For the Quarterly Period Ended
|
|
Commission File Number 1-11605
|
December 30, 2017
|
|
|
|
|
|
|
|
Incorporated in Delaware
|
|
I.R.S. Employer Identification
|
|
|
No. 95-4545390
|
|
Large accelerated filer
|
|
x
|
|
Accelerated filer
|
|
¨
|
|
|
|
|
|
||
Non-accelerated filer
(Do not check if smaller reporting company)
|
|
¨
|
|
Smaller reporting company
|
|
¨
|
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company
|
|
¨
|
|
Quarter Ended
|
||||||
|
December 30,
2017 |
|
December 31,
2016 |
||||
Revenues:
|
|
|
|
||||
Services
|
$
|
12,984
|
|
|
$
|
12,406
|
|
Products
|
2,367
|
|
|
2,378
|
|
||
Total revenues
|
15,351
|
|
|
14,784
|
|
||
Costs and expenses:
|
|
|
|
||||
Cost of services (exclusive of depreciation and amortization)
|
(7,334
|
)
|
|
(7,020
|
)
|
||
Cost of products (exclusive of depreciation and amortization)
|
(1,403
|
)
|
|
(1,386
|
)
|
||
Selling, general, administrative and other
|
(2,079
|
)
|
|
(1,985
|
)
|
||
Depreciation and amortization
|
(742
|
)
|
|
(687
|
)
|
||
Total costs and expenses
|
(11,558
|
)
|
|
(11,078
|
)
|
||
Restructuring and impairment charges
|
(15
|
)
|
|
—
|
|
||
Other income, net
|
53
|
|
|
—
|
|
||
Interest expense, net
|
(129
|
)
|
|
(99
|
)
|
||
Equity in the income of investees
|
43
|
|
|
118
|
|
||
Income before income taxes
|
3,745
|
|
|
3,725
|
|
||
Income taxes
|
728
|
|
|
(1,237
|
)
|
||
Net income
|
4,473
|
|
|
2,488
|
|
||
Less: Net income attributable to noncontrolling interests
|
(50
|
)
|
|
(9
|
)
|
||
Net income attributable to The Walt Disney Company (Disney)
|
$
|
4,423
|
|
|
$
|
2,479
|
|
|
|
|
|
||||
Earnings per share attributable to Disney:
|
|
|
|
||||
Diluted
|
$
|
2.91
|
|
|
$
|
1.55
|
|
|
|
|
|
||||
Basic
|
$
|
2.93
|
|
|
$
|
1.56
|
|
|
|
|
|
||||
Weighted average number of common and common equivalent shares outstanding:
|
|
|
|
||||
Diluted
|
1,521
|
|
|
1,603
|
|
||
|
|
|
|
||||
Basic
|
1,512
|
|
|
1,592
|
|
||
|
|
|
|
||||
Dividends declared per share
|
$
|
0.84
|
|
|
$
|
0.78
|
|
|
Quarter Ended
|
||||||
|
December 30,
2017 |
|
December 31,
2016 |
||||
Net income
|
$
|
4,473
|
|
|
$
|
2,488
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
||||
Market value adjustments for investments
|
(1
|
)
|
|
(11
|
)
|
||
Market value adjustments for hedges
|
18
|
|
|
280
|
|
||
Pension and postretirement medical plan adjustments
|
61
|
|
|
46
|
|
||
Foreign currency translation and other
|
87
|
|
|
(290
|
)
|
||
Other comprehensive income
|
165
|
|
|
25
|
|
||
Comprehensive income
|
4,638
|
|
|
2,513
|
|
||
Net income attributable to noncontrolling interests, including redeemable noncontrolling interests
|
(50
|
)
|
|
(9
|
)
|
||
Other comprehensive (income)/loss attributable to noncontrolling interests
|
(41
|
)
|
|
99
|
|
||
Comprehensive income attributable to Disney
|
$
|
4,547
|
|
|
$
|
2,603
|
|
|
December 30,
2017 |
|
September 30,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4,677
|
|
|
$
|
4,017
|
|
Receivables
|
9,886
|
|
|
8,633
|
|
||
Inventories
|
1,307
|
|
|
1,373
|
|
||
Television costs and advances
|
846
|
|
|
1,278
|
|
||
Other current assets
|
558
|
|
|
588
|
|
||
Total current assets
|
17,274
|
|
|
15,889
|
|
||
Film and television costs
|
7,937
|
|
|
7,481
|
|
||
Investments
|
3,206
|
|
|
3,202
|
|
||
Parks, resorts and other property
|
|
|
|
||||
Attractions, buildings and equipment
|
54,617
|
|
|
54,043
|
|
||
Accumulated depreciation
|
(29,647
|
)
|
|
(29,037
|
)
|
||
|
24,970
|
|
|
25,006
|
|
||
Projects in progress
|
2,355
|
|
|
2,145
|
|
||
Land
|
1,259
|
|
|
1,255
|
|
||
|
28,584
|
|
|
28,406
|
|
||
Intangible assets, net
|
6,930
|
|
|
6,995
|
|
||
Goodwill
|
31,430
|
|
|
31,426
|
|
||
Other assets
|
2,373
|
|
|
2,390
|
|
||
Total assets
|
$
|
97,734
|
|
|
$
|
95,789
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and other accrued liabilities
|
$
|
9,574
|
|
|
$
|
8,855
|
|
Current portion of borrowings
|
6,009
|
|
|
6,172
|
|
||
Deferred revenue and other
|
4,292
|
|
|
4,568
|
|
||
Total current liabilities
|
19,875
|
|
|
19,595
|
|
||
Borrowings
|
20,082
|
|
|
19,119
|
|
||
Deferred income taxes
|
2,826
|
|
|
4,480
|
|
||
Other long-term liabilities
|
6,726
|
|
|
6,443
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
|
|
||
Redeemable noncontrolling interests
|
1,142
|
|
|
1,148
|
|
||
Equity
|
|
|
|
||||
Preferred stock, $0.01 par value, Authorized – 100 million shares, Issued – none
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value,
Authorized – 4.6 billion shares, Issued – 2.9 billion shares |
36,254
|
|
|
36,248
|
|
||
Retained earnings
|
75,763
|
|
|
72,606
|
|
||
Accumulated other comprehensive loss
|
(3,404
|
)
|
|
(3,528
|
)
|
||
|
108,613
|
|
|
105,326
|
|
||
Treasury stock, at cost, 1.4 billion shares
|
(65,324
|
)
|
|
(64,011
|
)
|
||
Total Disney Shareholders’ equity
|
43,289
|
|
|
41,315
|
|
||
Noncontrolling interests
|
3,794
|
|
|
3,689
|
|
||
Total equity
|
47,083
|
|
|
45,004
|
|
||
Total liabilities and equity
|
$
|
97,734
|
|
|
$
|
95,789
|
|
|
Quarter Ended
|
||||||
|
December 30,
2017 |
|
December 31,
2016 |
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
4,473
|
|
|
$
|
2,488
|
|
Depreciation and amortization
|
742
|
|
|
687
|
|
||
Deferred income taxes
|
(1,726
|
)
|
|
(76
|
)
|
||
Equity in the income of investees
|
(43
|
)
|
|
(118
|
)
|
||
Cash distributions received from equity investees
|
170
|
|
|
203
|
|
||
Net change in film and television costs and advances
|
34
|
|
|
440
|
|
||
Equity-based compensation
|
94
|
|
|
97
|
|
||
Other
|
139
|
|
|
187
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables
|
(1,378
|
)
|
|
(1,160
|
)
|
||
Inventories
|
65
|
|
|
102
|
|
||
Other assets
|
(29
|
)
|
|
311
|
|
||
Accounts payable and other accrued liabilities
|
(1,160
|
)
|
|
(2,763
|
)
|
||
Income taxes
|
856
|
|
|
1,047
|
|
||
Cash provided by operations
|
2,237
|
|
|
1,445
|
|
||
|
|
|
|
||||
INVESTING ACTIVITIES
|
|
|
|
||||
Investments in parks, resorts and other property
|
(981
|
)
|
|
(1,040
