For the Fiscal Year Ended September 30, 2017
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Commission File Number 1-11605
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Incorporated in Delaware
500 South Buena Vista Street, Burbank, California 91521
(818) 560-1000
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I.R.S. Employer Identification No.
95-4545390
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Title of Each Class
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Name of Each Exchange
on Which Registered
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Common Stock, $.01 par value
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New York Stock Exchange
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
(Do not check if smaller reporting company)
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o
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Smaller reporting company
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o
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Emerging growth company
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o
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Page
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PART I
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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PART II
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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PART III
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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PART IV
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ITEM 15.
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•
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fees charged to cable, satellite and telecommunications service providers (traditional Multi-channel Video Programming Distributors “MVPD”), over-the-top (OTT) digital MVPDs (“DMVPD”) collectively referred to as MVPDs and television stations affiliated with our domestic broadcast television network for the right to deliver our programs to their customers/subscribers (“affiliate fees”);
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the sale to advertisers of time in programs for commercial announcements (“ad sales”); and
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the sale to television networks and distributors for the right to use our television programming (“program sales”).
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Estimated
Subscribers
(in millions)
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ESPN - Domestic
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ESPN
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88
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ESPN2
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87
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ESPNU
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67
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ESPNEWS
(2)
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66
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SEC Network
(2)
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60
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Disney - Domestic
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Disney Channel
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92
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Disney Junior
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72
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Disney XD
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74
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Freeform
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90
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International Channels
(3)
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ESPN
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146
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Disney Channel
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221
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Disney Junior
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151
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Disney XD
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127
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(1)
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Nielsen Media Research estimates are as of September 2017 and capture traditional MVPD and certain DMVPD subscriber counts.
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(2)
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Because Nielsen Media Research does not measure these channels, estimated subscriber counts are according to SNL Kagan as of December 2016.
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(3)
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Because Nielsen Media Research and SNL Kagan do not measure these channels, estimated subscriber counts are based on internal management reports as of September 2017.
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ESPN.com - which delivers sports news, information and video on internet-connected devices, with a dozen editions in three languages globally. In the U.S., ESPN.com also features live video streams of ESPN channels to authenticated MVPD subscribers. Non-subscribers have limited access to certain content.
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ESPN App - which delivers scores, news, highlights, short form video, podcasts and live audio, with 11 editions in three languages globally. In the U.S., the ESPN app also features live video streams of ESPN’s linear channels and exclusive events on internet-connected devices to authenticated MVPD subscribers. Non-subscribers have limited access to certain content.
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ESPN Events Management – which owns and operates the ESPYs (annual awards show), X Games (winter and summer action sports competitions) and a portfolio of collegiate sporting events including bowl games, basketball games and post-season award shows
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ESPN Radio – which distributes talk and play by play programming and is one of the largest sports radio networks in the U.S. ESPN Radio network programming is carried on approximately 400 terrestrial stations including four ESPN owned stations in New York, Los Angeles, Chicago and Dallas and on satellite and internet radio
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ESPN The Magazine – which is a bi-weekly sports magazine
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TV Station
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Market
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Television Market
Ranking
(1)
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WABC
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New York, NY
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1
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KABC
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Los Angeles, CA
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2
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WLS
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Chicago, IL
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3
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WPVI
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Philadelphia, PA
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4
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KGO
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San Francisco, CA
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6
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KTRK
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Houston, TX
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8
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WTVD
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Raleigh-Durham, NC
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24
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KFSN
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Fresno, CA
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54
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(1)
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Based on Nielsen Media Research, U.S. Television Household Estimates, January 1, 2017
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A&E – which offers entertainment programming including original reality and scripted series
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HISTORY – which offers original series and event-driven specials
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Lifetime – which is devoted to female-focused programming
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Lifetime Movie Network (LMN) – which is a 24-hour movie channel
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FYI – which offers contemporary lifestyle programming
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Lifetime Real Women – which is a 24-hour cable channel with programming focusing on women
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(1)
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Nielsen Media Research estimates are as of September 2017 and capture traditional MVPD and certain DMVPD subscriber counts.
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Licensing of television and radio stations.
Each of the television and radio 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. We (and the acquiring entity in the case of a divestiture) must also obtain FCC approval whenever we seek to have a license transferred in connection with the acquisition or divestiture of a station. The FCC may decline to renew or approve the transfer of a license in certain circumstances and may delay renewals while permitting a licensee to continue operating. 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.
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Television and radio station ownership limits.
The FCC imposes limitations on the number of television stations and radio stations we can own in a specific market, on the combined number of television and radio stations we can own in a single market and on the aggregate percentage of the national audience that can be reached by television stations we own. Currently:
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FCC regulations may restrict our ability to own more than one television station in a market, depending on the size and nature of the market. We do not own more than one television station in any market.
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Federal statutes permit our television stations in the aggregate to reach a maximum of 39% of the national audience. Pursuant to the most recent decision by the FCC as to how to calculate compliance with this limit, our eight stations reach approximately 21% of the national audience.
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FCC regulations in some cases impose restrictions on our ability to acquire additional radio or television stations in the markets in which we own radio stations, but we do not believe any such limitations are material to our current operating plans.
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Dual networks.
FCC rules currently prohibit any of the four major broadcast television networks — ABC, CBS, Fox and NBC — from being under common ownership or control.
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Regulation of programming.
The FCC regulates broadcast programming by, among other things, banning “indecent” programming, regulating political advertising and imposing commercial time limits during children’s programming. Penalties for broadcasting indecent programming can range up to nearly $400 thousand per indecent utterance or image per station.
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Cable and satellite carriage of broadcast television stations.
With respect to cable systems operating within a television station’s Designated Market Area, FCC rules require that every three years each television station elect either “must carry” status, pursuant to which cable operators generally must carry a local television station in the station’s market, or “retransmission consent” status, pursuant to which the cable operator must negotiate with the television station to obtain the consent of the television station prior to carrying its signal. Under the Satellite Home Viewer Improvement Act and its successors, including most recently the STELA Reauthorization Act (STELAR), which also requires the “must carry” or “retransmission consent” election, satellite carriers are permitted to retransmit a local television station’s signal into its local market with the consent of the local television station. The ABC owned television stations have historically elected retransmission consent. Portions of these satellite laws are set to expire on December 31, 2019.
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Cable and satellite carriage of programming.
The Communications Act and FCC rules regulate some aspects of negotiations regarding cable and satellite retransmission consent, and some cable and satellite companies have sought regulation of additional aspects of the carriage of programming on cable and satellite systems. New legislation, court action or regulation in this area could have an impact on the Company’s operations.
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licensing characters and content from our film, television and other properties to third parties for use on consumer merchandise, published materials and in multi-platform games;
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selling merchandise through our retail stores, internet shopping sites and to wholesalers;
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selling games through app distributors and online and through consumers’ in-game purchases;
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selling self-published children’s books and magazines and comic books to wholesalers;
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selling advertising in online video content; and
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charging tuition at English language learning centers in China (Disney English).
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Our broadcast and cable networks, stations and online offerings compete for viewers with other broadcast, cable and satellite services as well as with home entertainment products, new sources of broadband and mobile delivered content and internet usage.
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Our broadcast and cable networks and stations compete for the sale of advertising time with other broadcast, cable and satellite services, as well as with newspapers, magazines, billboards and radio stations. In addition, we increasingly face competition for advertising sales from internet and mobile delivered content, which offer advertising delivery technologies that are more targeted than can be achieved through traditional means.
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Our cable networks compete for carriage of their programming with other programming providers.
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Our studio operations, broadcast and cable networks compete to obtain creative and performing talent, sports and other programming, story properties, advertiser support and market share with other studio operations, broadcast and cable networks and new sources of broadband delivered content.
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Our theme parks and resorts compete for guests with all other forms of entertainment, lodging, tourism and recreation activities.
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Our studio operations compete for customers with all other forms of entertainment.
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Our Consumer Products & Interactive Media segment competes with other licensors, publishers and retailers of character, brand and celebrity names.
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Our interactive media operations compete with other licensors and publishers of console, online and mobile games and other types of home entertainment.
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U.S. FCC regulation of our television and radio networks, our national programming networks, and our owned television stations. See Item 1 — Business — Media Networks, Federal Regulation.
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Federal, state and foreign privacy and data protection laws and regulations.
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Regulation of the safety of consumer products and theme park operations.
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Environmental protection regulations.
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Imposition by foreign countries of trade restrictions, restrictions on the manner in which content is currently licensed and distributed, ownership restrictions, currency exchange controls or motion picture or television content requirements or quotas.
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Domestic and international wage laws, tax laws or currency controls.
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Revenues in our Media Networks segment are subject to seasonal advertising patterns and changes in viewership levels. In general, advertising revenues are somewhat higher during the fall and somewhat lower during the summer months. Affiliate fees are typically collected ratably throughout the year.
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Revenues in our Parks and Resorts segment fluctuate with changes in theme park attendance and resort occupancy resulting from the seasonal nature of vacation travel and leisure activities. Peak attendance and resort occupancy generally occur during the summer months when school vacations occur and during early-winter and spring-holiday periods.
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Revenues in our Studio Entertainment segment fluctuate due to the timing and performance of releases in the theatrical, home entertainment and television markets. Release dates are determined by several factors, including competition and the timing of vacation and holiday periods.
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Revenues in our Consumer Products & Interactive Media segments are influenced by seasonal consumer purchasing behavior, which generally results in higher revenues during the Company’s first fiscal quarter, and by the timing and performance of theatrical and game releases and cable programming broadcasts.
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ITEM 1B.
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Unresolved Staff Comments
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ITEM 2.
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Properties
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Location
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Property /
Approximate Size
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Use
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Business Segment
(1)
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Burbank, CA & surrounding cities
(2)
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Land (201 acres) & Buildings (4,695,000 ft
2
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Owned Office/Production/Warehouse (includes 236,000 ft
2
sublet to third-party tenants)
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Corp/Studio/Media/
CPIM/P&R
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Burbank, CA & surrounding cities
(2)
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Buildings (1,537,000 ft
2
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Leased Office/Warehouse
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Corp/Studio/Media/
CPIM/P&R
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Los Angeles, CA
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Land (22 acres) & Buildings (600,000 ft
2
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Owned Office/Production/Technical
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Media/Studio
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Los Angeles, CA
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Buildings (462,000 ft
2
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Leased Office/Production/Technical/Theater
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Media/Studio
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New York, NY
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Land (6 acres) & Buildings (1,418,000 ft
2
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Owned Office/Production/Technical
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Media/Corp
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New York, NY
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Buildings (550,000 ft
2
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Leased Office/Production/Theater/Warehouse (includes 14,000 ft
2
sublet to third-party tenants)
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Corp/Studio/Media/CPIM
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Bristol, CT
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Land (117 acres) & Buildings (1,174,000 ft
2
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Owned Office/Production/Technical
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Media
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Bristol, CT
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Buildings (512,000 ft
2
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Leased Office/Warehouse/Technical
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Media
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Emeryville, CA
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Land (20 acres) & Buildings (430,000 ft
2
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Owned Office/Production/Technical
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Studio
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Emeryville, CA
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Buildings (80,000 ft
2
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Leased Office/Storage
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Studio
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San Francisco, CA
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Buildings (709,000 ft
2
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Leased Office/Production/Technical/Theater (includes 56,000 ft
2
sublet to third-party tenants)
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Corp/Studio/Media/
CPIM/P&R
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USA & Canada
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Land and Buildings (Multiple sites and sizes)
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Owned and Leased Office/ Production/Transmitter/Theaters/Warehouse
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Corp/Studio/Media/
CPIM/P&R
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Hammersmith, England
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Building (279,500 ft
2
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Leased Office
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Corp/Studio/Media/
CPIM/P&R
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Europe, Asia, Australia & Latin America
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Buildings (Multiple sites and sizes)
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Leased Office/Warehouse/Retail
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Corp/Studio/Media/
CPIM/P&R
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(1)
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Corp – Corporate, CPIM – Consumer Products & Interactive Media, P&R – Parks and Resorts
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(2)
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Surrounding cities include Glendale, CA, North Hollywood, CA and Sun Valley, CA
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Name
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Age
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Title
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Executive
Officer Since
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Robert A. Iger
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66
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Chairman and Chief Executive Officer
(1)
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2000
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Alan N. Braverman
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69
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Senior Executive Vice President, General Counsel and Secretary
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2003
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Kevin A. Mayer
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55
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Senior Executive Vice President and Chief Strategy Officer
(2)
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2005
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Christine M. McCarthy
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62
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Senior Executive Vice President and Chief Financial Officer
(3)
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2005
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M. Jayne Parker
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56
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Senior Executive Vice President and Chief Human Resources Officer
(4)
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2009
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(1)
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Mr. Iger was appointed Chairman of the Board and Chief Executive Officer effective March 13, 2012. He was President and Chief Executive Officer from October 2, 2005 through that date.
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(2)
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Mr. Mayer was appointed Senior Executive Vice President and Chief Strategy Officer effective June 30, 2015. He was previously Executive Vice President, Corporate Strategy and Business Development of the Company from 2005 to 2015.
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(3)
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Ms. McCarthy was appointed Senior Executive Vice President and Chief Financial Officer effective June 30, 2015. She was previously Executive Vice President, Corporate Real Estate, Alliances and Treasurer of the Company from 2000 to 2015.
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(4)
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Ms. Parker was appointed Senior Executive Vice President and Chief Human Resources Officer effective August 20, 2017. She was previously Executive Vice President and Chief Human Resources Officer from 2009.
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Period
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Total Number
of Shares
Purchased
(1)
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Weighted
Average Price
Paid per Share
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Total Number
of Shares
Purchased
as Part of
Publicly
Announced
Plans or
Programs
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Maximum
Number of
Shares that
May Yet Be
Purchased
Under the
Plans or
Programs
(2)
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July 2, 2017 – July 31, 2017
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6,365,800
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$
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105.57
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6,343,537
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219 million
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August 1, 2017 – August 31, 2017
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12,517,752
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103.28
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12,299,100
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207 million
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September 1, 2017 – September 30, 2017
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14,978,497
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99.40
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14,945,804
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192 million
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Total
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33,862,049
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101.99
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33,588,441
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192 million
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(1)
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273,608 shares were purchased on the open market to provide shares to participants in the Walt Disney Investment Plan (WDIP). These purchases were not made pursuant to a publicly announced repurchase plan or program.
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(2)
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Under a share repurchase program implemented effective June 10, 1998, the Company is authorized to repurchase shares of its common stock. On January 30, 2015, the Company’s Board of Directors increased the repurchase authorization to a total of 400 million shares as of that date. The repurchase program does not have an expiration date.
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2017
(1)
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2016
(2)
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2015
(3)
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2014
(4)
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2013
(5)
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Statements of income
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Revenues
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$
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55,137
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$
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55,632
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$
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52,465
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$
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48,813
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$
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45,041
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Net income
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9,366
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9,790
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8,852
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8,004
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6,636
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|||||
Net income attributable to Disney
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8,980
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9,391
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8,382
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7,501
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6,136
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Per common share
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||||||||||
Earnings attributable to Disney
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Diluted
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$
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5.69
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$
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5.73
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$
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4.90
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$
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4.26
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|
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$
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3.38
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Basic
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5.73
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|
|
5.76
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|
|
4.95
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|
|
4.31
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|
|
3.42
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|||||
Dividends
(6)
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1.56
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1.42
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1.81
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|
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0.86
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|
|
0.75
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|||||
Balance sheets
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||||||||||
Total assets
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$
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95,789
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|
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$
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92,033
|
|
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$
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88,182
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|
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$
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84,141
|
|
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$
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81,197
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Long-term obligations
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26,710
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|
|
24,189
|
|
|
19,142
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|
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18,573
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|
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17,293
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|||||
Disney shareholders’ equity
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41,315
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|
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43,265
|
|
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44,525
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44,958
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|
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45,429
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|||||
Statements of cash flows
(7)
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||||||||||
Cash provided (used) by:
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||||||||||
Operating activities
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$
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12,343
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$
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13,136
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|
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$
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11,385
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|
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$
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10,148
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|
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$
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9,495
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|
Investing activities
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(4,111
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)
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|
(5,758
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)
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|
(4,245
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)
|
|
(3,345
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)
|
|
(4,676
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)
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|||||
Financing activities
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(8,959
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)
|
|
(7,220
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)
|
|
(5,801
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)
|
|
(6,981
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)
|
|
(4,458
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)
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(1)
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The fiscal 2017 results include a benefit from the adoption of a new accounting pronouncement related to the tax impact of employee share-based awards ($0.08 per diluted share) (see Note 18 to the Consolidated Financial Statements). In addition, results include a non-cash net gain in connection with the acquisition of a controlling interest in BAMTech ($0.10 per diluted share) (see Note 3 to the Consolidated Financial Statements), an adverse impact due to a charge, net of committed insurance recoveries, incurred in connection with the settlement of litigation ($0.07 per dilutive share) and restructuring and impairment charges ($0.04 per diluted share), which collectively resulted in a net adverse impact of $0.01 per diluted share.
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(2)
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The fiscal 2016 results include the Company’s share of a net gain recognized by A+E in connection with an acquisition of an interest in Vice ($0.13 per diluted share) (see Note 3 to the Consolidated Financial Statements), restructuring and impairment charges ($0.07 per diluted share) and a charge in connection with the discontinuation of our Infinity console game business ($0.05 per diluted share) (see Note 1 to the Consolidated Financial Statements). These items collectively resulted in a net benefit of $0.01 per diluted share.
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(3)
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The fiscal 2015 results include the write-off of a deferred tax asset as a result of the Disneyland Paris recapitalization ($0.23 per diluted share) (see Note 9 to the Consolidated Financial Statements) and restructuring and impairment charges ($0.02 per diluted share), which collectively resulted in a net adverse impact of $0.25 per diluted share.
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(4)
|
The fiscal 2014 results include a loss resulting from the foreign currency translation of net monetary assets denominated in Venezuelan currency ($0.05 per diluted share), restructuring and impairment charges ($0.05 per diluted share), a gain on the sale of property ($0.03 per diluted share) and a portion of a settlement of an affiliate contract dispute ($0.01 per diluted share). These items collectively resulted in a net adverse impact of $0.06 per diluted share.
|
(5)
|
During fiscal 2013, the Company completed a $4.1 billion cash and stock acquisition of Lucasfilm Ltd. LLC. In addition, results for the year include a charge related to the Celador litigation ($0.11 per diluted share), restructuring and impairment charges ($0.07 per diluted share), a charge related to an equity redemption by Hulu ($0.02 per diluted share), favorable tax adjustments related to an increase in the amount of prior-year foreign earnings considered to be indefinitely reinvested outside of the United States and favorable tax adjustments related to pre-tax earnings of prior years ($0.12 per diluted share) and gains in connection with the sale of our equity interest in ESPN STAR Sports and certain businesses ($0.08 per diluted share). These items collectively resulted in a net adverse impact of $0.01 per diluted share.
|
(6)
|
In fiscal 2015, the Company began paying dividends on a semiannual basis. Accordingly, fiscal 2015 includes dividend payments related to fiscal 2014 and the first half of fiscal 2015 (see Note 11 to the Consolidated Financial Statements).
|
(7)
|
Cash flow information for prior years has been restated to reflect the adoption of new accounting standards during fiscal 2017 (see Note 18 to the Consolidated Financial Statements). Operating activities reflected a $77 million decrease, a $476 million increase, a $368 million increase and a $43 million increase, and financing activities reflected decreases of $229 million, $287 million, $271 million and $244 million in fiscal 2016, 2015, 2014 and 2013, respectively.
|
|
|
|
|
|
|
|
% Change
Better/(Worse)
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
vs. 2016 |
|
2016
vs. 2015 |
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Services
|
$
|
46,843
|
|
|
$
|
47,130
|
|
|
$
|
43,894
|
|
|
(1
|
)%
|
|
7
|
%
|
Products
|
8,294
|
|
|
8,502
|
|
|
8,571
|
|
|
(2
|
)%
|
|
(1
|
)%
|
|||
Total revenues
|
55,137
|
|
|
55,632
|
|
|
52,465
|
|
|
(1
|
)%
|
|
6
|
%
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of services (exclusive of depreciation and amortization)
|
(25,320
|
)
|
|
(24,653
|
)
|
|
(23,191
|
)
|
|
(3
|
)%
|
|
(6
|
)%
|
|||
Cost of products (exclusive of depreciation and amortization)
|
(4,986
|
)
|
|
(5,340
|
)
|
|
(5,173
|
)
|
|
7
|
%
|
|
(3
|
)%
|
|||
Selling, general, administrative and other
|
(8,176
|
)
|
|
(8,754
|
)
|
|
(8,523
|
)
|
|
7
|
%
|
|
(3
|
)%
|
|||
Depreciation and amortization
|
(2,782
|
)
|
|
(2,527
|
)
|
|
(2,354
|
)
|
|
(10
|
)%
|
|
(7
|
)%
|
|||
Total costs and expenses
|
(41,264
|
)
|
|
(41,274
|
)
|
|
(39,241
|
)
|
|
—
|
%
|
|
(5
|
)%
|
|||
Restructuring and impairment charges
|
(98
|
)
|
|
(156
|
)
|
|
(53
|
)
|
|
37
|
%
|
|
>(100
|
)%
|
|||
Other income, net
|
78
|
|
|
—
|
|
|
—
|
|
|
nm
|
|
|
nm
|
|
|||
Interest expense, net
|
(385
|
)
|
|
(260
|
)
|
|
(117
|
)
|
|
(48
|
)%
|
|
>(100
|
)%
|
|||
Equity in the income of investees
|
320
|
|
|
926
|
|
|
814
|
|
|
(65
|
)%
|
|
14
|
%
|
|||
Income before income taxes
|
13,788
|
|
|
14,868
|
|
|
13,868
|
|
|
(7
|
)%
|
|
7
|
%
|
|||
Income taxes
|
(4,422
|
)
|
|
(5,078
|
)
|
|
(5,016
|
)
|
|
13
|
%
|
|
(1
|
)%
|
|||
Net income
|
9,366
|
|
|
9,790
|
|
|
8,852
|
|
|
(4
|
)%
|
|
11
|
%
|
|||
Less: Net income attributable to noncontrolling interests
|
(386
|
)
|
|
(399
|
)
|
|
(470
|
)
|
|
3
|
%
|
|
15
|
%
|
|||
Net income attributable to The Walt Disney Company (Disney)
|
$
|
8,980
|
|
|
$
|
9,391
|
|
|
$
|
8,382
|
|
|
(4
|
)%
|
|
12
|
%
|
Earnings per share attributable to Disney:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Diluted
|
$
|
5.69
|
|
|
$
|
5.73
|
|
|
$
|
4.90
|
|
|
(1
|
)%
|
|
17
|
%
|
Basic
|
$
|
5.73
|
|
|
$
|
5.76
|
|
|
$
|
4.95
|
|
|
(1
|
)%
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common and common equivalent shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted
|
1,578
|
|
|
1,639
|
|
|
1,709
|
|
|
|
|
|
|||||
Basic
|
1,568
|
|
|
1,629
|
|
|
1,694
|
|
|
|
|
|
•
|
Consolidated Results and Non-Segment Items
|
•
|
Business Segment Results —
2017 vs. 2016
|
•
|
Business Segment Results —
2016 vs. 2015
|
•
|
Corporate and Unallocated Shared Expenses
|
•
|
Liquidity and Capital Resources
|
•
|
Contractual Obligations, Commitments and Off Balance Sheet Arrangements
|
•
|
Critical Accounting Policies and Estimates
|
•
|
Forward-Looking Statements
|
(in millions)
|
2017
|
||
Gain related to the acquisition of BAMTech
|
$
|
255
|
|
Settlement of litigation
|
(177
|
)
|
|
Other income, net
|
$
|
78
|
|
(in millions)
|
|
2017
|
|
2016
|
|
% Change
Better/(Worse)
|
||||||
Interest expense
|
|
$
|
(507
|
)
|
|
$
|
(354
|
)
|
|
(43
|
)%
|
|
Interest and investment income
|
|
122
|
|
|
94
|
|
|
30
|
%
|
|
||
Interest expense, net
|
|
$
|
(385
|
)
|
|
$
|
(260
|
)
|
|
(48
|
)%
|
|
|
2017
|
|
2016
|
|
Change
Better/(Worse)
|
||||
Effective income tax rate
|
32.1
|
%
|
|
34.2
|
%
|
|
2.1
|
|
ppt
|
(in millions)
|
|
2016
|
|
2015
|
|
% Change
Better/(Worse)
|
||||||
Interest expense
|
|
$
|
(354
|
)
|
|
$
|
(265
|
)
|
|
(34
|
)%
|
|
Interest and investment income
|
|
94
|
|
|
148
|
|
|
(36
|
)%
|
|
||
Interest expense, net
|
|
$
|
(260
|
)
|
|
$
|
(117
|
)
|
|
>(100
|
)%
|
|
|
2016
|
|
2015
|
|
Change
Better/(Worse)
|
||||
Effective income tax rate
|
34.2
|
%
|
|
36.2
|
%
|
|
2.0
|
|
ppt
|
•
|
A $255 million non-cash net gain in connection with the acquisition of a controlling interest in BAMTech
|
•
|
A $177 million charge, net of committed insurance recoveries, in connection with the settlement of litigation
|
•
|
Restructuring and impairment charges totaling $98 million
|
•
|
The $332 million Vice Gain
|
•
|
Restructuring and impairment charges totaling $156 million
|
•
|
The $129 million Infinity Charge
|
•
|
The $399 million Disneyland Paris Tax Asset Write-off
|
•
|
Restructuring and impairment charges totaling $53 million
|
(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, 2017:
|
|
|
|
|
|
|
|
||||||||
Settlement of litigation
|
$
|
(177
|
)
|
|
$
|
65
|
|
|
$
|
(112
|
)
|
|
$
|
(0.07
|
)
|
Restructuring and impairment charges
|
(98
|
)
|
|
31
|
|
|
(67
|
)
|
|
(0.04
|
)
|
||||
Gain related to the acquisition of BAMTech
|
255
|
|
|
(93
|
)
|
|
162
|
|
|
0.10
|
|
||||
Total
|
$
|
(20
|
)
|
|
$
|
3
|
|
|
$
|
(17
|
)
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
||||||||
Year Ended October 1, 2016:
|
|
|
|
|
|
|
|
||||||||
Vice Gain
|
$
|
332
|
|
|
$
|
(122
|
)
|
|
$
|
210
|
|
|
$
|
0.13
|
|
Restructuring and impairment charges
|
(156
|
)
|
|
43
|
|
|
(113
|
)
|
|
(0.07
|
)
|
||||
Infinity Charge
(3)
|
(129
|
)
|
|
47
|
|
|
(82
|
)
|
|
(0.05
|
)
|
||||
Total
|
$
|
47
|
|
|
$
|
(32
|
)
|
|
$
|
15
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended October 3, 2015:
|
|
|
|
|
|
|
|
|
|||||||
Disneyland Paris Tax Asset Write-off
|
$
|
—
|
|
|
$
|
(399
|
)
|
|
$
|
(399
|
)
|
|
$
|
(0.23
|
)
|
Restructuring and impairment charges
|
(53
|
)
|
|
20
|
|
|
(33
|
)
|
|
(0.02
|
)
|
||||
Total
|
$
|
(53
|
)
|
|
$
|
(379
|
)
|
|
$
|
(432
|
)
|
|
$
|
(0.25
|
)
|
(1)
|
Tax benefit/expense adjustments are determined using the tax rate applicable to the individual item affecting comparability.
|
(2)
|
EPS is net of noncontrolling interest share, where applicable. Total may not equal the sum of the column due to rounding.
|
(3)
|
Recorded in “Cost of products” in the Consolidated Statements of Income. See Note 1 to the Consolidated Financial Statements.
|
|
|
|
|
|
|
|
% Change
Better/(Worse)
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
2017
vs. 2016 |
|
2016
vs. 2015 |
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||
Media Networks
|
$
|
23,510
|
|
|
$
|
23,689
|
|
|
$
|
23,264
|
|
|
(1
|
)%
|
|
2
|
%
|
Parks and Resorts
|
18,415
|
|
|
16,974
|
|
|
16,162
|
|
|
8
|
%
|
|
5
|
%
|
|||
Studio Entertainment
|
8,379
|
|
|
9,441
|
|
|
7,366
|
|
|
(11
|
)%
|
|
28
|
%
|
|||
Consumer Products & Interactive Media
|
4,833
|
|
|
5,528
|
|
|
5,673
|
|
|
(13
|
)%
|
|
(3
|
)%
|
|||
|
$
|
55,137
|
|
|
$
|
55,632
|
|
|
$
|
52,465
|
|
|
(1
|
)%
|
|
6
|
%
|
Segment operating income:
|
|
|
|
|
|
|
|
|
|
||||||||
Media Networks
|
$
|
6,902
|
|
|
$
|
7,755
|
|
|
$
|
7,793
|
|
|
(11
|
)%
|
|
—
|
%
|
Parks and Resorts
|
3,774
|
|
|
3,298
|
|
|
3,031
|
|
|
14
|
%
|
|
9
|
%
|
|||
Studio Entertainment
|
2,355
|
|
|
2,703
|
|
|
1,973
|
|
|
(13
|
)%
|
|
37
|
%
|
|||
Consumer Products & Interactive Media
|
1,744
|
|
|
1,965
|
|
|
1,884
|
|
|
(11
|
)%
|
|
4
|
%
|
|||
|
$
|
14,775
|
|
|
$
|
15,721
|
|
|
$
|
14,681
|
|
|
(6
|
)%
|
|
7
|
%
|
|
|
|
|
|
|
|
% Change
Better/(Worse)
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
2017
vs. 2016 |
|
2016
vs. 2015 |
||||||||
Segment operating income
|
$
|
14,775
|
|
|
$
|
15,721
|
|
|
$
|
14,681
|
|
|
(6
|
)%
|
|
7
|
%
|
Corporate and unallocated shared expenses
|
(582
|
)
|
|
(640
|
)
|
|
(643
|
)
|
|
9
|
%
|
|
—
|
%
|
|||
Restructuring and impairment charges
|
(98
|
)
|
|
(156
|
)
|
|
(53
|
)
|
|
37
|
%
|
|
>(100
|
)%
|
|||
Other income, net
|
78
|
|
|
—
|
|
|
—
|
|
|
nm
|
|
|
nm
|
|
|||
Interest expense, net
|
(385
|
)
|
|
(260
|
)
|
|
(117
|
)
|
|
(48
|
)%
|
|
>(100
|
)%
|
|||
Vice Gain
|
—
|
|
|
332
|
|
|
—
|
|
|
nm
|
|
|
nm
|
|
|||
Infinity Charge
|
—
|
|
|
(129
|
)
|
|
—
|
|
|
nm
|
|
|
nm
|
|
|||
Income before income taxes
|
$
|
13,788
|
|
|
$
|
14,868
|
|
|
$
|
13,868
|
|
|
(7
|
)%
|
|
7
|
%
|
|
Year Ended
|
|
% Change
Better /
(Worse)
|
||||||||
(in millions)
|
September 30, 2017
|
|
October 1, 2016
|
|
|||||||
Revenues
|
|
|
|
|
|
|
|||||
Affiliate fees
|
$
|
12,659
|
|
|
$
|
12,259
|
|
|
3
|
%
|
|
Advertising
|
8,129
|
|
|
8,509
|
|
|
(4
|
)%
|
|
||
TV/SVOD distribution and other
|
2,722
|
|
|
2,921
|
|
|
(7
|
)%
|
|
||
Total revenues
|
23,510
|
|
|
23,689
|
|
|
(1
|
)%
|
|
||
Operating expenses
|
(14,068
|
)
|
|
(13,571
|
)
|
|
(4
|
)%
|
|
||
Selling, general, administrative and other
|
(2,647
|
)
|
|
(2,705
|
)
|
|
2
|
%
|
|
||
Depreciation and amortization
|
(237
|
)
|
|
(255
|
)
|
|
7
|
%
|
|
||
Equity in the income of investees
|
344
|
|
|
597
|
|
|
(42
|
)%
|
|
||
Operating Income
|
$
|
6,902
|
|
|
$
|
7,755
|
|
|
(11
|
)%
|
|
|
Year Ended
|
|
% Change
Better /
(Worse)
|
||||||||
(in millions)
|
September 30, 2017
|
|
October 1, 2016
|
|
|||||||
Revenues
|
|
|
|
|
|
|
|||||
Cable Networks
|
$
|
16,527
|
|
|
$
|
16,632
|
|
|
(1
|
)%
|
|
Broadcasting
|
6,983
|
|
|
7,057
|
|
|
(1
|
)%
|
|
||
|
$
|
23,510
|
|
|
$
|
23,689
|
|
|
(1
|
)%
|
|
Segment operating income
|
|
|
|
|
|
|
|||||
Cable Networks
|
$
|
5,353
|
|
|
$
|
5,965
|
|
|
(10
|
)%
|
|
Broadcasting
|
1,205
|
|
|
1,193
|
|
|
1
|
%
|
|
||
Equity in the income of investees
|
344
|
|
|
597
|
|
|
(42
|
)%
|
|
||
|
$
|
6,902
|
|
|
$
|
7,755
|
|
|
(11
|
)%
|
|
|
Year Ended
|
|
% Change
Better /
(Worse)
|
||||||||
(in millions)
|
September 30, 2017
|
|
October 1, 2016
|
|
|||||||
Revenues
|
|
|
|
|
|
|
|||||
Domestic
|
$
|
14,812
|
|
|
$
|
14,242
|
|
|
4
|
%
|
|
International
|
3,603
|
|
|
2,732
|
|
|
32
|
%
|
|
||
Total revenues
|
18,415
|
|
|
16,974
|
|
|
8
|
%
|
|
||
Operating expenses
|
(10,667
|
)
|
|
(10,039
|
)
|
|
(6
|
)%
|
|
||
Selling, general, administrative and other
|
(1,950
|
)
|
|
(1,913
|
)
|
|
(2
|
)%
|
|
||
Depreciation and amortization
|
(1,999
|
)
|
|
(1,721
|
)
|
|
(16
|
)%
|
|
||
Equity in the loss of investees
|
(25
|
)
|
|
(3
|
)
|
|
>(100
|
)%
|
|
||
Operating Income
|
$
|
3,774
|
|
|
$
|
3,298
|
|
|
14
|
%
|
|
|
Domestic
|
|
International
(2)
|
|
Total
|
||||||||||||||||||
|
Fiscal Year 2017
|
|
Fiscal Year 2016
|
|
Fiscal Year 2017
|
|
Fiscal Year 2016
|
|
Fiscal Year 2017
|
|
Fiscal Year 2016
|
||||||||||||
Parks
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Increase/ (decrease)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Attendance
|
2
|
%
|
|
(1
|
)%
|
|
47
|
%
|
|
5
|
%
|
|
13
|
%
|
|
1
|
%
|
||||||
Per Capita Guest Spending
|
2
|
%
|
|
7
|
%
|
|
(1
|
)%
|
|
6
|
%
|
|
(1
|
)%
|
|
7
|
%
|
||||||
Hotels
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Occupancy
|
88
|
%
|
|
89
|
%
|
|
80
|
%
|
|
78
|
%
|
|
86
|
%
|
|
87
|
%
|
||||||
Available Room Nights
(in thousands)
|
10,205
|
|
|
10,382
|
|
|
3,022
|
|
|
2,600
|
|
|
13,227
|
|
|
12,982
|
|
||||||
Per Room Guest Spending
|
|
$317
|
|
|
|
$305
|
|
|
|
$292
|
|
|
|
$278
|
|
|
|
$312
|
|
|
|
$301
|
|
(1)
|
Per room guest spending consists of the average daily hotel room rate as well as guest spending on food, beverage and merchandise at the hotels. Hotel statistics include rentals of Disney Vacation Club units.
