|
|
|
|
|
|
|
Delaware
|
001-38842
|
83-0940635
|
|
(State or other jurisdiction
|
(Commission File Number)
|
(IRS Employer
|
|
of incorporation)
|
|
Identification No.)
|
|
|
|
|
|
|
|
☐
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
☐
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
☐
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
☐
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
|
Common Stock, $0.01 par value
|
|
DIS
|
|
New York Stock Exchange
|
|
Emerging growth company
|
☐
|
|
|
|
|
|
|
|
|
The Walt Disney Company
|
|
|
|
|
|
|
|
By:
|
|
/s/ Brent A. Woodford
|
|
|
|
|
Brent A. Woodford
|
|
|
|
|
Executive Vice President
|
|
|
|
|
Controllership, Financial Planning and Tax
|
|
|
|
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 29, 2018, September 30, 2017 and October 1, 2016
|
|
|
Consolidated Statements of Comprehensive Income for the Years Ended September 29, 2018, September 30, 2017 and October 1, 2016
|
|
|
Consolidated Balance Sheets as of September 29, 2018 and September 30, 2017
|
|
|
Consolidated Statements of Cash Flows for the Years Ended September 29, 2018, September 30, 2017 and October 1, 2016
|
|
|
Consolidated Statements of Shareholders’ Equity for the Years Ended September 29, 2018, September 30, 2017 and October 1, 2016
|
|
|
Notes to Consolidated Financial Statements
|
|
|
Quarterly Financial Summary (unaudited)
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Revenues:
|
|
|
|
|
|
||||||
|
Services
|
$
|
50,869
|
|
|
$
|
46,843
|
|
|
$
|
47,130
|
|
|
Products
|
8,565
|
|
|
8,294
|
|
|
8,502
|
|
|||
|
Total revenues
|
59,434
|
|
|
55,137
|
|
|
55,632
|
|
|||
|
Costs and expenses:
|
|
|
|
|
|
||||||
|
Cost of services (exclusive of depreciation and amortization)
|
(27,528
|
)
|
|
(25,320
|
)
|
|
(24,653
|
)
|
|||
|
Cost of products (exclusive of depreciation and amortization)
|
(5,198
|
)
|
|
(4,986
|
)
|
|
(5,340
|
)
|
|||
|
Selling, general, administrative and other
|
(8,860
|
)
|
|
(8,176
|
)
|
|
(8,754
|
)
|
|||
|
Depreciation and amortization
|
(3,011
|
)
|
|
(2,782
|
)
|
|
(2,527
|
)
|
|||
|
Total costs and expenses
|
(44,597
|
)
|
|
(41,264
|
)
|
|
(41,274
|
)
|
|||
|
Restructuring and impairment charges
|
(33
|
)
|
|
(98
|
)
|
|
(156
|
)
|
|||
|
Other income, net
|
601
|
|
|
78
|
|
|
—
|
|
|||
|
Interest expense, net
|
(574
|
)
|
|
(385
|
)
|
|
(260
|
)
|
|||
|
Equity in the income (loss) of investees, net
|
(102
|
)
|
|
320
|
|
|
926
|
|
|||
|
Income before income taxes
|
14,729
|
|
|
13,788
|
|
|
14,868
|
|
|||
|
Income taxes
|
(1,663
|
)
|
|
(4,422
|
)
|
|
(5,078
|
)
|
|||
|
Net income
|
13,066
|
|
|
9,366
|
|
|
9,790
|
|
|||
|
Less: Net income attributable to noncontrolling interests
|
(468
|
)
|
|
(386
|
)
|
|
(399
|
)
|
|||
|
Net income attributable to The Walt Disney Company (Disney)
|
$
|
12,598
|
|
|
$
|
8,980
|
|
|
$
|
9,391
|
|
|
|
|
|
|
|
|
||||||
|
Earnings per share attributable to Disney:
|
|
|
|
|
|
||||||
|
Diluted
|
$
|
8.36
|
|
|
$
|
5.69
|
|
|
$
|
5.73
|
|
|
Basic
|
$
|
8.40
|
|
|
$
|
5.73
|
|
|
$
|
5.76
|
|
|
|
|
|
|
|
|
||||||
|
Weighted average number of common and common equivalent shares outstanding:
|
|
|
|
|
|
||||||
|
Diluted
|
1,507
|
|
|
1,578
|
|
|
1,639
|
|
|||
|
Basic
|
1,499
|
|
|
1,568
|
|
|
1,629
|
|
|||
|
|
|
|
|
|
|
||||||
|
Dividends declared per share
|
$
|
1.68
|
|
|
$
|
1.56
|
|
|
$
|
1.42
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Net Income
|
$
|
13,066
|
|
|
$
|
9,366
|
|
|
$
|
9,790
|
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
|
|
||||||
|
Market value adjustments for investments
|
7
|
|
|
(18
|
)
|
|
13
|
|
|||
|
Market value adjustments for hedges
|
207
|
|
|
(37
|
)
|
|
(359
|
)
|
|||
|
Pension and postretirement medical plan adjustments
|
434
|
|
|
584
|
|
|
(1,154
|
)
|
|||
|
Foreign currency translation and other
|
(289
|
)
|
|
(103
|
)
|
|
(156
|
)
|
|||
|