|
)
|
||
Other
|
(62
|
)
|
|
5
|
|
||
Cash used in investing activities
|
(1,043
|
)
|
|
(1,035
|
)
|
||
|
|
|
|
||||
FINANCING ACTIVITIES
|
|
|
|
||||
Commercial paper borrowings, net
|
1,140
|
|
|
732
|
|
||
Borrowings
|
1,025
|
|
|
42
|
|
||
Reduction of borrowings
|
(1,330
|
)
|
|
(194
|
)
|
||
Repurchases of common stock
|
(1,313
|
)
|
|
(1,465
|
)
|
||
Proceeds from exercise of stock options
|
50
|
|
|
65
|
|
||
Other
|
(156
|
)
|
|
(167
|
)
|
||
Cash used in financing activities
|
(584
|
)
|
|
(987
|
)
|
||
|
|
|
|
||||
Impact of exchange rates on cash, cash equivalents and restricted cash
|
21
|
|
|
(112
|
)
|
||
|
|
|
|
||||
Change in cash, cash equivalents and restricted cash
|
631
|
|
|
(689
|
)
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
4,064
|
|
|
4,760
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
4,695
|
|
|
$
|
4,071
|
|
|
Quarter Ended
|
||||||||||||||||||||||
|
December 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Disney
Shareholders
|
|
Non-
controlling
Interests
(1)
|
|
Total
Equity
|
|
Disney
Shareholders
|
|
Non-
controlling
Interests
(1)
|
|
Total
Equity
|
||||||||||||
Beginning balance
|
$
|
41,315
|
|
|
$
|
3,689
|
|
|
$
|
45,004
|
|
|
$
|
43,265
|
|
|
$
|
4,058
|
|
|
$
|
47,323
|
|
Comprehensive income/(loss)
|
4,547
|
|
|
97
|
|
|
4,644
|
|
|
2,603
|
|
|
(90
|
)
|
|
2,513
|
|
||||||
Equity compensation activity
|
6
|
|
|
—
|
|
|
6
|
|
|
48
|
|
|
—
|
|
|
48
|
|
||||||
Dividends
|
(1,266
|
)
|
|
—
|
|
|
(1,266
|
)
|
|
(1,237
|
)
|
|
—
|
|
|
(1,237
|
)
|
||||||
Common stock repurchases
|
(1,313
|
)
|
|
—
|
|
|
(1,313
|
)
|
|
(1,465
|
)
|
|
—
|
|
|
(1,465
|
)
|
||||||
Distributions and other
|
—
|
|
|
8
|
|
|
8
|
|
|
(4
|
)
|
|
(1
|
)
|
|
(5
|
)
|
||||||
Ending balance
|
$
|
43,289
|
|
|
$
|
3,794
|
|
|
$
|
47,083
|
|
|
$
|
43,210
|
|
|
$
|
3,967
|
|
|
$
|
47,177
|
|
(1)
|
Excludes redeemable noncontrolling interest
|
1.
|
Principles of Consolidation
|
2.
|
Cash and Cash Equivalents and Restricted Cash
|
|
|
December 30,
2017 |
|
September 30,
2017 |
||||
Cash and cash equivalents
|
|
$
|
4,677
|
|
|
$
|
4,017
|
|
Restricted cash included in:
|
|
|
|
|
||||
Other current assets
|
|
13
|
|
|
26
|
|
||
Other assets
|
|
5
|
|
|
21
|
|
||
Total cash, cash equivalents and restricted cash in the statement of cash flows
|
|
$
|
4,695
|
|
|
$
|
4,064
|
|
3.
|
Segment Information
|
|
Quarter Ended
|
||||||
|
December 30,
2017 |
|
December 31,
2016 |
||||
Media Networks
|
$
|
50
|
|
|
$
|
119
|
|
Parks and Resorts
|
(7
|
)
|
|
(2
|
)
|
||
Consumer Products & Interactive Media
|
—
|
|
|
1
|
|
||
Equity in the income of investees included in segment operating income
|
$
|
43
|
|
|
$
|
118
|
|
|
Quarter Ended
|
||||||
|
December 30,
2017 |
|
December 31,
2016 |
||||
Revenues
(1)
:
|
|
|
|
||||
Media Networks
|
$
|
6,243
|
|
|
$
|
6,233
|
|
Parks and Resorts
|
5,154
|
|
|
4,555
|
|
||
Studio Entertainment
|
2,504
|
|
|
2,520
|
|
||
Consumer Products & Interactive Media
|
1,450
|
|
|
1,476
|
|
||
|
$
|
15,351
|
|
|
$
|
14,784
|
|
Segment operating income
(1)
:
|
|
|
|
||||
Media Networks
|
$
|
1,193
|
|
|
$
|
1,362
|
|
Parks and Resorts
|
1,347
|
|
|
1,110
|
|
||
Studio Entertainment
|
829
|
|
|
842
|
|
||
Consumer Products & Interactive Media
|
617
|
|
|
642
|
|
||
|
$
|
3,986
|
|
|
$
|
3,956
|
|
(1)
|
Studio Entertainment revenues and operating income include an allocation of Consumer Products & Interactive Media revenues, which is meant to reflect royalties on sales of merchandise based on film properties. The increase to Studio Entertainment revenues and operating income and corresponding decrease to Consumer Products & Interactive Media revenues and operating income was
$171 million
and
$181 million
for the quarters ended
December 30, 2017
and
December 31, 2016
, respectively.
|
|
Quarter Ended
|
||||||
|
December 30,
2017 |
|
December 31,
2016 |
||||
Segment operating income
|
$
|
3,986
|
|
|
$
|
3,956
|
|
Corporate and unallocated shared expenses
|
(150
|
)
|
|
(132
|
)
|
||
Restructuring and impairment charges
|
(15
|
)
|
|
—
|
|
||
Other income, net
|
53
|
|
|
—
|
|
||
Interest expense, net
|
(129
|
)
|
|
(99
|
)
|
||
Income before income taxes
|
$
|
3,745
|
|
|
$
|
3,725
|
|
4.
|
Acquisitions
|
|
Media
Networks
|
|
Parks and
Resorts
|
|
Studio
Entertainment
|
|
Consumer
Products & Interactive Media
|
|
Unallocated
(1)
|
|
Total
|
||||||||||||
Balance at Sept. 30, 2017
|
$
|
16,325
|
|
|
$
|
291
|
|
|
$
|
6,817
|
|
|
$
|
4,393
|
|
|
$
|
3,600
|
|
|
$
|
31,426
|
|
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dispositions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other, net
|
7
|
|
|
—
|
|
|
7
|
|
|
2
|
|
|
(12
|
)
|
|
4
|
|
||||||
Balance at Dec. 30, 2017
|
$
|
16,332
|
|
|
$
|
291
|
|
|
$
|
6,824
|
|
|
$
|
4,395
|
|
|
$
|
3,588
|
|
|
$
|
31,430
|
|
(1)
|
Goodwill will be allocated to the segments once the BAMTech purchase price allocation is finalized.
|
5.
|
Borrowings
|
|
September 30,
2017 |
|
Borrowings
|
|
Payments
|
|
Other
Activity
|
|
December 30,
2017 |
||||||||||
Commercial paper with original maturities less than three months
(1)
|
$
|
1,151
|
|
|
$
|
2,047
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,198
|
|
Commercial paper with original maturities greater than three months
|
1,621
|
|
|
712
|
|
|
(1,619
|
)
|
|
(1
|
)
|
|
713
|
|
|||||
U.S. and European medium-term notes
|
19,721
|
|
|
—
|
|
|
(1,300
|
)
|
|
6
|
|
|
18,427
|
|
|||||
BAMTech acquisition payable
|
1,581
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,581
|
|
|||||
Asia Theme Parks borrowings
|
1,145
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
1,175
|
|
|||||
Foreign currency denominated debt and other
(2)
|
72
|
|
|
1,025
|
|
|
(30
|
)
|
|
(70
|
)
|
|
997
|
|
|||||
Total
|
$
|
25,291
|
|
|
$
|
3,784
|
|
|
$
|
(2,949
|
)
|
|
$
|
(35
|
)
|
|
$
|
26,091
|
|
(1)
|
Borrowings and payments are reported net.
|
(2)
|
The other activity is primarily market value adjustments for debt with qualifying hedges.