|
(2)
|
Per capita guest spending growth rate is stated on a constant currency basis. Per room guest spending is stated at the fiscal 2016 average foreign exchange rate.
|
|
Year Ended
|
|
% Change
Better /
(Worse)
|
||||||||
(in millions)
|
September 30, 2017
|
|
October 1, 2016
|
|
|||||||
Revenues
|
|
|
|
|
|
|
|||||
Theatrical distribution
|
$
|
2,903
|
|
|
$
|
3,672
|
|
|
(21
|
)%
|
|
Home entertainment
|
1,798
|
|
|
2,108
|
|
|
(15
|
)%
|
|
||
TV/SVOD distribution and other
|
3,678
|
|
|
3,661
|
|
|
—
|
%
|
|
||
Total revenues
|
8,379
|
|
|
9,441
|
|
|
(11
|
)%
|
|
||
Operating expenses
|
(3,667
|
)
|
|
(3,991
|
)
|
|
8
|
%
|
|
||
Selling, general, administrative and other
|
(2,242
|
)
|
|
(2,622
|
)
|
|
14
|
%
|
|
||
Depreciation and amortization
|
(115
|
)
|
|
(125
|
)
|
|
8
|
%
|
|
||
Operating Income
|
$
|
2,355
|
|
|
$
|
2,703
|
|
|
(13
|
)%
|
|
|
Year Ended
|
|
% Change
Better /
(Worse)
|
||||||||
(in millions)
|
September 30, 2017
|
|
October 1, 2016
|
|
|||||||
Revenues
|
|
|
|
|
|
|
|||||
Licensing, publishing and games
|
$
|
3,256
|
|
|
$
|
3,819
|
|
|
(15
|
)%
|
|
Retail and other
|
1,577
|
|
|
1,709
|
|
|
(8
|
)%
|
|
||
Total revenues
|
4,833
|
|
|
5,528
|
|
|
(13
|
)%
|
|
||
Operating expenses
|
(1,904
|
)
|
|
(2,263
|
)
|
|
16
|
%
|
|
||
Selling, general, administrative and other
|
(1,007
|
)
|
|
(1,125
|
)
|
|
10
|
%
|
|
||
Depreciation and amortization
|
(179
|
)
|
|
(175
|
)
|
|
(2
|
)%
|
|
||
Equity in the income of investees
|
1
|
|
|
—
|
|
|
nm
|
|
|
||
Operating Income
|
$
|
1,744
|
|
|
$
|
1,965
|
|
|
(11
|
)%
|
|
|
Year Ended
|
|
% Change
Better /
(Worse)
|
||||||||
(in millions)
|
October 1, 2016
|
|
October 3, 2015
|
|
|||||||
Revenues
|
|
|
|
|
|
|
|||||
Affiliate fees
|
$
|
12,259
|
|
|
$
|
12,029
|
|
|
2
|
%
|
|
Advertising
|
8,509
|
|
|
8,361
|
|
|
2
|
%
|
|
||
TV/SVOD distribution and other
|
2,921
|
|
|
2,874
|
|
|
2
|
%
|
|
||
Total revenues
|
23,689
|
|
|
23,264
|
|
|
2
|
%
|
|
||
Operating expenses
|
(13,571
|
)
|
|
(13,150
|
)
|
|
(3
|
)%
|
|
||
Selling, general, administrative and other
|
(2,705
|
)
|
|
(2,869
|
)
|
|
6
|
%
|
|
||
Depreciation and amortization
|
(255
|
)
|
|
(266
|
)
|
|
4
|
%
|
|
||
Equity in the income of investees
|
597
|
|
|
814
|
|
|
(27
|
)%
|
|
||
Operating Income
|
$
|
7,755
|
|
|
$
|
7,793
|
|
|
—
|
%
|
|
|
Year Ended
|
|
% Change
Better /
(Worse)
|
||||||||
(in millions)
|
October 1, 2016
|
|
October 3, 2015
|
|
|||||||
Revenues
|
|
|
|
|
|
|
|||||
Cable Networks
|
$
|
16,632
|
|
|
$
|
16,581
|
|
|
—
|
%
|
|
Broadcasting
|
7,057
|
|
|
6,683
|
|
|
6
|
%
|
|
||
|
$
|
23,689
|
|
|
$
|
23,264
|
|
|
2
|
%
|
|
Segment operating income
|
|
|
|
|
|
|
|||||
Cable Networks
|
$
|
5,965
|
|
|
$
|
5,891
|
|
|
1
|
%
|
|
Broadcasting
|
1,193
|
|
|
1,088
|
|
|
10
|
%
|
|
||
Equity in the income of investees
|
597
|
|
|
814
|
|
|
(27
|
)%
|
|
||
|
$
|
7,755
|
|
|
$
|
7,793
|
|
|
—
|
%
|
|
|
Year Ended
|
|
% Change
Better /
(Worse)
|
||||||||
(in millions)
|
October 1, 2016
|
|
October 3, 2015
|
|
|||||||
Revenues
|
|
|
|
|
|
|
|||||
Domestic
|
$
|
14,242
|
|
|
$
|
13,611
|
|
|
5
|
%
|
|
International
|
2,732
|
|
|
2,551
|
|
|
7
|
%
|
|
||
Total revenues
|
16,974
|
|
|
16,162
|
|
|
5
|
%
|
|
||
Operating expenses
|
(10,039
|
)
|
|
(9,730
|
)
|
|
(3
|
)%
|
|
||
Selling, general, administrative and other
|
(1,913
|
)
|
|
(1,884
|
)
|
|
(2
|
)%
|
|
||
Depreciation and amortization
|
(1,721
|
)
|
|
(1,517
|
)
|
|
(13
|
)%
|
|
||
Equity in the loss of investees
|
(3
|
)
|
|
—
|
|
|
nm
|
|
|
||
Operating Income
|
$
|
3,298
|
|
|
$
|
3,031
|
|
|
9
|
%
|
|
|
Domestic
|
|
International
(2)
|
|
Total
|
||||||||||||||||||
|
Fiscal Year 2016
|
|
Fiscal Year 2015
|
|
Fiscal Year 2016
|
|
Fiscal Year 2015
|
|
Fiscal Year 2016
|
|
Fiscal Year 2015
|
||||||||||||
Parks
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Increase/ (decrease)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Attendance
|
(1
|
)%
|
|
7
|
%
|
|
5
|
%
|
|
—
|
%
|
|
1
|
%
|
|
5
|
%
|
||||||
Per Capita Guest Spending
|
7
|
%
|
|
4
|
%
|
|
5
|
%
|
|
5
|
%
|
|
7
|
%
|
|
4
|
%
|
||||||
Hotels
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Occupancy
|
89
|
%
|
|
87
|
%
|
|
78
|
%
|
|
79
|
%
|
|
87
|
%
|
|
86
|
%
|
||||||
Available Room Nights
(in thousands) |
10,382
|
|
|
10,644
|
|
|
2,600
|
|
|
2,473
|
|
|
12,982
|
|
|
13,117
|
|
||||||
Per Room Guest Spending
|
|
$305
|
|
|
|
$295
|
|
|
|
$285
|
|
|
|
$295
|
|
|
|
$302
|
|
|
|
$295
|
|
(1)
|
Per room guest spending consists of the average daily hotel room rate as well as guest spending on food, beverage and merchandise at the hotels. Hotel statistics include rentals of Disney Vacation Club units.
|
(2)
|
Per capita guest spending growth rate is stated on a constant currency basis. Per room guest spending is stated at the fiscal 2015 average foreign exchange rate.
|
|
Year Ended
|
|
% Change
Better /
(Worse)
|
||||||||
(in millions)
|
October 1, 2016
|
|
October 3, 2015
|
|
|||||||
Revenues
|
|
|
|
|
|
|
|||||
Theatrical distribution
|
$
|
3,672
|
|
|
$
|
2,321
|
|
|
58
|
%
|
|
Home entertainment
|
2,108
|
|
|
1,799
|
|
|
17
|
%
|
|
||
TV/SVOD distribution and other
|
3,661
|
|
|
3,246
|
|
|
13
|
%
|
|
||
Total revenues
|
9,441
|
|
|
7,366
|
|
|
28
|
%
|
|
||
Operating expenses
|
(3,991
|
)
|
|
(3,050
|
)
|
|
(31
|
)%
|
|
||
Selling, general, administrative and other
|
(2,622
|
)
|
|
(2,204
|
)
|
|
(19
|
)%
|
|
||
Depreciation and amortization
|
(125
|
)
|
|
(139
|
)
|
|
10
|
%
|
|
||
Operating Income
|
$
|
2,703
|
|
|
$
|
1,973
|
|
|
37
|
%
|
|
|
Year Ended
|
|
% Change
Better /
(Worse)
|
||||||||
(in millions)
|
October 1, 2016
|
|
October 3, 2015
|
|
|||||||
Revenues
|
|
|
|
|
|
|
|||||
Licensing, publishing and games
|
$
|
3,819
|
|
|
$
|
3,850
|
|
|
(1
|
)%
|
|
Retail and other
|
1,709
|
|
|
1,823
|
|
|
(6
|
)%
|
|
||
Total revenues
|
5,528
|
|
|
5,673
|
|
|
(3
|
)%
|
|
||
Operating expenses
|
(2,263
|
)
|
|
(2,434
|
)
|
|
7
|
%
|
|
||
Selling, general, administrative and other
|
(1,125
|
)
|
|
(1,172
|
)
|
|
4
|
%
|
|
||
Depreciation and amortization
|
(175
|
)
|
|
(183
|
)
|
|
4
|
%
|
|
||
Operating Income
|
$
|
1,965
|
|
|
$
|
1,884
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
% Change
Better/(Worse) |
|
||||||||||
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
|
2017
vs. 2016 |
|
2016
vs. 2015 |
|
||||||||
Corporate and unallocated shared expenses
|
|
$
|
(582
|
)
|
|
$
|
(640
|
)
|
|
$
|
(643
|
)
|
|
9
|
%
|
|
—
|
%
|
|
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash provided by operations
|
|
$
|
12,343
|
|
|
$
|
13,136
|
|
|
$
|
11,385
|
|
Cash used in investing activities
|
|
(4,111
|
)
|
|
(5,758
|
)
|
|
(4,245
|
)
|
|||
Cash used in financing activities
|
|
(8,959
|
)
|
|
(7,220
|
)
|
|
(5,801
|
)
|
|||
Impact of exchange rates on cash, cash equivalents and restricted cash
|
|
31
|
|
|
(123
|
)
|
|
(302
|
)
|
|||
Change in cash, cash equivalents and restricted cash
|
|
$
|
(696
|
)
|
|
$
|
35
|
|
|
$
|
1,037
|
|
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Media Networks
|
|
|
|
|
|
|
||||||
Cable Networks
|
|
$
|
137
|
|
|
$
|
147
|
|
|
$
|
150
|
|
Broadcasting
|
|
88
|
|
|
90
|
|
|
95
|
|
|||
Total Media Networks
|
|
225
|
|
|
237
|
|
|
245
|
|
|||
Parks and Resorts
|
|
|
|
|
|
|
||||||
Domestic
|
|
1,336
|
|
|
1,273
|
|
|
1,169
|
|
|||
International
|
|
660
|
|
|
445
|
|
|
345
|
|
|||
Total Parks and Resorts
|
|
1,996
|
|
|
1,718
|
|
|
1,514
|
|
|||
Studio Entertainment
|
|
50
|
|
|
51
|
|
|
55
|
|
|||
Consumer Products & Interactive Media
|
|
63
|
|
|
63
|
|
|
69
|
|
|||
Corporate
|
|
252
|
|
|
251
|
|
|
249
|
|
|||
Total depreciation expense
|
|
$
|
2,586
|
|
|
$
|
2,320
|
|
|
$
|
2,132
|
|
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Media Networks
|
|
$
|
12
|
|
|
$
|
18
|
|
|
$
|
21
|
|
Parks and Resorts
|
|
3
|
|
|
3
|
|
|
3
|
|
|||
Studio Entertainment
|
|
65
|
|
|
74
|
|
|
84
|
|
|||
Consumer Products & Interactive Media
|
|
116
|
|
|
112
|
|
|
114
|
|
|||
Total amortization of intangible assets
|
|
$
|
196
|
|
|
$
|
207
|
|
|
$
|
222
|
|
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Beginning balances:
|
|
|
|
|
|
|
||||||
Production and programming assets
|
|
$
|
7,547
|
|
|
$
|
7,353
|
|
|
$
|
6,386
|
|
Programming liabilities
|
|
(1,063
|
)
|
|
(989
|
)
|
|
(875
|
)
|
|||
|
|
6,484
|
|
|
6,364
|
|
|
5,511
|
|
|||
Spending:
|
|
|
|
|
|
|
||||||
Television program licenses and rights
|
|
7,406
|
|
|
6,585
|
|
|
6,335
|
|
|||
Film and television production
|
|
5,319
|
|
|
4,632
|
|
|
4,701
|
|
|||
|
|
12,725
|
|
|
11,217
|
|
|
11,036
|
|
|||
Amortization:
|
|
|
|
|
|
|
||||||
Television program licenses and rights
|
|
(7,595
|
)
|
|
(6,678
|
)
|
|
(6,482
|
)
|
|||
Film and television production
|
|
(4,055
|
)
|
|
(4,438
|
)
|
|
(3,632
|
)
|
|||
|
|
(11,650
|
)
|
|
(11,116
|
)
|
|
(10,114
|
)
|
|||
Change in film and television production and
programming costs
|
|
1,075
|
|
|
101
|
|
|
922
|
|
|||
Other non-cash activity
|
|
94
|
|
|
19
|
|
|
(69
|
)
|
|||
Ending balances:
|
|
|
|
|
|
|
||||||
Production and programming assets
|
|
8,759
|
|
|
7,547
|
|
|
7,353
|
|
|||
Programming liabilities
|
|
(1,106
|
)
|
|
(1,063
|
)
|
|
(989
|
)
|
|||
|
|
$
|
7,653
|
|
|
$
|
6,484
|
|
|
$
|
6,364
|
|
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Media Networks
|
|
|
|
|
|
|
||||||
Cable Networks
|
|
$
|
75
|
|
|
$
|
86
|
|
|
$
|
127
|
|
Broadcasting
|
|
64
|
|
|
80
|
|
|
71
|
|
|||
Parks and Resorts
|
|
|
|
|
|
|
||||||
Domestic
|
|
2,375
|
|
|
2,180
|
|
|
1,457
|
|
|||
International
|
|
816
|
|
|
2,035
|
|
|
2,147
|
|
|||
Studio Entertainment
|
|
85
|
|
|
86
|
|
|
107
|
|
|||
Consumer Products & Interactive Media
|
|
30
|
|
|
53
|
|
|
87
|
|
|||
Corporate
|
|
178
|
|
|
253
|
|
|
269
|
|
|||
|
|
$
|
3,623
|
|
|
$
|
4,773
|
|
|
$
|
4,265
|
|
(in millions)
|
|
October 1, 2016
|
|
Borrowings
|
|
Payments
|
|
Other
Activity
|
|
September 30, 2017
|
||||||||||
Commercial paper with original maturities less than three months, net
(1)
|
|
$
|
777
|
|
|
$
|
372
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
1,151
|
|
Commercial paper with original maturities greater than three months
|
|
744
|
|
|
6,364
|
|
|
(5,489
|
)
|
|
2
|
|
|
1,621
|
|
|||||
U.S. and European medium-term notes
|
|
16,827
|
|
|
4,741
|
|
|
(1,850
|
)
|
|
3
|
|
|
19,721
|
|
|||||
Asia Theme Parks borrowings
|
|
1,087
|
|
|
13
|
|
|
—
|
|
|
45
|
|
|
1,145
|
|
|||||
BAMTech acquisition payable
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,581
|
|
|
1,581
|
|
|||||
Foreign currency denominated debt and other obligations
(3)
|
|
735
|
|
|
66
|
|
|
(514
|
)
|
|
(215
|
)
|
|
72
|
|
|||||
Total
|
|
$
|
20,170
|
|
|
$
|
11,556
|
|
|
$
|
(7,853
|
)
|
|
$
|
1,418
|
|
|
$
|
25,291
|
|
(1)
|
Borrowings and reductions of borrowings are reported net.
|
(2)
|
See Note 3 to the Consolidated Financial Statements for further discussion of BAMTech.
|
(3)
|
The other activity is due to market value adjustments for debt with qualifying hedges.
|
|
|
Payments Due by Period
|
||||||||||||||||||
(in millions)
|
|
Total
|
|
Less than
1 Year
|
|
1-3
Years
|
|
4-5
Years
|
|
More than
5 Years
|
||||||||||
Borrowings (Note 8)
(1)
|
|
$
|
32,796
|
|
|
$
|
6,718
|
|
|
$
|
6,833
|
|
|
$
|
4,873
|
|
|
$
|
14,372
|
|
Operating lease commitments (Note 14)
|
|
3,348
|
|
|
580
|
|
|
873
|
|
|
568
|
|
|
1,327
|
|
|||||
Capital lease obligations (Note 14)
|
|
533
|
|
|
25
|
|
|
32
|
|
|
30
|
|
|
446
|
|
|||||
Sports programming commitments (Note 14)
|
|
44,954
|
|
|
6,068
|
|
|
12,920
|
|
|
11,070
|
|
|
14,896
|
|
|||||
Broadcast programming commitments (Note 14)
|
|
2,594
|
|
|
594
|
|
|
792
|
|
|
403
|
|
|
805
|
|
|||||
Total sports and other broadcast programming commitments
|
|
47,548
|
|
|
6,662
|
|
|
13,712
|
|
|
11,473
|
|
|
15,701
|
|
|||||
Other
(2)
|
|
7,413
|
|
|
1,825
|
|
|
1,775
|
|
|
1,389
|
|
|
2,424
|
|
|||||
Total contractual obligations
(3)
|
|
$
|
91,638
|
|
|
$
|
15,810
|
|
|
$
|
23,225
|
|
|
$
|
18,333
|
|
|
$
|
34,270
|
|
(1)
|
Excludes market value adjustments which reduce recorded borrowings by
$73 million
. Includes interest payments based on contractual terms for fixed rate debt and on current interest rates for variable rate debt. In 2023, the Company has the ability to call a debt instrument prior to its scheduled maturity, which if exercised by the Company would reduce future interest payments by $1.0 billion.
|
(2)
|
Other commitments primarily comprise contracts for the construction of three new cruise ships, creative talent and employment agreements and unrecognized tax benefits. Creative talent and employment agreements include obligations to actors, producers, sports, television and radio personalities and executives.
|
(3)
|
Contractual commitments include the following:
|
Liabilities recorded on the balance sheet
|
$
|
25,929
|
|
Commitments not recorded on the balance sheet
|
65,709
|
|
|
|
$
|
91,638
|
|
Fiscal Year 2017
|
|
Interest Rate
Sensitive
Financial
Instruments
|
|
Currency
Sensitive
Financial
Instruments
|
|
Equity
Sensitive
Financial
Instruments
|
|
Commodity Sensitive Financial Instruments
|
|
Combined
Portfolio
|
||||||||||
Year end fiscal 2017 VAR
|
|
$
|
57
|
|
|
$
|
47
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
92
|
|
Average VAR
|
|
64
|
|
|
55
|
|
|
2
|
|
|
2
|
|
|
106
|
|
|||||
Highest VAR
|
|
80
|
|
|
64
|
|
|
2
|
|
|
2
|
|
|
126
|
|
|||||
Lowest VAR
|
|
56
|
|
|
46
|
|
|
2
|
|
|
1
|
|
|
92
|
|
|||||
Year end fiscal 2016 VAR
|
|
74
|
|
|
60
|
|
|
3
|
|
|
2
|
|
|
113
|
|
(1)
|
Financial Statements and Schedules
|
(2)
|
Exhibits
|
|
|
Exhibit
|
|
Location
|
3.1
|
|
Restated Certificate of Incorporation of the Company
|
|
|
3.2
|
|
Bylaws of the Company
|
|
|
4.1
|
|
Five-Year Credit Agreement dated as of March 14, 2014
|
|
|
4.2
|
|
Five-Year Credit Agreement dated as of March 11, 2016
|
|
|
4.3
|
|
364 Day Credit Agreement dated as of March 10, 2017
|
|
|
4.4
|
|
Senior Debt Securities Indenture, dated as of September 24, 2001, between the Company and Wells Fargo Bank, N.A., as Trustee
|
|
|
4.5
|
|
Other long-term borrowing instruments are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. The Company undertakes to furnish copies of such instruments to the Commission upon request
|
|
|
10.1
|
|
Amended and Restated Employment Agreement, dated as of October 6, 2011, between the Company and Robert A. Iger
|
|
|
10.2
|
|
Amendment dated July 1, 2013 to Amended and Restated Employment Agreement, dated as of October 6, 2011, between the Company and Robert A. Iger
|
|
|
10.3
|
|
Amendment dated October 2, 2014 to Amended and Restated Employment Agreement, dated as of October 6, 2011, between the Company and Robert A. Iger
|
|
|
10.4
|
|
Amendment dated March 22, 2017 to Amended and Restated Employment Agreement, dated as of October 6, 2011, between the Company and Robert A. Iger
|
|
|
10.5
|
|
Employment Agreement, dated as of September 27, 2013 between the Company and Alan N. Braverman
|
|
|
10.6
|
|
Amendment dated February 4, 2015 to the Employment Agreement dated as of September 27, 2013 between the Company and Alan N. Braverman
|
|
|
10.7
|
|
Amendment dated August 15, 2017 to the Employment Agreement dated as of September 27, 2013 between the Company and Alan N. Braverman
|
|
|
10.8
|
|
Employment Agreement dated as of July 1, 2015 between the Company and Kevin A. Mayer
|
|
|
10.9
|
|
Amendment dated August 15, 2017 to the Employment Agreement dated as of July 1, 2015 between the Company and Kevin A. Mayer
|
|
|
10.10
|
|
Employment Agreement dated August 15, 2017 and effective between the Company and Jayne Parker
|
|
|
10.11
|
|
Employment Agreement dated as of July 1, 2015 between the Company and Christine M. McCarthy
|
|
|
10.12
|
|
Amendment dated August 15, 2017 to the Employment Agreement dated as of July 1, 2015 between the Company and Christine M. McCarthy
|
|
|
|
Exhibit
|
|
Location
|
10.13
|
|
Voluntary Non-Qualified Deferred Compensation Plan
|
|
|
10.14
|
|
Description of Directors Compensation
|
|
|
10.15
|
|
Form of Indemnification Agreement for certain officers and directors
|
|
Annex C to the Proxy Statement for the 1987 annual meeting of DEI
|
10.16
|
|
1995 Stock Option Plan for Non-Employee Directors
|
|
|
10.17
|
|
Amended and Restated 2002 Executive Performance Plan
|
|
|
10.18
|
|
Management Incentive Bonus Program
|
|
|
10.19
|
|
Amended and Restated 1997 Non-Employee Directors Stock and Deferred Compensation Plan
|
|
|
10.20
|
|
Amended and Restated The Walt Disney Company/Pixar 2004 Equity Incentive Plan
|
|
|
10.21
|
|
Amended and Restated 2011 Stock Incentive Plan
|
|
|
10.22
|
|
Disney Key Employees Retirement Savings Plan
|
|
|
10.23
|
|
Amendments dated April 30, 2015 to the Amended and Restated The Walt Disney Productions and Associated Companies Key Employees Deferred Compensation and Retirement Plan, Amended and Restated Benefit Equalization Plan of ABC, Inc. and Disney Key Employees Retirement Savings Plan
|
|
|
10.24
|
|
Group Personal Excess Liability Insurance Plan
|
|
|
10.25
|
|
Amended and Restated Severance Pay Plan
|
|
|
10.26
|
|
Form of Restricted Stock Unit Award Agreement (Time-Based Vesting)
|
|
|
10.27
|
|
Form of Performance-Based Stock Unit Award Agreement (Section 162(m) Vesting Requirement)
|
|
|
10.28
|
|
Form of Performance-Based Stock Unit Award Agreement (Three-Year Vesting subject to Total Shareholder Return/EPS Growth Tests/
Section 162(m) Vesting Requirement)
|
|
|
10.29
|
|
Form of Non-Qualified Stock Option Award Agreement
|
|
|
10.30
|
|
Disney Savings and Investment Plan as Amended and Restated Effective January 1, 2015
|
|
|
10.31
|
|
First Amendment dated December 19, 2016 to the Disney Savings and Investment Plan as amended and restated effective January 1, 2015
|
|
|
10.32
|
|
Second Amendment dated December 3, 2012 to the Disney Savings and Investment Plan
|
|
|
10.33
|
|
Third Amendment dated December 18, 2014 to the Disney Savings and Investment Plan
|
|
|
10.34
|
|
Fourth Amendment dated April 30, 2015 to the Disney Savings and Investment Plan
|
|
|
|
Exhibit
|
|
Location
|
12.1
|
|
Ratio of earnings to fixed charges
|
|
|
21
|
|
Subsidiaries of the Company
|
|
|
23
|
|
Consent of PricewaterhouseCoopers LLP
|
|
|
31(a)
|
|
Rule 13a-14(a) Certification of Chief Executive Officer of the Company in accordance with Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
31(b)
|
|
Rule 13a-14(a) Certification of Chief Financial Officer of the Company in accordance with Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
32(a)
|
|
Section 1350 Certification of Chief Executive Officer of the Company in accordance with Section 906 of the Sarbanes-Oxley Act of 2002*
|
|
|
32(b)
|
|
Section 1350 Certification of Chief Financial Officer of the Company in accordance with Section 906 of the Sarbanes-Oxley Act of 2002*
|
|
|
101
|
|
The following materials from the Company’s Annual Report on Form 10-K for the year ended September 30, 2017 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Equity and (vi) related notes
|
|
Filed herewith
|
*
|
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.