Other comprehensive income/(loss)
|
359
|
|
|
426
|
|
|
(1,656
|
)
|
|||
|
Comprehensive income
|
13,425
|
|
|
9,792
|
|
|
8,134
|
|
|||
|
Net income attributable to noncontrolling interests,
including redeemable noncontrolling interests
|
(468
|
)
|
|
(386
|
)
|
|
(399
|
)
|
|||
|
Other comprehensive loss attributable to noncontrolling interests
|
72
|
|
|
25
|
|
|
98
|
|
|||
|
Comprehensive income attributable to Disney
|
$
|
13,029
|
|
|
$
|
9,431
|
|
|
$
|
7,833
|
|
|
|
September 29, 2018
|
|
September 30, 2017
|
||||
|
ASSETS
|
|
|
|
||||
|
Current assets
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
4,150
|
|
|
$
|
4,017
|
|
|
Receivables
|
9,334
|
|
|
8,633
|
|
||
|
Inventories
|
1,392
|
|
|
1,373
|
|
||
|
Television costs and advances
|
1,314
|
|
|
1,278
|
|
||
|
Other current assets
|
635
|
|
|
588
|
|
||
|
Total current assets
|
16,825
|
|
|
15,889
|
|
||
|
Film and television costs
|
7,888
|
|
|
7,481
|
|
||
|
Investments
|
2,899
|
|
|
3,202
|
|
||
|
Parks, resorts and other property
|
|
|
|
||||
|
Attractions, buildings and equipment
|
55,238
|
|
|
54,043
|
|
||
|
Accumulated depreciation
|
(30,764
|
)
|
|
(29,037
|
)
|
||
|
|
24,474
|
|
|
25,006
|
|
||
|
Projects in progress
|
3,942
|
|
|
2,145
|
|
||
|
Land
|
1,124
|
|
|
1,255
|
|
||
|
|
29,540
|
|
|
28,406
|
|
||
|
Intangible assets, net
|
6,812
|
|
|
6,995
|
|
||
|
Goodwill
|
31,269
|
|
|
31,426
|
|
||
|
Other assets
|
3,365
|
|
|
2,390
|
|
||
|
Total assets
|
$
|
98,598
|
|
|
$
|
95,789
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
|
Current liabilities
|
|
|
|
||||
|
Accounts payable and other accrued liabilities
|
$
|
9,479
|
|
|
$
|
8,855
|
|
|
Current portion of borrowings
|
3,790
|
|
|
6,172
|
|
||
|
Deferred revenue and other
|
4,591
|
|
|
4,568
|
|
||
|
Total current liabilities
|
17,860
|
|
|
19,595
|
|
||
|
Borrowings
|
17,084
|
|
|
19,119
|
|
||
|
Deferred income taxes
|
3,109
|
|
|
4,480
|
|
||
|
Other long-term liabilities
|
6,590
|
|
|
6,443
|
|
||
|
Commitments and contingencies (Note 14)
|
|
|
|
|
|
||
|
Redeemable noncontrolling interests
|
1,123
|
|
|
1,148
|
|
||
|
Equity
|
|
|
|
||||
|
Preferred stock
|
—
|
|
|
—
|
|
||
|
Common stock, $.01 par value, Authorized – 4.6 billion shares,
Issued – 2.9 billion shares |
36,779
|
|
|
36,248
|
|
||
|
Retained earnings
|
82,679
|
|
|
72,606
|
|
||
|
Accumulated other comprehensive loss
|
(3,097
|
)
|
|
(3,528
|
)
|
||
|
|
116,361
|
|
|
105,326
|
|
||
|
Treasury stock, at cost, 1.4 billion shares
|
(67,588
|
)
|
|
(64,011
|
)
|
||
|
Total Disney Shareholders’ equity
|
48,773
|
|
|
41,315
|
|
||
|
Noncontrolling interests
|
4,059
|
|
|
3,689
|
|
||
|
Total equity
|
52,832
|
|
|
45,004
|
|
||
|
Total liabilities and equity
|
$
|
98,598
|
|
|
$
|
95,789
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
|
Net income
|
$
|
13,066
|
|
|
$
|
9,366
|
|
|
$
|
9,790
|
|
|
Depreciation and amortization
|
3,011
|
|
|
2,782
|
|
|
2,527
|
|
|||
|
Gains on acquisitions and dispositions
|
(560
|
)
|
|
(289
|
)
|
|
(26
|
)
|
|||
|
Deferred income taxes
|
(1,573
|
)
|
|
334
|
|
|
1,214
|
|
|||
|
Equity in the (income) loss of investees
|
102
|
|
|
(320
|
)
|
|
(926
|
)
|
|||
|
Cash distributions received from equity investees
|
775
|
|
|
788
|
|
|
799
|
|
|||
|
Net change in film and television costs and advances
|
(523
|
)
|
|
(1,075
|
)
|
|
(101
|
)
|
|||
|
Equity-based compensation
|
393
|
|
|
364
|
|
|
393
|
|
|||
|
Other
|
441
|
|
|
503
|
|
|
674
|
|
|||
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
|
Receivables
|
(720
|
)
|
|
107
|
|
|
(393
|
)
|
|||
|
Inventories
|
(17
|
)
|
|
(5
|
)
|
|
186
|
|
|||
|
Other assets
|
(927
|
)
|
|
(52
|
)
|
|
(443
|
)
|
|||
|
Accounts payable and other accrued liabilities
|
235
|
|
|
(368
|
)
|
|
40
|
|
|||
|
Income taxes
|
592
|
|
|
208
|
|
|
(598
|
)
|
|||
|
Cash provided by operations
|
14,295
|
|
|
12,343
|
|
|
13,136