|
|
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
|
|
|
Quarter Ended
|
||||||
|
December 30,
2017 |
|
December 31,
2016 |
||||
Interest expense
|
$
|
(146
|
)
|
|
$
|
(121
|
)
|
Interest and investment income
|
17
|
|
|
22
|
|
||
Interest expense, net
|
$
|
(129
|
)
|
|
$
|
(99
|
)
|
6.
|
International Theme Parks
|
|
December 30, 2017
|
|
September 30, 2017
|
||||
Cash and cash equivalents
|
$
|
844
|
|
|
$
|
843
|
|
Other current assets
|
397
|
|
|
376
|
|
||
Total current assets
|
1,241
|
|
|
1,219
|
|
||
Parks, resorts and other property
|
9,449
|
|
|
9,403
|
|
||
Other assets
|
110
|
|
|
111
|
|
||
Total assets
(1)
|
$
|
10,800
|
|
|
$
|
10,733
|
|
|
|
|
|
||||
Current liabilities
|
$
|
1,061
|
|
|
$
|
1,163
|
|
Borrowings - long-term
|
1,175
|
|
|
1,145
|
|
||
Other long-term liabilities
|
390
|
|
|
371
|
|
||
Total liabilities
(1)
|
$
|
2,626
|
|
|
$
|
2,679
|
|
(1)
|
At
December 30, 2017
and
September 30, 2017
, total assets of the Asia Theme Parks were
$8.1 billion
and primarily consist of parks, resorts and other property of
$7.3 billion
. At
December 30, 2017
and
September 30, 2017
, total liabilities of the Asia Theme Parks were
$2.1 billion
.
|
|
December 30, 2017
|
||
Revenues
|
$
|
905
|
|
Costs and expenses
|
(870
|
)
|
|
Equity in the loss of investees
|
(7
|
)
|
7.
|
Income Taxes
|
•
|
Effective January 1, 2018, the U.S. corporate federal statutory income tax rate was reduced from
35.0%
to
21.0%
. Because of our fiscal year end, the Company’s fiscal 2018 statutory federal tax rate is
24.5%
, which is applicable to each quarter of the fiscal year, and will be
21.0%
thereafter.
|
•
|
The Company remeasured its existing U.S. federal deferred tax assets and liabilities at the rate that the Company expects to be in effect when those deferred taxes will be realized (either
24.5%
if in 2018 or
21.0%
thereafter). The
|
•
|
A one-time tax is due on certain accumulated foreign earnings (Deemed Repatriation Tax), which is payable over eight years. The tax rate is generally
15.5%
on the portion of the earnings held in cash and cash equivalents and
8%
on the remainder. The Company recognized a charge for the Deemed Repatriation Tax of approximately
$0.3 billion
in the first quarter of fiscal 2018. Generally there will no longer be a U.S. federal income tax cost arising from the repatriation of foreign earnings.
|
•
|
The Company will be eligible to claim an immediate deduction for investments in qualified fixed assets and film and television productions placed in service in fiscal 2018 through fiscal 2022. This provision phases out through fiscal 2027.
|
•
|
The domestic production activity deduction was eliminated effective for the Company’s fiscal 2019.
|
•
|
Certain foreign derived income will be taxed in the U.S. at an effective rate of approximately
13%
(which increases to approximately
16%
in 2025) rather than the general statutory rate of
21%
. This will be effective for the Company in fiscal 2019.
|
•
|
Certain foreign earnings will be taxed at a minimum effective rate of approximately
13%
. This will be effective for the Company in fiscal 2019.
|
•
|
Filing the fiscal 2017 U.S. federal income tax return, which could impact our estimated foreign earnings and deferred income tax assets and liabilities,
|
•
|
Finalizing the determination of foreign cash and cash equivalents at the end of fiscal 2018, which is required to calculate the Deemed Repatriation Tax, and
|
•
|
Receiving additional information with respect to the income tax attributes of our equity method investments.
|
8.
|
Pension and Other Benefit Programs
|
|
Pension Plans
|
|
Postretirement Medical Plans
|
||||||||||||
|
Quarter Ended
|
|
Quarter Ended
|
||||||||||||
|
December 30, 2017
|
|
December 31, 2016
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||||
Service costs
|
$
|
88
|
|
|
$
|
91
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Interest costs
|
123
|
|
|
112
|
|
|
15
|
|
|
14
|
|
||||
Expected return on plan assets
|
(225
|
)
|
|
(219
|
)
|
|
(13
|
)
|
|
(12
|
)
|
||||
Amortization of prior-year service costs
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||
Recognized net actuarial loss
|
87
|
|
|
101
|
|
|
3
|
|
|
4
|
|
||||
Net periodic benefit cost
|
$
|
76
|
|
|
$
|
88
|
|
|
$
|
8
|
|
|
$
|
9
|
|
9.
|
Earnings Per Share
|
|
Quarter Ended
|
||||
|
December 30,
2017 |
|
December 31,
2016 |
||
Shares (in millions):
|
|
|
|
||
Weighted average number of common and common equivalent shares outstanding (basic)
|
1,512
|
|
|
1,592
|
|
Weighted average dilutive impact of Awards
|
9
|
|
|
11
|
|
Weighted average number of common and common equivalent shares outstanding (diluted)
|
1,521
|
|
|
1,603
|
|
Awards excluded from diluted earnings per share
|
16
|
|
|
16
|
|
10.
|
Equity
|
Per Share
|
|
Total Paid
|
|
Payment Timing
|
|
Related to Fiscal Period
|
$0.84
|
$1.3 billion
|
Second Quarter of Fiscal 2018
|
Second Half 2017
|
|||
$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
|
|
|
|
|
|
Unrecognized
Pension and Postretirement Medical Expense |
|
Foreign
Currency Translation and Other |
|
AOCI
|
||||||||||
|
Market Value Adjustments
|
|
|||||||||||||||||
AOCI, before tax
|
Investments
|
|
Cash Flow Hedges
|
|
|||||||||||||||
Balance at September 30, 2017
|
$
|
15
|
|
|
$
|
(108
|
)
|
|
$
|
(4,906
|
)
|
|
$
|
(523
|
)
|
|
$
|
(5,522
|
)
|
Quarter Ended December 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Unrealized gains (losses) arising during the period
|
(1
|
)
|
|
19
|
|
|
—
|
|
|
62
|
|
|
80
|
|
|||||
Reclassifications of realized net (gains) losses to net income
|
—
|
|
|
20
|
|
|
96
|
|
|
—
|
|
|
116
|
|
|||||
Balance at December 30, 2017
|
$
|
14
|
|
|
$
|
(69
|
)
|
|
$
|
(4,810
|
)
|
|
$
|
(461
|
)
|
|
$
|
(5,326
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at October 1, 2016
|
$
|
44
|
|
|
$
|
(38
|
)
|
|
$
|
(5,859
|
)
|
|
$
|
(521
|
)
|
|
$
|
(6,374
|
)
|
Quarter Ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized gains (losses) arising during the period
|
(18
|
)
|
|
506
|
|
|
—
|
|
|
(141
|
)
|
|
347
|
|
|||||
Reclassifications of realized net (gains) losses to net income
|
—
|
|
|
(70
|
)
|
|
108
|
|
|
—
|
|
|
38
|
|
|||||
Balance at December 31, 2016
|
$
|
26
|
|
|
$
|
398
|
|
|
$
|
(5,751
|
)
|
|
$
|
(662
|
)
|
|
$
|
(5,989
|
)
|
|
|
|
|
|
Unrecognized
Pension and Postretirement Medical Expense |
|
Foreign