|
|
|
|
|
|
THE WALT DISNEY COMPANY
|
|
|
|
|
|
(Registrant)
|
Date:
|
November 22, 2017
|
|
By:
|
|
/s/ ROBERT A. IGER
|
|
|
|
|
|
(Robert A. Iger,
|
|
|
|
|
|
Chairman and Chief Executive Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
Principal Executive Officer
|
|
|
|
|
/s/ ROBERT A. IGER
|
|
Chairman and Chief Executive Officer
|
|
November 22, 2017
|
(Robert A. Iger)
|
|
|
|
|
|
|
|
||
Principal Financial and Accounting Officers
|
|
|
|
|
/s/ CHRISTINE M. MCCARTHY
|
|
Senior Executive Vice President
and Chief Financial Officer
|
|
November 22, 2017
|
(Christine M. McCarthy)
|
|
|
|
|
|
|
|
||
/s/ BRENT A. WOODFORD
|
|
Executive Vice President-Controllership, Financial Planning and Tax
|
|
November 22, 2017
|
(Brent A. Woodford)
|
|
|
|
|
|
|
|
||
Directors
|
|
|
|
|
/s/ SUSAN E. ARNOLD
|
|
Director
|
|
November 22, 2017
|
(Susan E. Arnold)
|
|
|
|
|
|
|
|
||
/s/ MARY T. BARRA
|
|
Director
|
|
November 22, 2017
|
(Mary T. Barra)
|
|
|
|
|
|
|
|
||
/s/ JOHN S. CHEN
|
|
Director
|
|
November 22, 2017
|
(John S. Chen)
|
|
|
|
|
|
|
|
||
/s/ JACK DORSEY
|
|
Director
|
|
November 22, 2017
|
(Jack Dorsey)
|
|
|
|
|
|
|
|
||
/s/ ROBERT A. IGER
|
|
Chairman of the Board and Director
|
|
November 22, 2017
|
(Robert A. Iger)
|
|
|
|
|
|
|
|
||
/s/ MARIA ELENA LAGOMASINO
|
|
Director
|
|
November 22, 2017
|
(Maria Elena Lagomasino)
|
|
|
|
|
|
|
|
||
/s/ FRED H. LANGHAMMER
|
|
Director
|
|
November 22, 2017
|
(Fred H. Langhammer)
|
|
|
|
|
|
|
|
||
/s/ AYLWIN B. LEWIS
|
|
Director
|
|
November 22, 2017
|
(Aylwin B. Lewis)
|
|
|
|
|
|
|
|
||
/s/ ROBERT W. MATSCHULLAT
|
|
Director
|
|
November 22, 2017
|
(Robert W. Matschullat)
|
|
|
|
|
|
|
|
|
|
/s/ MARK G. PARKER
|
|
Director
|
|
November 22, 2017
|
(Mark G. Parker)
|
|
|
|
|
|
|
|
||
/s/ SHERYL SANDBERG
|
|
Director
|
|
November 22, 2017
|
(Sheryl Sandberg)
|
|
|
|
|
|
|
|
|
|
/s/ ORIN C. SMITH
|
|
Director
|
|
November 22, 2017
|
(Orin C. Smith)
|
|
|
|
|
|
Page
|
Management’s Report on Internal Control Over Financial Reporting
|
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Financial Statements of The Walt Disney Company and Subsidiaries
|
|
Consolidated Statements of Income for the Years Ended September 30, 2017, October 1, 2016 and October 3, 2015
|
|
Consolidated Statements of Comprehensive Income for the Years Ended September 30, 2017, October 1, 2016 and October 3, 2015
|
|
Consolidated Balance Sheets as of September 30, 2017 and October 1, 2016
|
|
Consolidated Statements of Cash Flows for the Years Ended September 30, 2017, October 1, 2016 and October 3, 2015
|
|
Consolidated Statements of Shareholders’ Equity for the Years Ended September 30, 2017, October 1, 2016 and October 3, 2015
|
|
Notes to Consolidated Financial Statements
|
|
Quarterly Financial Summary (unaudited)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Services
|
$
|
46,843
|
|
|
$
|
47,130
|
|
|
$
|
43,894
|
|
Products
|
8,294
|
|
|
8,502
|
|
|
8,571
|
|
|||
Total revenues
|
55,137
|
|
|
55,632
|
|
|
52,465
|
|
|||
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of services (exclusive of depreciation and amortization)
|
(25,320
|
)
|
|
(24,653
|
)
|
|
(23,191
|
)
|
|||
Cost of products (exclusive of depreciation and amortization)
|
(4,986
|
)
|
|
(5,340
|
)
|
|
(5,173
|
)
|
|||
Selling, general, administrative and other
|
(8,176
|
)
|
|
(8,754
|
)
|
|
(8,523
|
)
|
|||
Depreciation and amortization
|
(2,782
|
)
|
|
(2,527
|
)
|
|
(2,354
|
)
|
|||
Total costs and expenses
|
(41,264
|
)
|
|
(41,274
|
)
|
|
(39,241
|
)
|
|||
Restructuring and impairment charges
|
(98
|
)
|
|
(156
|
)
|
|
(53
|
)
|
|||
Other income, net
|
78
|
|
|
—
|
|
|
—
|
|
|||
Interest expense, net
|
(385
|
)
|
|
(260
|
)
|
|
(117
|
)
|
|||
Equity in the income of investees
|
320
|
|
|
926
|
|
|
814
|
|
|||
Income before income taxes
|
13,788
|
|
|
14,868
|
|
|
13,868
|
|
|||
Income taxes
|
(4,422
|
)
|
|
(5,078
|
)
|
|
(5,016
|
)
|
|||
Net income
|
9,366
|
|
|
9,790
|
|
|
8,852
|
|
|||
Less: Net income attributable to noncontrolling interests
|
(386
|
)
|
|
(399
|
)
|
|
(470
|
)
|
|||
Net income attributable to The Walt Disney Company (Disney)
|
$
|
8,980
|
|
|
$
|
9,391
|
|
|
$
|
8,382
|
|
|
|
|
|
|
|
||||||
Earnings per share attributable to Disney:
|
|
|
|
|
|
||||||
Diluted
|
$
|
5.69
|
|
|
$
|
5.73
|
|
|
$
|
4.90
|
|
Basic
|
$
|
5.73
|
|
|
$
|
5.76
|
|
|
$
|
4.95
|
|
|
|
|
|
|
|
||||||
Weighted average number of common and common equivalent shares outstanding:
|
|
|
|
|
|
||||||
Diluted
|
1,578
|
|
|
1,639
|
|
|
1,709
|
|
|||
Basic
|
1,568
|
|
|
1,629
|
|
|
1,694
|
|
|||
|
|
|
|
|
|
||||||
Dividends declared per share
|
$
|
1.56
|
|
|
$
|
1.42
|
|
|
$
|
1.81
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net Income
|
$
|
9,366
|
|
|
$
|
9,790
|
|
|
$
|
8,852
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
|
|
||||||
Market value adjustments for investments
|
(18
|
)
|
|
13
|
|
|
(87
|
)
|
|||
Market value adjustments for hedges
|
(37
|
)
|
|
(359
|
)
|
|
130
|
|
|||
Pension and postretirement medical plan adjustments
|
584
|
|
|
(1,154
|
)
|
|
(301
|
)
|
|||
Foreign currency translation and other
|
(103
|
)
|
|
(156
|
)
|
|
(272
|
)
|
|||
Other comprehensive income/(loss)
|
426
|
|
|
(1,656
|
)
|
|
(530
|
)
|
|||
Comprehensive income
|
9,792
|
|
|
8,134
|
|
|
8,322
|
|
|||
Net income attributable to noncontrolling interests
|
(386
|
)
|
|
(399
|
)
|
|
(470
|
)
|
|||
Other comprehensive loss attributable to noncontrolling interests
|
25
|
|
|
98
|
|
|
77
|
|
|||
Comprehensive income attributable to Disney
|
$
|
9,431
|
|
|
$
|
7,833
|
|
|
$
|
7,929
|
|
|
September 30, 2017
|
|
October 1, 2016
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4,017
|
|
|
$
|
4,610
|
|
Receivables
|
8,633
|
|
|
9,065
|
|
||
Inventories
|
1,373
|
|
|
1,390
|
|
||
Television costs and advances
|
1,278
|
|
|
1,208
|
|
||
Other current assets
|
588
|
|
|
693
|
|
||
Total current assets
|
15,889
|
|
|
16,966
|
|
||
Film and television costs
|
7,481
|
|
|
6,339
|
|
||
Investments
|
3,202
|
|
|
4,280
|
|
||
Parks, resorts and other property
|
|
|
|
||||
Attractions, buildings and equipment
|
54,043
|
|
|
50,270
|
|
||
Accumulated depreciation
|
(29,037
|
)
|
|
(26,849
|
)
|
||
|
25,006
|
|
|
23,421
|
|
||
Projects in progress
|
2,145
|
|
|
2,684
|
|
||
Land
|
1,255
|
|
|
1,244
|
|
||
|
28,406
|
|
|
27,349
|
|
||
Intangible assets, net
|
6,995
|
|
|
6,949
|
|
||
Goodwill
|
31,426
|
|
|
27,810
|
|
||
Other assets
|
2,390
|
|
|
2,340
|
|
||
Total assets
|
$
|
95,789
|
|
|
$
|
92,033
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and other accrued liabilities
|
$
|
8,855
|
|
|
$
|
9,130
|
|
Current portion of borrowings
|
6,172
|
|
|
3,687
|
|
||
Deferred revenue and other
|
4,568
|
|
|
4,025
|
|
||
Total current liabilities
|
19,595
|
|
|
16,842
|
|
||
Borrowings
|
19,119
|
|
|
16,483
|
|
||
Deferred income taxes
|
4,480
|
|
|
3,679
|
|
||
Other long-term liabilities
|
6,443
|
|
|
7,706
|
|
||
Commitments and contingencies (Note 14)
|
|
|
|
|
|
||
Redeemable noncontrolling interests
|
1,148
|
|
|
—
|
|
||
Equity
|
|
|
|
||||
Preferred stock, $.01 par value
Authorized – 100 million shares, Issued – none
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value, Authorized – 4.6 billion shares,
Issued – 2.9 billion shares |
36,248
|
|
|
35,859
|
|
||
Retained earnings
|
72,606
|
|
|
66,088
|
|
||
Accumulated other comprehensive loss
|
(3,528
|
)
|
|
(3,979
|
)
|
||
|
105,326
|
|
|
97,968
|
|
||
Treasury stock, at cost, 1.4 billion shares at September 30, 2017 and 1.3 billion shares at October 1, 2016
|
(64,011
|
)
|
|
(54,703
|
)
|
||
Total Disney Shareholders’ equity
|
41,315
|
|
|
43,265
|
|
||
Noncontrolling interests
|
3,689
|
|
|
4,058
|
|
||
Total equity
|
45,004
|
|
|
47,323
|
|
||
Total liabilities and equity
|
$
|
95,789
|
|
|
$
|
92,033
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
9,366
|
|
|
$
|
9,790
|
|
|
$
|
8,852
|
|
Depreciation and amortization
|
2,782
|
|
|
2,527
|
|
|
2,354
|
|
|||
Gains on acquisitions and sales of investments
|
(289
|
)
|
|
(26
|
)
|
|
(91
|
)
|
|||
Deferred income taxes
|
334
|
|
|
1,214
|
|
|
(102
|
)
|
|||
Equity in the income of investees
|
(320
|
)
|
|
(926
|
)
|
|
(814
|
)
|
|||
Cash distributions received from equity investees
|
788
|
|
|
799
|
|
|
752
|
|
|||
Net change in film and television costs and advances
|
(1,075
|
)
|
|
(101
|
)
|
|
(922
|
)
|
|||
Equity-based compensation
|
364
|
|
|
393
|
|
|
410
|
|
|||
Other
|
503
|
|
|
674
|
|
|
628
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables
|
107
|
|
|
(393
|
)
|
|
(211
|
)
|
|||
Inventories
|
(5
|
)
|
|
186
|
|
|
1
|
|
|||
Other assets
|
(52
|
)
|
|
(443
|
)
|
|
223
|
|
|||
Accounts payable and other accrued liabilities
|
(368
|
)
|
|
40
|
|
|
(49
|
)
|
|||
Income taxes
|
208
|
|
|
(598
|
)
|
|
354
|
|
|||
Cash provided by operations
|
12,343
|
|
|
13,136
|
|
|
11,385
|
|
|||
|
|
|
|
|
|
||||||
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Investments in parks, resorts and other property
|
(3,623
|
)
|
|
(4,773
|
)
|
|
(4,265
|
)
|
|||
Acquisitions
|
(417
|
)
|
|
(850
|
)
|
|
—
|
|
|||
Other
|
(71
|
)
|
|
(135
|
)
|
|
20
|
|
|||
Cash used in investing activities
|
(4,111
|
)
|
|
(5,758
|
)
|
|
(4,245
|
)
|
|||
|
|
|
|
|
|
||||||
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Commercial paper borrowings/(repayments), net
|
1,247
|
|
|
(920
|
)
|
|
2,376
|
|
|||
Borrowings
|
4,820
|
|
|
6,065
|
|
|
2,550
|
|
|||
Reduction of borrowings
|
(2,364
|
)
|
|
(2,205
|
)
|
|
(2,221
|
)
|
|||
Dividends
|
(2,445
|
)
|
|
(2,313
|
)
|
|
(3,063
|
)
|
|||
Repurchases of common stock
|
(9,368
|
)
|
|
(7,499
|
)
|
|
(6,095
|
)
|
|||
Proceeds from exercise of stock options
|
276
|
|
|
259
|
|
|
329
|
|
|||
Contributions from noncontrolling interest holders
|
17
|
|
|
—
|
|
|
1,012
|
|
|||
Other
|
(1,142
|
)
|
|
(607
|
)
|
|
(689
|
)
|
|||
Cash used in financing activities
|
(8,959
|
)
|
|
(7,220
|
)
|
|
(5,801
|
)
|
|||
|
|
|
|
|
|
||||||
Impact of exchange rates on cash, cash equivalents and restricted cash
|
31
|
|
|
(123
|
)
|
|
(302
|
)
|
|||
|
|
|
|
|
|
||||||
Change in cash, cash equivalents and restricted cash
|
(696
|
)
|
|
35
|
|
|
1,037
|
|
|||
Cash, cash equivalents and restricted cash, beginning of year
|
4,760
|
|
|
4,725
|
|
|
3,688
|
|
|||
Total cash, cash equivalents and restricted cash
|
$
|
4,064
|
|
|
$
|
4,760
|
|
|
$
|
4,725
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
466
|
|
|
$
|
395
|
|
|
$
|
314
|
|
Income taxes paid
|
$
|
3,801
|
|
|
$
|
4,133
|
|
|
$
|
4,396
|
|
|
|
Equity Attributable to Disney
|
|
|
|
|
|||||||||||||||||||||||||
|
|
Shares
|
|
Common
Stock
|
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
Treasury
Stock
|
|
Total
Disney
Equity
|
|
Non-controlling
Interests
|
|
Total Equity
|
|||||||||||||||||
Balance at September 27, 2014
|
|
1,707
|
|
|
$
|
34,301
|
|
|
$
|
53,734
|
|
|
$
|
(1,968
|
)
|
|
$
|
(41,109
|
)
|
|
$
|
44,958
|
|
|
$
|
3,220
|
|
|
$
|
48,178
|
|
Comprehensive income
|
|
—
|
|
|
—
|
|
|
8,382
|
|
|
(453
|
)
|
|
—
|
|
|
7,929
|
|
|
393
|
|
|
8,322
|
|
|||||||
Equity compensation activity
|
|
14
|
|
|
828
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
828
|
|
|
—
|
|
|
828
|
|
|||||||
Common stock repurchases
|
|
(60
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,095
|
)
|
|
(6,095
|
)
|
|
—
|
|
|
(6,095
|
)
|
|||||||
Dividends
|
|
—
|
|
|
24
|
|
|
(3,087
|
)
|
|
—
|
|
|
—
|
|
|
(3,063
|
)
|
|
—
|
|
|
(3,063
|
)
|
|||||||
Contributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,012
|
|
|
1,012
|
|
|||||||
Distributions and other
|
|
—
|
|
|
(31
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(32
|
)
|
|
(495
|
)
|
|
(527
|
)
|
|||||||
Balance at October 3, 2015
|
|
1,661
|
|
|
$
|
35,122
|
|
|
$
|
59,028
|
|
|
$
|
(2,421
|
)
|
|
$
|
(47,204
|
)
|
|
$
|
44,525
|
|
|
$
|
4,130
|
|
|
$
|
48,655
|
|
Comprehensive income
|
|
—
|
|
|
—
|
|
|
9,391
|
|
|
(1,558
|
)
|
|
—
|
|
|
7,833
|
|
|
301
|
|
|
8,134
|
|
|||||||
Equity compensation activity
|
|
10
|
|
|
726
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
726
|
|
|
—
|
|
|
726
|
|
|||||||
Common stock repurchases
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,499
|
)
|
|
(7,499
|
)
|
|
—
|
|
|
(7,499
|
)
|
|||||||
Dividends
|
|
—
|
|
|
15
|
|
|
(2,328
|
)
|
|
—
|
|
|
—
|
|
|
(2,313
|
)
|
|
—
|
|
|
(2,313
|
)
|
|||||||
Distributions and other
|
|
—
|
|
|
(4
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(373
|
)
|
|
(380
|
)
|
|||||||
Balance at October 1, 2016
|
|
1,597
|
|
|
$
|
35,859
|
|
|
$
|
66,088
|
|
|
$
|
(3,979
|
)
|
|
$
|
(54,703
|
)
|
|
$
|
43,265
|
|
|
$
|
4,058
|
|
|
$
|
47,323
|
|
Comprehensive income
|
|
—
|
|
|
—
|
|
|
8,980
|
|
|
451
|
|
|
—
|
|
|
9,431
|
|
|
361
|
|
|
9,792
|
|
|||||||
Equity compensation activity
|
|
8
|
|
|
529
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
529
|
|
|
—
|
|
|
529
|
|
|||||||
Common stock repurchases
|
|
(89
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,368
|
)
|
|
(9,368
|
)
|
|
—
|
|
|
(9,368
|
)
|
|||||||
Dividends
|
|
—
|
|
|
13
|
|
|
(2,458
|
)
|
|
—
|
|
|
—
|
|
|
(2,445
|
)
|
|
—
|
|
|
(2,445
|
)
|
|||||||
Distributions and other
|
|
1
|
|
|
(153
|
)
|
|
(4
|
)
|
|
—
|
|
|
60
|
|
|
(97
|
)
|
|
(730
|
)
|
|
(827
|
)
|
|||||||
Balance at September 30, 2017
|
|
1,517
|
|
|
$
|
36,248
|
|
|
$
|
72,606
|
|
|
$
|
(3,528
|
)
|
|
$
|
(64,011
|
)
|
|
$
|
41,315
|
|
|
$
|
3,689
|
|
|
$
|
45,004
|
|
1
|
Description of the Business and Segment Information
|
|
2017
|
|
2016
|
|
2015
|
||||||
Media Networks
|
$
|
344
|
|
|
$
|
597
|
|
|
$
|
814
|
|
Parks and Resorts
|
(25
|
)
|
|
(3
|
)
|
|
—
|
|
|||
Consumer Products & Interactive Media
|
1
|
|
|
—
|
|
|
—
|
|
|||
Equity in the income of investees included in segment operating income
|
320
|
|
|
594
|
|
|
814
|
|
|||
Vice Gain
|
—
|
|
|
332
|
|
|
—
|
|
|||
Total equity in the income of investees
|
$
|
320
|
|
|
$
|
926
|
|
|
$
|
814
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
|
|
|
|
|
||||||
Media Networks
|
$
|
23,510
|
|
|
$
|
23,689
|
|
|
$
|
23,264
|
|
Parks and Resorts
|
18,415
|
|
|
16,974
|
|
|
16,162
|
|
|||
Studio Entertainment
|
|
|
|
|
|
||||||
Third parties
|
7,887
|
|
|
8,701
|
|
|
6,838
|
|
|||
Intersegment
|
492
|
|
|
740
|
|
|
528
|
|
|||
|
8,379
|
|
|
9,441
|
|
|
7,366
|
|
|||
Consumer Products & Interactive Media
|
|
|
|
|
|
||||||
Third parties
|
5,325
|
|
|
6,268
|
|
|
6,201
|
|
|||
Intersegment
|
(492
|
)
|
|
(740
|
)
|
|
(528
|
)
|
|||
|
4,833
|
|
|
5,528
|
|
|
5,673
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Total consolidated revenues
|
$
|
55,137
|
|
|
$
|
55,632
|
|
|
$
|
52,465
|
|
Segment operating income
|
|
|
|
|
|
||||||
Media Networks
|
$
|
6,902
|
|
|
$
|
7,755
|
|
|
$
|
7,793
|
|
Parks and Resorts
|
3,774
|
|
|
3,298
|
|
|
3,031
|
|
|||
Studio Entertainment
|
2,355
|
|
|
2,703
|
|
|
1,973
|
|
|||
Consumer Products & Interactive Media
|
1,744
|
|
|
1,965
|
|
|
1,884
|
|
|||
Total segment operating income
|
$
|
14,775
|
|
|
$
|
15,721
|
|
|
$
|
14,681
|
|
Reconciliation of segment operating income to income before income taxes
|
|
|
|
|
|
||||||
Segment operating income
|
$
|
14,775
|
|
|
$
|
15,721
|
|
|
$
|
14,681
|
|
Corporate and unallocated shared expenses
|
(582
|
)
|
|
(640
|
)
|
|
(643
|
)
|
|||
Restructuring and impairment charges
|
(98
|
)
|
|
(156
|
)
|
|
(53
|
)
|
|||
Other income, net
|
78
|
|
|
—
|
|
|
—
|
|
|||
Interest expense, net
|
(385
|
)
|
|
(260
|
)
|
|
(117
|
)
|
|||
Vice Gain
|
—
|
|
|
332
|
|
|
—
|
|
|||
Infinity Charge
(1)
|
—
|
|
|
(129
|
)
|
|
—
|
|
|||
Income before income taxes
|
$
|
13,788
|
|
|
$
|
14,868
|
|
|
$
|
13,868
|
|
Capital expenditures
|
|
|
|
|
|
||||||
Media Networks
|
|
|
|
|
|
||||||
Cable Networks
|
$
|
75
|
|
|
$
|
86
|
|
|
$
|
127
|
|
Broadcasting
|
64
|
|
|
80
|
|
|
71
|
|
|||
Parks and Resorts
|
|
|
|
|
|
||||||
Domestic
|
2,375
|
|
|
2,180
|
|
|
1,457
|
|
|||
International
|
816
|
|
|
2,035
|
|
|
2,147
|
|
|||
Studio Entertainment
|
85
|
|
|
86
|
|
|
107
|
|
|||
Consumer Products & Interactive Media
|
30
|
|
|
53
|
|
|
87
|
|
|||
Corporate
|
178
|
|
|
253
|
|
|
269
|
|
|||
Total capital expenditures
|
$
|
3,623
|
|
|
$
|
4,773
|
|
|
$
|
4,265
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Depreciation expense
|
|
|
|
|
|
||||||
Media Networks
|
$
|
225
|
|
|
$
|
237
|
|
|
$
|
245
|
|
Parks and Resorts
|
|
|
|
|
|
||||||
Domestic
|
1,336
|
|
|
1,273
|
|
|
1,169
|
|
|||
International
|
660
|
|
|
445
|
|
|
345
|
|
|||
Studio Entertainment
|
50
|
|
|
51
|
|
|
55
|
|
|||
Consumer Products & Interactive Media
|
63
|
|
|
63
|
|
|
69
|
|
|||
Corporate
|
252
|
|
|
251
|
|
|
249
|
|
|||
Total depreciation expense
|
$
|
2,586
|
|
|
$
|
2,320
|
|
|
$
|
2,132
|
|
Amortization of intangible assets
|
|
|
|
|
|
||||||
Media Networks
|
$
|
12
|
|
|
$
|
18
|
|
|
$
|
21
|
|
Parks and Resorts
|
3
|
|
|
3
|
|
|
3
|
|
|||
Studio Entertainment
|
65
|
|
|
74
|
|
|
84
|
|
|||
Consumer Products & Interactive Media
|
116
|
|
|
112
|
|
|
114
|
|
|||
Total amortization of intangible assets
|
$
|
196
|
|
|
$
|
207
|
|
|
$
|
222
|
|
Identifiable assets
(2)
|
|
|
|
|
|
||||||
Media Networks
|
$
|
32,475
|
|
|
$
|
32,706
|
|
|
|
||
Parks and Resorts
|
29,492
|
|
|
28,275
|
|
|
|
||||
Studio Entertainment
|
16,307
|
|
|
15,359
|
|
|
|
||||
Consumer Products & Interactive Media
|
8,996
|
|
|
9,332
|
|
|
|
||||
Corporate
(3)
|
4,919
|
|
|
6,361
|
|
|
|
||||
Unallocated Goodwill
(4)
|
3,600
|
|
|
—
|
|
|
|
||||
Total consolidated assets
|
$
|
95,789
|
|
|
$
|
92,033
|
|
|
|
||
Supplemental revenue data
|
|
|
|
|
|
||||||
Affiliate fees
|
$
|
12,659
|
|
|
$
|
12,259
|
|
|
$
|
12,029
|
|
Advertising
|
8,237
|
|
|
8,649
|
|
|
8,499
|
|
|||
Retail merchandise, food and beverage
|
6,433
|
|
|
6,116
|
|
|
5,986
|
|
|||
Theme park admissions
|
6,502
|
|
|
5,900
|
|
|
5,483
|
|
|||
Revenues
|
|
|
|
|
|
||||||
United States and Canada
|
$
|
41,881
|
|
|
$
|
42,616
|
|
|
$
|
40,320
|
|
Europe
|
6,541
|
|
|
6,714
|
|
|
6,507
|
|
|||
Asia Pacific
|
5,075
|
|
|
4,582
|
|
|
3,958
|
|
|||
Latin America and Other
|
1,640
|
|
|
1,720
|
|
|
1,680
|
|
|||
|
$
|
55,137
|
|
|
$
|
55,632
|
|
|
$
|
52,465
|
|
Segment operating income
|
|
|
|
|
|
||||||
United States and Canada
|
$
|
10,962
|
|
|
$
|
12,139
|
|
|
$
|
10,820
|
|
Europe
|
1,812
|
|
|
1,815
|
|
|
1,964
|
|
|||
Asia Pacific
|
1,626
|
|
|
1,324
|
|
|
1,365
|
|
|||
Latin America and Other
|
375
|
|
|
443
|
|
|
532
|
|
|||
|
$
|
14,775
|
|
|
$
|
15,721
|
|
|
$
|
14,681
|
|
|
2017
|
|
2016
|
||||
Long-lived assets
(5)
|
|
|
|
||||
United States and Canada
|
$
|
61,215
|
|
|
$
|
56,388
|
|
Europe
|
8,208
|
|
|
8,125
|
|
||
Asia Pacific
|
8,196
|
|
|
8,228
|
|
||
Latin America and Other
|
155
|
|
|
210
|
|
||
|
$
|
77,774
|
|
|
$
|
72,951
|
|
(1)
|
In fiscal 2016, the Company discontinued its Infinity console game business, which is reported in the Consumer Products & Interactive Media segment, and recorded a charge (Infinity Charge) primarily to write down inventory. The charge also included severance and other asset impairments. The charge was reported in “Cost of products” in the Consolidated Statement of Income.
|
(2)
|
Identifiable assets include amounts associated with equity method investments, goodwill and intangible assets. Equity method investments by segment are as follows:
|
|
2017
|
|
2016
|
||||
Media Networks
|
$
|
2,998
|
|
|
$
|
4,032
|
|
Parks and Resorts
|
70
|
|
|
22
|
|
||
Studio Entertainment
|
1
|
|
|
3
|
|
||
Consumer Products & Interactive Media
|
—
|
|
|
—
|
|
||
Corporate
|
18
|
|
|
25
|
|
||
|
$
|
3,087
|
|
|
$
|
4,082
|
|
|
2017
|
|
2016
|
||||
Media Networks
|
$
|
18,346
|
|
|
$
|
18,153
|
|
Parks and Resorts
|
391
|
|
|
373
|
|
||
Studio Entertainment
|
8,360
|
|
|
8,450
|
|
||
Consumer Products & Interactive Media
|
7,594
|
|
|
7,653
|
|
||
Corporate
|
130
|
|
|
130
|
|
||
Unallocated Goodwill
|
3,600
|
|
|
—
|
|
||
|
$
|
38,421
|
|
|
$
|
34,759
|
|
(3)
|
Primarily fixed assets and cash and cash equivalents.
|
(4)
|
Unallocated Goodwill relates to the BAMTech acquisition (see Note 3 for further discussion of the transaction).
|
(5)
|
Long-lived assets are total assets less the following: current assets, long-term receivables, deferred taxes, financial investments and derivatives.
|
2
|
Summary of Significant Accounting Policies
|
•
|
Affiliate fees
|
•
|
Advertising revenues
|
•
|
Revenue from the licensing and distribution of film and television properties
|
•
|
Admissions to our theme parks, charges for room nights at hotels and sales of cruise vacation packages
|
•
|
Licensing of intellectual property for use on consumer merchandise, published materials and in multi-platform games
|
•
|
Amortization of programming, production, participations and residuals costs
|
•
|
Distribution costs
|
•
|
Operating labor
|
•
|
Facilities and infrastructure costs
|
•
|
The sale of food, beverage and merchandise at our retail locations
|
•
|
The sale of DVDs, Blu-ray discs and video game discs and accessories
|
•
|
The sale of books, comic books and magazines
|
•
|
Costs of goods sold
|
•
|
Amortization of programming, production, participations and residuals costs
|
•
|
Distribution costs
|
•
|
Operating labor
|
•
|
Retail occupancy costs
|
•
|
Game development costs
|
|
|
September 30, 2017
|
|
October 1, 2016
|
|
October 3, 2015
|
||||||
Cash and cash equivalents
|
|
$
|
4,017
|
|
|
$
|
4,610
|
|
|
$
|
4,269
|
|
Restricted cash included in:
|
|
|
|
|
|
|
||||||
Other current assets
|
|
26
|
|
|
96
|
|
|
250
|
|
|||
Other assets
|
|
21
|
|
|
54
|
|
|
206
|
|
|||
Total cash, cash equivalents and restricted cash in the statement of cash flows
|
|
$
|
4,064
|
|
|
$
|
4,760
|
|
|
$
|
4,725
|
|
Attractions
|
|
25 – 40 years
|
Buildings and improvements
|
|
20 – 40 years
|
Leasehold improvements
|
|
Life of lease or asset life if less
|
Land improvements
|
|
20 – 40 years
|
Furniture, fixtures and equipment
|
|
3 – 25 years
|
2018
|
$
|
258
|
|
2019
|
246
|
|
|
2020
|
220
|
|
|
2021
|
216
|
|
|
2022
|
214
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Weighted average number of common and common equivalent shares outstanding (basic)
|
1,568
|
|
|
1,629
|
|
|
1,694
|
|
Weighted average dilutive impact of Awards
|
10
|
|
|
10
|
|
|
15
|
|
Weighted average number of common and common equivalent shares outstanding (diluted)
|
1,578
|
|
|
1,639
|
|
|
1,709
|
|
Awards excluded from diluted earnings per share
|
10
|
|
|
6
|
|
|
3
|
|
3
|
Acquisitions
|
|
Media
Networks
|
|
Parks and
Resorts
|
|
Studio
Entertainment
|
|
Consumer
Products & Interactive Media
|
|
Unallocated
(1)
|
|
Total
|
||||||||||||
Balance at Oct. 3, 2015
|
$
|
16,354
|
|
|
$
|
291
|
|
|
$
|
6,836
|
|
|
$
|
4,345
|
|
|
$
|
—
|
|
|
$
|
27,826
|
|
Acquisitions
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Dispositions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other, net
|
(10
|
)
|
|
—
|
|
|
(7
|
)
|
|
(1
|
)
|
|
—
|
|
|
(18
|
)
|
||||||
Balance at Oct. 1, 2016
|
$
|
16,345
|
|
|
$
|
291
|
|
|
$
|
6,830
|
|
|
$
|
4,344
|
|
|
$
|
—
|
|
|
$
|
27,810
|
|
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,600
|
|
|
3,600
|
|
||||||
Dispositions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other, net
|
(20
|
)
|
|
—
|
|
|
(13
|
)
|
|
49
|
|
|
—
|
|
|
16
|
|
||||||
Balance at Sept. 30, 2017
|
$
|
16,325
|
|
|
$
|
291
|
|
|
$
|
6,817
|
|
|
$
|
4,393
|
|
|
$
|
3,600
|
|
|
$
|
31,426
|
|
(1)
|
Goodwill will be allocated to the segments once the BAMTech purchase price allocation is finalized.
|
4
|
Other Income, net
|
|
2017
|
|
2016
|
|
2015
|
||||||
Gain related to the acquisition of BAMTech
|
$
|
255
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Settlement of litigation
|
(177
|
)
|
|
—
|
|
|
—
|
|
|||
Other income, net
|
$
|
78
|
|
|
$
|
—
|
|
|
$
|
—
|
|
5
|
Investments
|
|
September 30,
2017 |
|
October 1,
2016 |
||||
Investments, equity basis
(1)
|
$
|
3,087
|
|
|
$
|
4,082
|
|
Investments, other
|
115
|
|
|
198
|
|
||
|
$
|
3,202
|
|
|
$
|
4,280
|
|
(1)
|
Prior to September 25, 2017, BAMTech was accounted for under the equity basis of accounting. At September 25, 2017, the Company acquired an additional interest and now consolidates BAMTech (see Note 3 for further discussion of the BAMTech transaction). Accordingly, equity basis investments decreased by approximately $1 billion.
|
Results of Operations:
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|||||||
Revenues
|
$
|
8,122
|
|
|
$
|
7,416
|
|
|
$
|
6,561
|
|
Net income
|
857
|
|
|
1,855
|
|
|
1,912
|
|
Balance Sheet
|
September 30,
2017 |
|
October 1,
2016 |
|
October 3,
2015 |
||||||
|
|
|
|
|
|||||||
Current assets
|
$
|
4,623
|
|
|
$
|
4,801
|
|
|
$
|
3,676
|
|
Non-current assets
|
10,047
|
|
|
8,906
|
|
|
6,429
|
|
|||
|
$
|
14,670
|
|
|
$
|
13,707
|
|
|
$
|
10,105
|
|
Current liabilities
|
$
|
2,852
|
|
|
$
|
2,018
|
|
|
$
|
1,614
|
|
Non-current liabilities
|
5,056
|
|
|
4,531
|
|
|
4,128
|
|
|||
Redeemable preferred stock
|
1,123
|
|
|
583
|
|
|
—
|
|
|||
Shareholders’ equity
|
5,639
|
|
|
6,575
|
|
|
4,363
|
|
|||
|
$
|
14,670
|
|
|
$
|
13,707
|
|
|
$
|
10,105
|
|
6
|
International Theme Parks
|
|
September 30, 2017
|
|
October 1, 2016
|
||||
Cash and cash equivalents
|
$
|
843
|
|
|
$
|
1,008
|
|
Other current assets
|
376
|
|
|
331
|
|
||
Total current assets
|
1,219
|
|
|
1,339
|
|
||
Parks, resorts and other property
|
9,403
|
|
|
9,270
|
|
||
Other assets
|
111
|
|
|
88
|
|
||
Total assets
(1)
|
$
|
10,733
|
|
|
$
|
10,697
|
|
|
|
|
|
||||
Current liabilities
|
$
|
1,163
|
|
|
$
|
1,499
|
|
Borrowings - long-term
|
1,145
|
|
|
1,087
|
|
||
Other long-term liabilities
|
371
|
|
|
256
|
|
||
Total liabilities
(1)
|
$
|
2,679
|
|
|
$
|
2,842
|
|
(1)
|
The total assets of the Asia Theme Parks were
$8.1 billion
and
$8.2 billion
at
September 30, 2017
and
October 1, 2016
, respectively, and primarily consist of parks, resorts and other property of
$7.3 billion
at both
September 30, 2017
and
October 1, 2016
. The total liabilities of the Asia Theme Parks were
$2.1 billion
and
$2.2 billion
at
September 30, 2017
and
October 1, 2016
, respectively.
|
|
September 30, 2017
|
||
Revenues
|
$
|
3,318
|
|
Costs and expenses
|
(3,265
|
)
|
|
Equity in the loss of investees
|
(25
|
)
|
7
|
Film and Television Costs and Advances
|
|
September 30, 2017
|
|
October 1, 2016
|
||||
Theatrical film costs
|
|
|
|
||||
Released, less amortization
|
$
|
1,658
|
|
|
$
|
1,677
|
|
Completed, not released
|
—
|
|
|
—
|
|
||
In-process
|
3,200
|
|
|
2,179
|
|
||
In development or pre-production
|
306
|
|
|
336
|
|
||
|
5,164
|
|
|
4,192
|
|
||
Television costs
|
|
|
|
||||
Released, less amortization
|
1,152
|
|
|
1,015
|
|
||
Completed, not released
|
472
|
|
|
365
|
|
||
In-process
|
364
|
|
|
417
|
|
||
In development or pre-production
|
53
|
|
|
13
|
|
||
|
2,041
|
|
|
1,810
|
|
||
Television programming rights and advances
|
1,554
|
|
|
1,545
|
|
||
|
8,759
|
|
|
7,547
|
|
||
Less current portion
|
1,278
|
|
|
1,208
|
|
||
Non-current portion
|
$
|
7,481
|
|
|
$
|
6,339
|
|
8
|
Borrowings
|
|
|
|
|
|
|
2017
|
||||||||||||||
|
|
2017
|
|
2016
|
|
Stated
Interest
Rate
(1)
|
|
Pay Floating Interest rate and Cross-
Currency Swaps
(2)
|
|
Effective
Interest
Rate
(3)
|
|
Swap
Maturities
|
||||||||
Commercial paper
|
|
$
|
2,772
|
|
|
$
|
1,521
|
|
|
—
|
|
|
$
|
—
|
|
|
1.24
|
%
|
|
|
U.S. and European medium-term notes
(4)
|
|
19,721
|
|
|
16,827
|
|
|
2.73
|
%
|
|
8,150
|
|
|
2.70
|
%
|
|
2018-2027
|
|||
BAMTech acquisition payable
|
|
1,581
|
|
|
—
|
|
|
1.27
|
%
|
|
—
|
|
|
1.27
|
%
|
|
|
|||
Capital Cities/ABC debt
|
|
105
|
|
|
107
|
|
|
8.75
|
%
|
|
—
|
|
|
6.00
|
%
|
|
|
|||
Foreign currency denominated debt
|
|
13
|
|
|
448
|
|
|
7.65
|
%
|
|
—
|
|
|
7.65
|
%
|
|
|
|||
Other
(5)
|
|
(46
|
)
|
|
180
|
|
|
|
|
—
|
|
|
|
|
|
|||||
|
|
24,146
|
|
|
19,083
|
|
|
2.35
|
%
|
|
8,150
|
|
|
2.46
|
%
|
|
|
|||
Asia Theme Parks borrowings
|
|
1,145
|
|
|
1,087
|
|
|
1.24
|
%
|
|
—
|
|
|
5.07
|
%
|
|
|
|||
Total borrowings
|
|
25,291
|
|
|
20,170
|
|
|
2.30
|
%
|
|
8,150
|
|
|
2.58
|
%
|
|
|
|||
Less current portion
|
|
6,172
|
|
|
3,687
|
|
|
0.93
|
%
|
|
1,550
|
|
|
1.44
|
%
|
|
|
|||
Total long-term borrowings
|
|
$
|
19,119
|
|
|
$
|
16,483
|
|
|
|
|
$
|
6,600
|
|
|
|
|
|
(1)
|
The stated interest rate represents the weighted-average coupon rate for each category of borrowings. For floating rate borrowings, interest rates are the rates in effect at
September 30, 2017
; these rates are not necessarily an indication of future interest rates.
|
(2)
|
Amounts represent notional values of interest rate and cross-currency swaps outstanding as of
September 30, 2017
.
|
(3)
|
The effective interest rate includes the impact of existing and terminated interest rate and cross-currency swaps, purchase accounting adjustments and debt issuance premiums, discounts and costs.
|
(4)
|
Includes net debt issuance premiums, discounts and costs totaling
$138 million
and
$132 million
at
September 30, 2017
and
October 1, 2016
, respectively.
|
(5)
|
Includes market value adjustments for debt with qualifying hedges, which reduce borrowings by
$73 million
and increase borrowings by
$146 million
at
September 30, 2017
and
October 1, 2016
, respectively.
|
|
Committed
Capacity
|
|
Capacity
Used
|
|
Unused
Capacity
|
||||||
Facility expiring March 2018
|
$
|
2,500
|
|
|
$
|
—
|
|
|
$
|
2,500
|
|
Facility expiring March 2019
|
2,250
|
|
|
—
|
|
|
2,250
|
|
|||
Facility expiring March 2021
|
2,250
|
|
|
—
|
|
|
2,250
|
|
|||
Total
|
$
|
7,000
|
|
|
$
|
—
|
|
|
$
|
7,000
|
|
|
Commercial paper with original maturities less than three months, net
(1)
|
|
Commercial paper with original maturities greater than three months
|
|
Total
|
||||||
Balance at Oct. 3, 2015
|
$
|
2,330
|
|
|
$
|
100
|
|
|
$
|
2,430
|
|
Additions
|
—
|
|
|
4,794
|
|
|
4,794
|
|
|||
Payments
|
(1,559
|
)
|
|
(4,155
|
)
|
|
(5,714
|
)
|
|||
Other Activity
|
6
|
|
|
5
|
|
|
11
|
|
|||
Balance at Oct. 1, 2016
|
$
|
777
|
|
|
$
|
744
|
|
|
$
|
1,521
|
|
Additions
|
372
|
|
|
6,364
|
|
|
6,736
|
|
|||
Payments
|
—
|
|
|
(5,489
|
)
|
|
(5,489
|
)
|
|||
Other Activity
|
2
|
|
|
2
|
|
|
4
|
|
|||
Balance at Sept. 30, 2017
|
$
|
1,151
|
|
|
$
|
1,621
|
|
|
$
|
2,772
|
|
|
Before
Asia
Theme Parks
Consolidation
|
|
Asia
Theme Parks
|
|
Total
|
||||||
2018
|
$
|
6,169
|
|
|
$
|
—
|
|
|
$
|
6,169
|
|
2019
|
2,757
|
|
|
59
|
|
|
2,816
|
|
|||
2020
|
3,000
|
|
|
—
|
|
|
3,000
|
|
|||
2021
|
2,105
|
|
|
—
|
|
|
2,105
|
|
|||
2022
|
1,900
|
|
|
46
|
|
|
1,946
|
|
|||
Thereafter
|
8,426
|
|
|
1,040
|
|
|
9,466
|
|
|||
|
$
|
24,357
|
|
|
$
|
1,145
|
|
|
$
|
25,502
|
|
9
|
Income Taxes
|
Income Before Income Taxes
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|||||||
Domestic (including U.S. exports)
|
$
|
12,611
|
|
|
$
|
14,018
|
|
|
$
|
12,825
|
|
Foreign subsidiaries
|
1,177
|
|
|
850
|
|
|
1,043
|
|
|||
|
$
|
13,788
|
|
|
$
|
14,868
|
|
|
$
|
13,868
|
|
Income Tax Expense/(Benefit)
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
3,229
|
|
|
$
|
3,146
|
|
|
$
|
4,182
|
|
State
|
360
|
|
|
154
|
|
|
333
|
|
|||
Foreign
(1)
|
489
|
|
|
533
|
|
|
525
|
|
|||
|
4,078
|
|
|
3,833
|
|
|
5,040
|
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
370
|
|
|
1,172
|
|
|
82
|
|
|||
State
|
5
|
|
|
100
|
|
|
(52
|
)
|
|||
Foreign
|
(31
|
)
|
|
(27
|
)
|
|
(54
|
)
|
|||
|
344
|
|
|
1,245
|
|
|
(24
|
)
|
|||
|
$
|
4,422
|
|
|
$
|
5,078
|
|
|
$
|
5,016
|
|
Components of Deferred Tax Assets and Liabilities
|
September 30, 2017
|
|
October 1, 2016
|
||||
|
|
|
|||||
Deferred tax assets
|
|
|
|
||||
Accrued liabilities
|
$
|
(2,422
|
)
|
|
$
|
(2,736
|
)
|
Net operating losses and tax credit carryforwards
|
(1,705
|
)
|
|
(1,567
|
)
|
||
Other
|
(386
|
)
|
|
(566
|
)
|
||
Total deferred tax assets
|
(4,513
|
)
|
|
(4,869
|
)
|
||
Deferred tax liabilities
|
|
|
|
||||
Depreciable, amortizable and other property
|
5,692
|
|
|
5,682
|
|
||
Foreign subsidiaries
|
518
|
|
|
348
|
|
||
Licensing revenues
|
476
|
|
|
480
|
|
||
Other
|
422
|
|
|
295
|
|
||
Total deferred tax liabilities
|
7,108
|
|
|
6,805
|
|
||
Net deferred tax liability before valuation allowance
|
2,595
|
|
|
1,936
|
|
||
Valuation allowance
|
1,716
|
|
|
1,602
|
|
||
Net deferred tax liability
|
$
|
4,311
|
|
|
$
|
3,538
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Federal income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State taxes, net of federal benefit
|
1.7
|
|
|
1.8
|
|
|
1.9
|
|
Domestic production activity deduction
|
(2.1
|
)
|
|
(1.6
|
)
|
|
(1.9
|
)
|
Earnings in jurisdictions taxed at rates different from the statutory U.S. federal rate
|
(1.6
|
)
|
|
(1.1
|
)
|
|
(1.5
|
)
|
Disneyland Paris recapitalization
(1)
|
—
|
|
|
—
|
|
|
2.9
|
|
Other, including tax reserves and related interest
(2)
|
(0.9
|
)
|
|
0.1
|
|
|
(0.2
|
)
|
|
32.1
|
%
|
|
34.2
|
%
|
|
36.2
|
%
|
(1)
|
At the beginning of fiscal 2015, the Company had a
$399 million
deferred income tax asset on the difference between the Company’s tax basis in its investment in Disneyland Paris and the Company’s financial statement carrying value of Disneyland Paris. As a result of the Disneyland Paris recapitalization and the increase in the Company’s ownership interest (see Note 6 for further discussion of this transaction), the deferred tax asset was written off to income tax expense in fiscal 2015.
|
(2)
|
In fiscal 2017, the Company adopted new accounting guidance, which resulted in $125 million of tax benefits related to employee share-based awards being credited to “Income taxes” in the Consolidated Statement of Income (see Note 18).