|
|
|||
|
|
|
|
|
|
|
||||||
|
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
|
Investments in parks, resorts and other property
|
(4,465
|
)
|
|
(3,623
|
)
|
|
(4,773
|
)
|
|||
|
Acquisitions
|
(1,581
|
)
|
|
(417
|
)
|
|
(850
|
)
|
|||
|
Other
|
710
|
|
|
(71
|
)
|
|
(135
|
)
|
|||
|
Cash used in investing activities
|
(5,336
|
)
|
|
(4,111
|
)
|
|
(5,758
|
)
|
|||
|
|
|
|
|
|
|
||||||
|
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
|
Commercial paper borrowings/(payments), net
|
(1,768
|
)
|
|
1,247
|
|
|
(920
|
)
|
|||
|
Borrowings
|
1,056
|
|
|
4,820
|
|
|
6,065
|
|
|||
|
Reduction of borrowings
|
(1,871
|
)
|
|
(2,364
|
)
|
|
(2,205
|
)
|
|||
|
Dividends
|
(2,515
|
)
|
|
(2,445
|
)
|
|
(2,313
|
)
|
|||
|
Repurchases of common stock
|
(3,577
|
)
|
|
(9,368
|
)
|
|
(7,499
|
)
|
|||
|
Proceeds from exercise of stock options
|
210
|
|
|
276
|
|
|
259
|
|
|||
|
Contributions from noncontrolling interest holders
|
399
|
|
|
17
|
|
|
—
|
|
|||
|
Other
|
(777
|
)
|
|
(1,142
|
)
|
|
(607
|
)
|
|||
|
Cash used in financing activities
|
(8,843
|
)
|
|
(8,959
|
)
|
|
(7,220
|
)
|
|||
|
|
|
|
|
|
|
||||||
|
Impact of exchange rates on cash, cash equivalents and restricted cash
|
(25
|
)
|
|
31
|
|
|
(123
|
)
|
|||
|
|
|
|
|
|
|
||||||
|
Change in cash, cash equivalents and restricted cash
|
91
|
|
|
(696
|
)
|
|
35
|
|
|||
|
Cash, cash equivalents and restricted cash, beginning of year
|
4,064
|
|
|
4,760
|
|
|
4,725
|
|
|||
|
Cash, cash equivalents and restricted cash, end of year
|
$
|
4,155
|
|
|
$
|
4,064
|
|
|
$
|
4,760
|
|
|
|
|
|
|
|
|
||||||
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
|
Interest paid
|
$
|
631
|
|
|
$
|
466
|
|
|
$
|
395
|
|
|
Income taxes paid
|
$
|
2,503
|
|
|
$
|
3,801
|
|
|
$
|
4,133
|
|
|
|
|
Equity Attributable to Disney
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
Shares
|
|
Common
Stock
|
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
Treasury
Stock
|
|
Total
Disney
Equity
|
|
Non-controlling
Interests (1)
|
|
Total Equity
|
|||||||||||||||||
|
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
|
)
|
|||||||
|
Contributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
17
|
|
|||||||
|
Distributions and other
|
|
1
|
|
|
(153
|
)
|
|
(4
|
)
|
|
—
|
|
|
60
|
|
|
(97
|
)
|
|
(747
|
)
|
|
(844
|
)
|
|||||||
|
Balance at September 30, 2017
|
|
1,517
|
|
|
$
|
36,248
|
|
|
$
|
72,606
|
|
|
$
|
(3,528
|
)
|
|
$
|
(64,011
|
)
|
|
$
|
41,315
|
|
|
$
|
3,689
|
|
|
$
|
45,004
|
|
|
Comprehensive income
|
|
—
|
|
|
—
|
|
|
12,598
|
|
|
431
|
|
|
—
|
|
|
13,029
|
|
|
425
|
|
|
13,454
|
|
|||||||
|
Equity compensation activity
|
|
6
|
|
|
518
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
518
|
|
|
—
|
|
|
518
|
|
|||||||
|
Common stock repurchases
|
|
(35
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,577
|
)
|
|
(3,577
|
)
|
|
—
|
|
|
(3,577
|
)
|
|||||||
|
Dividends
|
|
—
|
|
|
14
|
|
|
(2,529
|
)
|
|
—
|
|
|
—
|
|
|
(2,515
|
)
|
|
—
|
|
|
(2,515
|
)
|
|||||||
|
Contributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
488
|
|
|
488
|
|
|||||||
|
Distributions and other
|
|
—
|
|
|
(1
|
)
|
|
4
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
(543
|
)
|
|
(540
|
)
|
|||||||
|
Balance at September 29, 2018
|
|
1,488
|
|
|
$
|
36,779
|
|
|
$
|
82,679
|
|
|
$
|
(3,097
|
)
|
|
$
|
(67,588
|
)
|
|
$
|
48,773
|
|
|
$
|
4,059
|
|
|
$
|
52,832
|
|
|
1
|
Description of the Business and Segment Information
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Revenues
|
|
|
|
|
|
||||||
|
Media Networks
|
$
|
21,922
|
|
|
$
|
21,299
|
|
|
$
|
21,326
|
|
|
Parks, Experiences & Consumer Products
|
|
|
|
|
|
||||||
|
Third parties
|
25,257
|
|
|
23,516
|
|
|
22,998
|
|
|||
|
Intersegment
|
(556
|
)
|
|
(492
|
)
|
|
(740
|
)
|
|||
|
|
24,701
|
|
|
23,024
|
|
|
22,258
|
|
|||
|
Studio Entertainment
|
|
|
|
|
|
||||||
|
Third parties