Currency Translation and Other |
|
AOCI
|
||||||||||
|
Market Value Adjustments
|
|
|||||||||||||||||
Tax on AOCI
|
Investments
|
|
Cash Flow Hedges
|
|
|||||||||||||||
Balance at September 30, 2017
|
$
|
(7
|
)
|
|
$
|
46
|
|
|
$
|
1,839
|
|
|
$
|
116
|
|
|
$
|
1,994
|
|
Quarter Ended December 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Unrealized gains (losses) arising during the period
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(16
|
)
|
|
(29
|
)
|
|||||
Reclassifications of realized net (gains) losses to net income
|
—
|
|
|
(8
|
)
|
|
(35
|
)
|
|
—
|
|
|
(43
|
)
|
|||||
Balance at December 30, 2017
|
$
|
(7
|
)
|
|
$
|
25
|
|
|
$
|
1,804
|
|
|
$
|
100
|
|
|
$
|
1,922
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at October 1, 2016
|
$
|
(18
|
)
|
|
$
|
13
|
|
|
$
|
2,208
|
|
|
$
|
192
|
|
|
$
|
2,395
|
|
Quarter Ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Unrealized gains (losses) arising during the period
|
7
|
|
|
(182
|
)
|
|
(22
|
)
|
|
(50
|
)
|
|
(247
|
)
|
|||||
Reclassifications of realized net (gains) losses to net income
|
—
|
|
|
26
|
|
|
(40
|
)
|
|
—
|
|
|
(14
|
)
|
|||||
Balance at December 31, 2016
|
$
|
(11
|
)
|
|
$
|
(143
|
)
|
|
$
|
2,146
|
|
|
$
|
142
|
|
|
$
|
2,134
|
|
|
|
|
|
|
Unrecognized
Pension and Postretirement Medical Expense |
|
Foreign
Currency Translation and Other |
|
AOCI
|
||||||||||
|
Market Value Adjustments
|
|
|||||||||||||||||
AOCI, after tax
|
Investments
|
|
Cash Flow Hedges
|
|
|||||||||||||||
Balance at September 30, 2017
|
$
|
8
|
|
|
$
|
(62
|
)
|
|
$
|
(3,067
|
)
|
|
$
|
(407
|
)
|
|
$
|
(3,528
|
)
|
Quarter Ended December 30, 2017:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized gains (losses) arising during the period
|
(1
|
)
|
|
6
|
|
|
—
|
|
|
46
|
|
|
51
|
|
|||||
Reclassifications of realized net (gains) losses to net income
|
—
|
|
|
12
|
|
|
61
|
|
|
—
|
|
|
73
|
|
|||||
Balance at December 30, 2017
|
$
|
7
|
|
|
$
|
(44
|
)
|
|
$
|
(3,006
|
)
|
|
$
|
(361
|
)
|
|
$
|
(3,404
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at October 1, 2016
|
$
|
26
|
|
|
$
|
(25
|
)
|
|
$
|
(3,651
|
)
|
|
$
|
(329
|
)
|
|
$
|
(3,979
|
)
|
Quarter Ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unrealized gains (losses) arising during the period
|
(11
|
)
|
|
324
|
|
|
(22
|
)
|
|
(191
|
)
|
|
100
|
|
|||||
Reclassifications of realized net (gains) losses to net income
|
—
|
|
|
(44
|
)
|
|
68
|
|
|
—
|
|
|
24
|
|
|||||
Balance at December 31, 2016
|
$
|
15
|
|
|
$
|
255
|
|
|
$
|
(3,605
|
)
|
|
$
|
(520
|
)
|
|
$
|
(3,855
|
)
|
Gains/(losses) in net income:
|
|
Affected line item in the
Condensed Consolidated
Statements of Income:
|
|
Quarter Ended
|
||||||
|
|
December 30,
2017 |
|
December 31,
2016 |
||||||
Cash flow hedges
|
|
Primarily revenue
|
|
$
|
(20
|
)
|
|
$
|
70
|
|
Estimated tax
|
|
Income taxes
|
|
8
|
|
|
(26
|
)
|
||
|
|
|
|
(12
|
)
|
|
44
|
|
||
|
|
|
|
|
|
|
||||
Pension and postretirement
medical expense
|
|
Costs and expenses
|
|
(96
|
)
|
|
(108
|
)
|
||
Estimated tax
|
|
Income taxes
|
|
35
|
|
|
40
|
|
||
|
|
|
|
(61
|
)
|
|
(68
|
)
|
||
|
|
|
|
|
|
|
||||
Total reclassifications for the period
|
|
|
|
$
|
(73
|
)
|
|
$
|
(24
|
)
|
11.
|
Equity-Based Compensation
|
|
Quarter Ended
|
||||||
|
December 30,
2017 |
|
December 31,
2016 |
||||
Stock options
|
$
|
23
|
|
|
$
|
20
|
|
RSUs
|
71
|
|
|
77
|
|
||
Total equity-based compensation expense
(1)
|
$
|
94
|
|
|
$
|
97
|
|
Equity-based compensation expense capitalized during the period
|
$
|
19
|
|
|
$
|
21
|
|
(1)
|
Equity-based compensation expense is net of capitalized equity-based compensation and excludes amortization of previously capitalized equity-based compensation costs.
|
12.
|
Commitments and Contingencies
|
13.
|
Fair Value Measurements
|
|
Fair Value Measurement at December 30, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Investments
|
$
|
32
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32
|
|
Derivatives
|
|
|
|
|
|
|
|
||||||||
Foreign exchange
|
—
|
|
|
416
|
|
|
—
|
|
|
416
|
|
||||
Other
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
—
|
|
|
(188
|
)
|
|
—
|
|
|
(188
|
)
|
||||
Foreign exchange
|
—
|
|
|
(459
|
)
|
|
—
|
|
|
(459
|
)
|
||||
Total recorded at fair value
|
$
|
32
|
|
|
$
|
(218
|
)
|
|
$
|
—
|
|
|
$
|
(186
|
)
|
Fair value of borrowings
|
$
|
—
|
|
|
$
|
23,935
|
|
|
$
|
2,793
|
|
|
$
|
26,728
|
|
|
Fair Value Measurement at September 30, 2017
|
||||||||||||||
|
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
|
|
14.
|
Derivative Instruments
|
|
As of December 30, 2017
|
||||||||||||||
|
Current
Assets
|
|
Other Assets
|
|
Other Current Liabilities
|
|
Other Long-
Term
Liabilities
|
||||||||
Derivatives designated as hedges
|
|
|
|
|
|
|
|
||||||||
Foreign exchange
|
$
|
152
|
|
|
$
|
237
|
|
|
$
|
(187
|
)
|
|
$
|
(184
|
)
|
Interest rate
|
—
|
|
|
—
|
|
|
(161
|
)
|
|
—
|
|
||||
Other
|
11
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Derivatives not designated as hedges
|
|
|
|
|
|
|
|
||||||||
Foreign exchange
|
24
|
|
|
3
|
|
|
(64
|
)
|
|
(25
|
)
|
||||
Interest rate
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
||||
Gross fair value of derivatives
|
187
|
|
|
242
|
|
|
(412
|
)
|
|
(236
|
)
|
||||
Counterparty netting
|
(141
|
)
|
|
(238
|
)
|
|
204
|
|
|
175
|
|
||||
Cash collateral (received)/paid
|
(12
|
)
|
|
(1
|
)
|
|
35
|
|
|
—
|
|
||||
Net derivative positions
|
$
|
34
|
|
|
$
|
3
|
|
|
$
|
(173
|
)
|
|
$
|
(61
|
)
|
|
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
|
)
|
|
Quarter Ended
|
||||||
|
December 30,
2017 |
|
December 31,
2016 |
||||
Gain (loss) on interest rate swaps
|
$
|
(64
|
)
|
|
$
|
(232
|
)
|
Gain (loss) on hedged borrowings
|
64
|
|
|
232
|
|
|
Costs and Expenses
|
|
Interest expense, net
|
|
Income Tax expense
|
||||||||||||||||||
Quarter Ended:
|
December 30,
2017 |
|
December 31,
2016 |
|
December 30,
2017 |
|
December 31,
2016 |
|
December 30,
2017 |
|
December 31,
2016 |
||||||||||||
Net gains (losses) on foreign currency denominated assets and liabilities
|
$
|
17
|
|
|
$
|
(233
|
)
|
|
$
|
3
|
|
|
$
|
7
|
|
|
$
|
3
|
|
|
$
|
23
|
|
Net gains (losses) on foreign exchange risk management contracts not designated as hedges
|
(14
|
)
|
|
221
|
|
|
(1
|
)
|
|
(7
|
)
|
|
(1
|
)
|
|
(31
|
)
|
||||||
Net gains (losses)
|
$
|
3
|
|
|
$
|
(12
|
)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
(8
|
)
|
15.