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at the beginning of the year
|
$
|
844
|
|
|
$
|
912
|
|
|
$
|
803
|
|
Increases for current year tax positions
|
61
|
|
|
71
|
|
|
98
|
|
|||
Increases for prior year tax positions
|
13
|
|
|
142
|
|
|
280
|
|
|||
Decreases in prior year tax positions
|
(55
|
)
|
|
(158
|
)
|
|
(193
|
)
|
|||
Settlements with taxing authorities
|
(31
|
)
|
|
(123
|
)
|
|
(76
|
)
|
|||
Balance at the end of the year
|
$
|
832
|
|
|
$
|
844
|
|
|
$
|
912
|
|
10
|
Pension and Other Benefit Programs
|
|
Pension Plans
|
|
Postretirement Medical Plans
|
||||||||||||
|
September 30, 2017
|
|
October 1, 2016
|
|
September 30, 2017
|
|
October 1,
2016 |
||||||||
Projected benefit obligations
|
|
|
|
|
|
|
|
||||||||
Beginning obligations
|
$
|
(14,480
|
)
|
|
$
|
(12,379
|
)
|
|
$
|
(1,759
|
)
|
|
$
|
(1,590
|
)
|
Service cost
|
(368
|
)
|
|
(318
|
)
|
|
(11
|
)
|
|
(11
|
)
|
||||
Interest cost
|
(447
|
)
|
|
(458
|
)
|
|
(56
|
)
|
|
(61
|
)
|
||||
Actuarial gain / (loss)
|
343
|
|
|
(1,769
|
)
|
|
42
|
|
|
(142
|
)
|
||||
Plan amendments and other
|
(22
|
)
|
|
8
|
|
|
(9
|
)
|
|
(9
|
)
|
||||
Benefits paid
|
442
|
|
|
436
|
|
|
47
|
|
|
54
|
|
||||
Ending obligations
|
$
|
(14,532
|
)
|
|
$
|
(14,480
|
)
|
|
$
|
(1,746
|
)
|
|
$
|
(1,759
|
)
|
Fair value of plans’ assets
|
|
|
|
|
|
|
|
||||||||
Beginning fair value
|
$
|
10,401
|
|
|
$
|
9,415
|
|
|
$
|
614
|
|
|
$
|
568
|
|
Actual return on plan assets
|
1,056
|
|
|
624
|
|
|
61
|
|
|
34
|
|
||||
Contributions
|
1,348
|
|
|
839
|
|
|
61
|
|
|
61
|
|
||||
Benefits paid
|
(442
|
)
|
|
(436
|
)
|
|
(47
|
)
|
|
(54
|
)
|
||||
Expenses and other
|
(38
|
)
|
|
(41
|
)
|
|
7
|
|
|
5
|
|
||||
Ending fair value
|
$
|
12,325
|
|
|
$
|
10,401
|
|
|
$
|
696
|
|
|
$
|
614
|
|
|
|
|
|
|
|
|
|
||||||||
Underfunded status of the plans
|
$
|
(2,207
|
)
|
|
$
|
(4,079
|
)
|
|
$
|
(1,050
|
)
|
|
$
|
(1,145
|
)
|
Amounts recognized in the balance sheet
|
|
|
|
|
|
|
|
||||||||
Non-current assets
|
$
|
70
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
(46
|
)
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
||||
Non-current liabilities
|
(2,231
|
)
|
|
(4,039
|
)
|
|
(1,050
|
)
|
|
(1,145
|
)
|
||||
|
$
|
(2,207
|
)
|
|
$
|
(4,079
|
)
|
|
$
|
(1,050
|
)
|
|
$
|
(1,145
|
)
|
|
Pension Plans
|
|
Postretirement Medical Plans
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Service cost
|
$
|
368
|
|
|
$
|
318
|
|
|
$
|
332
|
|
|
$
|
11
|
|
|
$
|
11
|
|
|
$
|
14
|
|
Interest cost
|
447
|
|
|
458
|
|
|
521
|
|
|
56
|
|
|
61
|
|
|
68
|
|
||||||
Expected return on plan assets
|
(874
|
)
|
|
(747
|
)
|
|
(711
|
)
|
|
(49
|
)
|
|
(45
|
)
|
|
(39
|
)
|
||||||
Amortization of prior year service costs
|
12
|
|
|
14
|
|
|
16
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Recognized net actuarial loss
|
405
|
|
|
242
|
|
|
247
|
|
|
17
|
|
|
8
|
|
|
10
|
|
||||||
Net periodic benefit cost
|
$
|
358
|
|
|
$
|
285
|
|
|
$
|
405
|
|
|
$
|
35
|
|
|
$
|
34
|
|
|
$
|
52
|
|
|
Pension Plans
|
|
Postretirement
Medical Plans
|
|
Total
|
||||||
Prior service cost
|
$
|
(65
|
)
|
|
$
|
—
|
|
|
$
|
(65
|
)
|
Net actuarial loss
|
(4,578
|
)
|
|
(194
|
)
|
|
(4,772
|
)
|
|||
Total amounts included in AOCI
|
(4,643
|
)
|
|
(194
|
)
|
|
(4,837
|
)
|
|||
Prepaid / (accrued) pension cost
|
2,436
|
|
|
(856
|
)
|
|
1,580
|
|
|||
Net balance sheet liability
|
$
|
(2,207
|
)
|
|
$
|
(1,050
|
)
|
|
$
|
(3,257
|
)
|
|
Pension Plans
|
|
Postretirement Medical Plans
|
|
Total
|
||||||
Prior service cost
|
$
|
(13
|
)
|
|
$
|
—
|
|
|
$
|
(13
|
)
|
Net actuarial loss
|
(347
|
)
|
|
(14
|
)
|
|
(361
|
)
|
|||
Total
|
$
|
(360
|
)
|
|
$
|
(14
|
)
|
|
$
|
(374
|
)
|
Asset Class
|
|
Minimum
|
|
Maximum
|
||
|
|
|
|
|
||
Equity investments
|
|
30
|
%
|
|
60
|
%
|
Fixed income investments
|
|
20
|
%
|
|
40
|
%
|
Alternative investments
|
|
10
|
%
|
|
30
|
%
|
Cash & money market funds
|
|
0
|
%
|
|
10
|
%
|
|
|
As of September 30, 2017
|
|||||||||||||
Description
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
Plan Asset Mix
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Cash
|
|
$
|
88
|
|
|
$
|
—
|
|
|
$
|
88
|
|
|
1
|
%
|
Common and preferred stocks
(1)
|
|
2,974
|
|
|
—
|
|
|
2,974
|
|
|
23
|
%
|
|||
Mutual funds
|
|
771
|
|
|
—
|
|
|
771
|
|
|
6
|
%
|
|||
Government and federal agency bonds, notes and MBS
|
|
1,870
|
|
|
548
|
|
|
2,418
|
|
|
19
|
%
|
|||
Corporate bonds
|
|
—
|
|
|
579
|
|
|
579
|
|
|
4
|
%
|
|||
Mortgage- and asset-backed securities
|
|
—
|
|
|
99
|
|
|
99
|
|
|
1
|
%
|
|||
Derivatives and other, net
|
|
—
|
|
|
14
|
|
|
14
|
|
|
—
|
%
|
|||
Total investments in the fair value hierarchy
|
|
$
|
5,703
|
|
|
$
|
1,240
|
|
|
$
|
6,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Assets valued at NAV as a practical expedient:
|
|
|
|
|
|
|
|
|
|||||||
Common collective funds
|
|
|
|
|
|
2,727
|
|
|
21
|
%
|
|||||
Alternative investments
|
|
|
|
|
|
2,201
|
|
|
17
|
%
|
|||||
Money market funds and other
|
|
|
|
|
|
1,150
|
|
|
9
|
%
|
|||||
Total investments at fair value
|
|
|
|
|
|
$
|
13,021
|
|
|
100
|
%
|
|
|
As of October 1, 2016
|
|||||||||||||
Description
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
Plan Asset Mix
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Cash
|
|
$
|
115
|
|
|
$
|
—
|
|
|
$
|
115
|
|
|
1
|
%
|
Common and preferred stocks
(1)
|
|
2,238
|
|
|
—
|
|
|
2,238
|
|
|
20
|
%
|
|||
Mutual funds
|
|
720
|
|
|
—
|
|
|
720
|
|
|
7
|
%
|
|||
Government and federal agency bonds, notes and MBS
|
|
2,116
|
|
|
420
|
|
|
2,536
|
|
|
23
|
%
|
|||
Corporate bonds
|
|
—
|
|
|
469
|
|
|
469
|
|
|
4
|
%
|
|||
Mortgage- and asset-backed securities
|
|
—
|
|
|
86
|
|
|
86
|
|
|
1
|
%
|
|||
Derivatives and other, net
|
|
1
|
|
|
(7
|
)
|
|
(6
|
)
|
|
—
|
%
|
|||
Total investments in the fair value hierarchy
|
|
$
|
5,190
|
|
|
$
|
968
|
|
|
$
|
6,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Assets valued at NAV as a practical expedient:
|
|
|
|
|
|
|
|
|
|||||||
Common collective funds
|
|
|
|
|
|
1,861
|
|
|
17
|
%
|
|||||
Alternative investments
|
|
|
|
|
|
2,072
|
|
|
19
|
%
|
|||||
Money market funds and other
|
|
|
|
|
|
924
|
|
|
8
|
%
|
|||||
Total investments at fair value
|
|
|
|
|
|
$
|
11,015
|
|
|
100
|
%
|
(1)
|
Includes
2.9 million
shares of Company common stock valued at
$282 million
(
2%
of total plan assets) and
2.8 million
shares valued at
$264 million
(
2%
of total plan assets) at
September 30, 2017
and
October 1, 2016
, respectively.
|
|
Pension
Plans
|
|
Postretirement
Medical Plans
(1)
|
||||
2018
|
$
|
503
|
|
|
$
|
49
|
|
2019
|
504
|
|
|
53
|
|
||
2020
|
536
|
|
|
58
|
|
||
2021
|
569
|
|
|
63
|
|
||
2022
|
607
|
|
|
67
|
|
||
2023 – 2027
|
3,569
|
|
|
405
|
|
(1)
|
Estimated future benefit payments are net of expected Medicare subsidy receipts of
$79 million
.
|
Equity Securities
|
7
|
%
|
to
|
11
|
%
|
Debt Securities
|
3
|
%
|
to
|
5
|
%
|
Alternative Investments
|
7
|
%
|
to
|
12
|
%
|
|
Discount Rate
|
|
Expected
Long-Term
Rate of Return
On Assets
|
|
Assumed Healthcare
Cost Trend Rate
|
||||||||||||||
Increase/(decrease)
|
Benefit
Expense
|
|
Projected Benefit Obligations
|
|
Benefit
Expense
|
|
Net Periodic Postretirement Medical Cost
|
|
Projected Benefit Obligations
|
||||||||||
1 ppt decrease
|
$
|
263
|
|
|
$
|
2,778
|
|
|
$
|
127
|
|
|
$
|
(29
|
)
|
|
$
|
(239
|
)
|
1 ppt increase
|
(242
|
)
|
|
(2,349
|
)
|
|
(127
|
)
|
|
44
|
|
|
316
|
|
•
|
Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.
|
•
|
If a participating employer stops contributing to the multiemployer plan, the unfunded obligations of the plan may become the obligation of the remaining participating employers.
|
•
|
If the Company chooses to stop participating in these multiemployer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan.
|
|
2017
|
|
2016
|
|
2015
|
||||||
Pension plans
|
$
|
127
|
|
|
$
|
126
|
|
|
$
|
128
|
|
Health & welfare plans
|
160
|
|
|
167
|
|
|
173
|
|
|||
Total contributions
|
$
|
287
|
|
|
$
|
293
|
|
|
$
|
301
|
|
11
|
Equity
|
Per Share
|
|
Total Paid
|
|
Payment Timing
|
|
Related to Fiscal Period
|
$0.78
|
|
$1.2 billion
|
|
Fourth Quarter of Fiscal 2017
|
|
First Half 2017
|
$0.78
|
|
$1.2 billion
|
|
Second Quarter of Fiscal 2017
|
|
Second Half 2016
|
$0.71
|
|
$1.1 billion
|
|
Fourth Quarter of Fiscal 2016
|
|
First Half 2016
|
$0.71
|
|
$1.2 billion
|
|
Second Quarter of Fiscal 2016
|
|
Second Half 2015
|
$0.66
|
|
$1.1 billion
|
|
Fourth Quarter of Fiscal 2015
|
|
First Half 2015
|
$1.15
|
|
$1.9 billion
|
|
Second Quarter of Fiscal 2015
|
|
2014
|
Fiscal year
|
|
Shares acquired
|
|
Total paid
|
2017
|
|
89 million
|
|
$9.4 billion
|
2016
|
|
74 million
|
|
$7.5 billion
|
2015
|
|
60 million
|
|
$6.1 billion
|
|
Market Value Adjustments
|
|
Unrecognized
Pension and
Postretirement
Medical
Expense
|
|
Foreign
Currency
Translation
and Other
(1)
|
|
AOCI
|
||||||||||||
|
Investments
|
|
Cash Flow
Hedges
|
|
|||||||||||||||
Balance at Sept. 27, 2014
|
$
|
100
|
|
|
$
|
204
|
|
|
$
|
(2,196
|
)
|
|
$
|
(76
|
)
|
|
$
|
(1,968
|
)
|
Unrealized gains (losses) arising during the period
|
(37
|
)
|
|
421
|
|
|
(474
|
)
|
|
(195
|
)
|
|
(285
|
)
|
|||||
Reclassifications of realized net (gains) losses to net income
|
(50
|
)
|
|
(291
|
)
|
|
173
|
|
|
—
|
|
|
(168
|
)
|
|||||
Balance at Oct. 3, 2015
|
13
|
|
|
334
|
|
|
(2,497
|
)
|
|
(271
|
)
|
|
(2,421
|
)
|
|||||
Unrealized gains (losses) arising during the period
|
13
|
|
|
(193
|
)
|
|
(1,321
|
)
|
|
(58
|
)
|
|
(1,559
|
)
|
|||||
Reclassifications of realized net (gains) losses to net income
|
—
|
|
|
(166
|
)
|
|
167
|
|
|
—
|
|
|
1
|
|
|||||
Balance at Oct. 1, 2016
|
26
|
|
|
(25
|
)
|
|
(3,651
|
)
|
|
(329
|
)
|
|
(3,979
|
)
|
|||||
Unrealized gains (losses) arising during the period
|
(1
|
)
|
|
85
|
|
|
312
|
|
|
(78
|
)
|
|
318
|
|
|||||
Reclassifications of realized net (gains) losses to net income
|
(17
|
)
|
|
(122
|
)
|
|
272
|
|
|
—
|
|
|
133
|
|
|||||
Balance at Sept. 30, 2017
|
$
|
8
|
|
|
$
|
(62
|
)
|
|
$
|
(3,067
|
)
|
|
$
|
(407
|
)
|
|
$
|
(3,528
|
)
|
(1)
|
Foreign Currency Translation and Other is net of an average
22%
estimated tax at
September 30, 2017
as the Company has not recognized deferred tax assets for some of our foreign entities.
|
Gains/(losses) in net income:
|
|
Affected line item in the Consolidated Statements of Income:
|
|
2017
|
|
2016
|
|
2015
|
||||||
Investments, net
|
|
Interest expense, net
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
79
|
|
Estimated tax
|
|
Income taxes
|
|
(10
|
)
|
|
—
|
|
|
(29
|
)
|
|||
|
|
|
|
17
|
|
|
—
|
|
|
50
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
Cash flow hedges
|
|
Primarily revenue
|
|
194
|
|
|
264
|
|
|
462
|
|
|||
Estimated tax
|
|
Income taxes
|
|
(72
|
)
|
|
(98
|
)
|
|
(171
|
)
|
|||
|
|
|
|
122
|
|
|
166
|
|
|
291
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
Pension and postretirement medical expense
|
|
Cost and expenses
|
|
(432
|
)
|
|
(265
|
)
|
|
(274
|
)
|
|||
Estimated tax
|
|
Income taxes
|
|
160
|
|
|
98
|
|
|
101
|
|
|||
|
|
|
|
(272
|
)
|
|
(167
|
)
|
|
(173
|
)
|
|||
|
|
|
|
|
|
|
|
|
||||||
Total reclassifications for the period
|
|
|
|
$
|
(133
|
)
|
|
$
|
(1
|
)
|
|
$
|
168
|
|
12
|
Equity-Based Compensation
|
|
2017
|
|
2016
|
|
2015
|
|||
Risk-free interest rate
|
2.6
|
%
|
|
2.3
|
%
|
|
2.1
|
%
|
Expected volatility
|
22
|
%
|
|
26
|
%
|
|
24
|
%
|
Dividend yield
|
1.58
|
%
|
|
1.32
|
%
|
|
1.37
|
%
|
Termination rate
|
4.0
|
%
|
|
4.0
|
%
|
|
3.2
|
%
|
Exercise multiple
|
1.62
|
|
|
1.62
|
|
|
1.48
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Stock option
|
$
|
90
|
|
|
$
|
93
|
|
|
$
|
102
|
|
RSUs
|
274
|
|
|
293
|
|
|
309
|
|
|||
Total equity-based compensation expense
(1)
|
364
|
|
|
386
|
|
|
411
|
|
|||
Tax impact
|
(123
|
)
|
|
(131
|
)
|
|
(134
|
)
|
|||
Reduction in net income
|
$
|
241
|
|
|
$
|
255
|
|
|
$
|
277
|
|
Equity-based compensation expense capitalized during the period
|
$
|
78
|
|
|
$
|
78
|
|
|
$
|
57
|
|
Tax benefit reported in cash flow from financing activities
(2)
|
n/a
|
|
|
$
|
208
|
|
|
$
|
313
|
|
(1)
|
Equity-based compensation expense is net of capitalized equity-based compensation and estimated forfeitures and excludes amortization of previously capitalized equity-based compensation costs.
|
(2)
|
The amount for fiscal 2017 is not applicable as the Company adopted new accounting guidance in fiscal 2017 (see Note 18).
|
|
2017
|
|||||
|
Shares
|
|
Weighted
Average
Exercise Price
|
|||
Outstanding at beginning of year
|
25
|
|
|
$
|
66.91
|
|
Awards forfeited
|
(1
|
)
|
|
99.40
|
|
|
Awards granted
|
5
|
|
|
105.20
|
|
|
Awards exercised
|
(5
|
)
|
|
52.58
|
|
|
Outstanding at end of year
|
24
|
|
|
$
|
76.68
|
|
Exercisable at end of year
|
14
|
|
|
$
|
58.62
|
|
|
|
|
|
|
|
|
Vested
|
|||||||||||
|
Range of Exercise Prices
|
|
Number of
Options
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Years of
Contractual
Life
|
|||||||||||
|
|
$
|
—
|
|
—
|
$
|
35
|
|
|
|
1
|
|
|
$
|
30.15
|
|
|
2.3
|
|
|
$
|
36
|
|
—
|
$
|
45
|
|
|
|
4
|
|
|
39.10
|
|
|
3.9
|
|
|
|
$
|
46
|
|
—
|
$
|
90
|
|
|
|
6
|
|
|
59.42
|
|
|
5.6
|
|
|
|
$
|
91
|
|
—
|
$
|
115
|
|
|
|
3
|
|
|
99.59
|
|
|
7.6
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected to Vest
|
|||||||||||
|
Range of Exercise Prices
|
|
Number of
Options
(1)
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Years of
Contractual
Life
|
|||||||||||
|
|
$
|
—
|
|
—
|
$
|
75
|
|
|
|
1
|
|
|
$
|
72.56
|
|
|
6.2
|
|
|
$
|
76
|
|
—
|
$
|
95
|
|
|
|
2
|
|
|
92.12
|
|
|
7.3
|
|
|
|
$
|
96
|
|
—
|
$
|
115
|
|
|
|
7
|
|
|
107.98
|
|
|
8.9
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
(1)
|
Number of options expected to vest is total unvested options less estimated forfeitures.
|
|
2017
|
|||||
|
Units
|
|
Weighted
Average
Grant-Date
Fair Value
|
|||
Unvested at beginning of year
|
10
|
|
|
$
|
88.84
|
|
Granted
(1)
|
4
|
|
|
105.66
|
|
|
Vested
|
(4
|
)
|
|
77.15
|
|
|
Forfeited
|
(1
|
)
|
|
97.85
|
|
|
Unvested at end of year
(2)
|
9
|
|
|
$
|
101.17
|
|
13
|
Detail of Certain Balance Sheet Accounts
|
Current receivables
|
|
September 30,
2017 |
|
October 1,
2016 |
||||
|
|
|
|
|||||
Accounts receivable
|
|
$
|
8,013
|
|
|
$
|
8,458
|
|
Other
|
|
807
|
|
|
760
|
|
||
Allowance for doubtful accounts
|
|
(187
|
)
|
|
(153
|
)
|
||
|
|
$
|
8,633
|
|
|
$
|
9,065
|
|
Other current assets
|
|
|
|
|
||||
Prepaid expenses
|
|
$
|
445
|
|
|
$
|
449
|
|
Other
|
|
143
|
|
|
244
|
|
||
|
|
$
|
588
|
|
|
$
|
693
|
|
Parks, resorts and other property
|
|
|
|
|
||||
Attractions, buildings and improvements
|
|
$
|
28,644
|
|
|
$
|
27,930
|
|
Leasehold improvements
|
|
898
|
|
|
830
|
|
||
Furniture, fixtures and equipment
|
|
18,908
|
|
|
16,912
|
|
||
Land improvements
|
|
5,593
|
|
|
4,598
|
|
||
|
|
54,043
|
|
|
50,270
|
|
||
Accumulated depreciation
|
|
(29,037
|
)
|
|
(26,849
|
)
|
||
Projects in progress
|
|
2,145
|
|
|
2,684
|
|
||
Land
|
|
1,255
|
|
|
1,244
|
|
||
|
|
$
|
28,406
|
|
|
$
|
27,349
|
|
Intangible assets
|
|
|
|
|
||||
Character/franchise intangibles and copyrights
|
|
$
|
5,829
|
|
|
$
|
5,829
|
|
Other amortizable intangible assets
|
|
1,154
|
|
|
893
|
|
||
Accumulated amortization
|
|
(1,828
|
)
|
|
(1,635
|
)
|
||
Net amortizable intangible assets
|
|
5,155
|
|
|
5,087
|
|
||
FCC licenses
|
|
602
|
|
|
624
|
|
||
Trademarks
|
|
1,218
|
|
|
1,218
|
|
||
Other indefinite lived intangible assets
|
|
20
|
|
|
20
|
|
||
|
|
$
|
6,995
|
|
|
$
|
6,949
|
|
Other non-current assets
|
|
September 30,
2017 |
|
October 1,
2016 |
||||
|
|
|
|
|||||
Receivables
|
|
$
|
1,688
|
|
|
$
|
1,651
|
|
Prepaid expenses
|
|
233
|
|
|
229
|
|
||
Other
|
|
469
|
|
|
460
|
|
||
|
|
$
|
2,390
|
|
|
$
|
2,340
|
|
Other long-term liabilities
|
|
|
|
|
||||
Pension and postretirement medical plan liabilities
|
|
$
|
3,281
|
|
|
$
|
5,184
|
|
Other
|
|
3,162
|
|
|
2,522
|
|
||
|
|
$
|
6,443
|
|
|
$
|
7,706
|
|
14
|
Commitments and Contingencies
|
|
Broadcast
Programming
|
|
Operating
Leases
|
|
Other
|
|
Total
|
||||||||
2018
|
$
|
6,662
|
|
|
$
|
580
|
|
|
$
|
1,825
|
|
|
$
|
9,067
|
|
2019
|
6,868
|
|
|
472
|
|
|
998
|
|
|
8,338
|
|
||||
2020
|
6,844
|
|
|
401
|
|
|
777
|
|
|
8,022
|
|
||||
2021
|
6,694
|
|
|
324
|
|
|
384
|
|
|
7,402
|
|
||||
2022
|
4,779
|
|
|
244
|
|
|
1,005
|
|
|
6,028
|
|
||||
Thereafter
|
15,701
|
|
|
1,327
|
|
|
2,424
|
|
|
19,452
|
|
||||
|
$
|
47,548
|
|
|
$
|
3,348
|
|
|
$
|
7,413
|
|
|
$
|
58,309
|
|
2018
|
$
|
25
|
|
2019
|
17
|
|
|
2020
|
15
|
|
|
2021
|
15
|
|
|
2022
|
15
|
|
|
Thereafter
|
446
|
|
|
Total minimum obligations
|
533
|
|
|
Less amount representing interest
|
(392
|
)
|
|
Present value of net minimum obligations
|
141
|
|
|
Less current portion
|
(12
|
)
|
|
Long-term portion
|
$
|
129
|
|
15
|
Fair Value Measurement
|
|
|
Fair Value Measurement at September 30, 2017
|
||||||||||||||
Description
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
||||||||||
Investments
|
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36
|
|
Derivatives
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||
Foreign exchange
|
|
—
|
|
|
403
|
|
|
—
|
|
|
403
|
|
||||
Other
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
|
—
|
|
|
(122
|
)
|
|
—
|
|
|
(122
|
)
|
||||
Foreign exchange
|
|
—
|
|
|
(427
|
)
|
|
—
|
|
|
(427
|
)
|
||||
Total recorded at fair value
|
|
$
|
36
|
|
|
$
|
(128
|
)
|
|
$
|
—
|
|
|
$
|
(92
|
)
|
Fair value of borrowings
|
|
$
|
—
|
|
|
$
|
23,110
|
|
|
$
|
2,764
|
|
|
$
|
25,874
|
|
|
|
Fair Value Measurement at October 1, 2016
|
||||||||||||||
Description
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Investments
|
|
$
|
85
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
85
|
|
Derivatives
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
|
—
|
|
|
132
|
|
|
—
|
|
|
132
|
|
||||
Foreign exchange
|
|
—
|
|
|
596
|
|
|
—
|
|
|
596
|
|
||||
Other
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
||||
Foreign exchange
|
|
—
|
|
|
(510
|
)
|
|
—
|
|
|
(510
|
)
|
||||
Other
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
||||
Total recorded at fair value
|
|
$
|
85
|
|
|
$
|
207
|
|
|
$
|
—
|
|
|
$
|
292
|
|
Fair value of borrowings
|
|
$
|
—
|
|
|
$
|
19,500
|
|
|
$
|
1,579
|
|
|
$
|
21,079
|
|
16
|
Derivative Instruments
|
|
As of September 30, 2017
|
||||||||||||||
|
Current
Assets
|
|
Other Assets
|
|
Other
Current
Liabilities
|
|
Other Long-
Term
Liabilities
|
||||||||
Derivatives designated as hedges
|
|
|
|
|
|
|
|
||||||||
Foreign exchange
|
$
|
175
|
|
|
$
|
190
|
|
|
$
|
(192
|
)
|
|
$
|
(170
|
)
|
Interest rate
|
—
|
|
|
10
|
|
|
(106
|
)
|
|
—
|
|
||||
Other
|
6
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Derivatives not designated as hedges
|
|
|
|
|
|
|
|
||||||||
Foreign exchange
|
38
|
|
|
—
|
|
|
(46
|
)
|
|
(19
|
)
|
||||
Interest Rate
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
||||
Gross fair value of derivatives
|
219
|
|
|
202
|
|
|
(344
|
)
|
|
(205
|
)
|
||||
Counterparty netting
|
(142
|
)
|
|
(190
|
)
|
|
188
|
|
|
144
|
|
||||
Cash collateral (received)/paid
|
(20
|
)
|
|
(7
|
)
|
|
19
|
|
|
—
|
|
||||
Net derivative positions
|
$
|
57
|
|
|
$
|
5
|
|
|
$
|
(137
|
)
|
|
$
|
(61
|
)
|
|
As of October 1, 2016
|
||||||||||||||
|
Current
Assets
|
|
Other Assets
|
|
Other
Current
Liabilities
|
|
Other Long-
Term
Liabilities
|
||||||||
Derivatives designated as hedges
|
|
|
|
|
|
|
|
||||||||
Foreign exchange
|
$
|
278
|
|
|
$
|
191
|
|
|
$
|
(209
|
)
|
|
$
|
(163
|
)
|
Interest rate
|
—
|
|
|
132
|
|
|
(13
|
)
|
|
—
|
|
||||
Other
|
3
|
|
|
3
|
|
|
(4
|
)
|
|
—
|
|
||||
Derivatives not designated as hedges
|
|
|
|
|
|
|
|
||||||||
Foreign exchange
|
125
|
|
|
2
|
|
|
(133
|
)
|
|
(5
|
)
|
||||
Gross fair value of derivatives
|
406
|
|
|
328
|
|
|
(359
|
)
|
|
(168
|
)
|
||||
Counterparty netting
|
(241
|
)
|
|
(199
|
)
|
|
316
|
|
|
124
|
|
||||
Cash collateral (received)/paid
|
(77
|
)
|
|
(44
|
)
|
|
7
|
|
|
—
|
|
||||
Net derivative positions
|
$
|
88
|
|
|
$
|
85
|
|
|
$
|
(36
|
)
|
|
$
|
(44
|
)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Gain (loss) on interest rate swaps
|
$
|
(211
|
)
|
|
$
|
18
|
|
|
$
|
60
|
|
Gain (loss) on hedged borrowings
|
211
|
|
|
(18
|
)
|
|
(60
|
)
|
|
Costs and Expenses
|
|
Interest expense, net
|
|
Income Tax Expense
|
||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
Net gains (losses) on foreign currency denominated assets and liabilities
|
$
|
105
|
|
|
$
|
2
|
|
|
$
|
(574
|
)
|
|
$
|
(13
|
)
|
|
$
|
(2
|
)
|
|
$
|
42
|
|
|
$
|
3
|
|
|
$
|
49
|
|
|
$
|
40
|
|
Net gains (losses) on foreign exchange risk management contracts not designated as hedges
|
(120
|
)
|
|
(65
|
)
|
|
558
|
|
|
11
|
|
|
—
|
|
|
(43
|
)
|
|
24
|
|
|
(24
|
)
|
|
—
|
|
|||||||||
Net gains (losses)
|
$
|
(15
|
)
|
|
$
|
(63
|
)
|
|
$
|
(16
|
)
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
27
|
|
|
$
|
25
|
|
|
$
|
40
|
|
17
|
Restructuring and Impairment Charges
|
18
|
New Accounting Pronouncements
|
•
|
During fiscal 2017, excess tax benefits of
$0.1 billion
, were recognized as a benefit in “Income taxes” in the Consolidated Statement of Income and classified as a source in operating activities in the Consolidated Statement of Cash Flows. The guidance required prospective adoption for the statement of income and allowed for either prospective or retrospective adoption for the statement of cash flows. The Company elected to prospectively adopt the effect to the statement of cash flows and accordingly, did not restate the Consolidated Statements of Cash Flows for fiscal
2016
or
2015
, which had excess tax benefits of approximately
$0.2 billion
and
$0.3 billion
, respectively.
|
•
|
During fiscal 2017, cash paid for shares withheld to satisfy employee taxes of
$0.2 billion
was classified as a use in financing activities in the Consolidated Statement of Cash Flows. The guidance required retrospective adoption; accordingly, for fiscal 2016 and 2015, uses of
$0.2 billion
and
$0.3 billion
, respectively, were reclassified from operating activities to financing activities in the Consolidated Statements of Cash Flows.