|
9,509
|
|
|
7,860
|
|
|
8,629
|
|
|||
|
Intersegment
|
556
|
|
|
492
|
|
|
740
|
|
|||
|
|
10,065
|
|
|
8,352
|
|
|
9,369
|
|
|||
|
Direct-to-Consumer & International
|
3,414
|
|
|
3,075
|
|
|
3,306
|
|
|||
|
Eliminations(1)
|
(668
|
)
|
|
(613
|
)
|
|
(627
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
Total consolidated revenues
|
$
|
59,434
|
|
|
$
|
55,137
|
|
|
$
|
55,632
|
|
|
Segment operating income
|
|
|
|
|
|
||||||
|
Media Networks
|
$
|
7,338
|
|
|
$
|
7,196
|
|
|
$
|
7,804
|
|
|
Parks, Experiences & Consumer Products
|
6,095
|
|
|
5,487
|
|
|
5,198
|
|
|||
|
Studio Entertainment
|
3,004
|
|
|
2,363
|
|
|
2,767
|
|
|||
|
Direct-to-Consumer & International
|
(738
|
)
|
|
(284
|
)
|
|
(38
|
)
|
|||
|
Eliminations(1)
|
(10
|
)
|
|
13
|
|
|
(10
|
)
|
|||
|
Total segment operating income(2)
|
$
|
15,689
|
|
|
$
|
14,775
|
|
|
$
|
15,721
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Reconciliation of segment operating income to income before income taxes
|
|
|
|
|
|
||||||
|
Segment operating income
|
$
|
15,689
|
|
|
$
|
14,775
|
|
|
$
|
15,721
|
|
|
Corporate and unallocated shared expenses
|
(744
|
)
|
|
(582
|
)
|
|
(640
|
)
|
|||
|
Restructuring and impairment charges
|
(33
|
)
|
|
(98
|
)
|
|
(156
|
)
|
|||
|
Other income, net
|
601
|
|
|
78
|
|
|
—
|
|
|||
|
Interest expense, net
|
(574
|
)
|
|
(385
|
)
|
|
(260
|
)
|
|||
|
Vice Gain(2)
|
—
|
|
|
—
|
|
|
332
|
|
|||
|
Infinity Charge(3)
|
—
|
|
|
—
|
|
|
(129
|
)
|
|||
|
Impairment of equity investments(2)
|
(210
|
)
|
|
—
|
|
|
—
|
|
|||
|
Income before income taxes
|
$
|
14,729
|
|
|
$
|
13,788
|
|
|
$
|
14,868
|
|
|
Capital expenditures
|
|
|
|
|
|
||||||
|
Media Networks
|
|
|
|
|
|
||||||
|
Cable Networks
|
$
|
96
|
|
|
$
|
64
|
|
|
$
|
81
|
|
|
Broadcasting
|
107
|
|
|
67
|
|
|
73
|
|
|||
|
Parks, Experiences & Consumer Products
|
|
|
|
|
|
||||||
|
Domestic
|
3,223
|
|
|
2,392
|
|
|
2,215
|
|
|||
|
International
|
677
|
|
|
827
|
|
|
2,053
|
|
|||
|
Studio Entertainment
|
96
|
|
|
85
|
|
|
86
|
|
|||
|
Direct-to-Consumer & International
|
107
|
|
|
30
|
|
|
65
|
|
|||
|
Corporate
|
159
|
|
|
158
|
|
|
200
|
|
|||
|
Total capital expenditures
|
$
|
4,465
|
|
|
$
|
3,623
|
|
|
$
|
4,773
|
|
|
Depreciation expense
|
|
|
|
|
|
||||||
|
Media Networks
|
$
|
199
|
|
|
$
|
206
|
|
|
$
|
217
|
|
|
Parks, Experiences & Consumer Products
|
|
|
|
|
|
||||||
|
Domestic
|
1,449
|
|
|
1,371
|
|
|
1,314
|
|
|||
|
International
|
768
|
|
|
679
|
|
|
468
|
|
|||
|
Studio Entertainment
|
55
|
|
|
50
|
|
|
46
|
|
|||
|
Direct-to-Consumer & International
|
106
|
|
|
74
|
|
|
61
|
|
|||
|
Corporate
|
181
|
|
|
206
|
|
|
214
|
|
|||
|
Total depreciation expense
|
$
|
2,758
|
|
|
$
|
2,586
|
|
|
$
|
2,320
|
|
|
Amortization of intangible assets
|
|
|
|
|
|
||||||
|
Media Networks
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
Parks, Experiences & Consumer Products
|
110
|
|
|
111
|
|
|
107
|
|
|||
|
Studio Entertainment
|
64
|
|
|
65
|
|
|
74
|
|
|||
|
Direct-to-Consumer & International
|
79
|
|
|
20
|
|
|
24
|
|
|||
|
Total amortization of intangible assets
|
$
|
253
|
|
|
$
|
196
|
|
|
$
|
207
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Identifiable assets(4)
|
|
|
|
|
|
||||||
|
Media Networks
|
$
|
14,216
|
|
|
$
|
13,660
|
|
|
|
||
|
Parks, Experiences & Consumer Products
|
34,684
|
|
|
33,755
|
|
|
|
||||
|
Studio Entertainment
|
10,197
|
|
|
9,672
|
|
|
|
||||
|
Direct-to-Consumer & International
|
3,558
|
|
|
4,083
|
|
|
|
||||
|
Corporate(5)
|
4,977
|
|
|
3,475
|
|
|
|
||||
|
Eliminations
|
(303
|
)
|
|
(282
|
)
|
|
|
||||
|
Goodwill(6)
|
31,269
|
|
|
31,426
|
|
|
|
||||
|
Total consolidated assets
|
$
|
98,598
|
|
|
$
|
95,789
|
|
|
|
||
|
Supplemental revenue data
|
|
|
|
|
|
||||||
|
Affiliate fees
|
$
|
13,279
|
|
|
$
|
12,659
|
|
|
$
|
12,259
|
|
|
Advertising
|
7,904
|
|
|
8,237
|
|
|
8,649
|
|
|||