|
Restructuring and Impairment Charges and Other Income
|
16.
|
New Accounting Pronouncements
|
•
|
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 remaining license period once an expected shortfall is identified.
|
•
|
For licenses that include multiple television and film titles subject to minimum guaranteed license fees that are recoupable against the licensee’s aggregate underlying sales from all titles, the Company will allocate the minimum guaranteed license fee to each title and recognize the allocated license fee as revenue when the title is made available to the customer. License fees in excess of the allocated by-title minimum guarantee are deferred until the aggregate contractual minimum guarantee has been exceeded and thereafter recognized as earned based on the licensee’s underlying sales. Under current guidance, an upfront allocation of the minimum guarantee is not required as license fees are recognized as earned based on the licensee’s underlying sales with any shortfalls recognized at 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.
|
|
Quarter Ended
|
|
% Change
|
|||||||
(in millions, except per share data)
|
December 30,
2017 |
|
December 31,
2016 |
|
Better/
(Worse)
|
|||||
Revenues:
|
|
|
|
|
|
|||||
Services
|
$
|
12,984
|
|
|
$
|
12,406
|
|
|
5
|
%
|
Products
|
2,367
|
|
|
2,378
|
|
|
—
|
%
|
||
Total revenues
|
15,351
|
|
|
14,784
|
|
|
4
|
%
|
||
Costs and expenses:
|
|
|
|
|
|
|||||
Cost of services (exclusive of depreciation and amortization)
|
(7,334
|
)
|
|
(7,020
|
)
|
|
(4)
|
%
|
||
Cost of products (exclusive of depreciation and amortization)
|
(1,403
|
)
|
|
(1,386
|
)
|
|
(1)
|
%
|
||
Selling, general, administrative and other
|
(2,079
|
)
|
|
(1,985
|
)
|
|
(5)
|
%
|
||
Depreciation and amortization
|
(742
|
)
|
|
(687
|
)
|
|
(8)
|
%
|
||
Total costs and expenses
|
(11,558
|
)
|
|
(11,078
|
)
|
|
(4)
|
%
|
||
Restructuring and impairment charges
|
(15
|
)
|
|
—
|
|
|
nm
|
|
||
Other income, net
|
53
|
|
|
—
|
|
|
nm
|
|
||
Interest expense, net
|
(129
|
)
|
|
(99
|
)
|
|
(30)
|
%
|
||
Equity in the income of investees
|
43
|
|
|
118
|
|
|
(64)
|
%
|
||
Income before income taxes
|
3,745
|
|
|
3,725
|
|
|
1
|
%
|
||
Income taxes
|
728
|
|
|
(1,237
|
)
|
|
nm
|
|
||
Net income
|
4,473
|
|
|
2,488
|
|
|
80
|
%
|
||
Less: Net income attributable to noncontrolling interests
|
(50
|
)
|
|
(9
|
)
|
|
>(100)
|
%
|
||
Net income attributable to Disney
|
$
|
4,423
|
|
|
$
|
2,479
|
|
|
78
|
%
|
|
|
|
|
|
|
|||||
Diluted earnings per share attributable to Disney
|
$
|
2.91
|
|
|
$
|
1.55
|
|
|
88
|
%
|
|
Quarter Ended
|
|
|
|||||||
(in millions)
|
December 30,
2017 |
|
December 31,
2016 |
|
% Change
Better/(Worse)
|
|||||
Interest expense
|
$
|
(146
|
)
|
|
$
|
(121
|
)
|
|
(21)
|
%
|
Interest and investment income
|
17
|
|
|
22
|
|
|
(23)
|
%
|
||
Interest expense, net
|
$
|
(129
|
)
|
|
$
|
(99
|
)
|
|
(30)
|
%
|
|
Quarter Ended
|
|
|
||||||
|
December 30,
2017 |
|
December 31,
2016 |
|
Change
Better/(Worse)
|
||||
Effective income tax rate (benefit) / expense
|
(19.4
|
)%
|
|
33.2
|
%
|
|
52.6
|
|
ppt
|
•
|
A one-time net benefit of approximately $1.6 billion, which reflected an approximate $1.9 billion benefit from remeasuring our deferred tax balances to the new statutory rate, partially offset by a charge of approximately $0.3 billion from accruing a Deemed Repatriation Tax. This net benefit had an impact of approximately 41.8 percentage points on the effective income tax rate.
|
•
|
A reduction in the Company’s fiscal 2018 U.S. statutory federal income tax rate to 24.5% from 35.0% in the prior year. Net of state tax and other effects, the reduction in the statutory rate had an impact of approximately 9.2 percentage points on the effective income tax rate.
|
|
Quarter Ended
|
|
|
|||||||
(in millions)
|
December 30,
2017 |
|
December 31,
2016 |
|
% Change
Better/(Worse)
|
|||||
Net income attributable to noncontrolling interests
|
$
|
50
|
|
|
$
|
9
|
|
|
>(100)
|
%
|
|
Quarter Ended
|
|
% Change
|
|||||||
(in millions)
|
December 30,
2017 |
|
December 31,
2016 |
|
Better/
(Worse) |
|||||
Revenues:
|
|
|
|
|
|
|||||
Media Networks
|
$
|
6,243
|
|
|
$
|
6,233
|
|
|
—
|
%
|
Parks and Resorts
|
5,154
|
|
|
4,555
|
|
|
13
|
%
|
||
Studio Entertainment
|
2,504
|
|
|
2,520
|
|
|
(1)
|
%
|
||
Consumer Products & Interactive Media
|
1,450
|
|
|
1,476
|
|
|
(2)
|
%
|
||
|
$
|
15,351
|
|
|
$
|
14,784
|
|
|
4
|
%
|
Segment operating income:
|
|
|
|
|
|
|||||
Media Networks
|
$
|
1,193
|
|
|
$
|
1,362
|
|
|
(12)
|
%
|
Parks and Resorts
|
1,347
|
|
|
1,110
|
|
|
21
|
%
|
||
Studio Entertainment
|
829
|
|
|
842
|
|
|
(2)
|
%
|
||
Consumer Products & Interactive Media
|
617
|
|
|
642
|
|
|
(4)
|
%
|
||
|
$
|
3,986
|
|
|
$
|
3,956
|
|
|
1
|
%
|
|
Quarter Ended
|
|
% Change
|
|||||||
(in millions)
|
December 30,
2017 |
|
December 31,
2016 |
|
Better/
(Worse) |
|||||
Segment operating income
|
$
|
3,986
|
|
|
$
|
3,956
|
|
|
1
|
%
|
Corporate and unallocated shared expenses
|
(150
|
)
|
|
(132
|
)
|
|
(14)
|
%
|
||
Restructuring and impairment charges
|
(15
|
)
|
|
—
|
|
|
nm
|
|
||
Other income, net
|
53
|
|
|
—
|
|
|
nm
|
|
||
Interest expense, net
|
(129
|
)
|
|
(99
|
)
|
|
(30)
|
%
|
||
Income before income taxes
|
$
|
3,745
|
|
|
$
|
3,725
|
|
|
1
|
%
|
|
Quarter Ended
|
|
% Change
|
|||||||
(in millions)
|
December 30,
2017 |
|
December 31,
2016 |
|
Better/
(Worse) |
|||||
Media Networks
|
|
|
|
|
|
|||||
Cable Networks
|
$
|
39
|
|
|
$
|
36
|
|
|
(8)
|
%
|
Broadcasting
|
24
|
|
|
21
|
|
|
(14)
|
%
|
||
Total Media Networks
|
63
|
|
|
57
|
|
|
(11)
|
%
|
||
Parks and Resorts
|
|
|
|
|
|
|
||||
Domestic
|
357
|
|
|
328
|
|
|
(9)
|
%
|
||
International
|
177
|
|
|
156
|
|
|
(13)
|
%