|
•
|
For television and film content licensing agreements with multiple availability windows with the same licensee, the Company will defer more revenues to future windows than is currently deferred.
|
•
|
For licenses of character images, brands and trademarks subject to minimum guaranteed license fees, we currently recognize the difference between the minimum guaranteed amount and actual royalties earned from licensee merchandise sales (“shortfalls”) at the end of the contract period. Under the new guidance, projected guarantee shortfalls will be recognized straight-line over the license period remaining once an expected shortfall is identified.
|
•
|
For licenses that include multiple television and film titles subject to minimum guaranteed license fees, the Company will recognize an allocation of the minimum guaranteed license fee as each title is made available to the customer. Under current guidance, guarantee shortfalls for licenses of multiple titles are deferred to the end of the contract period.
|
•
|
For renewals or extensions of license agreements for television and film content, we will recognize revenue when the licensed content becomes available under the renewal or extension, instead of when the agreement is renewed or extended.
|
(unaudited)
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
||||||||
2017
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
14,784
|
|
|
$
|
13,336
|
|
|
$
|
14,238
|
|
|
$
|
12,779
|
|
|
Segment operating income
(5)
|
|
3,956
|
|
|
3,996
|
|
|
4,011
|
|
|
2,812
|
|
|
||||
Net income
|
|
2,488
|
|
|
2,539
|
|
|
2,474
|
|
|
1,865
|
|
|
||||
Net income attributable to Disney
|
|
2,479
|
|
|
2,388
|
|
|
2,366
|
|
|
1,747
|
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted
|
|
$
|
1.55
|
|
|
$
|
1.50
|
|
|
$
|
1.51
|
|
(3)
|
$
|
1.13
|
|
(4)
|
Basic
|
|
1.56
|
|
|
1.51
|
|
|
1.51
|
|
|
1.14
|
|
|
||||
2016
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
15,244
|
|
|
$
|
12,969
|
|
|
$
|
14,277
|
|
|
$
|
13,142
|
|
|
Segment operating income
(5)
|
|
4,267
|
|
|
3,822
|
|
|
4,456
|
|
|
3,176
|
|
|
||||
Net income
|
|
2,910
|
|
|
2,276
|
|
|
2,712
|
|
|
1,892
|
|
|
||||
Net income attributable to Disney
|
|
2,880
|
|
|
2,143
|
|
|
2,597
|
|
|
1,771
|
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted
|
|
$
|
1.73
|
|
(1)
|
$
|
1.30
|
|
(2)
|
$
|
1.59
|
|
(3)
|
$
|
1.10
|
|
(4)
|
Basic
|
|
1.74
|
|
|
1.31
|
|
|
1.60
|
|
|
$
|
1.10
|
|
|
(1)
|
Results for the first quarter of fiscal 2016 included the Vice Gain, which had a favorable impact of
$0.13
on earnings per diluted share (see Note 1 to the Consolidated Financial Statements), partially offset by restructuring and impairment charges, which had an adverse impact of
$0.03
on diluted earnings per share.
|
(2)
|
Results for the second quarter of fiscal 2016 included the Infinity Charge, which had an adverse impact of
$0.06
on diluted earnings per share (See Note 1 to the Consolidated Financial Statements).
|
(3)
|
Results for the third quarter of fiscal 2017 included a charge, net of committed insurance recoveries, incurred in connection with the settlement of litigation, which had an adverse impact of
$0.07
on diluted earnings per share. Results for the third quarter of fiscal 2016 included restructuring and impairment charges, which had an adverse impact of
$0.03
on diluted earnings per share.
|
(4)
|
Results for the fourth quarter of fiscal 2017 included a non-cash net gain in connection with the acquisition of a controlling interest in BAMTech, which had a favorable impact of
$0.10
per diluted earnings per share (see Note 3 to the Consolidated Financial Statements), partially offset by restructuring and impairment charges, which had an adverse impact of
$0.04
per diluted earnings per share. Results for the fourth quarter of fiscal 2016 included an adjustment to the Infinity Charge taken in the second quarter, which had a favorable impact of
$0.01
per diluted earnings per share, partially offset by restructuring and impairment charges, which had an adverse impact of
$0.01
per diluted earnings per share.
|
(5)
|
Segment operating results reflect earnings before the Infinity Charge, corporate and unallocated shared expenses, restructuring and impairment charges, other expense, interest income/(expense), income taxes and noncontrolling interests. Segment operating income includes equity in the income of investees except for the Vice Gain.
|
|
|
Page
|
Preamble
|
v
|
|
ARTICLE 1 Definitions
|
1
|
|
1.01
|
“ABC Employee”
|
1
|
1.02
|
“Adjustment Factor”
|
1
|
1.03
|
“Affiliated Employer”
|
1
|
1.04
|
“After-Tax Account”
|
1
|
1.05
|
“Aggregate Account” or “Account”
|
2
|
1.06
|
“Alternate Payee”
|
2
|
1.07
|
“Authorized Leave of Absence”
|
2
|
1.08
|
“Automatic Contribution”
|
2
|
1.09
|
“Automatic Contribution Account”
|
2
|
1.10
|
“Beneficiary”
|
3
|
1.11
|
“Board” or “Board of Directors”
|
3
|
1.12
|
“Break in Service”
|
3
|
1.13
|
“Code”
|
4
|
1.14
|
“Committee”
|
4
|
1.15
|
“Company”
|
4
|
1.16
|
“Company Stock”
|
4
|
1.17
|
“Company Stock Fund”
|
5
|
1.18
|
“Company Stock ESOP Fund”
|
5
|
1.19
|
“Company Stock Non-ESOP Fund”
|
5
|
1.20
|
“Compensation”
|
5
|
1.21
|
“Covered Employee”
|
6
|
1.22
|
“Effective Date”
|
9
|
1.23
|
“Eligibility Computation Period”
|
9
|
1.24
|
“Eligible Employee”
|
10
|
1.25
|
“Employee”
|
10
|
1.26
|
“Employer”
|
11
|
1.27
|
“Employment Commencement Date”
|
11
|
1.28
|
“Enrollment Date”
|
12
|
1.29
|
“ERISA”
|
12
|
1.30
|
“Highly Compensated Employee”
|
12
|
1.31
|
“Hour of Service”
|
13
|
1.32
|
“Income”
|
15
|
1.33
|
“Investment Fund”
|
15
|
1.34
|
“Leased Employee”
|
15
|
1.35
|
“Matching Account”
|
16
|
1.36
|
“Matching Contribution”
|
16
|
1.37
|
“Maximum Compensation Limitation”
|
16
|
1.38
|
“Participant”
|
16
|
1.39
|
“Plan”
|
16
|
1.40
|
“Plan Year”
|
16
|
1.41
|
“Qualified Domestic Relations Order”
|
16
|
1.42
|
“Reemployment Commencement Date”
|
17
|
1.43
|
“Rollover Account”
|
17
|
1.44
|
“Rollover Contribution”
|
17
|
1.45
|
“Roth Account”
|
17
|
1.46
|
“Roth Contributions”
|
17
|
1.47
|
“Rule of Parity”
|
17
|
1.48
|
“Section 402(g) Limit”
|
18
|
1.49
|
“Special Account”
|
18
|
1.50
|
“Special Contribution”
|
18
|
1.51
|
“Spousal Consent”
|
18
|
1.52
|
“Spouse”
|
18
|
1.53
|
“Statutory Compensation”
|
18
|
1.54
|
“Tax-Deferred Account”
|
19
|
1.55
|
“Tax-Deferred Contributions”
|
19
|
1.56
|
“Trust Agreement”
|
19
|
1.57
|
“Trust Fund”
|
19
|
1.58
|
“Trustee”
|
20
|
1.59
|
“Valuation Date”
|
20
|
ARTICLE 2 Eligibility and Participation
|
21
|
|
2.01
|
Eligibility
|
21
|
2.02
|
Participation
|
21
|
2.03
|
Reemployment of Former Employees and Former Participants
|
21
|
2.04
|
Special Rules Relating to Veteran’s Reemployment Rights Under USERRA
|
21
|
2.05
|
Transferred Participants
|
26
|
2.06
|
Termination of Employment and Termination of Participation
|
27
|
ARTICLE 3 Contributions
|
28
|
|
3.01
|
Tax-Deferred Contributions
|
28
|
3.02
|
Matching Contributions
|
29
|
3.03
|
Special Contributions
|
30
|
3.04
|
Deductibility Limitations and Form of Contribution
|
31
|
3.05
|
Rollover Contributions
|
31
|
3.06
|
After Tax-Contributions
|
33
|
3.07
|
Catch-up Contributions
|
33
|
3.08
|
Roth Contributions
|
34
|
3.09
|
Automatic Contribution for ESPN Regular Remote Employees
|
34
|
ARTICLE 4 Allocations to Participants’ Accounts
|
36
|
|
4.01
|
Individual Accounts
|
36
|
4.02
|
Account Allocations
|
36
|
4.03
|
Limitation on Allocations
|
37
|
4.04
|
No Guarantee
|
38
|
4.05
|
Statement of Accounts
|
38
|
ARTICLE 5 Vesting
|
39
|
|
5.01
|
Nonforfeitability of Aggregate Account
|
39
|
5.02
|
Automatic Contribution Account
|
39
|
ARTICLE 6 Investment Elections and Voting of Company Stock
|
40
|
|
6.01
|
Investment Options
|
40
|
6.02
|
Voting of Company Stock
|
46
|
ARTICLE 7 Participant Loans
|
50
|
|
7.01
|
Loans to Active Participants
|
50
|
7.02
|
Repayment of Loans
|
51
|
ARTICLE 8 Distributions to Participants and Beneficiaries
|
53
|
|
8.01
|
Withdrawals from After-Tax Account and Rollover Account
|
53
|
8.02
|
Hardship Withdrawals
|
53
|
8.03
|
Distributions on Account of Termination of Employment
|
56
|
8.04
|
Restrictions and Requirements on Distributions
|
59
|
8.05
|
Method of Payment for Eligible Rollover Distributions
|
61
|
8.06
|
Recapture of Payments
|
64
|
8.07
|
Age 59½ Withdrawals
|
64
|
8.08
|
Required Minimum Distributions
|
65
|
ARTICLE 9 Administration of Plan
|
71
|
|
9.01
|
Plan Administrative Committee
|
71
|
9.02
|
Duties of Committee
|
72
|
9.03
|
Meetings
|
72
|
9.04
|
Actions By the Committee
|
72
|
9.05
|
Compensation and Bonding
|
72
|
9.06
|
Establishment of Rules and Interpretation of Plan
|
73
|
9.07
|
Service in More Than One Fiduciary Capacity
|
74
|
9.08
|
Limitation of Liability
|
74
|
9.09
|
Indemnification
|
74
|
9.10
|
Expenses of Administration
|
74
|
9.11
|
Claims Procedures
|
75
|
9.12
|
Limitation on Actions
|
81
|
9.13
|
Class Action Forum
|
82
|
ARTICLE 10 Management of Funds
|
84
|
|
10.01
|
Trust Agreement
|
84
|
10.02
|
Exclusive Benefit Rule
|
84
|
10.03
|
Committee Power and Duties
|
84
|
ARTICLE 11 Assignments and Liens
|
86
|
|
11.01
|
Nonalienation
|
86
|
11.02
|
Qualified Domestic Relations Orders
|
87
|
11.03
|
Facility of Payment
|
88
|
11.04
|
Information
|
88
|
11.05
|
Construction
|
89
|
11.06
|
Proof of Death and Right of Beneficiary or Other Person
|
89
|
11.07
|
Failure to Locate Recipient
|
89
|
11.08
|
Electronic Transmission of Notices to Participants
|
90
|
ARTICLE 12 Amendment, Merger and Termination
|
91
|
|
12.01
|
Amendment of Plan
|
91
|
12.02
|
Merger or Consolidation
|
91
|
12.03
|
Additional Participating Employers
|
92
|
12.04
|
Termination of Plan
|
93
|
12.05
|
Distribution of Assets on Plan Termination or a Complete Discontinuance of Contributions
|
93
|
12.06
|
Notification of Termination
|
93
|
ARTICLE 13 Top-Heavy Provisions
|
95
|
|
13.01
|
Priority Over Other Plan Provisions
|
95
|
13.02
|
Definitions Used in this Article
|
95
|
13.03
|
Minimum Allocation
|
98
|
ARTICLE 14 Limitations on Contributions and Allocations to Participants’ Accounts
|
100
|
|
14.01
|
Definitions Used in This Article
|
100
|
14.02
|
Actual Deferral Percentage Test
|
102
|
14.03
|
Contribution Percentage Test
|
105
|
14.04
|
Additional Discrimination Testing Provisions
|
107
|
14.05
|
Maximum Annual Additions
|
109
|
14.06
|
Return of Contributions
|
111
|
14.07
|
Contributions in Excess of Section 402(g) Limit
|
112
|
ARTICLE 15 General Provisions
|
114
|
|
15.01
|
No Contract of Employment
|
114
|
15.02
|
Severability
|
114
|
15.03
|
Scrivener’s Errors
|
114
|
APPENDIX A - Transfer of Assets from the Jumbo Pictures, Inc.
|
|
|
APPENDIX B - Transfer of Certain Assets to or from the Go. Com Plan
|
|
|
APPENDIX C - Recognition of Service with Acquisitions or Predecessor Employers
|
|
|
APPENDIX D - Transfer of Assets from the Fox Plan
|
|
|
APPENDIX E - Transfer of Assets from the Miramax Plan
|
|
|
APPENDIX F - Transfer of Assets from the Dream Quest Plan
|
|
|
APPENDIX G - Transfer of Assets from the Mammoth Records Plan
|
|
|
APPENDIX H - Transfer of Assets from the ABC, Inc. Savings & Investment Plan
|
|
|
APPENDIX I - Employees Transferred from Designated Disney Affiliated Companies
|
|
1.
|
Article 4 (
Allocations to Participants’ Accounts
), Article 6 (
Investment Elections and Voting of Company Stock
), Article 9 (
Administration of Plan
), Article 10 (
Management of Funds
), Article 11 (
Assignments and Liens
), Article 12 (
Amendment, Merger and Termination
) with the exception of Section 12.03 (
Additional Participating Employers
), and Article 15 (
General Provisions
) shall apply to all employees and former employees (to the extent appropriate) who are Participants on or after the Effective Date;
|
2.
|
An employee’s or former employee’s eligibility for and amount of contributions allocated with respect to Plan Years beginning before the Effective Date shall not be affected by the provisions of this restatement of the Plan, except as expressly provided herein;
|
3.
|
The provisions of Section 8.03
(Distributions on Account of Termination of Employment)
, Section 8.05 (
Method of Payment for Eligible Rollover Distributions
), Section 8.06 (
Recapture of Payments
), Section 8.07
(Age 59-1/2 Withdrawals)
, and Section 8.08 (
Required Minimum Distributions
) shall apply, as appropriate, to distributions that occur under the Plan on or after the Effective Date; and
|
4.
|
Amendments to the Plan shall be effective as of (a) the dates set forth in the instruments adopting the amendments (including any prior amendment to or restatement of the Plan) or (b) the dates specified in the particular provision of this restatement of the Plan affected by such amendment (or as of the Effective Date if not specified).
|
1.01
|
“ABC Employee”
means an Employee who is employed by ABC, Inc. or any subsidiary or affiliate of ABC, Inc. that is an Employer.
|
1.02
|
“Adjustment Factor”
means any of the cost of living adjustment factors prescribed by the Secretary of the Treasury under Section 415(d) of the Code applied to such items and in such manner as the Secretary shall provide.
|
1.03
|
“Affiliated Employer”
means any company not participating in the Plan that is:
|
(a)
|
a member of a controlled group of corporations as defined in Section 414(b) of the Code (determined under Code Section 1563(a) without regard to Code Sections 1563(a)(4) and (e)(3)(C)) with the Company; or
|
(b)
|
any trade or business under common control (as defined in Code Section 414(c)) with the Company; or
|
(c)
|
a member of an affiliated service group (as defined in Code Section 414(m)) that includes the Company; or
|
(d)
|
any other entity required to be aggregated with the Company pursuant to Treasury regulations under Code Section 414(o).
|
1.04
|
“After-Tax Account”
means the account maintained for a Participant to record his after-tax contributions made to the Plan prior to January 1, 1987 and adjustments relating thereto.
|
1.05
|
“Aggregate Account” or “Account”
means the records, including subaccounts, maintained by the Committee in the manner provided hereunder to determine the interest of each Participant in the assets of the Plan and may refer to any or all of the accounts that a Participant may have under this Plan, namely a Tax-Deferred Account, a Matching Account, an Automatic Contribution Account, a Rollover Account, a Special Account, an After-Tax Account or a Roth Account.
|
1.06
|
“Alternate Payee”
means any Spouse, former Spouse, child or other dependent of a Participant who is recognized by a qualified domestic relations order as having a right to receive all, or a portion, of the benefits payable under the Plan with respect to a Participant.
|
1.07
|
“Authorized Leave of Absence”
means an absence authorized by an Employer or an Affiliated Employer under its standard personnel practices as applied in a uniform and nondiscriminatory manner to all persons similarly situated, provided that the Employee resumes employment with the Employer or an Affiliated Employer or retires within the period specified in the Authorized Leave of Absence. An Employer or an Affiliated Employer is not required to authorize any absence due to a strike, a walkout or a lockout as an Authorized Leave of Absence. An absence due to service in the Uniformed Services of the United States shall be considered an Authorized Leave of Absence provided that the Employee complies with all of the requirements of federal law in order to be entitled to reemployment and provided further that the Employee returns to employment with an Employer or an Affiliated Employer within the period provided by such law.
|
1.08
|
“Automatic Contribution”
means the Employer Automatic Contribution made to the Plan on behalf of a Participant pursuant to Section 3.09.
|
1.09
|
“Automatic Contribution Account”
means the account maintained for a Participant to record Automatic Contributions made on his behalf pursuant to Section 3.09 and adjustments relating thereto.
|
1.10
|
“Beneficiary”
means any person, persons or entity named by a Participant by written designation filed with the Committee to receive benefits payable in the event of the Participant’s death, provided that if the Participant is married and he designates someone other than his Spouse as the Beneficiary, the Participant must file a Spousal Consent with the Committee. If any Participant fails to designate a Beneficiary, or if the Beneficiary designated by a deceased Participant dies before the Participant, then the Beneficiary shall be deemed to be the Participant’s surviving Spouse or, if none, then the Beneficiary shall be determined in accordance with the following order of priority:
|
(a)
|
the Participant’s domestic partner (determined in accordance with procedures prescribed by the Committee), or if none:
|
(b)
|
the Participant’s natural and legally-adopted children (equally), or if none;
|
(c)
|
the Participant’s parents (equally), or if none;
|
(d)
|
the Participant’s brothers and sisters (equally), or if none;
|
(e)
|
the Participant’s estate.
|
1.11
|
“Board”
or
“Board of Directors”
means the Board of Directors of The Walt Disney Company.
|
1.12
|
“Break in Service”
means an Eligibility Computation Period during which an Employee is credited with less than 501 Hours of Service. Solely for the purpose of determining if an Employee incurred a Break in Service, Hours of Service shall also include hours granted, on the basis of forty-five (45) hours per week, for periods during which an Employee is on an Authorized Leave of Absence.
|
(a)
|
The Employee’s pregnancy;
|
(b)
|
The birth of a child of the Employee;
|
(c)
|
The placement of a child with the Employee in connection with the Employee’s adoption of such child;
|
(d)
|
The caring for such child for a period beginning immediately following such birth or placement; or
|
(e)
|
The Employee’s own illness or caring for his Spouse or a member of his immediate family pursuant to the Family and Medical Leave Act of 1993 and regulations thereunder.
|
1.13
|
“Code”
means the Internal Revenue Code of 1986, as amended.
|
1.14
|
“Committee”
means the Investment and Administrative Committee of The Walt Disney Company Sponsored Qualified Benefit Plans and Key Employees Deferred Compensation and Retirement Plan.
|
1.15
|
“Company”
means The Walt Disney Company and its successors.
|
1.16
|
“Company Stock”
means common stock of the Company.
|
1.17
|
Company Stock ESOP Fund”
means the Investment Fund established and maintained pursuant to Section 6.01(a)(i)(A)(I).
|
1.18
|
“Company Stock Non-ESOP Fund”
means the Investment Fund established and maintained pursuant to Section 6.01(a)(i)(A)(II).
|
1.19
|
“Compensation”
means an Employee’s base pay (excluding overtime, bonuses, relocation reimbursement, stock options, incentive compensation, profit participation, compensation for extended work week, or other extraordinary payments, as determined by the Committee) and an ABC Employee’s commissions and sales bonuses paid during the calendar year by the Employer in return for the Employee’s services. Except, for an ABC Employee who is represented by a collective bargaining representative, “Compensation” means the amount of covered compensation prescribed by the collective bargaining agreement with the Employer pursuant to which he is treated as a Covered Employee. Compensation does not include:
|
(a)
|
Employer contributions to any pension plan other than contributions caused by an Employee’s salary deferral reduction pursuant to Section 401(k) of the Code;
|
(b)
|
Employer contributions to this Plan or any other plan of deferred compensation maintained by an Employer other than Tax-Deferred Contributions;
|
(c)
|
Fringe benefits not taxable to the Employee (other than an elective qualified transportation fringe arrangement described in Code Section 132(f)(4));
|
(d)
|
Payments to or on behalf of an individual after he is no longer an Employee;
|
(e)
|
Imputed life insurance and all other forms of imputed income (for example, but not by way of limitation, income based on the value of health care coverage for the Employee’s domestic partner, regardless of whether the Employee is permitted to exclude such amount from taxable gross income);
|
(f)
|
Back pay; and
|
(g)
|
.Any Compensation in lieu of unused vacation and/or sick pay.
|
1.20
|
“Covered Employee”
means:
|
(a)
|
For an Employee who is not an ABC Employee:
|
(i)
|
Except as provided in (ii) or (iii) below, an Employee of an Employer who receives Compensation in the form of a salary (as distinguished from hourly‑paid Employees), whether or not such Employee is exempt for wage-and-hour-law purposes.
|
(ii)
|
If employed by Magical Cruise Company, Limited, an Employee must be a salaried Employee as described in (i), a United States citizen, an officer of Magical Cruise Company, Limited, and not eligible for additional overtime when working over 70 hours in a week.
|
(iii)
|
If employed by DCL Island Development, Ltd., an Employee must be a salaried Employee as described in (i) and either a United States citizen or holder of a valid Green Card issued by U.S. Citizenship and Immigration Services (or any successor agency).
|
(A)
|
an Employee who is covered by a collective bargaining agreement, unless the applicable collective bargaining agreement specifically provides for coverage by the Plan;
|
(B)
|
an Employee who is employed by an Employer pursuant to an oral or written agreement that provides that the individual shall not be eligible to participate in the Plan;
|
(C)
|
an Employee who is a “Leased Employee” (determined, for this purpose, without regard to the requirement that services be performed for at least one year);
|
(D)
|
an Employee who is a non-resident alien with no United States source income; and
|
(E)
|
an Employee designated by an Employer as employed in a division or group, or at a site that the Employer determined, on a nondiscriminatory basis, shall not be eligible to participate in the Plan.
|
(b)
|
For an ABC Employee, an Employee who is a regular Full-Time Employee or a regular Part-Time Employee and who is remunerated in U.S. currency, except that an ABC Employee described by any of the following paragraphs shall not be a Covered Employee:
|
(i)
|
an Employee who is covered by a collective bargaining agreement, unless the applicable bargaining agreement specifically provides for coverage by the Plan; or
|
(ii)
|
an Employee if at the time of the adoption of the Plan by his Employer, or thereafter, the Employer elects to exclude some or all employees described in Section 410(b)(3)(C) of the Code and the Employee is excluded from the Plan by reason of such election; or
|
(iii)
|
an individual who is employed as a “daily hire” which means, for purposes of this paragraph (iii) and subject to the provisions of applicable collective bargaining agreements, an Employee who is hired by his Employer on a day to day basis, usually for a one-day assignment; or
|
(iv)
|
an individual who is hired for what is intended by his Employer to be a temporary period for a position in connection with a special event, such as Olympics coverage or Presidential election coverage; or
|
(v)
|
an individual who is hired in a position for a specific prime time program or series produced by the Entertainment Division of the ABC Television Network; or
|
(vi)
|
an individual who is employed pursuant to an agreement that provides that the individual shall not be eligible to participate in the Plan; or
|
(vii)
|
an individual who is not classified as an employee by the Employer, but who is treated as an Employee by reason of being treated as a “common law” employee of the Employer pursuant to the standards prescribed by Internal Revenue Service Revenue Ruling 87-41 or any successor thereto; or
|
(viii)
|
an Employee who is an Employee by reason of being treated as a Leased Employee (determined, for this purpose, without regard to the requirement that services be performed for at least one year); or
|
(ix)
|
an Employee whose basic compensation for services on behalf of the Employer is not paid directly by the Employer; or
|
(x)
|
an Employee of any division, unit, or department designated by the Employer to be a non-participating division, unit, or department; or
|
(xi)
|
an hourly-paid Employee who is not covered by a collective bargaining agreement.
|
(c)
|
For purposes of this definition of “Covered Employee,” and notwithstanding any other provisions of the Plan to the contrary, individuals who are not classified by the Company, in its discretion, as employees under Code Section 3121(d) (including but not limited to, individuals classified by the Company as independent contractors and non-employee consultants) and individuals who are classified by the Company, in its discretion, as employees of any entity other than the Company or an Affiliated Employer do not meet the definition of Covered Employee and are ineligible for benefits under the Plan, even if the classification by the Company is determined to be erroneous, or is retroactively revised. In the event the classification of an individual who is excluded from the definition of Covered Employee under the preceding sentence is determined to be erroneous or is retroactively revised, the individual shall nonetheless continue to be excluded from the definition of Covered Employee and shall be ineligible for benefits for all periods prior to the date the Company determines its classification of the individual is erroneous or should be revised. The foregoing sets forth a clarification of the intention of the Company regarding participation in the Plan for any Plan Year, including Plan Years prior to the amendment of this definition of “Covered Employee.”
|
1.21
|
“Effective Date”
means January 1, 2015, the date this amended and restated Plan becomes effective. The Plan was originally effective May 1, 1984.
|
1.22
|
“Eligibility Computation Period”
means, with respect to an Employee, the applicable of (a) or (b) as follows:
|
(a)
|
the 12‑consecutive‑month period commencing on the Employee’s Employment Commencement Date in which he is credited with at least 1,000 Hours of Service; or
|
(b)
|
in the case of an Employee who is not credited with at least 1,000 Hours of Service in the 12‑month period described in Section 1.22(a) above, a Plan Year, commencing with the Plan Year beginning immediately following the Employee’s Employment Commencement Date, in which he has been credited with at least 1,000 Hours of Service.
|
1.23
|
“Eligible Employee”
means a Covered Employee who has attained age eighteen (18) and has reached the ninetieth (90th) day following his Employment Commencement Date; provided, however, that the requirement that the Covered Employee attain age eighteen (18) shall not apply to an ABC Employee and the requirement that the Covered Employee has reached the ninetieth (90th) day following his Employment Commencement Date shall not apply to ESPN Regular Remote Employees.
|
1.24
|
“Employee”
means any person receiving Compensation for services rendered to an Employer or an Affiliated Employer, whose Compensation is subject to withholding of United States federal income tax and/or for whom Social Security contributions are made by an Employer or an Affiliated Employer, including any Leased Employee but excluding any person who serves solely as a director or independent contractor. In determining whether an individual is an Employee for purposes of the Plan, the individual shall only be classified as an Employee with respect to a period of time only if the Employer or Affiliated Employer treated the individual as a common law employee for payroll tax purposes for such period
|
(a)
|
an individual who serves solely as a director or independent contractor or an individual whom the Employer or Affiliated Employer regards to be an independent contractor;
|
(b)
|
an individual who is not classified as an Employee by an Employer or Affiliated Employer, but who is treated as an Employee by reason of being treated as a “common law” employee of the Employer or Affiliated Employer pursuant to the standards prescribed by Internal Revenue Service Ruling 87-41 or any successor thereto;
|
(c)
|
an individual whose basic compensation for services on behalf of an Employer or Affiliated Employer is not paid directly by an Employer or Affiliated Employer; and
|
(d)
|
an individual working for a company providing goods or services (including temporary employee services) to an Employer or Affiliated Employer whom the Employer or Affiliated Employer does not regard to be a common law employee of the Employer or Affiliated Employer.
|
1.25
|
“Employer”
means the Company and any subsidiary or affiliate of the Company that adopts this Plan in accordance with Section 12.03.
|
1.26
|
“Employment Commencement Date”
means, subject to any applicable Appendix, the first date as of which an Employee is credited with an Hour of Service for an Employer or an Affiliated Employer. For an Employee of an entity that first becomes an Affiliated Employer on or after December 3, 2007, the first date as of which the Employee is credited with an Hour of Service shall be determined taking into account hours of service with such entity
|
1.27
|
“Enrollment Date”
means the first day of the first payroll period after an Employee becomes an Eligible Employee, or the beginning of any payroll period thereafter, as of which the Eligible Employee elects to commence participation in the Plan in accordance with Section 2.02.
|
1.28
|
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.
|
1.29
|
“Highly Compensated Employee”
means for any Plan Year, any Employee of the Employer or an Affiliated Employer (whether or not eligible for participation in the Plan) who:
|
(a)
|
was a 5 percent owner (as defined in Section 414(q)(2) and Section 416(i) of the Code) for such Plan Year or the prior Plan Year, or
|
(b)
|
for the preceding Plan Year received Statutory Compensation in excess of $115,000 (which is the dollar amount in effect for the Plan Year immediately preceding the Plan Year beginning on the Effective Date), and was among the highest 20 percent of employees for the preceding Plan Year when ranked by Statutory Compensation paid for that year, excluding, for purposes of determining the number of such employees, such Employees as the Committee may determine on a consistent basis pursuant to Section 414(q) of the Code. The $115,000 dollar amount in the preceding sentence shall be adjusted from time to time for the cost of living in accordance with Section 414(q) of the Code.
|
1.30
|
“Hour of Service”
means, with respect to any applicable computation period:
|
(a)
|
each hour for which an Employee is paid or is entitled to payment for the performance of duties for an Employer or an Affiliated Employer during the applicable computation period;
|
(b)
|
each hour for which an Employee is paid, or is entitled to payment, by an Employer or an Affiliated Employer on account of a period during which no duties are performed (regardless of whether the employment relationship has terminated) because of vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty, or leave of absence, but:
|
(i)
|
no more than 501 Hours of Service are to be credited under this subsection (b) to an Employee for any single continuous period during which he performs no duties (whether or not the period occurs in a single computation period);
|
(ii)
|
an hour is not credited where an individual directly or indirectly is paid or is entitled to payment because of a period during which no duties are performed if that payment is made or is due under a plan maintained solely
|
(iii)
|
Hours of Service will not be credited for a payment that solely reimburses an Employee for medical or medically related expenses incurred. For purposes of this subsection (b), a payment is deemed to be made by or be due from an Employer or an Affiliated Employer regardless of whether it is made by or due from that entity directly or indirectly through a trust fund or insurers (among others) to which that entity contributes or pays premiums and regardless of whether contributions made or due to the trust fund or insurer or other funding vehicle are for the benefit of particular individuals or are on behalf of a group of individuals in the aggregate.
|
(c)
|
each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by an Employer or Affiliated Employer. The same Hours of Service must not be credited both under subsection (a) or (b) and also under this subsection (c). Thus, for example, if an Employee receives a back-pay award following a determination that he was paid at an unlawful rate for Hours of Service previously credited, he is not entitled to additional credit for the same Hours of Service. Crediting of Hours of Service for back pay awarded or agreed to with respect to periods described in subsection (b) is subject to the limitations set forth in that subsection. For example, no more than 501 Hours of Service are required to be credited for payment of back pay, to the extent that the back pay is awarded or agreed to for a period of time during which an Employee did not or would not have performed duties.
|
(d)
|
For determining Hours of Service for reasons other than the performance of duties, the special rule provided in 29 C.F.R. Section 2530.200b-2(b) is incorporated by reference. That rule provides that Hours of Service are credited on the basis of the number of hours in the Employee’s regular work schedule or, in the case of a payment not calculated in units or time, by dividing the payment in question by the Employee’s most recent hourly rate of pay.
|
(e)
|
For purposes of crediting Hours of Service to computation periods, the special rule provided in 29 C.F.R. Section 2530.200b-2(c) is incorporated by reference. That rule provides that Hours of Service are credited to an Employee in the computation periods covered by the Employee’s regular work schedule during the period of nonperformance.
|
(f)
|
The determination of Hours of Service must be made from records of hours worked and hours for which payment is made or due.
|
(g)
|
For purpose of determining Hours of Service credited each Employee must be credited with at least forty-five (45) Hours of Service for each week for which he would be required to be credited with at least one Hour of Service under subsection (a).
|
(h)
|
Hours of Service credit for a period of “qualified military service” shall be determined in accordance with Section 2.04.
|
1.31
|
“Income”
means the net gain or loss of the Trust Fund from investments, as reflected by interest payments, dividends, realized and unrealized gains and losses on securities, other investment transactions and expenses paid from the Trust Fund. In determining the Income of the Trust Fund as of any date, assets shall be valued on the basis of their then fair market value.
|
1.32
|
“Investment Fund”
means the one or more investment funds provided pursuant to Section 6.01(a) hereof.
|
1.33
|
“Leased Employee”
means any person (other than a person treated as a common law employee of the Employer or Affiliated Employer) who, pursuant to an agreement between the Employer or Affiliated Employer and any other person (“leasing organization”), performed services for the Employer or Affiliated Employer or any related persons determined in accordance with Section 414(n)(6) of the Code on a substantially full-time basis for a period of at least one year (i.e., has completed at least 1,500 Hours of Service in the initial 12 consecutive months services were performed or during any Plan Year that
|
1.34
|
“Matching Account”
means the account maintained for a Participant to record Matching Contributions made on his behalf pursuant to Section 3.02 and adjustments relating thereto.
|
1.35
|
“Matching Contribution”
means the Employer Matching Contribution made to the Plan on behalf of a Participant pursuant to Section 3.02.
|
1.36
|
“Maximum Compensation Limitation”
means $265,000 as of the Effective Date, adjusted thereafter for cost-of-living increases in accordance with Code Section 401(a)(17)(B). Annual Compensation means compensation during the Plan Year or such other consecutive 12-month period over which compensation is otherwise determined under the Plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year.
|
1.37
|
“Participant”
means any individual on whose behalf any Accounts are maintained under the Plan, the balance of which has not been distributed in full to him or his Beneficiary.
|
1.38
|
“Plan”
means the Disney Savings and Investment Plan (the “Disney Salaried Savings and Investment Plan” before February 1, 2007) as set forth in this document, and as it may be amended from time to time.