|
Retail merchandise, food and beverage
|
6,923
|
|
|
6,433
|
|
|
6,116
|
|
|||
|
Theme park admissions
|
7,183
|
|
|
6,502
|
|
|
5,900
|
|
|||
|
Revenues
|
|
|
|
|
|
||||||
|
United States and Canada
|
$
|
45,038
|
|
|
$
|
41,881
|
|
|
$
|
42,616
|
|
|
Europe
|
7,026
|
|
|
6,541
|
|
|
6,714
|
|
|||
|
Asia Pacific
|
5,531
|
|
|
5,075
|
|
|
4,582
|
|
|||
|
Latin America and Other
|
1,839
|
|
|
1,640
|
|
|
1,720
|
|
|||
|
|
$
|
59,434
|
|
|
$
|
55,137
|
|
|
$
|
55,632
|
|
|
Segment operating income
|
|
|
|
|
|
||||||
|
United States and Canada
|
$
|
11,396
|
|
|
$
|
10,962
|
|
|
$
|
12,139
|
|
|
Europe
|
1,922
|
|
|
1,812
|
|
|
1,815
|
|
|||
|
Asia Pacific
|
1,869
|
|
|
1,626
|
|
|
1,324
|
|
|||
|
Latin America and Other
|
502
|
|
|
375
|
|
|
443
|
|
|||
|
|
$
|
15,689
|
|
|
$
|
14,775
|
|
|
$
|
15,721
|
|
|
Long-lived assets(7)
|
|
|
|
|
|
||||
|
United States and Canada
|
$
|
65,245
|
|
|
$
|
61,215
|
|
|
|
|
Europe
|
6,275
|
|
|
8,208
|
|
|
|
||
|
Asia Pacific
|
7,775
|
|
|
8,196
|
|
|
|
||
|
Latin America and Other
|
131
|
|
|
155
|
|
|
|
||
|
|
$
|
79,426
|
|
|
$
|
77,774
|
|
|
|
|
(1)
|
Intersegment content transaction are as follows:
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Revenues
|
|
|
|
|
|
||||||
|
Studio Entertainment:
|
|
|
|
|
|
||||||
|
Content transactions with Media Networks
|
$
|
(169
|
)
|
|
$
|
(137
|
)
|
|
$
|
(159
|
)
|
|
Content transactions with Direct-to-Consumer & International
|
(28
|
)
|
|
(22
|
)
|
|
(11
|
)
|
|||
|
Media Networks:
|
|
|
|
|
|
||||||
|
Content transactions with Direct-to-Consumer & International
|
(471
|
)
|
|
(454
|
)
|
|
(457
|
)
|
|||
|
Total
|
$
|
(668
|
)
|
|
$
|
(613
|
)
|
|
$
|
(627
|
)
|
|
|
|
|
|
|
|
||||||
|
Operating Income
|
|
|
|
|
|
||||||
|
Studio Entertainment:
|
|
|
|
|
|
||||||
|
Content transactions with Media Networks
|
$
|
(8
|
)
|
|
$
|
15
|
|
|
$
|
(10
|
)
|
|
Media Networks:
|
|
|
|
|
|
||||||
|
Content transactions with Direct-to-Consumer & International
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|||
|
Total
|
$
|
(10
|
)
|
|
$
|
13
|
|
|
$
|
(10
|
)
|
|
(2)
|
Equity in the income of investees included in segment operating income is as follows:
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Media Networks
|
$
|
711
|
|
|
$
|
766
|
|
|
$
|
779
|
|
|
Parks, Experiences and Consumer Products
|
(23
|
)
|
|
(25
|
)
|
|
(3
|
)
|
|||
|
Direct-to-Consumer & International
|
(580
|
)
|
|
(421
|
)
|
|
(182
|
)
|
|||
|
Equity in the income of investees included in segment operating income
|
108
|
|
|
320
|
|
|
594
|
|
|||
|
Impairment of equity investments:
|
|
|
|
|
|
||||||
|
Vice
|
(157
|
)
|
|
—
|
|
|
—
|
|
|||
|
Villages Nature
|
(53
|
)
|
|
—
|
|
|
—
|
|
|||
|
Vice Gain
|
—
|
|
|
—
|
|
|
332
|
|
|||
|
Equity in the income (loss) of investees, net
|
$
|
(102
|
)
|
|
$
|
320
|
|
|
$
|
926
|
|
|
(3)
|
In fiscal 2016, the Company discontinued its Infinity console game business, which is reported in the Parks, Experiences & Consumer Products 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.
|
|
(4)
|
Equity method investments included in identifiable assets by segment are as follows:
|
|
|
2018
|
|
2017
|
||||
|
Media Networks
|
$
|
2,430
|
|
|
$
|
2,505
|
|
|
Parks, Experiences & Consumer Products
|
1
|
|
|
70
|
|
||
|
Studio Entertainment
|
1
|
|
|
1
|
|
||
|
Direct-to-Consumer & International
|
320
|
|
|
493
|
|
||
|
Corporate
|
16
|
|
|
18
|
|
||
|
|
$
|
2,768
|
|
|
$
|
3,087
|
|
|
|
2018
|
|
2017
|
||||
|
Media Networks
|
$
|
1,546
|
|
|
$
|
1,547
|
|
|
Parks, Experiences & Consumer Products
|
3,167
|
|
|
3,277
|
|
||
|
Studio Entertainment
|
1,479
|
|
|
1,543
|
|
||
|
Direct-to-Consumer & International
|
490
|
|
|
498
|
|
||
|
Corporate
|
130
|
|
|
130
|
|
||
|
|
$
|
6,812
|
|
|
$
|
6,995
|
|
|
(5)
|
Primarily fixed assets and cash and cash equivalents.
|
|
(6)
|
See Note 3 for goodwill by segment.