|
||
Total Parks and Resorts
|
534
|
|
|
484
|
|
|
(10)
|
%
|
||
Studio Entertainment
|
13
|
|
|
12
|
|
|
(8)
|
%
|
||
Consumer Products & Interactive Media
|
13
|
|
|
15
|
|
|
13
|
%
|
||
Corporate
|
54
|
|
|
68
|
|
|
21
|
%
|
||
Total depreciation expense
|
$
|
677
|
|
|
$
|
636
|
|
|
(6)
|
%
|
|
Quarter Ended
|
|
% Change
|
|||||||
(in millions)
|
December 30,
2017 |
|
December 31,
2016 |
|
Better/
(Worse) |
|||||
Media Networks
|
$
|
20
|
|
|
$
|
2
|
|
|
>(100)
|
%
|
Parks and Resorts
|
—
|
|
|
1
|
|
|
—
|
%
|
||
Studio Entertainment
|
17
|
|
|
16
|
|
|
(6)
|
%
|
||
Consumer Products & Interactive Media
|
28
|
|
|
32
|
|
|
13
|
%
|
||
Total amortization of intangible assets
|
$
|
65
|
|
|
$
|
51
|
|
|
(27)
|
%
|
|
Quarter Ended
|
|
% Change
|
|||||||
(in millions)
|
December 30,
2017 |
|
December 31,
2016 |
|
Better/
(Worse) |
|||||
Revenues
|
|
|
|
|
|
|||||
Affiliate fees
|
$
|
3,205
|
|
|
$
|
3,075
|
|
|
4
|
%
|
Advertising
|
2,320
|
|
|
2,529
|
|
|
(8)
|
%
|
||
TV/SVOD distribution and other
|
718
|
|
|
629
|
|
|
14
|
%
|
||
Total revenues
|
6,243
|
|
|
6,233
|
|
|
—
|
%
|
||
Operating expenses
|
(4,370
|
)
|
|
(4,298
|
)
|
|
(2)
|
%
|
||
Selling, general, administrative and other
|
(647
|
)
|
|
(633
|
)
|
|
(2)
|
%
|
||
Depreciation and amortization
|
(83
|
)
|
|
(59
|
)
|
|
(41)
|
%
|
||
Equity in the income of investees
|
50
|
|
|
119
|
|
|
(58)
|
%
|
||
Operating Income
|
$
|
1,193
|
|
|
$
|
1,362
|
|
|
(12)
|
%
|
|
Quarter Ended
|
|
% Change
|
|||||||
(in millions)
|
December 30,
2017 |
|
December 31,
2016 |
|
Better/
(Worse) |
|||||
Revenues
|
|
|
|
|
|
|||||
Cable Networks
(1)
|
$
|
4,493
|
|
|
$
|
4,428
|
|
|
1
|
%
|
Broadcasting
|
1,750
|
|
|
1,805
|
|
|
(3)
|
%
|
||
|
$
|
6,243
|
|
|
$
|
6,233
|
|
|
—
|
%
|
Segment operating income
|
|
|
|
|
|
|||||
Cable Networks
(1)
|
$
|
858
|
|
|
$
|
864
|
|
|
(1)
|
%
|
Broadcasting
|
285
|
|
|
379
|
|
|
(25)
|
%
|
||
Equity in the income of investees
(1)
|
50
|
|
|
119
|
|
|
(58)
|
%
|
||
|
$
|
1,193
|
|
|
$
|
1,362
|
|
|
(12)
|
%
|
(1)
|
Cable Networks results in the current quarter include the consolidated results of BAMTech, whereas in the prior-year quarter the Company’s share of BAMTech’s results was reported in equity in the income of investees.
|
|
Quarter Ended
|
|
% Change
|
|||||||
(in millions)
|
December 30,
2017 |
|
December 31,
2016 |
|
Better/
(Worse) |
|||||
Revenues
|
|
|
|
|
|
|||||
Domestic
|
$
|
4,169
|
|
|
$
|
3,740
|
|
|
11
|
%
|
International
|
985
|
|
|
815
|
|
|
21
|
%
|
||
Total revenues
|
5,154
|
|
|
4,555
|
|
|
13
|
%
|
||
Operating expenses
|
(2,811
|
)
|
|
(2,547
|
)
|
|
(10)
|
%
|
||
Selling, general, administrative and other
|
(455
|
)
|
|
(411
|
)
|
|
(11)
|
%
|
||
Depreciation and amortization
|
(534
|
)
|
|
(485
|
)
|
|
(10)
|
%
|
||
Equity in the loss of investees
|
(7
|
)
|
|
(2
|
)
|
|
>(100)
|
%
|
||
Operating Income
|
$
|
1,347
|
|
|
$
|
1,110
|
|
|
21
|
%
|
|
Domestic
|
|
International
(2)
|
|
Total
|
||||||||||||||||||
|
Quarter Ended
|
|
Quarter Ended
|
|
Quarter Ended
|
||||||||||||||||||
|
Dec. 30,
2017 |
|
Dec. 31,
2016 |
|
Dec. 30,
2017 |
|
Dec. 31,
2016 |
|
Dec. 30,
2017 |
|
Dec. 31,
2016 |
||||||||||||
Parks
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Increase/(decrease)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Attendance
|
6
|
%
|
|
(5)
|
%
|
|
10
|
%
|
|
50
|
%
|
|
7
|
%
|
|
6
|
%
|
||||||
Per Capita Guest Spending
|
7
|
%
|
|
7
|
%
|
|
9
|
%
|
|
(3)
|
%
|
|
7
|
%
|
|
2
|
%
|
||||||
Hotels
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Occupancy
|
91
|
%
|
|
91
|
%
|
|
84
|
%
|
|
79
|
%
|
|
89
|
%
|
|
88
|
%
|
||||||
Available Room Nights (in thousands)
|
2,516
|
|
|
2,569
|
|
|
799
|
|
|
731
|
|
|
3,315
|
|
|
3,300
|
|
||||||
Per Room Guest Spending
|
|
$344
|
|
|
|
$324
|
|
|
|
$293
|
|
|
|
$286
|
|
|
|
$332
|
|
|
|
$316
|
|
(1)
|
Per room guest spending consists of the average daily hotel room rate, as well as food, beverage and merchandise sales 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 2017
first
quarter average foreign exchange rate.
|
|
Quarter Ended
|
|
% Change
|
|||||||
(in millions)
|
December 30,
2017 |
|
December 31,
2016 |
|
Better/
(Worse) |
|||||
Revenues
|
|
|
|
|
|
|||||
Theatrical distribution
|
$
|
1,169
|
|
|
$
|
961
|
|
|
22
|
%
|
Home entertainment
|
390
|
|
|
547
|
|
|
(29)
|
%
|
||
TV/SVOD distribution and other
|
945
|
|
|
1,012
|
|
|
(7)
|
%
|
||
Total revenues
|
2,504
|
|
|
2,520
|
|
|
(1)
|
%
|
||
Operating expenses
|
(996
|
)
|
|
(1,007
|
)
|
|
1
|
%
|
||
Selling, general, administrative and other
|
(649
|
)
|
|
(643
|
)
|
|
(1)
|
%
|
||
Depreciation and amortization
|
(30
|
)
|
|
(28
|
)
|
|
(7)
|
%
|
||
Operating Income
|
$
|
829
|
|
|
$
|
842
|
|
|
(2)
|
%
|
|
Quarter Ended
|
|
% Change
|
|||||||
(in millions)
|
December 30,
2017 |
|
December 31,
2016 |
|
Better/
(Worse) |
|||||
Revenues
|
|
|
|
|
|
|||||
Licensing, publishing and games
|
$
|
904
|
|
|
$
|
936
|
|
|
(3)
|
%
|
Retail and other
|
546
|
|
|
540
|
|
|
1
|
%
|
||
Total revenues
|
1,450
|
|
|
1,476
|
|
|
(2)
|
%
|
||
Operating expenses
|
(560
|
)
|
|
(554
|
)
|
|
(1)
|
%
|
||
Selling, general, administrative and other
|
(232
|
)
|
|
(234
|
)
|
|
1
|
%
|
||
Depreciation and amortization
|
(41
|
)
|
|
(47
|
)
|
|
13
|
%
|
||
Equity in the income of investees
|
—
|
|
|
1
|
|
|
—
|
%
|
||
Operating Income
|
$
|
617
|
|
|
$
|
642
|
|
|
(4)
|
%
|
|
Quarter Ended
|
|
% Change
|
|||||||
(in millions)
|
December 30,
2017 |
|
December 31,
2016 |
|
Better/
(Worse) |
|||||
Corporate and unallocated shared expenses
|
$
|
(150
|
)
|
|
$
|
(132
|
)
|
|
(14)
|
%
|
•
|
The Company’s federal statutory income tax rate was reduced from 35.0% to 24.5% for fiscal 2018 and to 21.0% in following years.