|
1.39
|
“Plan Year”
means the calendar year, except for the short year from May 1, 1984 through December 31, 1984, which was the first year of the Plan.
|
1.40
|
“Qualified Domestic Relations Order”
means a domestic relations order that creates or recognizes the existence of an Alternate Payee’s right to, or assigns to an Alternate Payee the right to, receive all or portion of the benefits payable with respect to a Participant.
|
1.41
|
“Reemployment Commencement Date”
means the date an Employee first is credited with an Hour of Service following a prior Break in Service.
|
1.42
|
“Rollover Account”
means the account maintained for a Participant to record his Rollover Contributions to the Trust Fund pursuant to Section 3.05 and adjustments relating thereto.
|
1.43
|
“Rollover Contribution”
means a Rollover Contribution made to the Plan by a Participant pursuant to Section 3.05.
|
1.44
|
“Roth Account”
means the account maintained for a Participant to record contributions made on his behalf by an Employer pursuant to a Roth Contribution agreement described in Section 3.08, any rollover Roth amounts accepted by the Plan pursuant to Section 3.05(b), and adjustments relating to Roth Contributions or rollover Roth amounts.
|
1.45
|
“Roth Contributions”
means an Employer’s contribution made to the Plan on behalf of a Participant pursuant to a Roth Contribution agreement described in Section 3.08.
|
1.46
|
“Rule of Parity”
means a rule pursuant to which an Employee who incurs a Break in Service shall have his Eligibility Computation Periods that occur prior to such Break in Service ignored or restored. If an Employee incurs a Break in Service prior to becoming eligible to participate hereunder, his Eligibility Computation Periods prior to such Break in Service shall not be taken into account if the number of consecutive one-year Breaks in Service equals or exceeds the greater of the Employee’s Eligibility Computation Periods completed prior to the first such Break in Service or five. Eligibility Computation Periods previously eliminated by a prior application of this Section 1.46 shall not be counted for purposes of this Section 1.46.
|
1.47
|
“Section 402(g) Limit”
means for any calendar year, the dollar limitation contained in Code Section 402(g) in effect for such calendar year.
|
1.48
|
“Special Account”
means the account maintained for a Participant to record Special Contributions made on his behalf pursuant to Section 3.03, and adjustments relating thereto.
|
1.49
|
“Special Contribution”
means the Employer Special Contribution made to the Plan on behalf of a
Participant pursuant to Section 3.03.
|
1.50
|
“Spousal Consent”
means written consent given by a Participant’s Spouse to an election made by the Participant of a specified form of benefit or a designation by the Participant of a specified Beneficiary other than the Spouse. The specified form or specified beneficiary shall not be changed unless further Spousal Consent is given, unless the Spouse expressly waives the right to consent to any future changes. Spousal Consent shall be duly witnessed by a Plan representative or notary public and shall acknowledge the effect on the Spouse of the Participant’s election. The requirement for Spousal Consent may be waived by the Committee if it is established to its satisfaction that there is no Spouse, or that the Spouse cannot be located, or because of such other circumstances as may be established by applicable law. Spousal Consent shall be applicable only to the particular Spouse who provides such consent.
|
1.51
|
“Spouse”
means any person married to a Participant if (and only if) the marriage to that individual was legal and valid when it was entered into, under the laws of the jurisdiction where it was entered into. The term “Spouse” also shall include a former Spouse of a Participant to the extent required by a Qualified Domestic Relations Order. A Spouse does not include a domestic partner through civil union or other similar formal relationship that is not treated as marriage under applicable law.
|
1.52
|
“Statutory Compensation”
means “compensation” actually paid or made available to the Participant (or includable in the gross income of the Participant) by the Employer or an Affiliated Employer, where “compensation” includes the items described in Treas. Reg. §
|
1.53
|
“Tax-Deferred Account”
means the account maintained for a Participant to record contributions made on his behalf by an Employer pursuant to a Tax-Deferred Contribution agreement described in Section 3.01 and adjustments relating thereto.
|
1.54
|
“Tax-Deferred Contributions”
means an Employer’s contribution made to the Plan on behalf of a Participant pursuant to a Tax-Deferred Contribution agreement described in Section 3.01.
|
1.55
|
“Trust Agreement”
means the trust agreement or agreements that may be established from time to time hereunder and as the same may from time to time be amended and/or restated.
|
1.56
|
“Trust Fund”
means all money or other property that is held by the Trustee, pursuant to the terms of the Trust Agreement.
|
1.57
|
“Trustee”
means the entity or its successor acting as the trustee under the Trust Agreement, or any other trustee or trustees designated in any trust agreement or agreements that may be established to carry out the purposes of this Plan.
|
1.58
|
“Valuation Date”
means the date as of which the Trustee shall determine the value of the assets in the Trust Fund for purposes of enabling the Committee or its delegate to determine the value of the Aggregate Accounts.
|
2.01
|
Eligibility
|
2.02
|
Participation
|
(a)
|
authorizes his Tax-Deferred Contributions in accordance with Section 3.01 or Roth Contributions in accordance with Section 3.08;
|
(b)
|
names a Beneficiary; and
|
(c)
|
selects investment fund(s) pursuant to Article 6.
|
2.03
|
Reemployment of Former Employees and Former Participants
|
2.04
|
Special Rules Relating to Veteran’s Reemployment Rights Under USERRA
|
(a)
|
Notwithstanding any contrary provision of the Plan, the rules of Sections 2.04(d) and 2.04(e) shall apply to any Participant who is reemployed upon return from qualified military service as set forth in Sections 2.04(b) and 2.04(c). It is intended
|
(b)
|
“Qualified military service” means any service in the uniformed services, as defined in chapter 43 of title 38, United States Code, by an individual if the individual is entitled to reemployment rights under chapter 43 with respect to such service.
|
(c)
|
A Participant shall be treated as reemployed upon returning to work with an Employer or Affiliated Employer following qualified military service if:
|
i.
|
The Participant did not separate from military service with a disqualifying discharge or under other than honorable conditions;
|
ii.
|
The Participant, or an appropriate officer of the uniformed service, gave the Employer or Affiliated Employer advance notice of his intent to serve (unless prevented by military necessity or impossible or unreasonable under all circumstances);
|
iii.
|
The Participant has five years or less of cumulative qualified military service in his employment relationship with the Employer or Affiliated Employer (excluding any periods that are disregarded when applying the five-year limit under chapter 43 of title 38, United States Code); and
|
iv.
|
The Participant reports for work or submits an application for reemployment with the Employer or Affiliated Employer in a timely manner. Subject to special rules set forth in chapter 43, title 38 of the United States Code for individuals who are hospitalized or convalescing from illness or injury, a reemployment request is timely if the Participant reports for work or submits an application for reemployment to the Employer or Affiliated Employer after his period of qualified military service ends as follows:
|
Period of Qualified Military Service
|
Deadline for Report/Submission
|
Fewer than 31 days or any length if the service was for purposes of fitness examination
|
The beginning of the first full regularly-scheduled work period on the first full calendar day following completion of the service, and the expiration of 8 hours after a period allowing for safe transportation from the place of that service to the Participant’s residence (unless impossible or unreasonable)
|
31 to 180 days
|
Within 14 days (unless impossible or unreasonable)
|
181 days or more
|
Within 90 days
|
(d)
|
In the event this Section 2.04 applies to a Participant:
|
(i)
|
The Participant shall not incur a Break in Service by reason of his period of qualified military service.
|
(ii)
|
The Participant’s period of absence due to qualified military service shall be included in the determination of his Hours of Service, his status as an Eligible Employee under Section 1.23, and his eligibility for Matching Contributions under Section 3.02(b), as if the Participant had remained employed in the position he held with the Employer or Affiliated Employer before such absence began.
|
(iii)
|
The Participant shall be deemed to have received Compensation during the period of absence due to qualified military service at the rate he would have received Compensation had he remained employed as an Employee for that period or, if such rate is not reasonably certain, on the basis of the Participant’s average rate of Compensation during the 12-month period immediately preceding such period of qualified military service (or, if shorter, the period of the Participant’s employment as an Employee immediately preceding such period).
|
(e)
|
In the event this Section 2.04 applies to a Participant, he shall be permitted to make additional Tax-Deferred Contributions or Roth Contributions as provided in this Section 2.04(e):
|
(i)
|
Tax-Deferred Contributions or Roth Contributions made under this Section 2.04(e) must be made within five years (or, if less, three times the length of his most recent period of qualified military service) after his reemployment and while the Participant is an Employee.
|
(ii)
|
The maximum amount of Tax-Deferred Contributions or Roth Contributions that the Participant may make under this Section 2.04(e) is the maximum amount of Tax-Deferred Contributions or Roth Contributions that he would have been permitted to make during the period of absence due to qualified military service if he had continued to be employed by the Employer during such period in the position he held with the Employer immediately before such absence and received Compensation as set forth in Section 2.04(d)(iii). The maximum amount of Tax-Deferred Contributions or Roth Contributions so determined shall be reduced by the amount of any Tax-Deferred Contributions or Roth Contributions actually made by the Participant during his period of absence due to qualified military service.
|
(iii)
|
The Employer shall contribute Matching Contributions that would have been attributable to Tax-Deferred Contributions or Roth Contributions made pursuant to this Section 2.04(e) as soon as practicable after such Tax-Deferred Contributions or Roth Contributions are made.
|
(iv)
|
Contributions made pursuant to this Section 2.04(e):
|
(v)
|
Although Tax-Deferred Contributions, Roth Contributions or Matching Contributions made under to this Section 2.04(e) may relate to a prior period, no investment earnings or losses shall be credited to such contributions prior to the date they are actually made.
|
(f)
|
In the event a Participant has an outstanding loan under the Plan at the time a period of qualified military service begins, the rules set forth in Section 7.02(e) shall apply.
|
(g)
|
In accordance with Code Section 401(a)(37) and guidance issued thereunder, the survivors of a Participant who dies while performing qualified military service shall be eligible for any additional benefits (other than additional contributions related to the period of qualified military service) that would have been provided under the Plan if the Participant had resumed employment as described in Section 2.04(c) and immediately thereafter terminated employment due to death.
|
(h)
|
To the extent required by Code Section 414(u)(12) and guidance issued thereunder, an individual receiving differential wage payments (within the meaning of Code Section 3401(h)(2)) from the Employer or an Affiliated Employer shall be treated as an employee and the differential wage payments shall be treated as compensation.
|
(i)
|
The following distribution options are available to Participants (including Participants who have terminated employment) who are absent from work due to military service:
|
(i)
|
A Participant who, by reason of being a member of a reserve component (as defined in section 101 of title 37, United States Code), is ordered or called
|
(ii)
|
A Participant who is performing service in the uniformed services (as defined in chapter 43 of title 38, United States Code) while on active duty for a period of more than 30 days may elect a distribution of all or part of his Tax-Deferred Account and Roth Account in the form of a lump sum. Such election may be made, in the form and manner prescribed by the Committee, at any time during such active duty period. If a Participant who has not terminated employment receives a distribution under this clause (ii) that is not otherwise permitted under clause (i) above or Section 8.07 of the Plan, the Participant shall be prohibited from making Tax-Deferred Contributions or Roth Contributions under this Plan during the six-month period beginning on the date of the distribution. This clause (ii) is intended to satisfy the requirements of Code Section 414(u)(12)(B) and shall be construed in a manner that will effectuate this intent.
|
2.05
|
Transferred Participants
|
(a)
|
If a Participant remains in the employ of an Employer or an Affiliated Employer but ceases to be an Eligible Employee, his participation under the Plan shall be suspended, provided, however, that during the period of his employment in such ineligible position:
|
(i)
|
he shall cease to have any right to elect Tax-Deferred or Roth Contributions or to make Rollover Contributions;
|
(i)
|
he shall not receive allocations of Matching Contributions, Automatic Contributions, or Special Contributions;
|
(ii)
|
he shall continue to participate in income allocations pursuant to Section 4.02(a); and
|
(iii)
|
the provisions of Articles 6 and 8 shall continue to apply.
|
(b)
|
If an Employee again becomes an Eligible Employee, his rights and privileges as an Eligible Employee under this Plan shall be restored. In addition, to the extent applicable, the Employee’s Matching Contribution for the Plan Year in which he again becomes an Eligible Employee shall be determined under Section 3.02 after taking into account any tax-deferred, Roth and matching contributions allocated to the Employee for such Plan Year under any qualified defined contribution plan maintained by an Affiliated Employer in which the Employee was participating immediately before he resumed Eligible Employee status.
|
2.06
|
Termination of Employment and Termination of Participation
|
3.01
|
Tax-Deferred Contributions
|
(a)
|
A Tax-Deferred Contribution represents an agreement by an Eligible Employee with his Employer to accept a reduction in Compensation in consideration of a contribution to the Plan by the Employer on the Participant’s behalf in the same amount.
|
(b)
|
In accordance with rules that the Committee shall prescribe from time to time, an Eligible Employee may elect to enter into an agreement with his Employer as described in Section 3.01(a) by indicating the amount of Tax-Deferred Contributions he wishes to be contributed by his Employer. Tax-Deferred Contributions shall be subject to the following:
|
(i)
|
Tax-Deferred Contributions may be any whole percentage of a Participant’s Compensation (determined without regard to the Maximum Compensation Limitation) between one (1) percent and fifty (50) percent.
|
(ii)
|
Except as provided in Section 2.04 or 3.07, a Participant’s Tax-Deferred Contributions for any Plan Year may not exceed the Section 402(g) Limit for the applicable Plan Year or fifty (50) percent of the Participant’s Compensation for the Plan Year limited by the Maximum Compensation Limitation, if less.
|
(iii)
|
Tax-Deferred Contributions shall be made by regular payroll reduction.
|
(c)
|
Tax-Deferred Contribution elections are effective following the Participant’s Enrollment Date or as soon as administratively feasible thereafter. An election of Tax-Deferred Contributions shall remain in force until changed in the form and manner specified by the Committee. A Participant may elect to cease contributions
|
(d)
|
Tax-Deferred Contributions shall be transmitted to the Trustee as of the earliest date on which such contributions can reasonably be segregated from the Employer’s general assets, but no later than the fifteenth business day of the month following the payroll month in which the Tax-Deferred Contribution was deducted from the Participant’s Compensation.
|
(e)
|
All Tax-Deferred Contributions are subject to the limitations of Article 14 and the further limitations of this Article.
|
3.02
|
Matching Contributions
|
(a)
|
Each Employer will contribute, with respect to Participants (other than ESPN Regular Remote Employees) employed by it who have met the eligibility requirements set forth in Section 3.02(b), a Matching Contribution equal to 50% of so much of the aggregate Tax-Deferred Contributions and Roth Contributions made on behalf of the Participant for the Plan Year as do not exceed 4% (6% to the extent the Participant is a Covered Employee described in Section 1.20(a)(ii) or (iii)) of the Participant’s Compensation for the Plan Year, determined without regard to the
|
(b)
|
A Participant shall be eligible for Matching Contributions if he is a Covered Employee who has attained age eighteen (18) and has reached the one-year anniversary of his Employment Commencement Date; provided, however, that the requirement that the Covered Employee attain age eighteen (18) shall not apply to an ABC Employee.
|
(c)
|
Notwithstanding the foregoing, Matching Contributions of the Employers are discretionary and are not required.
|
(d)
|
All Matching Contributions shall be paid to the Trustee no later than the time prescribed by law for filing the federal income tax returns of the Employers, including any extensions granted for the filing of such tax returns.
|
(e)
|
All Matching Contributions are subject to the limitations of Article 14 and the further limitations of this Article.
|
3.03
|
Special Contributions
|
(a)
|
Special Contributions are not required and are made at each Employer’s discretion.
|
(b)
|
Special Contributions may be made to correct an Actual Deferral Percentage test failure under Section 14.02, to correct a Contribution Percentage test failure under Section 14.03, or in order to satisfy the average benefit percentage test described in Section 410(b)(2) of the Code, provided that the requirements for taking such contributions into account in such tests as set forth in applicable Treasury regulations (including the requirement that such contributions not be disproportionate) are met.
|
(c)
|
Special Contributions are made on behalf of Participants who are not Highly Compensated Employees and who are actively employed by the Employer on the last day of the pay period for which a Special Contribution is made.
|
(d)
|
All Special Contributions shall be paid to the Trustee no later than the time prescribed by law for filing the federal income tax returns of the Employers, including any extensions granted for the filing of such tax returns.
|
(e)
|
All Special Contributions are subject to the limitations of Article 14 and the further limitations of this Article.
|
3.04
|
Deductibility Limitations and Form of Contribution
|
(a)
|
In no event shall the aggregate Tax-Deferred, Roth, Matching, Automatic, and Special Contributions of the Employers exceed the amount deductible by the Employers for such Plan Year for income tax purposes as a contribution to the Trust under the applicable provisions of the Code. All Participant Tax-Deferred or Roth Contribution elections, Matching Contributions, Automatic Contributions, and Special Contributions are specifically conditioned on such deductibility.
|
(b)
|
All contributions of the Employers shall be in cash, except that Matching Contributions and Special Contributions may be made in the form of Company Stock.
|
3.05
|
Rollover Contributions
|
(a)
|
Subject to Committee procedures and without regard to any limitations on contributions set forth in this Plan, the Plan may receive from a Covered Employee, regardless of whether he is an Eligible Employee, in cash, any portion of:
|
(i)
|
An Eligible Rollover Distribution (as defined in Section 8.05(d)(i)) paid to the Covered Employee from a qualified trust described in Code Section 401(a), an annuity plan described in Code Section 403(a), an annuity contract described in Section 403(b) of the Code or an eligible plan under Section
|
(ii)
|
An Eligible Rollover Distribution (as defined in Section 8.05(d)(i)) paid as a direct rollover to the Trustee on behalf of the Covered Employee by a qualified trust described in Code Section 401(a), an annuity plan described in Code Section 403(a), an annuity contract described in Section 403(b) of the Code or an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state; and
|
(iii)
|
A distribution described in Code Section 408(d)(3)(A)(ii) (as modified by Code Section 408(d)(3)(D)) from an individual retirement account or annuity (conduit or non-conduit) paid to the Covered Employee provided that the Covered Employee pays over such amount to the Trustee on or before the 60th day after the day it was received by the Covered Employee.
|
(b)
|
Notwithstanding the foregoing:
|
(i)
|
the Plan shall not accept any after-tax amounts under this Section 3.05; that is, amounts (other than Roth amounts described below in paragraph (iii)) that would not be taxable to the Covered Employee upon distribution from this Plan;
|
(ii)
|
the Plan shall not accept any amounts from a Covered Employee or on behalf of a Covered Employee from a contributory individual retirement account or annuity of the Covered Employee; and
|
(iii)
|
the Plan may accept a “rollover” contribution to a Participant’s Roth Account only if it is a direct rollover from another Roth contribution account under
|
(c)
|
Upon approval by the Committee the amount transferred to the Plan by the Covered Employee shall be deposited by the Trustee. Any rollover Roth amounts accepted pursuant to Section 3.05(b)(iii) shall be credited to the Covered Employee’s Roth Account, and any other rollover amounts shall be credited to the Covered Employee’s Rollover Account. A Covered Employee shall be 100% vested in his Rollover Account and such Rollover Account shall share in allocations of income, gains and losses from investment options.
|
(d)
|
Upon a transfer described in this Section 3.05 by a Covered Employee who is not a Participant, the Covered Employee’s Rollover Account shall represent his sole interest in the Plan until he becomes a Participant.
|
(e)
|
The Committee shall develop such other procedures and may require such information from a Covered Employee desiring to make a rollover as it deems necessary or desirable to determine that the proposed rollover will meet the requirements of this Section 3.05 and that the amount rolled over qualifies for rollover treatment pursuant to applicable provisions of the Code.
|
3.06
|
After Tax-Contributions
|
3.07
|
Catch-up Contributions
|
3.08
|
Roth Contributions
|
(a)
|
Eligible Employees will be permitted to make Roth Contributions. A Roth Contribution represents an agreement by an Eligible Employee with his Employer to (i) accept a reduction in Compensation in consideration of a contribution to the Plan by the Employer on the Participant’s behalf in the same amount, (ii) designate the contribution irrevocably, at the time of the election as a Roth Contribution that is being made in lieu of all or a portion of the Tax-Deferred Contribution the Participant is otherwise eligible to make under Section 3.01 of the Plan; and (iii) provide that the contribution will be treated by the Employer as includable in the Participant's income pursuant to Section 402A of the Code.
|
(b)
|
An Eligible Employee may enter into an agreement with his Employer as described in Section 3.08(a) in accordance with the same rules that apply to Tax-Deferred Contributions under Section 3.01(b).
|
(c)
|
An Eligible Employee’s aggregate Tax-Deferred and Roth Contributions shall not exceed the limits set forth in Section 3.01(b), the limitations of Article 14, or the further limitations of this Article.
|
(d)
|
Roth Contribution elections and Roth Contributions shall be subject to Sections 3.01(c) and 3.01(d), respectively.
|
3.09
|
Automatic Contribution for ESPN Regular Remote Employees
|
(a)
|
For each Plan Year, the applicable Employer shall contribute, on behalf of each Participant who is an ESPN Regular Remote Employee, an amount equal to 4% of the Participant’s Compensation.
|
(b)
|
All Automatic Contributions shall be paid to the Trustee no later than the time prescribed by law for filing the federal income tax returns of the Employers, including any extensions granted for the filing of such tax returns.
|
(c)
|
All Automatic Contributions are subject to the limitations of Article 14 and the further limitations of this Article.
|
4.01
|
Individual Accounts
|
4.02
|
Account Allocations
|
(a)
|
Income
: As of each Valuation Date, each Investment Fund shall be revalued separately. Based on such revaluation of the Investment Funds, each Account shall be revalued as of the applicable Valuation Date to reflect its proportionate share of investment experience since the immediately preceding Valuation Date.
|
(b)
|
Tax-Deferred Contributions
: As of each Valuation Date, the Tax-Deferred Contributions received by the Trust Fund since the immediately preceding Valuation Date shall be allocated to the Tax-Deferred Accounts of the Participants on whose behalf such contributions were made.
|
(c)
|
Matching Contributions
: As of each Valuation Date, the Matching Contributions received by the Trust Fund since the immediately preceding Valuation Date shall be allocated to the Matching Account of the Participants on whose behalf such contributions were made.
|
(d)
|
Special Contributions
: As of each Valuation Date, Special Contributions received by the Trust Fund since the immediately preceding Valuation Date shall be allocated to the Special Accounts of Participants who are not Highly Compensated Employees and who were actively employed on the last day of the pay period for which the Special Contribution was made. The allocation for each Participant eligible to receive a share of the allocation shall be equal to the total amount of the Special Contribution divided by the total number of Participants eligible to receive an allocation of Special Contributions. Therefore, each eligible Participant shall receive the same dollar amount of allocation of Special Contributions as each other eligible Participant.
|
(e)
|
Rollover Contributions
: As of each Valuation Date, the Rollover Contributions received by the Trust Fund since the immediately preceding Valuation Date on behalf of a Participant shall be allocated to such Participant’s Rollover Account.
|
(f)
|
Roth Contributions
: As of each Valuation Date, the Roth Contributions and any rollover Roth amounts received by the Trust Fund since the immediately preceding Valuation Date shall be allocated to the Roth Accounts of the Participants on whose behalf such Roth Contributions and Roth rollovers were made.
|
(g)
|
Automatic Contributions
: As of each Valuation Date, the Automatic Contributions received by the Trust Fund since the immediately preceding Valuation Date shall be allocated to the Automatic Contribution Accounts of the Participants on whose behalf such Automatic Contributions were made.
|
4.03
|
Limitation on Allocations
|
4.04
|
No Guarantee
|
4.05
|
Statement of Accounts
|
5.01
|
Nonforfeitability of Aggregate Account
|
5.02
|
Automatic Contribution Account
|
6.01
|
Investment Options
|
(a)
|
The assets of the Trust Fund shall be maintained in multiple Investment Funds so as to provide alternative investment vehicles for the assets of the Plan. Such separate funds shall include:
|
(i)
|
Funds Investing in Company Stock
. Each of the Company Stock funds described in Section 6.01(a)(i)(A) shall be an Investment Fund under the Plan when indicated, subject to Sections 6.01(a)(i)(B) through 6.01(a)(i)(F):
|
(ii)
|
Other Funds
. Additional Investment Funds may be established by the Committee, which (except to the extent provided to the contrary in this Section 6.01) shall have the sole discretion to determine the number and character of such additional Investment Funds. The Committee, in its sole discretion, shall have the authority to limit or eliminate the availability of
|
(b)
|
Subject to the provisions of Section 6.01(f), the Committee shall adopt such rules and procedures as it deems advisable with respect to all matters relating to the selection and use of the Investment Funds, provided that all Participants are treated uniformly.
|
(c)
|
Except to the extent that a Participant’s loan is considered a separate investment pursuant to Section 7.01, each Participant shall designate the Investment Fund(s) (to the extent such Investment Fund(s) are available for new contributions) under which his Tax-Deferred, Roth, After-Tax, Rollover, Matching, Automatic, and Special Contributions and loan repayments under Article 7 are to be invested. Such designation shall be in the form and manner prescribed by the Committee. If a Participant fails to designate the Investment Fund(s) under which any of his contributions are to be invested, such contributions shall be invested in the default Investment Fund(s) specified in the Trust Agreement.
|
(d)
|
A Participant may (i) change his election of Investment Funds with respect to his future contributions, or (ii) redesignate the proportions and/or the Investment Funds in which amounts already allocated to his Tax-Deferred, Roth, After-Tax, Rollover, Matching, Automatic Contribution, and Special Accounts shall be invested (to the extent such Investment Fund(s) are available to accept contributions or transferred amounts). Elections made under this Section 6.01(d) shall be in the form and manner prescribed by the Committee, and shall be subject to any limitations described elsewhere in this Section 6.01.
|
(e)
|
If a Participant dies, his Beneficiary has the same investment election rights as the Participant had prior to his death, until the Participant’s Aggregate Account is distributed to the Beneficiary.
|
(f)
|
The Plan, including its constituent ESOP, is intended to constitute a plan described in Section 404(c) of ERISA and Title 29 of the Code of Federal Regulations, Section 2550.404c-1. As such, the Plan’s fiduciaries may be relieved of liability for any losses that are the direct and necessary result of investment instructions given by a Participant or a Beneficiary.
|
(g)
|
Each Participant is solely responsible for the selection of his investment options. The Trustee, the Committee, the Employers, and the officers, supervisors and other employees of the Employers are not empowered to advise a Participant as to the manner in which his accounts shall be invested. The fact that an Investment Fund is available to Participants for investment under the Plan shall not be construed as a recommendation for investment in that particular Investment Fund.
|
(h)
|
Notwithstanding the foregoing provisions of Sections 6.01(a) through (g), the Plan shall comply with the diversification requirements of Section 401(a)(35) of the Code and Treasury regulations and other applicable guidance issued thereunder. In this respect, a Participant, Beneficiary, or Alternate Payee shall be eligible to transfer all or part of the portion of his Aggregate Account that is invested in the Company Stock ESOP Fund or the Company Stock Non-ESOP Fund to any of the other available Investment Funds (to the extent available for transfers in), as provided in Section 6.01(c) or (d). In addition:
|
(i)
|
The Investment Funds described in Section 6.01(a) shall include not less than three Investment Funds, other than any Company Stock fund described in Section 6.01(a)(i)(A), into which a Participant, Beneficiary, or Alternate Payee may elect to transfer amounts invested in such a Company Stock fund. Each such additional Investment Fund shall be diversified and have materially different risk and return characteristics (or shall qualify to be treated as such pursuant to Treasury regulations or other applicable guidance).
|
(ii)
|
The rules adopted by the Committee pursuant to Section 6.01(b):
|
(iii)
|
The Committee shall notify Participants, Beneficiaries, and Alternate Payees of their diversification rights at the time, in the manner, and to the extent required pursuant to Section 101(m) of ERISA and regulations and other guidance issued thereunder.
|
6.02
|
Voting of Company Stock
|
(a)
|
Voting.
Each Participant with an interest in any Company Stock fund described in Section 6.01(a)(i)(A) shall have the right to direct the Trustee as to the manner in which the Trustee is to vote (including not to vote) the full and fractional shares of Company Stock held by the Company Stock ESOP Fund and the Company Stock Non-ESOP Fund that are credited to the Participant’s Aggregate Account, hereinafter referred to as the “Participant’s interest in Company Stock.” Directions from a Participant to the Trustee concerning the voting of Company Stock shall be communicated in writing, or by such other means as is agreed upon by the Trustee and the Committee. These directions shall be held in confidence by the Trustee and shall not be divulged to the Committee, the Company, or any officer or employee thereof, or any other person except to the extent that the consequences of such
|
(b)
|
Tender and Exchange Offers.
Each Participant with an interest in any Company Stock fund described in Section 6.01(a)(i)(A) shall have the right to direct the Trustee to tender or not to tender some or all of the shares of Company Stock reflecting such Participant’s interest in Company Stock described in the first sentence of Section 6.02(a). Directions from a Participant to the Trustee concerning the tender of Company Stock shall be communicated in writing, or by such other means as is agreed upon by the Trustee and the Committee. These directions shall be held in confidence by the Trustee and shall not be divulged to the Committee, the Company, or any officer or employee thereof, or any other person except to the extent that the consequences of such directions are reflected in reports regularly communicated to any such persons in the ordinary course of the performance of the Trustee’s services hereunder. The Trustee shall tender or not tender shares of Company Stock as directed by the Participant. Except as otherwise required by law, the Trustee shall not tender shares of Company Stock reflecting a Participant’s interest in Company Stock for which it has received no direction from the Participant.
|
i.
|
Withdrawal of Tender
. A Participant who has directed the Trustee to tender some or all of the shares of Company Stock reflecting the Participant’s interest in Company Stock may, at any time prior to the tender offer withdrawal deadline, direct the Trustee to withdraw some or all of the tendered shares reflecting the Participant’s interest, and the Trustee shall withdraw the directed number of shares from the tender offer prior to the tender offer withdrawal deadline. A Participant shall not be limited as to the number of directions to tender or withdraw that the Participant may give to the Trustee.
|
ii.
|
Tender Proceeds
. A direction by a Participant to the Trustee to tender shares of Company Stock reflecting the Participant’s interest in Company Stock shall not be considered a written election under the Plan by the Participant to withdraw, or have distributed, any or all of his withdrawable interest in the Plan. The Trustee shall credit to each Account of the Participant from which the tendered shares were taken the proceeds received by the Trustee in exchange for the shares of Company Stock tendered from the Account. Pending receipt of directions from the Participant or the Committee, as provided in the Plan, as to which of the remaining Investment Funds the proceeds should be invested in, the Trustee shall invest the proceeds in such Investment Fund(s) as may be prescribed by the Trust Agreement.
|
iii.
|
Exchange Offers
. All of the provisions of this Section 6.02(b) shall apply to exchange offers as well as to tender offers.
|
(c)
|
Other Shareholder Rights
. With respect to all shareholder rights other than the right to vote, the right to tender or exchange, and the right to withdraw shares previously tendered, in the case of Company Stock, the Trustee shall follow the procedures described in Section 6.02(a).
|
(d)
|
Stock Conversions
. All of the provisions of this Section 6.02 shall apply to securities received as a result of a conversion of Company Stock.
|
7.01
|
Loans to Active Participants
|
(a)
|
A Participant or Alternate Payee may have only one outstanding loan at a time.
|
(b)
|
A Participant’s or Alternate Payee’s loan shall not be less than $1,000 and shall not exceed the lesser of (i) $50,000, reduced to the extent of the Participant’s or Alternate Payee’s highest outstanding loan balance during the immediately prior 12-month period (ending the day before the new loan is granted) under the Plan and any other qualified plan maintained by the Employer or an Affiliated Employer or (ii) 50% of the total dollar value of the Participant’s or Alternate Payee’s Tax-Deferred, Roth, After-Tax, Matching, Special, Automatic Contribution, and Rollover Accounts as of the date the loan is made.
|
(c)
|
Spousal Consent for a loan will not be required.
|
(d)
|
All loans shall be subject to the approval of the Committee and to such rules or regulations as the Committee shall adopt.
|
(e)
|
An application for a loan by a Participant or Alternate Payee shall be made in accordance with the administrative procedures set forth by the Committee.
|
(f)
|
Each loan shall be made at a reasonable rate of interest determined in accordance with the Plan’s loan rules. The interest rate so determined with respect to a particular loan shall be fixed for the duration of such loan. Each loan shall be secured by the balance remaining in the borrower’s Aggregate Account or by such other security as the Committee may deem to be adequate.
|
(g)
|
Each loan shall be treated as a separate investment of the funds credited to a Participant’s or Alternate Payee’s Tax-Deferred, Roth, After‑Tax, Matching, Special, Automatic Contribution, or Rollover Account.
|
(h)
|
Loan proceeds shall be taken from the Participant’s or Alternate Payee’s Aggregate Accounts in the order prescribed in administrative procedures established by the Committee, as revised by the Committee from time to time in its discretion.
|
(i)
|
In accordance with Code Section 72(p)(3), the Committee shall notify the borrower that no interest deduction can be claimed with respect to any loan secured by the borrower’s Tax-Deferred Account or Roth Account.
|
(j)
|
Loan documentation will be processed within the time periods established by the Committee in its administrative procedures.
|
7.02
|
Repayment of Loans
|
(a)
|
The period of repayment for any loan shall be arrived at by agreement between the Committee and the borrower. The repayment period shall be in full year increments and shall not exceed five (5) years, except that a 30-year repayment period may apply to any loan used for the purpose of purchasing a home that is the Participant’s or Alternate Payee’s principal residence.
|
(b)
|
Loans may be repaid in full at any time. Partial prepayment is not allowed.
|
(c)
|
Repayment of loans shall be by regular payroll deduction, and all loans shall be contingent on the borrower’s payroll deduction authorization, provided that if a Participant is subsequently granted an unpaid leave of absence or is transferred to an Affiliated Employer or a position or location with the Employer that is not covered by the Plan (or ceases to have sufficient compensation from which the loan payment can be made, including following a termination of employment), the Participant must continue to make timely level installment payments of principal and interest, by
|
(d)
|
Loan defaults shall be treated as taxable distributions pursuant to Code requirements, but may not be applied to the borrower’s collateral in his Tax-Deferred, Roth, Matching, Automatic Contribution, or Special Account until such time as a distribution from such accounts could otherwise be made under the Plan.
|
(e)
|
Notwithstanding the foregoing, in the event a Participant enters qualified military service as defined in Section 2.04(b), loan repayments shall be suspended (and interest shall cease to accrue) during the period of service, and the period of repayment shall be extended by the number of months of the period of qualified military service; provided, however, if the Participant incurs a termination of employment and requests a distribution pursuant to Article 8, the loan shall be canceled, and the outstanding loan balance shall be distributed pursuant to Article 8.