|
|
(7)
|
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, and in published materials and interactive games
|
|
•
|
Amortization of programming and production costs and participations and residuals costs
|
|
•
|
Distribution costs
|
|
•
|
Operating labor
|
|
•
|
Facilities and infrastructure costs
|
|
•
|
Food, beverage and merchandise at our retail locations
|
|
•
|
DVDs and Blu-ray discs
|
|
•
|
Books, comic books and magazines
|
|
•
|
Costs of goods sold
|
|
•
|
Amortization of production, participations and residuals costs
|
|
•
|
Distribution costs
|
|
•
|
Operating labor
|
|
•
|
Retail occupancy costs
|
|
|
|
September 29, 2018
|
|
September 30, 2017
|
|
October 1, 2016
|
||||||
|
Cash and cash equivalents
|
|
$
|
4,150
|
|
|
$
|
4,017
|
|
|
$
|
4,610
|
|
|
Restricted cash included in:
|
|
|
|
|
|
|
||||||
|
Other current assets
|
|
1
|
|
|
26
|
|
|
96
|
|
|||
|
Other assets
|
|
4
|
|
|
21
|
|
|
54
|
|
|||
|
Total cash, cash equivalents and restricted cash in the statement of cash flows
|
|
$
|
4,155
|
|
|
$
|
4,064
|
|
|
$
|
4,760
|
|
|
Attractions, buildings and improvements
|
|
20 – 40 years
|
|
Furniture, fixtures and equipment
|
|
3 – 25 years
|
|
Land improvements
|
|
20 – 40 years
|
|
Leasehold improvements
|
|
Life of lease or asset life if less
|
|
2019
|
$
|
258
|
|
|
2020
|
233
|
|
|
|
2021
|
230
|
|
|
|
2022
|
228
|
|
|
|
2023
|
202
|
|
|
|
|
2018
|
|
2017
|
|
2016
|
|||
|
Weighted average number of common and common equivalent shares outstanding (basic)
|
1,499
|
|
|
1,568
|
|
|
1,629
|
|
|
Weighted average dilutive impact of Awards
|
8
|
|
|
10
|
|
|
10
|
|
|
Weighted average number of common and common equivalent shares outstanding (diluted)
|
1,507
|
|
|
1,578
|
|
|
1,639
|
|
|
Awards excluded from diluted earnings per share
|
12
|
|
|
10
|
|
|
6
|
|
|
3
|
Acquisitions
|
|
|
Media
Networks
|
|
Parks and
Resorts |
Studio
Entertainment
|
Consumer
Products & Interactive Media |
|
Parks, Experiences & Consumer Products
|
|
Direct-to-Consumer & International
|
Unallocated
|
Total
|
||||||||||||||||||||
|
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
|
|
|
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
Dispositions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
Other, net (1)
|
3,063
|
|
|
—
|
|
|
347
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
(3,600
|
)
|
|
(157
|
)
|
||||||||
|
Balance at Sept. 29, 2018
|
$
|
19,388
|
|
|
$
|
291
|
|
|
$
|
7,164
|
|
|
$
|
4,426
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31,269
|
|
|
Segment recast (2)
|
(3,399
|
)
|
|
(291
|
)
|
|
(70
|
)
|
|
(4,426
|
)
|
|
4,487
|
|
|
3,699
|
|
|
—
|
|
|
—
|
|
||||||||
|
Balance at Sept. 30, 2018
|
$
|
15,989
|
|
|
$
|
—
|
|
|
$
|
7,094
|
|
|
$
|
—
|
|
|
$
|
4,487
|
|
|
$
|
3,699
|
|
|
$
|
—
|
|
|
$
|
31,269
|
|
|
(1)
|
Other, net primarily represents the allocation of BAMTech goodwill to segments based on the final purchase price allocation and also includes the impact of updates to our initial estimated fair value of intangible assets related to BAMTech.
|
|
(2)
|
Represents the reallocation of goodwill as a result of the Company recasting its segments as described in Note 1.
|
|
4
|
Other Income, net
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Gains on sales of real estate and property rights
|
$
|
560
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Settlement of litigation
|
38
|
|
|
(177
|
)
|
|
—
|
|
|||
|
Gain related to the acquisition of BAMTech
|
3
|
|
|
255
|
|
|
—
|
|
|||
|
Other income, net
|
$
|
601
|
|
|
$
|
78
|
|
|
$
|
—
|
|
|
5
|
Investments
|
|
|
September 29,
2018 |
|
September 30,
2017 |
||||
|
Investments, equity basis
|
$
|
2,768
|
|
|
$
|
3,087
|
|
|
Investments, other
|
131
|
|
|
115
|
|
||
|
|
$
|
2,899
|
|
|
$
|
3,202
|
|
|
Results of Operations:
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
|||||||
|
Revenues
|
$
|
9,085
|
|
|
$
|
8,122
|
|
|
$
|
7,416
|
|
|
Net income
|
(152
|
)
|
|
857
|
|
|
1,855
|
|
|||
|
Balance Sheet
|
September 29,
2018 |
|
September 30,
2017 |
|
October 1,
2016 |
||||||
|
|
|
|
|
|
|||||||
|
Current assets
|
$
|
4,542
|
|
|
$
|
4,623
|
|
|
$
|
4,801
|
|
|
Non-current assets
|
9,998
|
|
|
10,047
|
|
|
8,906
|
|
|||
|
|
$
|
14,540
|
|
|
$
|
14,670
|
|
|
$
|
13,707
|
|
|
Current liabilities
|
$
|
3,197
|
|
|
$
|
2,852
|
|
|
$
|
2,018
|
|
|
Non-current liabilities
|
4,840
|
|
|
5,056
|
|
|
4,531
|
|
|||
|
Redeemable preferred stock
|
1,362
|
|
|
1,123
|
|
|
583
|
|
|||
|
Shareholders’ equity
|
5,141
|
|
|
5,639
|
|
|
6,575
|
|
|||
|
|
$
|
14,540
|
|
|
$
|
14,670
|
|
|
$
|
13,707
|
|
|
6
|
International Theme Parks
|
|
|
2018
|
|
2017
|
||||
|
Cash and cash equivalents
|
$
|
834
|
|
|
$
|
843
|
|
|
Other current assets
|
400
|
|
|
376
|
|
||
|
Total current assets
|
1,234
|
|
|
1,219
|
|
||
|
Parks, resorts and other property
|
8,973
|
|
|
9,403
|
|
||
|
Other assets
|
103
|
|
|
111
|
|
||
|
Total assets (1)
|
$
|
10,310
|
|
|
$
|
10,733
|
|
|
|
|
|
|
||||
|
Current liabilities
|
$
|
921
|
|
|
$
|
1,163
|
|
|
Borrowings - long-term
|
1,106
|
|
|
1,145
|
|
||
|
Other long-term liabilities
|
382
|
|
|
371
|
|
||
|
Total liabilities (1)
|
$
|
2,409
|
|
|
$
|
2,679
|
|
|
(1)
|
The total assets of the Asia Theme Parks were $8 billion at both September 29, 2018 and September 30, 2017 including parks, resorts and other property of $7 billion. The total liabilities of the Asia Theme Parks were $2 billion at both September 29, 2018 and September 30, 2017.