|
•
|
The current quarter includes a one-time net benefit of approximately $1.6 billion, which reflected an approximate $1.9 billion benefit from remeasuring our deferred tax balances to the new statutory rate, partially offset by a charge of approximately $0.3 billion from accruing a Deemed Repatriation Tax.
|
•
|
Generally, there will no longer be a U.S. federal income tax cost on the repatriation of foreign earnings.
|
•
|
The Company will be eligible to claim an immediate deduction for investments in qualified fixed assets and film and television productions placed in service during fiscal 2018 through fiscal 2022. This provision phases out through fiscal 2027.
|
•
|
Certain provisions of the Act are not effective for the Company until fiscal 2019 including:
|
•
|
The elimination of the domestic production activities deduction.
|
•
|
The taxation of certain foreign derived income in the U.S. at an effective rate of approximately 13% (which increases to approximately 16% in 2025) rather than the general statutory rate of 21%.
|
•
|
A minimum effective tax on certain foreign earnings of approximately 13%.
|
•
|
We expect a cash tax benefit similar to the reduction in the statutory rate, as well as a benefit from the immediate deduction for investments in qualified fixed assets and film and television productions.
|
|
Quarter Ended
|
|
% Change
Better/ (Worse) |
|||||||
(in millions)
|
December 30,
2017 |
|
December 31,
2016 |
|
||||||
Cash provided by operations
|
$
|
2,237
|
|
|
$
|
1,445
|
|
|
55
|
%
|
Cash used in investing activities
|
(1,043
|
)
|
|
(1,035
|
)
|
|
(1)
|
%
|
||
Cash used in financing activities
|
(584
|
)
|
|
(987
|
)
|
|
41
|
%
|
||
Impact of exchange rates on cash, cash equivalents and restricted cash
|
21
|
|
|
(112
|
)
|
|
nm
|
|
||
Change in cash, cash equivalents and restricted cash
|
$
|
631
|
|
|
$
|
(689
|
)
|
|
nm
|
|
|
Quarter Ended
|
||||||
(in millions)
|
December 30,
2017 |
|
December 31,
2016 |
||||
Beginning balances:
|
|
|
|
||||
Production and programming assets
|
$
|
8,759
|
|
|
$
|
7,547
|
|
Programming liabilities
|
(1,108
|
)
|
|
(1,063
|
)
|
||
|
7,651
|
|
|
6,484
|
|
||
Spending:
|
|
|
|
||||
Television program licenses and rights
|
2,114
|
|
|
2,031
|
|
||
Film and television production
|
1,687
|
|
|
1,275
|
|
||
|
3,801
|
|
|
3,306
|
|
||
Amortization:
|
|
|
|
||||
Television program licenses and rights
|
(2,728
|
)
|
|
(2,728
|
)
|
||
Film and television production
|
(1,107
|
)
|
|
(1,018
|
)
|
||
|
(3,835
|
)
|
|
(3,746
|
)
|
||
|
|
|
|
||||
Change in film and television production and programming costs
|
(34
|
)
|
|
(440
|
)
|
||
Other non-cash activity
|
(143
|
)
|
|
(36
|
)
|
||
Ending balances:
|
|
|
|
||||
Production and programming assets
|
8,783
|
|
|
7,393
|
|
||
Programming liabilities
|
(1,309
|
)
|
|
(1,385
|
)
|
||
|
$
|
7,474
|
|
|
$
|
6,008
|
|
|
Quarter Ended
|
||||||
(in millions)
|
December 30,
2017 |
|
December 31,
2016 |
||||
Media Networks
|
|
|
|
||||
Cable Networks
|
$
|
81
|
|
|
$
|
46
|
|
Broadcasting
|
36
|
|
|
22
|
|
||
Total Media Networks
|
117
|
|
|
68
|
|
||
Parks and Resorts
|
|
|
|
||||
Domestic
|
641
|
|
|
609
|
|
||
International
|
147
|
|
|
291
|
|
||
Total Parks and Resorts
|
788
|
|
|
900
|
|
||
Studio Entertainment
|
22
|
|
|
27
|
|
||
Consumer Products & Interactive Media
|
7
|
|
|
6
|
|
||
Corporate
|
47
|
|
|
39
|
|
||
|
$
|
981
|
|
|
$
|
1,040
|
|
•
|
we may experience negative reactions from the financial markets, and our stock price could decline to the extent that the current market price reflects an assumption that the transaction will be completed;
|
•
|
we may experience negative reactions from employees, customers, suppliers or other third parties;
|
•
|
management’s focus may have been diverted from pursuing other opportunities that could have been beneficial to Disney; and
|
•
|
our costs of pursuing the Acquisition may be higher than anticipated.
|
•
|
combining the companies’ corporate functions;
|
•
|
combining the businesses of Disney and 21CF in a manner that permits us to achieve the synergies anticipated to result from the Acquisition, the failure of which would result in the anticipated benefits of the Acquisition not being realized in the time frame currently anticipated or at all;
|
•
|
maintaining existing agreements with customers, distributors, providers, talent and vendors and avoiding delays in entering into new agreements with prospective customers, distributors, providers, talent and vendors;
|
•
|
determining whether and how to address possible differences in corporate cultures and management philosophies;
|
•
|
integrating the companies’ administrative and information technology infrastructure;
|
•
|
developing products and technology that allow value to be unlocked in the future; and
|
•
|
effecting potential actions that may be required in connection with obtaining regulatory approvals.
|
Period
|
|
Total
Number of
Shares
Purchased
(1)
|
|
Weighted
Average
Price Paid
per Share
|
|
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
|
Maximum
Number of
Shares that
May Yet Be
Purchased
Under the
Plans or
Programs
(2)
|
||||
October 1, 2017 - October 31, 2017
|
|
4,847,957
|
|
|
$
|
98.82
|
|
|
4,820,000
|
|
|
187 million
|
November 1, 2017 - November 30, 2017
|
|
4,308,205
|
|
|
101.77
|
|
|
4,283,745
|
|
|
183 million
|
|
December 1, 2017 - December 30, 2017
|
|
3,733,222
|
|
|
107.99
|
|
|
3,707,600
|
|
|
179 million
|
|
Total
|
|
12,889,384
|
|
|
102.46
|
|
|
12,811,345
|
|
|
179 million
|
(1)
|
78,039 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.
|
(2)
|
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 share repurchase authorization to a total of 400 million shares as of that date. The repurchase program does not have an expiration date.
|
|
|
|
|
|
THE WALT DISNEY COMPANY
|
|
|
(Registrant)
|
|
|
|
By:
|
|
/s/ CHRISTINE M. MCCARTHY
|
|
|
Christine M. McCarthy,
Senior Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
Number and Description of Exhibit
(Numbers Coincide with Item 601 of Regulation S-K)
|
|
Document Incorporated by Reference from a Previous Filing or Filed Herewith, as Indicated below
|
||
|
|
|
|
|
2.1
|
|
Agreement and Plan of Merger, dated as of December 13, 2017, among Twenty-First Century Fox Inc., The Walt Disney Company, TWC Merger Enterprises 2 Corp. and TWC Merger Enterprises 1, LLC
|
|
|
|
|
|
|
|
3.1
|
|
Amended and Restated Bylaws of The Walt Disney Company as of December 13, 2017
|
|
|
|
|
|
|
|
10.1
|
|
Voting Agreement, dated as of December 13, 2017, among The Walt Disney Company, Murdoch Family Trust and Cruden Financial Services LLC
|
|
|
|
|
|
|
|
10.2
|
|
Amendment dated December 13, 2017 to Amended and Restated Employment Agreement with Robert A. Iger, dated as of October 6, 2011
|
|
|
|
|
|
|
|
10.3
|
|
Performance-Based Stock Unit Award (Four-Year Vesting subject to Total Shareholder Return Test/Section 162(m) Vesting Requirements) for Robert A. Iger dated as of December 13, 2017
|
|
|
|
|
|
|
|
10.4
|
|
Performance-Based Stock Unit Award (Section 162(m) Vesting Requirement) for Robert A. Iger dated as of December 13, 2017
|
|
|
|
|
|
|
|
12.1
|
|
Ratio of Earnings to Fixed Charges
|
|
|
|
|
|
||
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 Quarterly Report on Form 10-Q for the quarter ended December 30, 2017 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Equity and (vi) related notes
|
|
Filed
|
*
|
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 Securities and Exchange Commission or its staff upon request.
|
A.
|
Total Shareholder Return Test.