|
8.01
|
Withdrawals from After-Tax Account and Rollover Account
|
(a)
|
A Participant may elect to withdraw amounts credited to his After-Tax Account, provided that the minimum withdrawal amount shall be $250 or, if less, the total value of the Participant’s After-Tax Account.
|
(b)
|
A Participant may elect to withdraw amounts credited to his Rollover Account, provided that the minimum withdrawal amount shall be $250 or, if less, the total value of the Participant’s Rollover Account.
|
(c)
|
Elections under this Section 8.01 shall be on forms approved by the Committee for that purpose.
|
8.02
|
Hardship Withdrawals
|
(a)
|
A Participant who either:
|
i.
|
has not terminated employment, or
|
ii.
|
has terminated employment but is a former ABC Employee who first became a member under the ABC, Inc. Savings & Investment Plan before January 1, 1995,
|
(b)
|
A distribution will be made on account of hardship only if the distribution is necessary to satisfy an immediate and heavy financial need of the Participant. For purposes of this Plan, a distribution is made on account of an immediate and heavy financial need of the Participant only if the distribution is for:
|
i.
|
the payment of medical expenses described in Section 213(d) of the Code incurred or to be incurred by the Participant, the Participant’s Spouse, any dependents of the Participant (as defined in Section 152 of the Code, but without regard to Sections 152(b)(1), (b)(2), and (d)(1)(B)), or the Participant’s Beneficiary;
|
ii.
|
costs directly related to the purchase of a principal residence for the Participant or a major rehabilitation of the living quarters of the Participant’s principal residence, but excluding mortgage payments;
|
iii.
|
the payment of tuition, related educational fees, room and board for up to the next twelve (12) months of post-secondary education for the Participant, his or her Spouse, children, dependents (as defined in Code Section 152, but without regard to Sections 152(b)(1), (b)(2), and (d)(1)(B)), or the Participant’s Beneficiary;
|
iv.
|
the prevention of the eviction of the Participant from his principal residence or foreclosure on the mortgage of the Participant’s principal residence;
|
v.
|
the payment of burial or funeral expenses for the Participant’s Spouse, child, parent, mother-in-law, father-in-law, other dependents (as defined in Code Section 152, but without regard to Section 152(d)(1)(B)), or Beneficiary; or
|
vi.
|
the payment of expenses for the repair of damage to the Participant’s principal residence that would qualify for the casualty deduction under Section 165 of the Code (without regard to whether the loss exceeds 10% of adjusted gross income).
|
(c)
|
A distribution will be considered necessary to satisfy an immediate and heavy financial need of the Participant only if all three (3) of the following requirements are satisfied:
|
i.
|
the distribution is not in excess of the amount required to relieve the immediate and heavy financial need of the Participant (taking into account the taxable nature of the distribution);
|
ii.
|
the Participant has obtained (or is currently obtaining) all distributions, withdrawals, and loans available under the Plan and all other plans maintained by any Employer or any Affiliated Employer (including any available distribution of dividends described in Section 6.01(a)(i)(F)) other than hardship distributions and the Participant represents in writing, on forms provided by the Committee and by providing any documentation required by the Committee, that the need cannot be relieved through reimbursement or compensation by insurance or otherwise, by reasonable liquidation of the Participant’s assets, to the extent such liquidation would not itself cause an immediate and heavy financial need, by cessation of Tax-Deferred and Roth Contributions under the Plan, by withdrawals, distributions (other than hardship distributions) or nontaxable loans (at the time of the loan) from any plan maintained by any other entity by which the Participant is employed, or by borrowing from commercial sources on reasonable commercial terms; and
|
iii.
|
the Committee determines that it can reasonably rely on the Participant’s written representation.
|
(d)
|
Distributions pursuant to this Section will be made as soon as practicable following the Committee’s approval of the Participant’s written request for withdrawal and will be made in the form of a single lump sum payment. The Committee may request any documentation it may require from a Participant to make a determination that the Participant is eligible for a hardship withdrawal hereunder.
|
(e)
|
A Participant who receives a hardship withdrawal under this Section 8.02 shall be prohibited from making Tax-Deferred or Roth Contributions under this Plan and elective deferrals and employee contributions under all other plans of the Employer or an Affiliated Employer for six months after receipt of the distribution.
|
(f)
|
All hardship withdrawal elections must be made on forms approved by the Committee for that purpose.
|
8.03
|
Distributions on Account of Termination of Employment
|
(a)
|
Except as set forth in Section 8.03(c) below, distribution of a Participant’s Aggregate Account shall commence as soon as practicable after the Participant’s termination of employment, but in no event later than the time prescribed by Section 409(o) of the Code. A Participant’s distributable Aggregate Account is based on the value of that Account as of the Valuation Date the Aggregate Account is to be distributed, except that there will be added to the value of the Participant’s Aggregate Account the fair market value of any amounts allocated to his Aggregate Account under Article 4 after that Valuation Date. If a loan is outstanding from the Trust Fund to the Participant on the date of distribution, the amount distributed will be reduced by the outstanding loan balance. The distribution will be paid to the Participant’s Beneficiary in the event the Participant’s termination of employment is caused by his death. In all other cases, payment will be made to the Participant.
|
(b)
|
Except as set forth in Section 8.03(c) below, distributions will be in the form of a lump sum cash payment, except that the Participant may request that any portion of the Participant’s Aggregate Account that is invested in a Company Stock fund described in Section 6.01(a)(i)(A) will be distributed in shares of Company Stock, plus cash for any fractional shares.
|
(c)
|
If the Participant’s termination of employment is due to reasons other than death and if the amount of his Aggregate Account (determined without regard to the value of
|
(d)
|
(i)
Except as provided in Section 8.03(d)(ii), if a Participant dies prior to receiving the lump sum distribution of his Aggregate Account or prior to the completion of installment payments under this Section, the distribution shall be paid to the Participant’s Beneficiary in a lump sum as soon as administratively practicable following the Participant’s death, and no later than the latest date payment is permitted under Section 8.08. Notwithstanding the foregoing, if the Participant’s death occurs after his required beginning date under Section 8.08, any minimum required distribution for the calendar year of the Participant’s death, if not paid before the Participant’s death, shall be paid, no later than December 31 of the calendar year in which the
|
(ii)
|
If the Beneficiary is a minor, the portion of the Participant’s Aggregate Account that is payable to such Beneficiary shall be distributed pursuant to Section 8.03(d)(i) in a lump sum to the legal guardian of such minor, but only after presentation of proof of legal guardianship satisfactory to the Committee. If proof of legal guardianship has not been provided:
|
(e)
|
It is possible for a Participant or Beneficiary to receive a distribution under this Section before all Matching, Automatic, and Special Contributions on behalf of the Participant are made to the Trust Fund. In such case, such additional amounts shall be paid to the Participant or Beneficiary as soon as practical after the Trust Fund’s receipt thereof.
|
(f)
|
If a Participant who terminated employment again becomes an Employee before commencing a distribution of his Aggregate Account, no distribution from the Trust
|
(g)
|
Notwithstanding any provision of this Plan to the contrary, a lump sum payment shall be made in lieu of all vested benefits if the value of the vested portion of the Participant’s Aggregate Accounts (determined without regard to the value of his Rollover Account) does not exceed the Cashout Limit. The Cashout Limit is $1,000.
|
8.04
|
Restrictions and Requirements on Distributions
|
(a)
|
Except for distributions permitted under Section 8.01 with respect to Participants who withdraw from their After-Tax Account or Rollover Account, Section 8.02 with respect to Participants who suffer a hardship, Section 8.07 with respect to Participants who reach age 59-1/2, or Section 2.04(i) for certain Participants on active military duty, a Participant's interest in the Plan will not be distributed before the Participant's termination of employment or death; provided, however, that if:
|
i.
|
The Plan is terminated without the establishment or maintenance by the Employers of an alternative defined contribution plan (within the meaning of Code Section 401(k)(10), Section 1.401(k)-1(d)(4) of the Treasury regulations, and other applicable guidance), or
|
ii.
|
A Participant incurs a "severance from employment" (within the meaning of Code Section 401(k)(2)(B), Section 1.401(k)-1(d)(2) of the Treasury regulations, and other applicable guidance) on account of an Employer’s or Affiliated Employer’s sale of the assets in a trade or business or sale of a subsidiary,
|
(b)
|
An event described in Section 8.04(a)(i) that otherwise would permit distribution of a Participant’s interest in the Plan will not be treated as described in Section 8.04(a)(i) unless the Participant receives a lump sum distribution by reason of the event. A lump sum distribution for this purpose will be a distribution described in Section 402(e)(4)(D) of the Code (without regard to subclauses (I), (II), (III), and (IV) of clause (i) thereof).
|
(c)
|
The provisions of this Section 8.04(c) will apply to restrict the Committee’s ability to delay the commencement of distributions. Except as otherwise provided in this Article 8, distribution of the Participant’s interest in his Aggregate Account shall begin no later than the 60th day after the close of the Plan Year in which occurs the latest of:
|
i.
|
The Participant’s 65th birthday;
|
ii.
|
The tenth anniversary of the date on which he became a Participant; or
|
iii.
|
The date he terminates employment.
|
(d)
|
The provisions of Section 8.08 will apply to restrict a Participant’s ability to delay distribution of benefits.
|
(e)
|
The Committee or its delegate shall provide recipients of a benefit hereunder with appropriate claim forms, election forms, withholding forms and an officially approved notice supplied by the Secretary of the Treasury that specifies certain
|
8.05
|
Method of Payment for Eligible Rollover Distributions
|
(a)
|
Notwithstanding any provision of the Plan to the contrary, if a Distributee is entitled to receive an Eligible Rollover Distribution that exceeds $200, the Distributee may elect, at the time and in the manner prescribed by Committee and in accordance with this Section 8.05, to have his Eligible Rollover Distribution paid in accordance with one of the following methods:
|
(i)
|
all of the Eligible Rollover Distribution shall be paid directly to the Distributee;
|
(ii)
|
all of the Eligible Rollover Distribution shall be paid as a Direct Rollover to the Eligible Retirement Plan designated by the Distributee; or
|
(iii)
|
the portion of the Eligible Rollover Distribution as designated by the Participant, which portion shall be at least $500 or such lesser amount as the Committee shall determine, shall be paid as a Direct Rollover to the Eligible Retirement Plan designated by the Distributee and the balance of the Eligible Rollover Distribution shall be paid directly to the Distributee.
|
(b)
|
No less than thirty (30) days and no more than one hundred eighty (180) days prior to the Distributee’s payment date, the Committee shall provide the Distributee with an election form and a notice that satisfies the requirements of Section 1.411(a)-11(c) of the Treasury regulations and Section 402(f) of the Code.
|
(c)
|
Notwithstanding the provisions of Section 8.05(b) above, distributions paid in accordance with Section 8.05(a) may commence less than 30 days after the material described in Section 8.05(b) is given to the Distributee provided that:
|
(i)
|
If the Distributee is the Participant, the value of his Aggregate Accounts (determined without regard to the value of his Rollover Account) does not exceed the Cashout Limit. The Cashout Limit is $1,000; or
|
(ii)
|
The Distributee is notified that he has the right to a period of at least thirty (30) days after receipt of the material to decide whether or not to elect a distribution and, after receipt of such notification, the Distributee affirmatively elects to receive a distribution.
|
(d)
|
The following definitions apply to the terms used in this Section 8.05:
|
(i)
|
“Eligible Rollover Distribution” means any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include:
|
(ii)
|
“Eligible Retirement Plan” means any of the following that accepts the Distributee’s Eligible Rollover Distribution: (A) an individual retirement account described in Section 408(a) of the Code, (B) an individual retirement annuity described in Section 408(b) of the Code (other than an endowment contract), (C) an annuity plan described in Section 403(a) of the Code, (D) a qualified trust described in Section 401(a) of the Code, (E) an annuity contract described in Section 403(b) of the Code, (F) an eligible plan under Section 457(b) of the Code that is maintained by a state, political subdivision of a state or any agency or instrumentality of a state or political subdivision of a state and that agrees to separately account for amounts transferred into such plan from this Plan, and (G) a Roth IRA described in Section 408A(b) of the Code. This definition of Eligible Retirement Plan shall also apply in the case of a distribution to a surviving Spouse or to a Spouse or former Spouse who is the alternate payee under a qualified domestic relations order (as defined in Code Section 414(p)). For a non-Spouse Beneficiary described in (iii)(C) below, an eligible retirement plan shall include only an individual retirement plan or annuity described in (A), (B), or (G), above, that is treated as an inherited IRA of the Beneficiary.
|
(iii)
|
“Distributee” includes (A) an Employee or former Employee, (B) the Employee's or former Employee's surviving Spouse and the Employee's or
|
(iv)
|
“Direct Rollover” means a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.
|
8.06
|
Recapture of Payments
|
(a)
|
By error, it is possible that payments to a Participant or Beneficiary may exceed the amounts to which the recipient is entitled. When notified of the error, the recipient must return the excess to the Trust Fund. This requirement is limited where explicit statutory provisions require limitation.
|
(b)
|
To prevent hardship, repayment under Section 8.06(a) may be made in installments, determined at the sole discretion of the Committee. A repayment arrangement, however, may not be contrary to law, and it may not be used as a disguised loan.
|
(c)
|
If a Trustee is authorized by statute to recover some payments, no Plan provision may be construed to contravene the statute.
|
8.07
|
Age 59½ Withdrawals
|
8.08
|
Required Minimum Distributions
|
(a)
|
The provisions of this Section 8.08 will apply for purposes of determining required minimum distributions.
|
i.
|
The requirements of this Section 8.08 will take precedence over any inconsistent provisions of the Plan.
|
ii.
|
All distributions required under this Section 8.08 will be determined and made in accordance with Treasury regulations under Code Section 401(a)(9).
|
(b)
|
The Participant’s entire interest will be distributed or begin to be distributed to the Participant no later than the Participant’s required beginning date.
|
(c)
|
If the Participant dies before distributions begin, the Participant’s entire interest will be distributed to the Participant’s Beneficiary (whether or not a designated beneficiary) by December 31 of the calendar year containing the fifth anniversary of the Participant’s death. Notwithstanding the foregoing, if:
|
i.
|
The Participant’s designated beneficiary is a minor;
|
ii.
|
The minor beneficiary will not cease to be a minor before the fifth anniversary described above; and
|
iii.
|
Proof of legal guardianship satisfactory to the Committee has not been provided pursuant to Section 8.03(d)(ii) at such time as may be required by the Committee,
|
(d)
|
Unless the Participant’s interest is distributed in a single sum on or before the required beginning date, as of the first distribution calendar year distributions will be made in accordance with Sections 8.08(e) through (h).
|
(e)
|
During the Participant’s lifetime, the minimum amount that will be distributed for each distribution calendar year is the lesser of:
|
i.
|
The quotient obtained by dividing the Participant’s account balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-(9) of the Treasury regulations, using the Participant’s age as of the Participant’s birthday in the distribution calendar year; or
|
ii.
|
If the Participant’s sole designated beneficiary for the distribution calendar year is the Participant’s Spouse, the quotient obtained by dividing the Participant’s account balance by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-(9) of the Treasury regulations, using
|
(f)
|
Required minimum distributions will be determined under Section 8.08(e) beginning with the first distribution calendar year up to and including the distribution calendar year that includes the Participant’s date of death.
|
(g)
|
If the Participant dies on or after the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s account balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the beneficiary, determined as follows:
|
i.
|
The Participant’s remaining life expectancy is calculated using the age of the Participant on his or her birthday in the year of death, reduced by one for each subsequent year.
|
ii.
|
If the Participant’s surviving Spouse is the Participant’s sole designated beneficiary, the remaining life expectancy of the surviving Spouse is calculated for each distribution calendar year after the year of the Participant’s death using the surviving Spouse’s age as of the Spouse’s birthday in that year. For distribution calendar years after the year of the surviving Spouse’s death, the remaining life expectancy of the surviving Spouse is calculated using the age of the surviving Spouse as of the Spouse’s birthday in the calendar year of the Spouse’s death, reduced by one for each subsequent calendar year.
|
iii.
|
If the Participant’s surviving Spouse is not the Participant’s sole designated beneficiary, the beneficiary’s remaining life expectancy is based on the age of the beneficiary on his birthday in the year following the year of the Participant’s death, reduced by one for each subsequent year.
|
(h)
|
If the Participant dies on or after the date distributions begin and there is no designated beneficiary as of September 30 of the year after the year of the Participant’s death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s account balance by the Participant’s remaining life expectancy calculated using the age of the Participant on his birthday in the year of death, reduced by one for each subsequent year.
|
(i)
|
The following definitions apply for purposes of this Section 8.08:
|
i.
|
“Designated beneficiary” or “beneficiary” means an individual who is designated as the beneficiary under Section 1.10 of the Plan and is the designated beneficiary under Code Section 401(a)(9) and Section 1.401(a)(9)-1, Q&A-4 of the Treasury regulations.
|
ii.
|
“Distribution calendar year” means a calendar year for which a minimum distribution is required. For distributions beginning before the Participant’s death, the first distribution calendar year is the calendar year immediately preceding the calendar year that contains the Participant’s required beginning date. For distributions beginning after the Participant’s death, the first distribution calendar year is the calendar year in which distributions are required to begin under Section 8.08(c). The required minimum distribution for the Participant’s first distribution calendar year will be made on or before the Participant’s required beginning date. The required minimum distribution for other distribution calendar years, including the required minimum distribution for the distribution calendar year in which the Participant’s required beginning date occurs, will be made on or before December 31 of that distribution calendar year.
|
iii.
|
“Life expectancy” means life expectancy based on the Single Life Table under Section 1.401(a)(9)-9 of the Treasury regulations.
|
iv.
|
“Account balance” means the Aggregate Account as of the last Valuation Date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of any contributions made and allocated to the Aggregate Account as of dates in the valuation calendar year after the Valuation Date and decreased by distributions made in the valuation calendar year after the Valuation Date. The account balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year.
|
v.
|
“Required beginning date” means, for a Participant who is a five percent owner (as defined in Code Section 416(i)), the April 1 following the calendar year in which the Participant attains age 70½. For any other Participant, required beginning date means the April 1 following the later of the calendar year in which he attains age 70½ or the calendar year in which he terminates employment.
|
(j)
|
Notwithstanding anything to the contrary in this Section 8.08, effective for the 2009 distribution calendar year, a Participant who (i) would have been required to receive required minimum distributions for the 2009 distribution calendar year (“2009 RMDs”) but for the enactment of Code Section 401(a)(9)(H), (ii) would have satisfied the requirement by receiving distributions from the Plan that are either equal to the 2009 RMDs or one or more payments in a series of substantially equal distributions (that include 2009 RMDs) made at least annually and expected to last for the life (or life expectancy) of the Participant, the joint lives (or joint life expectancies) of the Participant and his designated beneficiary, or for a period of at least 10 years (“Extended 2009 RMDs”), and (iii) has not set up scheduled payments but is receiving required minimum distributions from the Plan automatically will not receive those distributions for the 2009 distribution calendar year unless the Participant elects to receive such distributions. Affected Participants will be given
|
9.01
|
Plan Administrative Committee
|
(a)
|
The individuals holding, from time to time, the following positions within the Company, who shall be voting members of the Committee:
|
(b)
|
The individuals holding, from time to time, the following positions within the Company or Disney Worldwide Services, Inc., who shall be non-voting members of the Committee:
|
(c)
|
|
9.02
|
Duties of Committee
|
9.03
|
Meetings
|
9.04
|
Actions By the Committee
|
9.05
|
Compensation and Bonding
|
9.06
|
Establishment of Rules and Interpretation of Plan
|
(a)
|
promulgate and enforce rules and regulations as it deems necessary or appropriate for the administration of the Plan;
|
(b)
|
construe and interpret the Plan and decide all matters arising thereunder, including the right to remedy possible ambiguities, inconsistencies, and omissions and correct defects;
|
(c)
|
make factual determinations and decide all questions relating to individuals’ eligibility for participation in the Plan, vesting, forfeitures, the amount, manner and timing of payment, and the status of persons as Participants, Employees, Covered Employees, Eligible Employees, Highly Compensated Employees, Spouses, Beneficiaries, and Alternate Payees;
|
(d)
|
require any person to furnish such documentation, information, or other matter as the Committee may require for the proper administration of the Plan and as a prerequisite to any payment or distribution by the Plan;
|
(e)
|
direct that the Trust Fund be used to pay the reasonable administration expenses of the Plan; and
|
(f)
|
impose reasonable restrictions (including temporary prohibitions) on Participants’ contribution elections, changes in contribution elections, investment elections, changes in investment elections, loans, withdrawals, and distributions to accommodate the administrative requirements of the Plan.
|
9.07
|
Service in More Than One Fiduciary Capacity
|
9.08
|
Limitation of Liability
|
9.09
|
Indemnification
|
9.10
|
Expenses of Administration
|
9.11
|
Claims Procedures
|
(a)
|
Every claim for benefits under the Plan by a person (hereinafter referred to as “Claimant”) or by a Claimant’s authorized representative shall be filed by submitting to the person (the “claim administrator”) designated by the Committee, a written application on a form designated by the Committee. The claim administrator shall process such application and approve or disapprove it. Claims for benefits under the Plan other than disability benefits shall be governed by Sections 9.11(b) through 9.11(f). Claims for disability benefits under the Plan shall be governed by Section 9.11(g). Sections 9.11(h), 9.12, and 9.13 shall apply to all claims under the Plan, including, but not limited to claims for benefits (both based on the terms of the Plan and those based on an alleged violation of the law), claims for breach of fiduciary duty, and other claims that some aspect of the Plan’s operation, administration or design or some aspect of the Plan’s investments, is unlawful or violates the terms of the Plan.
|
(b)
|
If a Claimant is denied any benefits under the Plan (other than disability benefits) either in total or in an amount less than the full benefit to which he claims to be entitled, the claim administrator shall advise the Claimant of the denial within 90 days after receipt of the claim by the claim administrator. The claim administrator shall furnish the Claimant with a written notice setting forth:
|
i.
|
The computation of the Claimant’s benefit, if any;
|
ii.
|
The specific reason or reasons for the denial;
|
iii.
|
The specific Plan sections on which the denial is based;
|
iv.
|
A description of any additional material or information necessary for the Claimant to perfect his claim, if possible, and an explanation of why such material or information is needed; and
|
v.
|
A description of the Plan’s claim review procedures, the time limits under such procedures and a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following a denial of benefits on appeal.
|
(c)
|
Within 60 days of receipt of the information described in Section 9.11(b), the Claimant or his duly authorized representative may file written appeal of the determination with the Committee. As part of his appeal, the Claimant may submit written comments, documents, records and other information relating to the claim.
|
(d)
|
As long as the Claimant’s appeal is pending (including the 60-day period described in Section 9.11(c)) the Claimant or his duly authorized representative shall be provided, upon request and free of charge, access to and copies of all documents, records and other information relevant to the claim and may review pertinent Plan documents and may submit issues and comments in writing to the Committee.
|
(e)
|
The Committee shall notify the Claimant in writing of the appeals decision (whether or not adverse) in written or electronic form within a reasonable period of time, but not later than 60 days after the Committee’s receipt of the appeal. Notwithstanding, if the Committee determines that special circumstances (for example, the need to hold a hearing) require an extension of time, the Committee shall notify the Claimant of the reason or reasons for the extension and of the date by which it expects to make its decision. This extended period shall not exceed 60 days from the end of the initial 60-day period. The Committee’s decision on appeal shall take into account all comments, documents, records and other information submitted by the Claimant and
|
(f)
|
If the Committee decides to deny benefits on appeal, the Committee shall provide the Claimant in writing with:
|
i.
|
The specific reason or reasons for the denial;
|
ii.
|
The specific Plan provisions on which the denial is made;
|
iii.
|
A statement that the Claimant is entitled to receive, upon request and free of charge, access to and copies of all documents, records and other information relevant to the claim; and
|
iv.
|
A statement regarding the Claimant’s right to bring a civil action under Section 502(a) of ERISA following a denial of benefits on appeal.
|
(g)
|
If the Claimant seeks a disability benefit under the Plan, this Section 9.11(g) shall govern the claim.
|
i.
|
The specific reason or reasons for the denial;
|
ii.
|
The specific Plan sections on which the denial is based;
|
iii.
|
A description of any additional information necessary for the Claimant to perfect his claim, if possible, and an explanation of why such material or information is needed;
|
iv.
|
A description of the Plan’s claim review procedures, the time limits under such procedures and a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following a denial of benefits on appeal; and
|
v.
|
If applicable, a copy of the internal rule, guideline or protocol that was relied on to make the denial or a statement that such a rule was relied on and that a copy of such rule will be provided free of charge to the Claimant upon request.
|
i.
|
The specific reason or reasons for the denial;
|
ii.
|
The specific Plan sections on which the denial is based;
|
iii.
|
A statement that the Claimant is entitled to receive, upon request and free of charge, access to and copies of all documents, records and other information relevant to the claim;
|
iv.
|
A statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following a denial of benefits on appeal;
|
v.
|
If applicable, a copy of the internal rule, guideline or protocol that was relied on to make the denial or a statement that such a rule was relied on and that a copy of such rule will be provided free of charge to the Claimant; and
|
vi.
|
If the denial is based on a medical judgment an explanation of the scientific or clinical judgment for the determination or a statement that such explanation will be provided free of charge to the Claimant on request.
|
(h)
|
Any person eligible to receive benefits under the Plan shall furnish to the claim administrator or the Committee any information or evidence requested by the claim administrator or the Committee and reasonably required for the proper administration of the Plan. Failure on the part of any person to comply with any such request within a reasonable period of time shall be sufficient grounds for delay in the payment of any benefits that may be due under the Plan until such information or evidence is received by the claim administrator or the Committee. If any person claiming benefits under the Plan makes a false statement that is material to the claim for benefits, the claim administrator or the Committee may offset against future payments any amount paid to such person to which he was not entitled under the provisions of the Plan.
|
9.12
|
Limitation on Actions
|
(a)
|
A claim or action to recover benefits allegedly due under the provisions of the Plan or by reason of any law, nor
|
(b)
|
A claim or action to enforce rights under the Plan, nor
|
(c)
|
A claim or action to clarify rights to future benefits under the Plan, nor
|
(d)
|
Any other claim or action that (I) relates to the Plan and (II) seeks a remedy, ruling, or judgment of any kind against the Plan, the Committee, a Plan fiduciary (within the meaning of Section 3(21) of ERISA), or a party in interest (within the meaning of Section 3(14) of ERISA) with respect to the Plan
|
i.
|
Until the claimant has exhausted the administrative review procedure set forth in Section 9.11; and
|
ii.
|
Unless such claim or action is filed in a court with jurisdiction over such claim or action no later than thirty-six (36) months after:
|
9.13
|
Class Action Forum
|
(a)
|
To the fullest extent permitted by law, any putative class action lawsuit brought in whole or in part under Section 502 of ERISA (or any successor provision) and relating to the Plan, the lawfulness of any Plan provision, the administration of the Plan, the management, investment, or handling of Plan assets, or the performance or non-performance of Plan fiduciaries or administrators shall be filed in one of the following jurisdictions: (i) the jurisdiction in which the Plan is principally administered, or (ii)
|
(b)
|
If any putative class action within the scope of Section 9.13(a) is filed in a jurisdiction other than one of those described in Section 9.13(a), or if any non-class action filed in such a jurisdiction is subsequently amended or altered to include class action allegations, then the Plan, all parties to such action that are related to the Plan (such as a Plan fiduciary, administrator, or party in interest), all alleged Plan participants and beneficiaries shall take all necessary steps to have the action removed to, transferred to, or re-filed in a jurisdiction described in Section 9.13(a). Such steps may include, but are not limited to, (i) a joint motion to transfer the action, or (ii) a joint motion to dismiss the action without prejudice to its re-filing in a jurisdiction described in Section 9.13(a), with any applicable time limits or statutes of limitations applied as if the suit or class action allegation had originally been filed or asserted in a jurisdiction described in Section 9.13(a) at the same time that it was filed or asserted in a jurisdiction not described therein.
|
(c)
|
The provisions of this Section 9.13 shall be waived if no party invokes them within 120 days of the filing of a putative class action or the assertion of class action allegations.
|
(d)
|
This Section 9.13 does not relieve any putative class member of any obligation existing under the Plan or by law to exhaust administrative remedies before initiating litigation.
|
10.01
|
Trust Agreement
|
(a)
|
comply with laws and regulations, or as otherwise may be desirable when prompted by a change in law or regulation; and
|
(b)
|
make any other change that may be necessary or desirable, provided that any amendment adopted pursuant to this subsection shall not increase the Company’s annual expense by more than five (5) million dollars.
|
10.02
|
Exclusive Benefit Rule
|
10.03
|
Committee Power and Duties
|
(a)
|
The Committee may, in its discretion, appoint one or more investment managers (within the meaning of Section 3(38) of ERISA) to manage (including the power to acquire and dispose of) all or part of the assets of the Plan, as the Committee shall
|
(b)
|
The Committee shall have the duty to advise any investment adviser or person (including any investment manager) with discretionary investment authority over all or a portion of the Plan’s Trust Fund of the investment objectives which such person should observe. Such advice should, looking at the assets of the Plan as a whole, take into account the short-term cash needed for benefit payment as well as the long-term growth needed to discharge the Plan’s liabilities. The Committee may make such changes in the appointment of the Trustee or any investment advisers or investment managers, and may remove or replace the Trustee or any investment adviser or investment manager, as it deems advisable. The Committee also shall have the power and authority specified in any agreements with the Trustee or any investment adviser or investment manager.
|
(c)
|
With the approval of the Committee, a portion of the Plan’s Trust Fund may be invested in the Trustee’s certificates of deposit, or in the Trustee’s pooled or commingled qualified trust funds.
|
(d)
|
Notwithstanding the foregoing, the Trust Fund shall consist of separate Investment Funds as provided in Article 6, and to the extent required by Participant elections, may be fully invested in Company Stock.
|
(e)
|
The Committee shall prepare periodically a report of its actions that constitute settlor activities with respect to the Plan and shall deliver a copy of such report to the Board.
|
11.01
|
Nonalienation
|
(a)
|
Except as required by any applicable law or by subsection (c), no benefit under the Plan shall in any manner be anticipated, assigned, or alienated, and any attempt to do so shall be void. However, payment shall be made in accordance with the provisions of any judgment, decree, or order that:
|
(i)
|
creates for, or assigns to, a Spouse, former Spouse, child, or other dependent of a Participant the right to receive all or a portion of the Participant’s benefits under the Plan for the purpose of providing child support, alimony payments, or marital property rights to that Spouse, child, or dependent;
|
(ii)
|
is made pursuant to a state domestic relations law;
|
(iii)
|
does not require the Plan to provide any type of benefit, or any option, not otherwise provided under the Plan; and
|
(iv)
|
otherwise meets the requirements of Section 206(d) of ERISA, as amended, as a qualified domestic relations order.
|
(b)
|
Notwithstanding anything herein to the contrary, if the amount payable to the Alternate Payee under the Qualified Domestic Relations Order does not exceed the Cashout Limit, such amount shall be paid in one lump sum as soon as practicable following the qualification of the order. If the amount exceeds the Cashout Limit, it may be paid as soon as practicable following the qualification of the order if the Qualified Domestic Relations Order so provides and the Alternate Payee consents thereto; otherwise, it may not be payable before the earliest of (i) the Participant’s termination of employment, (ii) the time such amount could be withdrawn while still employed, or (iii) the Participant’s attainment of age 50. The Cashout Limit is $1,000.
|
(c)
|
A Participant’s benefit under the Plan shall be offset or reduced by the amount the Participant is required to pay to the Plan under the circumstances set forth in Section 401(a)(13)(C) of the Code.
|
11.02
|
Qualified Domestic Relations Orders
|
(a)
|
Establishment of Procedures
. The Committee shall establish reasonable written procedures to determine the qualified status of domestic relations orders and to administer distributions under orders determined to be Qualified Domestic Relations Orders, which procedures may include, without limitation, the adoption of one or more model Qualified Domestic Relations Orders. Such procedures shall be consistent with the requirements of Section 206(d) of ERISA and Sections 401(a)(13) and 414(p) of the Code. The Committee shall promptly notify the affected Participant and any other Alternate Payee of the receipt of a domestic relations order and the procedures for determining the qualified status of domestic relations orders. Within a reasonable period after the receipt of such order, the Committee shall determine whether such order is a Qualified Domestic Relations Order and shall notify the Participant and each Alternate Payee of such determination.
|
(b)
|
Disposition of Benefits Pending Determination
. During any period in which the qualified status of a domestic relations order is being determined (by the Committee, by a court, or otherwise), the Committee shall make arrangements to account separately for the amounts that would have been payable to each Alternate Payee if the order had been determined to be a Qualified Domestic Relations Order. If within 18 months of the receipt of the order, the order (or modification thereof) is determined to be a Qualified Domestic Relations Order, the Plan shall pay the amounts that have been separately accounted for to the person or persons entitled thereto. If within 18 months of the receipt of the order it is determined that the order is not qualified, or
|
(c)
|
Allocation of Expenses to Participant’s Account
. Expenses incurred by the Plan with respect to a putative Qualified Domestic Relations Order shall be charged against the affected Participant’s Aggregate Account.
|
11.03
|
Facility of Payment
|
(a)
|
If the Committee shall find that a Participant or other person entitled to a benefit is unable to care for his affairs because of illness or accident, the Committee may direct that any benefit due him, unless claim shall have been made for the benefit by a duly appointed legal representative, be paid to his Spouse, a child, a parent or other blood relative, or to a person with whom he resides.
|
(b)
|
Amounts payable under the Plan to a minor shall be paid for the minor’s benefit to the legal guardian of such minor, upon proof of legal guardianship satisfactory to the Committee. In the absence of proof of legal guardianship satisfactory to the Committee, any payment due under the Plan to a minor may be paid to such adult or adults as in the opinion of the Committee have assumed the custody or principal support of such minor, provided that such adults shall execute any affidavits or other forms and/or make any written representation as may be required by the Committee.
|
(c)
|
Any payment made under subsection (a) or (b) shall be a complete discharge of the liabilities of the Plan for that benefit.
|
11.04
|
Information
|
11.05
|
Construction
|
(a)
|
Governing Laws
. Except as otherwise provided by ERISA, this Plan and all provisions thereof shall be construed and administered according to the laws of the State of California.
|
(b)
|
Title and Headings Not to Control
. The titles to the Articles and the headings of Sections in the Plan are placed herein for convenience of reference only and, in the case of any conflict, the text of this instrument rather than such titles or headings shall control.
|
(c)
|
Gender and Person
. The masculine pronoun shall include the feminine, the feminine pronoun shall include the masculine, and the singular shall include the plural wherever the context so requires.