|
|
Revenues
|
$
|
3,834
|
|
|
Costs and expenses
|
(3,649
|
)
|
|
|
Equity in the loss of investees
|
(76
|
)
|
|
|
7
|
Film and Television Costs and Advances
|
|
|
September 29, 2018
|
|
September 30, 2017
|
||||
|
Theatrical film costs
|
|
|
|
||||
|
Released, less amortization
|
$
|
1,911
|
|
|
$
|
1,658
|
|
|
Completed, not released
|
397
|
|
|
—
|
|
||
|
In-process
|
2,974
|
|
|
3,200
|
|
||
|
In development or pre-production
|
173
|
|
|
306
|
|
||
|
|
5,455
|
|
|
5,164
|
|
||
|
Television costs
|
|
|
|
||||
|
Released, less amortization
|
1,301
|
|
|
1,152
|
|
||
|
Completed, not released
|
462
|
|
|
472
|
|
||
|
In-process
|
420
|
|
|
364
|
|
||
|
In development or pre-production
|
2
|
|
|
53
|
|
||
|
|
2,185
|
|
|
2,041
|
|
||
|
Television programming rights and advances
|
1,562
|
|
|
1,554
|
|
||
|
|
9,202
|
|
|
8,759
|
|
||
|
Less current portion
|
1,314
|
|
|
1,278
|
|
||
|
Non-current portion
|
$
|
7,888
|
|
|
$
|
7,481
|
|
|
8
|
Borrowings
|
|
|
|
|
|
|
|
2018
|
||||||||||||||
|
|
|
2018
|
|
2017
|
|
Stated
Interest
Rate (1)
|
|
Pay Floating Interest rate and Cross-
Currency Swaps (2)
|
|
Effective
Interest
Rate (3)
|
|
Swap
Maturities
|
||||||||
|
Commercial paper
|
|
$
|
1,005
|
|
|
$
|
2,772
|
|
|
—
|
|
|
$
|
—
|
|
|
2.24
|
%
|
|
|
|
U.S. and European medium-term notes (4)
|
|
17,942
|
|
|
19,721
|
|
|
2.91
|
%
|
|
6,600
|
|
|
3.27
|
%
|
|
2019-2027
|
|||
|
Foreign currency denominated debt
|
|
955
|
|
|
13
|
|
|
2.76
|
%
|
|
955
|
|
|
2.92
|
%
|
|
2025
|
|||
|
Capital Cities/ABC debt
|
|
103
|
|
|
105
|
|
|
8.75
|
%
|
|
—
|
|
|
5.99
|
%
|
|
|
|||
|
BAMTech acquisition payable
|
|
—
|
|
|
1,581
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
|
|||
|
Other (5)
|
|
(276
|
)
|
|
(46
|
)
|
|
|
|
—
|
|
|
|
|
|
|||||
|
|
|
19,729
|
|
|
24,146
|
|
|
2.79
|
%
|
|
7,555
|
|
|
3.22
|
%
|
|
|
|||
|
Asia Theme Parks borrowings
|
|
1,145
|
|
|
1,145
|
|
|
1.33
|
%
|
|
—
|
|
|
5.17
|
%
|
|
|
|||
|
Total borrowings
|
|
20,874
|
|
|
25,291
|
|
|
2.71
|
%
|
|
7,555
|
|
|
3.32
|
%
|
|
|
|||
|
Less current portion
|
|
3,790
|
|
|
6,172
|
|
|
1.85
|
%
|
|
1,600
|
|
|
2.94
|
%
|
|
|
|||
|
Total long-term borrowings
|
|
$
|
17,084
|
|
|
$
|
19,119
|
|
|
|
|
$
|
5,955
|
|
|
|
|
|
||
|
(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 29, 2018; 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 29, 2018.
|
|
(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 $121 million and $138 million at September 29, 2018 and September 30, 2017, respectively.
|
|
(5)
|
Includes market value adjustments for debt with qualifying hedges, which reduce borrowings by $304 million and $73 million at September 29, 2018 and September 30, 2017, respectively.
