of $101 million related to a legal ruling.

(3)TFCF and Hulu Acquisition Amortization is as follows:

	Quarter Ended				Nine Months Ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Amortization of intangible assets	$	326	$	361	$	1,068	$	1,186
Step-up of film and television costs	68		68		205		374
Intangibles related to a TFCF equity investee	3		3		9		9
	$	397	$	432	$	1,282	$	1,569

3.Revenues

The following table presents revenues by segment and major source:

	Quarter Ended June 29, 2024
	Entertainment		Sports		Experiences		Eliminations		Total
Subscription fees	$	4,729	$	414	$	—	$	—	$	5,143
Affiliate fees	1,726		2,571		—		(291)		4,006
Advertising	1,941		1,339		—		—		3,280
Theme park admissions	—		—		2,780		—		2,780
Resort and vacations	—		—		2,115		—		2,115
Retail and wholesale sales of merchandise, food and beverage	—		—		2,246		—		2,246
Merchandise licensing	143		—		702		—		845
TV/VOD distribution licensing	670		108		—		—		778
Theatrical distribution licensing	724		—		—		—		724
Home entertainment	142		—		—		—		142
Other	505		126		543		(78)		1,096
	$	10,580	$	4,558	$	8,386	$	(369)	$	23,155

12

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

	Quarter Ended July 1, 2023
	Entertainment		Sports		Experiences		Eliminations		Total
Subscription fees	$	4,157	$	380	$	—	$	—	$	4,537
Affiliate fees	1,833		2,633		—		(270)		4,196
Advertising	1,889		1,153		1		—		3,043
Theme park admissions	—		—		2,731		—		2,731
Resort and vacations	—		—		1,990		—		1,990
Retail and wholesale sales of merchandise, food and beverage	—		—		2,226		—		2,226
Merchandise licensing	128		—		748		—		876
TV/VOD distribution licensing	572		64		—		—		636
Theatrical distribution licensing	838		—		—		—		838
Home entertainment	252		—		—		—		252
Other	458		105		502		(60)		1,005
	$	10,127	$	4,335	$	8,198	$	(330)	$	22,330

	Nine Months Ended June 29, 2024
	Entertainment		Sports		Experiences		Eliminations		Total
Subscription fees	$	14,041	$	1,246	$	—	$	—	$	15,287
Affiliate fees	5,251		7,918		—		(883)		12,286
Advertising	5,709		3,640		—		—		9,349
Theme park admissions	—		—		8,568		—		8,568
Resort and vacations	—		—		6,334		—		6,334
Retail and wholesale sales of merchandise, food and beverage	—		—		6,989		—		6,989
Merchandise licensing	471		—		2,321		—		2,792
TV/VOD distribution licensing	1,686		235		—		—		1,921
Theatrical distribution licensing	1,098		—		—		—		1,098
Home entertainment	540		—		—		—		540
Other	1,561		666		1,699		(303)		3,623
	$	30,357	$	13,705	$	25,911	$	(1,186)	$	68,787

	Nine Months Ended July 1, 2023
	Entertainment		Sports		Experiences		Eliminations		Total
Subscription fees	$	12,243	$	1,139	$	—	$	—	$	13,382
Affiliate fees	5,631		8,052		—		(813)		12,870
Advertising	5,851		3,196		3		—		9,050
Theme park admissions	—		—		7,800		—		7,800
Resort and vacations	—		—		5,919		—		5,919
Retail and wholesale sales of merchandise, food and beverage	—		—		6,750		—		6,750
Merchandise licensing	449		—		2,342		—		2,791
TV/VOD distribution licensing	2,099		242		—		—		2,341
Theatrical distribution licensing	2,745		—		—		—		2,745
Home entertainment	639		—		—		—		639
Other	1,454		572		1,575		(231)		3,370
	$	31,111	$	13,201	$	24,389	$