|
11.06
|
Proof of Death and Right of Beneficiary or Other Person
|
11.07
|
Failure to Locate Recipient
|
11.08
|
Electronic Transmission of Notices to Participants
|
12.01
|
Amendment of Plan
|
(a)
|
The Company, acting through the Board, reserves the right at any time and from time to time, and retroactively if deemed necessary or appropriate, to amend in whole or in part any or all of the provisions of the Plan. The Committee, or its delegate, shall have the power to amend the Plan to:
|
(i)
|
comply with laws and regulations, or as otherwise may be desirable when prompted by a change in law or regulation; and
|
(ii)
|
make any other change that may be necessary or desirable provided any amendment adopted pursuant to this Section 12.01 shall not increase the Company’s annual expense by more than five (5) million dollars.
|
(b)
|
Any action required or permitted to be taken by the Board or the Committee under the Plan shall be by resolution adopted by the Board or the Committee at a meeting held either in person or by telephone or other electronic means, or by unanimous written consent in lieu of a meeting.
|
(c)
|
No amendment shall make it possible for any part of the funds of the Plan to be used for, or diverted to, purposes other than for the exclusive benefit of persons entitled to benefits under the Plan. No amendment shall be made that has the effect of decreasing the accrued benefits of any Participant or of reducing the nonforfeitable percentage of the accrued benefits of a Participant below the nonforfeitable percentage computed under the Plan as in effect on the date on which the amendment is adopted or, if later, the date on which the amendment becomes effective.
|
12.02
|
Merger or Consolidation
|
12.03
|
Additional Participating Employers
|
(a)
|
With the consent of the Company, any subsidiary or affiliated corporation or division of such corporation may adopt the Plan for its Eligible Employees. An Employer adopting the Plan shall compile and submit all information required by the Committee with reference to its Eligible Employees. An entity will be considered to have adopted the Plan with the consent of the Company if it takes significant action that is consistent with the adoption of the Plan, the Board or Committee is aware of the action, and neither objects to the action.
|
(b)
|
If an entity adopts the Plan in accordance with Section 12.03(a), or if any persons become Employees of an Employer as the result of merger or consolidation or as the result of acquisition of all or part of the assets or business of another company, the Company shall determine to what extent, if any, previous service with the subsidiary or associated company shall be recognized under the Plan, but subject to the continued qualification of the trust for the Plan as tax-exempt under the Code.
|
(c)
|
A participating Employer may withdraw its participation in the Plan upon appropriate action by it. In addition, an Employer will cease to participate in the Plan from and after the date it ceases to be an Affiliated Employer. In either event, the assets of the Plan held on account of Participants in the employ of that Employer, and any unpaid Aggregate Accounts of all Participants who have separated from the employ of that Employer, shall be determined by the Committee. Subject to the provisions
|
12.04
|
Termination of Plan
|
12.05
|
Distribution of Assets on Plan Termination or a Complete Discontinuance of Contributions
|
(a)
|
Subject to the provisions of Section 8.04, in case of termination of the Plan or a complete discontinuance of contributions under the Plan, the rights of Participants to the benefits accrued under the Plan to date of termination or discontinuance of contributions shall remain fully vested and nonforfeitable.
|
(b)
|
After providing for payment of any expenses properly chargeable against the Trust Fund, the Committee may direct the Trustee to distribute assets remaining in the Trust Fund. Distributions to Participants or Beneficiaries may be in cash or in kind and are not subject to the regular distribution provisions of this Plan except that distributions must be in a form that the Committee deems consistent with statutory requirements. Except as specifically provided otherwise by law, the Committee’s determination is conclusive on all persons.
|
(c)
|
In the event of a partial termination of the Plan, the provisions of this Section shall be applicable to the Participants affected by the partial termination.
|
12.06
|
Notification of Termination
|
13.01
|
Priority Over Other Plan Provisions
|
13.02
|
Definitions Used in this Article
|
(a)
|
“
Defined Benefit Plan
” means a qualified plan other than a Defined Contribution Plan.
|
(b)
|
“
Defined Contribution Plan
” means the tax-qualified plan described in Code Section 414(i).
|
(c)
|
“
Determination Date
” means, for the first Plan Year of the Plan, the last day of the Plan Year and, for any subsequent Plan Year, the last day of the preceding Plan Year.
|
(d)
|
“
Includable Compensation
” means Statutory Compensation limited each year by the Maximum Compensation Limitation.
|
(e)
|
“
Key Employee
” means any Employee or former Employee (including any deceased Employee) who at any time during the Plan Year that includes the Determination Date was an officer of the Employer or an Affiliated Employer having annual Includible Compensation greater than $130,000 (as adjusted under Code Section
|
(f)
|
“
Minimum Allocation
” means the allocation described in the first sentence of Section 13.03(a).
|
(g)
|
“
Permissive Aggregation Group
” means the Required Aggregation Group of qualified plans plus any other qualified plan or qualified plans of an Employer or an Affiliated Employer that when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of Code Sections 401(a)(4) and 410 (including simplified employee pension plans).
|
(h)
|
“
Present Value
” means present value based only on the interest and mortality rates specified in a Defined Benefit Plan.
|
(i)
|
“
Required Aggregation Group
” means each qualified plan of an Employer or an Affiliated Employer in which at least one key employee participates (regardless of whether the plan has terminated), and any other qualified plan of the Employer or an Affiliated Employer that enables such plan to meet the requirements of Code Sections 401(a)(4) or 410(b).
|
(j)
|
“
Top-Heavy Plan
” means the Plan for any Plan Year in which any of the following conditions exists: (i) the Top-Heavy Ratio for the Plan exceeds 60% and the Plan is not a part of any Required Aggregation Group or Permissive Aggregation Group of qualified plans; (ii) the Plan is a part of a Required Aggregation Group but not part of a Permissive Aggregation Group of qualified plans and the Top-Heavy Ratio for the Required Aggregation Group exceeds 60%; or (iii) the Plan is a part of a Required
|
(k)
|
“
Top-Heavy Ratio
” means a fraction, the numerator of which is the sum of the Present Value of accrued benefits and the account balances (as required by Code Section 416)) of all Key Employees with respect to such qualified plans as of the Determination Date and the denominator of which is the sum of the Present Value of the accrued benefits and the Account balances of all Employees with respect to such qualified plans as of the Determination Date. The value of account balances and the Present Value of accrued benefits will be determined as of the most recent Top-Heavy Valuation Date that falls within or ends with the 12-month period ending on the Determination Date, except as provided in Code Section 416 for the first and second Plan Years of a Defined Benefit Plan. The account balances and accrued benefits of a Participant who is not a Key Employee but who was a Key Employee in a prior year will be disregarded. The calculation of the Top-Heavy Ratio, and the extent to which distributions, rollovers, transfers, and contributions unpaid as of the Determination Date are taken into account, will be made in accordance with Code Section 416. Employee contributions described in Code Section 219(e)(2) will not be taken into account for purposes of computing the Top-Heavy Ratio. When aggregating plans, the value of account balances and accrued benefits will be calculated with reference to the Determination Dates that fall within the same calendar year. The accrued benefit of any Employee other than a Key Employee will be determined under the method, if any, that uniformly applies for accrual purposes under all qualified plans maintained by an Employer or an Affiliated Employer and included in a Required Aggregation Group or a Permissive Aggregation Group or, if there is no such method, as if the benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional accrual rate of Code Section 411(b)(1)(C). In addition:
|
(i)
|
The Present Values of accrued benefits and the amounts of account balances of an Employee as of the Determination Date shall be increased by the
|
(ii)
|
The accrued benefits and accounts of any individual who has not performed services for the Employer or an Affiliated Employer during the one-year period ending on the Determination Date shall not be taken into account.
|
(l)
|
“
Top-Heavy Valuation Date
” means the last day of each Plan Year.
|
13.03
|
Minimum Allocation
|
(a)
|
For any Plan Year in which the Plan is a Top-Heavy Plan, each Participant who is not a Key Employee will receive an allocation of Employer contributions of not less than the lesser of 3% of his Includable Compensation for such Plan Year or the percentage of Includable Compensation that equals the largest percentage of participating Employer contributions (including Tax-Deferred Contributions) and forfeitures allocated to a Key Employee. The Minimum Allocation is determined without regard to any Social Security contribution. Tax-Deferred or Roth Contributions made on behalf of Participants who are not Key Employees will not be treated as Employer contributions for purposes of the Minimum Allocation. Matching and Automatic Contributions shall be taken into account for purposes of satisfying the Minimum Allocation under the Plan or under such other plan that satisfies the minimum contribution requirement of Code Section 416(c)(2) with respect to such Participant. Matching Contributions that are used to satisfy the
|
(b)
|
No Minimum Allocation will be provided pursuant to subsection (a) to a Participant who is not employed by an Employer or an Affiliated Employer on the last day of the Plan Year.
|
(c)
|
If an Employer or an Affiliated Employer maintains one or more other Defined Contribution Plans covering Employees who are Participants in this Plan, the Minimum Allocation will be provided under this Plan, unless such other Defined Contribution Plans make explicit reference to this Plan and provide that the Minimum Allocation will not be provided under this Plan, in which case the provisions of subsection (a) will not apply to any Participant covered under such other Defined Contribution Plans. If an Employer or an Affiliated Employer maintains one or more Defined Benefit Plans covering Employees who are Participants in this Plan and such Defined Benefit Plans provide that Employees who are Participants therein will accrue the minimum benefit applicable to top-heavy Defined Benefit Plans notwithstanding their participation in this Plan, then the provisions of subsection (a) will not apply to any Participant covered under such Defined Benefit Plans. If an Employer or an Affiliated Employer maintains one or more Defined Benefit Plans covering Employees who are Participants in this Plan, and the provisions of the preceding sentence do not apply, then each Participant who is not a Key Employee and who is covered by such Defined Benefit Plans will receive a Minimum Allocation determined by applying the provisions of subsection (a) with the substitution of “5%” in each place that “3%” occurs therein.
|
(d)
|
The Participant’s Minimum Allocation shall be fully vested and nonforfeitable.
|
14.01
|
Definitions Used in This Article
|
(a)
|
“Actual Deferral Percentage”
means, with respect to a specified group of Employees, the average of the ratios, calculated separately for each Employee in that group, of (a) the amount of aggregate Tax‑Deferred Contributions made pursuant to Section 3.01 and Roth Contributions made pursuant to Section 3.08 for a Plan Year to (b) the Employee’s Statutory Compensation for that entire Plan Year capped by the Maximum Compensation Limitation, provided that, on the direction of the Committee, Statutory Compensation for a Plan Year shall be counted only if received during the period an Employee is, or is eligible to become, a Participant. The Actual Deferral Percentage for each group and the ratio determined for each Employee in the group shall be calculated to the nearest one one‑hundredth of one (1) percent. For purposes of determining the Actual Deferral Percentage for a Plan Year, Tax‑Deferred or Roth Contributions may be taken into account for a Plan Year only if they:
|
(i)
|
relate to Compensation that either (A) would have been received by the Employee in the Plan Year but for the deferral election or (B) are attributable to services performed by the Employee in the Plan Year and would have been received by the Employee within 2-½ months after the close of the Plan Year but for the deferral election (but only if such contributions are allocated to such Plan Year instead of the Plan Year in which the Compensation would have been paid);
|
(ii)
|
are allocated to the Employee as of a date within that Plan Year and the allocation is not contingent on Plan participation or performance of service after such date;
|
(iii)
|
are actually paid to the Trustee no later than twelve (12) months after the end of the Plan Year;
|
(iv)
|
are not catch-up contributions described in Section 3.07 for the Plan Year;
|
(v)
|
are not returned to a Nonhighly Compensated Employee for the Plan Year pursuant to Section 14.07(a);
|
(vi)
|
are not taken into account for purposes of determining the Contribution Percentage described in Section 14.01(b) for the Plan Year; and
|
(vii)
|
are not additional elective contributions made pursuant to Section 2.04(e).
|
(b)
|
“Contribution Percentage”
means, with respect to a specified group of Employees, the average of the ratios, calculated separately for each Employee in that group, of (a) the sum of the Employee’s Matching Contribution for that Plan Year to (b) his Statutory Compensation for that entire Plan Year capped by the Maximum Compensation Limitation, provided that, on the direction of the Committee, Statutory Compensation for a Plan Year shall be counted only if received during the period an Employee is, or is eligible to become, a Participant. The Contribution Percentage for each group and the ratio determined for each Employee in the group shall be calculated to the nearest one one‑hundredth of one (1) percent. For purposes of determining the Contribution Percentage for a Plan Year, Matching Contributions may be taken into account for a Plan Year only if they:
|
(i)
|
are allocated to the Employee as of a date within the Plan Year and on the basis of the Employee’s Tax-Deferred or Roth Contributions for the Plan Year;
|
(ii)
|
are actually paid to the Trustee no later than twelve (12) months after the end of the Plan Year;
|
(iii)
|
are not taken into account for purposes of determining the Actual Deferral Percentage described in Section 14.01(a) for the Plan Year;
|
(iv)
|
are not forfeited under the provisions of Section 14.02 or 14.07 for the Plan Year;
|
(v)
|
are not made pursuant to Section 2.04(e); and
|
(vi)
|
are not disproportionate matching contributions with respect to Nonhighly Compensated Employees for the Plan Year, as described in Treas. Reg. § 1.401(m)-2(a)(5)(ii).
|
(c)
|
“Earnings”
means the amount of income to be returned with any excess deferrals, excess contributions, or excess aggregate contributions under Section 14.02, 14.03, or 14.07. Earnings on excess deferrals and excess contributions shall be determined by multiplying the income earned on the Tax-Deferred and Roth Accounts for the Plan Year by a fraction, the numerator of which is the excess deferrals or excess contributions, as the case may be, for the Plan Year and the denominator of which is the sum of the Tax-Deferred Account and Roth Account balances at the end of the Plan Year, disregarding any income or loss occurring during the Plan Year. Earnings on excess aggregate contributions shall be determined in a similar manner by substituting the Matching Account for the Tax-Deferred and Roth Accounts, and the excess aggregate contributions for the excess deferrals and excess contributions in the preceding sentence.
|
(d)
|
“Nonhighly Compensated Employee”
means for any Plan Year an Employee of the Employer or an Affiliated Employer who is not a Highly Compensated Employee for that Plan Year.
|
14.02
|
Actual Deferral Percentage Test
|
(a)
|
The actual deferral ratio of the Highly Compensated Employee with the highest actual deferral ratio shall be reduced to the extent necessary to meet the actual deferral percentage test or to cause such ratio to equal the actual deferral ratio of the Highly Compensated Employee with the next‑highest ratio. This process will be repeated until the actual deferral percentage test is passed. Each ratio shall be rounded to the nearest one one‑hundredth of one (1) percent of the Participant’s Statutory Compensation capped by the Maximum Compensation Limitation. The amount of Tax‑Deferred and Roth Contributions made by each Highly Compensated Employee in excess of the amount permitted under
his revised deferral ratio shall be added together. This total dollar amount of excess contributions (“excess contributions”) shall then be allocated to some or all Highly Compensated Employees in accordance with the provisions of subsection (b) below.
|
(b)
|
The aggregate Tax-Deferred and Roth Contributions of the Highly Compensated Employee with the highest dollar amount of aggregate Tax-Deferred and Roth
|
(c)
|
The excess contributions, together with earnings thereon, allocated to a Participant shall be paid to the Participant before the close of the Plan Year following the Plan Year in which the excess contributions were made, and to the extent practicable, within 2½ months of the close of the Plan Year in which the excess contributions were made. However, any excess contributions for any Plan Year shall be reduced by any Tax-Deferred or Roth Contributions previously returned to the Participant under Section 14.07 for that Plan Year. In the event any Tax-Deferred or Roth Contributions returned under this Section were matched by Matching Contributions, such corresponding Matching Contributions, with earnings thereon, shall be forfeited and used to reduce Employer contributions.
|
(d)
|
In the event any Matching Contributions subject to forfeiture under this Section have been distributed to the Participant, the Employer shall make reasonable efforts to recover the contributions from the Participant.
|
(e)
|
The provisions of this Section 14.02 shall be interpreted and applied in accordance with Section 401(k)(3) of the Code and the Treasury Regulations and other guidance issued thereunder.
|
14.03
|
Contribution Percentage Test
|
(a)
|
The actual contribution ratio of the Highly Compensated Employee with the highest actual contribution ratio shall be reduced to the extent necessary to meet the test or to cause such ratio to equal the actual contribution ratio of the Highly Compensated Employee with the next‑highest actual contribution ratio. This process will be repeated until the actual contribution percentage test is passed. Each ratio shall be rounded to the nearest one one‑hundredth of one (1) percent of a Participant’s Statutory Compensation capped by the Maximum Compensation Limitation. The amount of Matching Contributions made by or on behalf of each Highly Compensated Employee in excess of the amount permitted under
his revised actual contribution ratio shall be added together. This total dollar amount of excess contributions (“excess aggregate contributions”) shall then be allocated to some or
|
(b)
|
The Matching Contributions of the Highly Compensated Employee with the highest dollar amount of such contributions shall be reduced by the lesser of (i) the amount required to cause that Employee’s Matching Contributions to equal the dollar amount of such contributions of the Highly Compensated Employee with the next‑highest dollar amount of such contributions, or (ii) an amount equal to the total excess aggregate contributions. This procedure is repeated until all excess aggregate contributions are allocated. The amount of excess aggregate contributions allocated to each Highly Compensated Employee, together with earnings thereon, shall be distributed or forfeited in accordance with the provisions of subsection (c) below.
|
(c)
|
If excess aggregate contributions are allocated to a Highly Compensated Employee under subsection (b) above, so much of the Matching Contributions, together with earnings, as shall be necessary to equal the balance of the excess aggregate contributions shall be forfeited and applied to reduce Employer contributions.
|
(d)
|
Any repayment or forfeiture of excess aggregate contributions shall be made before the close of the Plan Year following the Plan Year for which the excess aggregate contributions were made and, to the extent practicable, any repayment or forfeiture shall be made within 2½ months of the close of the Plan Year in which the excess aggregate contributions were made. In the event any Matching Contributions subject to forfeiture have been distributed to the Participant, the Employer shall make reasonable efforts to recover the contributions from the Participant.
|
(e)
|
The provisions of this Section 14.03 shall be interpreted and applied in accordance with Section 401(m)(2) of the Code and the Treasury Regulations and other guidance issued thereunder.
|
14.04
|
Additional Discrimination Testing Provisions
|
(a)
|
If any Highly Compensated Employee is a participant of another qualified plan of the Employer or an Affiliated Employer, other than any qualified plan that is not permitted to be aggregated with the Plan under Sections 401(k) and 401(m) of the Code and Treasury Regulations issued thereunder (determined without regard to the prohibition on aggregation of plans with different plan years or with different testing methods), under which tax‑deferred or Roth contributions or matching contributions are made on behalf of the Highly Compensated Employee or under which the Highly Compensated Employee makes after-tax contributions, the Committee shall implement rules, which shall be uniformly applicable to all employees similarly situated, to take into account all such contributions for the Highly Compensated Employee under all such plans in applying the limitations of Sections 14.02 and 14.03. If any other such qualified plan has a plan year other than the Plan Year defined in Section 1.39, the contributions to be taken into account shall be the contributions that would be taken into account for the Plan Year if the plan under which the contributions were made had the same Plan Year as the Plan.
|
(b)
|
In the event that this Plan is aggregated with one or more other plans to satisfy the requirements of Sections 401(a)(4) and 410(b) of the Code (other than for purposes of the average benefit percentage test) or if one or more other plans is aggregated with this Plan to satisfy the requirements of such sections of the Code, then the provisions of Sections 14.02 and 14.03 shall be applied by determining the Actual Deferral Percentage and Contribution Percentage of employees as if all such plans were a single plan. If this Plan is permissively aggregated with any other plan or plans for purposes of satisfying the provisions of Section 401(k)(3) of the Code, the aggregated plans also must satisfy the provisions of Sections 401(a)(4) and 410(b) of the Code as though they were a single plan. Plans may be aggregated under this subsection (b) only if they have the same plan year and only if they apply consistent testing methods with respect to Code Sections 401(k) and 401(m).
|
(c)
|
The Employer may elect to use Tax‑Deferred or Roth Contributions to pass the tests described in Section 14.03, provided that the test described in Section 14.02 is passed prior to such election and continues to be passed following the Employer’s election to shift the application of those Tax‑Deferred or Roth Contributions from Section 14.02 to Section 14.03.
|
(d)
|
The Employer may elect to use Special Contributions to pass the tests described in Section 14.02 or 14.03 as set forth in Section 3.03(b).
|
(e)
|
Notwithstanding any provision of the Plan to the contrary, if Employees included in a unit of Employees covered by a collective bargaining agreement are participating in the Plan and not more than two (2) percent of such Employees are Highly Compensated Employees and professionals, then such Employees shall be disregarded in applying the provisions of Sections 14.02 and 14.03. However, a separate actual deferral percentage test must be performed for the group of collective bargaining Employees on the basis that those Employees are included in a separate cash-or-deferred arrangement.
|
(f)
|
If the Employer elects to apply the provisions of Section 410(b)(4)(B) to satisfy the requirements of Section 401(k)(3)(A)(i) of the Code, the Employer may apply the provisions of Sections 14.02 and 14.03:
|
i.
|
by excluding from consideration all eligible Employees (other than Highly Compensated Employees) for the applicable year who have not met the minimum age and service requirements of Section 410(a)(1)(A) of the Code; or
|
ii.
|
by performing separate tests for the applicable year for all eligible Employees who have met such minimum age and service requirements and for all eligible Employees who have not met such minimum age and service requirements.
|
14.05
|
Maximum Annual Additions
|
(a)
|
Except as permitted under Section 2.04 or 3.07, the annual addition to a Participant’s Accounts for any Plan Year, which shall be considered the “limitation year” for purposes of Section 415 of the Code, when added to the Participant’s annual addition for that Plan Year under any other qualified defined contribution plan of the Employer or an Affiliated Employer, shall not exceed an amount that is equal to the lesser of (i) one hundred (100) percent of
his aggregate remuneration (as defined below) for that Plan Year or (ii) $53,000 as of the Effective Date, adjusted thereafter pursuant to Section 415(d) of the Code.
|
(b)
|
For purposes of this Section, the “annual addition” to a Participant’s Accounts under this Plan or any other qualified defined contribution plan (including a deemed qualified defined contribution plan under a qualified defined benefit plan) maintained by the Employer or an Affiliated Employer shall be the sum of:
|
i.
|
the total contributions, including Tax‑Deferred Contributions and Roth Contributions, made on the Participant’s behalf by the Employer and all Affiliated Employers;
|
ii.
|
all Participant contributions, exclusive of any Rollover Contributions;
|
iii.
|
forfeitures, if applicable, that have been allocated to the Participant’s Accounts under this Plan or
his accounts under any other such qualified defined contribution plan; and
|
iv.
|
solely for purposes of clause (ii) of subsection (a), above, amounts described in Sections 415(1)(1) and 419A(d)(2) allocated to the Participant.
|
(c)
|
For purposes of this Section, the term “remuneration” with respect to any Participant means his Statutory Compensation not exceeding the Maximum Compensation Limitation.
|
(d)
|
If a Participant’s annual addition under the Plan for a limitation year or, if the Participant is participating in another qualified defined contribution plan of the Employer or an Affiliated Employer during a particular limitation year, the Participant’s combined annual addition under the Plan and such other plan for such limitation year, prior to the application of the limitation set forth in subsection (a) above, would exceed that limitation, the Committee shall adjust the Participant’s annual additions under the Plan and such other plan (as applicable) by reducing contributions before they are allocated, in the following order of priority:
|
i.
|
First, the Participant’s unmatched Tax-Deferred Contributions under Section 3.01 or similar contributions under the other plan shall be reduced to the extent necessary.
|
ii.
|
Second, the Participant’s unmatched Roth Contributions under Section 3.08 or similar contributions under the other plan shall be reduced to the extent necessary.
|
iii.
|
Third, the Participant’s matched Tax-Deferred Contributions and corresponding Matching Contributions under the Plan or similar contributions under the other plan shall be reduced to the extent necessary.
|
iv.
|
Fourth, the Participant’s matched Roth Contributions and corresponding Matching Contributions under the Plan or similar contributions under the other plan shall be reduced to the extent necessary.
|
v.
|
Fifth, the Participant’s Automatic Contributions under the Plan or similar contributions under the other plan shall be reduced to the extent necessary.
|
14.06
|
Return of Contributions
|
(a)
|
If all or part of the Employer’s deductions for contributions to the Plan are disallowed by the Internal Revenue Service, the portion of the contributions to which that disallowance applies shall be returned to the Employer without interest but reduced by any investment loss attributable to those contributions, provided that the portion is returned within one year after the disallowance of the deduction. For this purpose, all contributions made by the Employer are expressly declared to be conditioned on their deductibility under Section 404 of the Code.
|
(b)
|
The Employer may recover, without interest, the amount of its contributions to the Plan made on account of a mistake of fact, reduced by any investment loss attributable to those contributions, if recovery is made within one (1) year after the date of those contributions.
|
(c)
|
In the event that Tax‑Deferred or Roth Contributions are returned to the Employer in accordance with the provisions of this Section, the elections to reduce Compensation that were made by Participants on whose behalf those contributions were made shall be void retroactive to the beginning of the period for which those contributions were made. The Tax‑Deferred or Roth Contributions so returned shall be distributed in cash to those Participants for whom those contributions were made, provided, however, that if the contributions are returned under the provisions of subsection (a) above, the amount of Tax‑Deferred or Roth Contributions to be
|
14.07
|
Contributions in Excess of Section 402(g) Limit
|
(a)
|
Except as permitted under Section 2.04 or 3.07, in no event shall the Participant’s aggregate Tax-Deferred Contributions, Roth Contributions and similar contributions made on his behalf by the Employer or an Affiliated Employer to all plans, contracts, or arrangements subject to the provisions of Code Section 401(a)(30) in any calendar year exceed the Section 402(g) Limit in effect for such calendar year. If a Participant’s aggregate Tax‑Deferred Contributions and Roth Contributions in a calendar year reach that dollar limit,
his election of Tax‑Deferred Contributions or Roth Contributions for the remainder of the calendar year will be canceled. As of the first pay period of the calendar year following such cancellation, the Participant’s election of Tax‑Deferred Contributions or Roth Contributions shall again become effective in accordance with
his previous election, unless the Participant elects otherwise.
|
(b)
|
If a Participant makes tax-deferred or Roth contributions under another qualified defined contribution plan maintained by an employer other than the Employer or an Affiliated Employer for any calendar year and those contributions when added to
his Tax‑Deferred Contributions or Roth Contributions exceed the dollar limit under this Section 14.07 for that calendar year, the Participant may allocate all or a portion of such excess deferrals to this Plan. In that event, Tax-Deferred Contributions will be returned first and, to the extent that the excess deferrals are more than the Participant’s Tax-Deferred Contributions for the year, then Roth Contributions equal to the remainder of the excess deferrals will be returned. Such excess deferrals, together with earnings, shall be returned to the Participant no later than the April 15 following the end of the calendar year in which such excess deferrals were made. However, the Plan shall not be required to return excess deferrals unless the Participant notifies the Committee, in writing, by March 1 of that following calendar year of the amount of the excess deferrals allocated to this Plan. The amount of any such excess deferrals to be returned for any calendar year shall be reduced by any Tax‑Deferred or Roth Contributions previously returned to the Participant under Section 14.02 for that calendar year. In the event any Tax‑Deferred or Roth Contributions returned under this Section 14.07 were matched by Matching Contributions under Section 3.02, those Matching Contributions, together with earnings, shall be forfeited and used to reduce Employer contributions. In the event those Matching Contributions subject to forfeiture have been distributed to the Participant, the Employer shall make reasonable efforts to recover the contributions from the Participant.
|
15.01
|
No Contract of Employment
|
(a)
|
to give any person the right to be retained in the service of an Employer; or
|
(b)
|
to interfere with the right of any Employer to discharge any person at any time without regard to the effect that such discharge shall have on his rights or potential rights, if any, under the Plan.
|
(c)
|
preclude any person from being or continuing to be an “at will” employee.
|
15.02
|
Severability
|
15.03
|
Scrivener’s Errors
|
1.
|
On October 25, 2001, the Company acquired ABC Family, Inc. (formerly Fox Family, Inc.). ABC Family, Inc. became a participating Employer on April 28, 2002. Notwithstanding any contrary provision of the Plan, the Employment Commencement Date for any Employee of ABC Family, Inc. assigned to a Disney business unit shall be the first date as of which he would have been credited with an Hour of Service for ABC Family, Inc. if ABC Family, Inc. had been an Employer or Affiliated Employer on such date; provided, however, that no Employee of ABC Family, Inc. shall become a Participant before April 28, 2002.
|
2.
|
On October 24, 2001, the Company acquired Baby Einstein Company. Baby Einstein Company became a participating Employer on April 1, 2002. Notwithstanding any contrary provision of the Plan, the Employment Commencement Date for any Employee of Baby Einstein Company shall be the first date as of which he would have been credited with an Hour of Service for Baby Einstein Company if Baby Einstein Company had been an Employer or Affiliated Employer on such date; provided, however, that no Employee of Baby Einstein Company shall become a Participant before April 1, 2002.
|
3.
|
On May 11, 2005, the Company acquired the assets of Avalanche Software, LC. Notwithstanding any contrary provision of the Plan, the Employment Commencement Date for any Employee whose employment with an Employer immediately followed employment with Avalanche Software, LC shall be the first date as of which he would have been credited with an Hour of Service for Avalanche Software, LC if Avalanche Software, LC had been an Employer or Affiliated Employer on such date; provided, however, that no prior employee of Avalanche Software, LC shall become a Participant before May 11, 2005.
|
•
|
Hong Kong International Theme Parks Limited
|
•
|
Hong Kong Disneyland Management Limited
|
•
|
Euro Disney SCA
|
•
|
Euro Disney Associates SCA
|
•
|
ED Spectacles SARL
|
•
|
Setemo Imagineering SARL
|
•
|
Euro Disney SAS
|
•
|
Euro Disneyland Imagineering SARL
|
•
|
Shanghai International Theme Park and Resort Management Company Limited
|
•
|
Shanghai International Theme Park Company Limited
|
•
|
Shanghai International Theme Park Associated Facilities Company Limited
|
•
|
Disney International Employment Services Inc.
|
1.
|
Section 2.02 of the Plan is hereby amended in its entirety to read as follows:
|
2.02
|
Participation
|
2.
|
The following new paragraphs (iv) and (v) are hereby added at the end of Section 3.01(b) of the Plan:
|
3.
|
The first paragraph of Section 3.01(c) of the Plan is hereby amended in its entirety to read as follows:
|
(1)
|
The portion of operating rental expense which management believes is representative of the interest component of rent expense.
|
(2)
|
The ratio does not adjust for interest on unrecognized tax benefits that are recorded as a component of income tax expense.
|
Name of Subsidiary
|
|
Country of Incorporation
|
ABC Cable Networks Group
|
|
United States
|
ABC Family Worldwide, Inc.
|
|
United States
|
ABC Holding Company Inc.
|
|
United States
|
ABC, Inc.
|
|
United States
|
American Broadcasting Companies, Inc.
|
|
United States
|
BAMTech, LLC
|
|
United States
|
Buena Vista Home Entertainment, Inc.
|
|
United States
|
Buena Vista International, Inc.
|
|
United States
|
Buena Vista Pay Television, Inc.
|
|
United States
|
Buena Vista Television, LLC
|
|
United States
|
Buena Vista Theatrical Group Ltd.
|
|
United States
|
Buena Vista Video On Demand
|
|
United States
|
Cable LT Holdings, Inc.
|
|
United States
|
Disney Destinations, LLC
|
|
United States
|
Disney Enterprises, Inc.
|
|
United States
|
Disney FTC Services (Singapore) Pte. Ltd.
|
|
Singapore
|
Disney Online
|
|
United States
|
Disney Vacation Club Management Corp.
|
|
United States
|
Disney Vacation Development, Inc.
|
|
United States
|
Disney Worldwide Services, Inc.
|
|
United States
|
Disney/ABC International Television, Inc.
|
|
United States
|
ESPN Classics, Inc.
|
|
United States
|
ESPN Enterprises, Inc.
|
|
United States
|
ESPN, Inc.
|
|
United States
|
ESPN Productions, Inc.
|
|
United States
|
Euro Disney Associes S.C.A
|
|
France
|
Hong Kong Disneyland Management Limited
|
|
Hong Kong
|
Imprint, Inc.
|
|
United States
|
International Family Entertainment, Inc.
|
|
United States
|
LFL Productions Limited
|
|
United States
|
Lucasfilm Entertainment Company Ltd. LLC
|
|
United States
|
Lucasfilm Ltd. LLC
|
|
United States
|
Magical Cruise Company, Limited
|
|
United Kingdom
|
Maker Studios, Inc.
|
|
United States
|
Marvel Characters B.V.
|
|
Netherlands
|
Marvel Entertainment, LLC
|
|
United States
|
Marvel Studios LLC
|
|
United States
|
MVL Film Finance LLC
|
|
United States
|
MVL International C.V.
|
|
Netherlands
|
Pixar
|
|
United States
|
Shanghai International Theme Park Associated Facilities Limited
|
|
China
|
Shanghai International Theme Park Company Limited
|
|
China
|
The Walt Disney Company (China) Limited
|
|
China
|
The Walt Disney Company Limited
|
|
United Kingdom
|
Touchstone Television Productions, LLC
|
|
United States
|
UTV Software Communications Limited
|
|
India
|
Walt Disney Parks & Resorts U.S., Inc.
|
|
United States
|
Walt Disney Pictures
|
|
United States
|
Walt Disney Pictures Productions, LLC
|
|
United States
|
Walt Disney Travel Co., Inc.
|
|
United States
|
WD Holdings (Shanghai), LLC
|
|
United States
|
Wedco Global Ventures Three LP
|
|
United Kingdom
|
Wedco International Holdings, Inc.
|
|
United States
|
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of the Company;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 22, 2017
|
|
By:
|
|
/s/ ROBERT A. IGER
|
|
|
|
|
|
Robert A. Iger
|
|
|
|
|
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of the Company;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 22, 2017
|
|
By:
|
|
/s/ CHRISTINE M. MCCARTHY
|
|
|
|
|
|
Christine M. McCarthy
|
|
|
|
|
|
Senior Executive Vice President
and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
|
|
|
By:
|
|
/s/ ROBERT A. IGER
|
|
|
Robert A. Iger
|
|
|
Chairman and Chief Executive Officer
|
|
|
November 22, 2017
|
*
|
A signed original of this written statement required by Section 906 has been provided to The Walt Disney Company and will be retained by The Walt Disney Company and furnished to the Securities and Exchange Commission or its staff upon request.
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
|
|
|
By:
|
|
/s/ CHRISTINE M. MCCARTHY
|
|
|
Christine M. McCarthy
|
|
|
Senior Executive Vice President
and Chief Financial Officer
|
|
|
November 22, 2017
|
*
|
A signed original of this written statement required by Section 906 has been provided to The Walt Disney Company and will be retained by The Walt Disney Company and furnished to the Securities and Exchange Commission or its staff upon request.
|