The vesting of the Target Award Amount (the “
TSR Target Award Amount
”) shall be conditioned upon the satisfaction of a performance vesting requirement (the “
TSR Performance Requirement
”) based on Total Shareholder Return of Disney as compared to the Total Shareholder Returns of the S&P 500 Companies, in each case, with respect to the approximately four-year period ending on the Determination Date (as each such term is defined below). To satisfy the TSR Performance Requirement, the TSR Percentile (as hereinafter defined) of Disney must equal or exceed the TSR Percentile of 25.00% of the S&P 500 Companies (the “
S&P 25th TSR Percentile
”). If this requirement is met, the number of Stock Units as to which the TSR Performance Requirement shall be satisfied shall be determined as follows:
|
i
|
If the TSR Percentile of Disney is equal to “S&P 25th TSR Percentile”, then the number of Stock Units which shall satisfy the TSR Performance Requirement shall be 50% of the TSR Target Award Amount.
|
ii
|
If the TSR Percentile of Disney equals or exceeds the TSR Percentile of 75.00% of the S&P 500 Companies (the “S&P 75th TSR Percentile”), the number of Stock Units which shall satisfy the TSR Performance Requirement shall be 150% of the TSR Target Award Amount.
|
iii
|
If the TSR Percentile of Disney exceeds the S&P 25th TSR Percentile but is less than the S&P 75th TSR Percentile, the percentage of Stock Units as to which the TSR Performance Requirement shall have been satisfied shall be determined by multiplying the TSR Percentile of Disney by two. For example, if the TSR Percentile of Disney is 40.00%, then Stock Units equal to 80% of the TSR Target Award Amount shall have satisfied the TSR Performance Requirement; if the TSR Percentile of Disney is 60.55%, then 121.10% of the TSR Target Award Amount shall have satisfied the TSR Performance Requirement.
|
(i)
|
for Disney (as such total return figures for Disney may be adjusted by the Committee, by no later than the Scheduled Vesting Date, to take into account any factors which the Committee has determined are not properly reflected in such reported figures) or
|
(ii)
|
for any other S&P 500 Company, in each case reported for the twenty (20) latest trading days up to and (if the Determination Date is a trading day) including the Determination Date. In determining Total Shareholder Return, the total return figures for each of Disney and each other S&P 500 Company for such respective four year periods shall be compared to the relative values reported for each such company for the twenty (20) days commencing with the day that twenty (20) trading days prior to the Date of Grant.
|
B.
|
Section 162(m) Vesting Requirement
.
This Award shall also be subject to additional
|
C.
|
Service Vesting Requirement
.
In addition to performance vesting requirements of subsection A and subsection B, if applicable, of this Section 3, the right of the Participant to receive payment of this Award shall become vested only if he or she remains continuously employed by Disney or an Affiliate from the date hereof until the Scheduled Vesting Date.
|
(i)
|
the date as of which all of the vesting requirements under Section 3 applicable to the TSR Target Award Amount as applicable, shall have been satisfied, or
|
(ii)
|
the date of certification of achievement of the Performance Target by the Committee, as required under Section 3.A and 3.B, if applicable, (or within 30 days following acceleration of vesting under Section 3 hereof, if applicable) but in no event later than two and one-half months after the end of Disney’s fiscal year in which the Scheduled Vesting Date occurs. The Stock Units shall be paid in cash or in Shares (or some combination thereof), as determined by the Committee in its discretion at the time of payment, and in either case shall be paid to the Participant after deduction of applicable minimum statutory withholding taxes.
|
(i)
|
the date as of which all of the applicable vesting requirements under Section 2 hereof shall have been satisfied for the applicable Tranche, or
|
(ii)
|
the date of certification of achievement of the applicable Performance Targets by the Committee for the applicable Tranche, as required under Section 2.A hereof, or within 30 days following acceleration of vesting under Section 3 hereof, if applicable but in no event later than the later of (x) December 31 of the year in which the Scheduled Vesting Date occurs and (y) two and one-half months after the Scheduled Vesting Date occurs. The Stock Units shall be paid in cash or in Shares (or some combination thereof), as determined by the Committee in its discretion at the time of payment, and in either case shall be paid to the Participant after deduction of applicable minimum statutory withholding taxes.
|
|
Quarter Ended
|
|
Fiscal Year Ended
|
||||||||||||||||||||||||
|
Dec. 30,
2017 |
|
Dec. 31,
2016 |
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||
EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income from continuing operations before income taxes
|
$
|
3,745
|
|
|
$
|
3,725
|
|
|
$
|
13,788
|
|
|
$
|
14,868
|
|
|
$
|
13,868
|
|
|
$
|
12,246
|
|
|
$
|
9,620
|
|
Equity in the income of investees
|
(43
|
)
|
|
(118
|
)
|
|
(320
|
)
|
|
(926
|
)
|
|
(814
|
)
|
|
(854
|
)
|
|
(688
|
)
|
|||||||
Cash distributions received from equity investees
|
170
|
|
|
203
|
|
|
788
|
|
|
799
|
|
|
752
|
|
|
718
|
|
|
694
|
|
|||||||
Interest expense, amortization of debt discounts and premiums on all indebtedness and amortization of capitalized interest
|
170
|
|
|
139
|
|
|
589
|
|
|
433
|
|
|
325
|
|
|
360
|
|
|
415
|
|
|||||||
Imputed interest on operating leases
(1)
|
75
|
|
|
70
|
|
|
289
|
|
|
282
|
|
|
286
|
|
|
294
|
|
|
292
|
|
|||||||
TOTAL EARNINGS
|
$
|
4,117
|
|
|
$
|
4,019
|
|
|
$
|
15,134
|
|
|
$
|
15,456
|
|
|
$
|
14,417
|
|
|
$
|
12,764
|
|
|
$
|
10,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
FIXED CHARGES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest expense and amortization of debt discounts and premiums on all indebtedness
|
$
|
146
|
|
|
$
|
121
|
|
|
$
|
507
|
|
|
$
|
354
|
|
|
$
|
265
|
|
|
$
|
294
|
|
|
$
|
349
|
|
Capitalized interest
|
26
|
|
|
21
|
|
|
87
|
|
|
139
|
|
|
110
|
|
|
73
|
|
|
77
|
|
|||||||
Imputed interest on operating leases
(1)
|
75
|
|
|
70
|
|
|
289
|
|
|
282
|
|
|
286
|
|
|
294
|
|
|
292
|
|
|||||||
TOTAL FIXED CHARGES
|
$
|
247
|
|
|
$
|
212
|
|
|
$
|
883
|
|
|
$
|
775
|
|
|
$
|
661
|
|
|
$
|
661
|
|
|
$
|
718
|
|
RATIO OF EARNINGS TO FIXED CHARGES
(2)
|
16.7
|
|
|
19.0
|
|
|
17.1
|
|
|
19.9
|
|
|
21.8
|
|
|
19.3
|
|
|
14.4
|
|
(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.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of the Company;
|
2.
|
Based on my knowledge, this 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 report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this 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 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:
|
February 6, 2018
|
|
By:
|
|
/s/ ROBERT A. IGER
|
|
|
|
|
|
Robert A. Iger
|
|
|
|
|
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of the Company;
|
2.
|
Based on my knowledge, this 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 report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this 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 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:
|
February 6, 2018
|
|
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
|
|
|
February 6, 2018
|
*
|
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
|
|
|
February 6, 2018
|
*
|
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.
|