|
|
|
Committed
Capacity
|
|
Capacity
Used
|
|
Unused
Capacity
|
||||||
|
Facility expiring March 2019
|
$
|
6,000
|
|
|
$
|
—
|
|
|
$
|
6,000
|
|
|
Facility expiring March 2021
|
2,250
|
|
|
—
|
|
|
2,250
|
|
|||
|
Facility expiring March 2023
|
4,000
|
|
|
—
|
|
|
4,000
|
|
|||
|
Total
|
$
|
12,250
|
|
|
$
|
—
|
|
|
$
|
12,250
|
|
|
|
Commercial paper with original maturities less than three months, net (1)
|
|
Commercial paper with original maturities greater than three months
|
|
Total
|
||||||
|
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
|
|
|
Additions
|
—
|
|
|
8,079
|
|
|
8,079
|
|
|||
|
Payments
|
(1,099
|
)
|
|
(8,748
|
)
|
|
(9,847
|
)
|
|||
|
Other Activity
|
(2
|
)
|
|
3
|
|
|
1
|
|
|||
|
Balance at Sept. 29, 2018
|
$
|
50
|
|
|
$
|
955
|
|
|
$
|
1,005
|
|
|
|
Before
Asia
Theme Parks
Consolidation
|
|
Asia
Theme Parks
|
|
Total
|
||||||
|
2019
|
$
|
3,763
|
|
|
$
|
39
|
|
|
$
|
3,802
|
|
|
2020
|
3,000
|
|
|
—
|
|
|
3,000
|
|
|||
|
2021
|
2,106
|
|
|
—
|
|
|
2,106
|
|
|||
|
2022
|
1,900
|
|
|
10
|
|
|
1,910
|
|
|||
|
2023
|
1,000
|
|
|
36
|
|
|
1,036
|
|
|||
|
Thereafter
|
8,385
|
|
|
1,060
|
|
|
9,445
|
|
|||
|
|
$
|
20,154
|
|
|
$
|
1,145
|
|
|
$
|
21,299
|
|
|
9
|
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 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% for 2018 or 21.0% thereafter). The Company recognized a benefit of approximately $2.1 billion in fiscal 2018 from the deferred tax remeasurement (Deferred Remeasurement).
|
|
•
|
A one-time tax is due on certain accumulated foreign earnings (Deemed Repatriation Tax), which is payable over eight years. The effective 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 $0.4 billion in 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 generally be eligible to claim an immediate deduction for investments in qualified fixed assets acquired and film and television productions that commenced after September 27, 2017 and are placed in service during fiscal 2018 through fiscal 2022. The immediate deduction phases out for assets placed in service in fiscal 2023 through fiscal 2027.
|
|
•
|
Certain provisions of the Act are not effective for the Company until fiscal 2019 including:
|
|
◦
|
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%, which increases to approximately 16% in 2025. This will be effective for the Company in fiscal 2019.
|
|
Income Before Income Taxes
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
|||||||
|
Domestic (including U.S. exports)
|
$
|
12,914
|
|
|
$
|
12,611
|
|
|
$
|
14,018
|
|
|
Foreign subsidiaries
|
1,815
|
|
|
1,177
|
|
|
850
|
|
|||
|
|
$
|
14,729
|
|
|
$
|
13,788
|
|
|
$
|
14,868
|
|
|
Components of Deferred Tax Assets and Liabilities
|
September 29, 2018
|
|
September 30, 2017
|
||||
|
|
|
|
|||||
|
Deferred tax assets
|
|
|
|
||||
|
Net operating losses and tax credit carryforwards
|
$
|
(1,437
|
)
|
|
$
|
(1,705
|
)
|
|
Accrued liabilities
|
(1,214
|
)
|
|
(2,422
|
)
|
||
|
Other
|
(328
|
)
|
|
(386
|
)
|
||
|
Total deferred tax assets
|
(2,979
|
)
|
|
(4,513
|
)
|
||
|
Deferred tax liabilities
|
|
|
|
||||
|
Depreciable, amortizable and other property
|
3,678
|
|
|
5,692
|
|
||
|
Investment in foreign entities
|
351
|
|
|
518
|
|
||
|
Licensing revenues
|
265
|
|
|
476
|
|
||
|
Investment in U.S. entities
|
189
|
|
|
292
|
|
||
|
Other
|
88
|
|
|
130
|
|
||
|
Total deferred tax liabilities
|
4,571
|
|
|
7,108
|
|
||
|
Net deferred tax liability before valuation allowance
|
1,592
|
|
|
2,595
|
|
||
|
Valuation allowance
|
1,383
|
|
|
1,716
|
|
||
|
Net deferred tax liability
|
$
|
2,975
|
|
|
$
|
4,311
|
|
|
|
2018
|
|
2017
|
|
2016
|
|||
|
Federal income tax rate
|
24.5
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
|
State taxes, net of federal benefit
|
1.9
|
|
|
1.7
|
|
|
1.8
|
|
|
Domestic production activity deduction
|
(1.4
|
)
|
|
(2.1
|
)
|
|
(1.6
|
)
|
|
Earnings in jurisdictions taxed at rates different from the statutory U.S. federal rate
|
(1.1
|
)
|
|
(1.6
|
)
|
|
(1.1
|
)
|
|
Tax Act(1)
|
(11.5
|
)
|
|
—
|
|
|
—
|
|
|
Other, including tax reserves and related interest
|
(1.1
|
)
|
|
(0.9
|
)
|
|
0.1
|
|
|
|
11.3
|
%
|
|
32.1
|
%
|
|
34.2
|
%
|
|
(1)
|
Reflects the impact from the Deferred Remeasurement, net of the Deemed Repatriation Tax
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Balance at the beginning of the year
|
$
|
832
|
|
|
$
|
844
|
|
|
$
|
912
|
|
|
Increases for current year tax positions
|
64
|
|
|
61
|
|
|
71
|
|
|||
|
Increases for prior year tax positions
|
48
|
|
|
13
|
|
|
142
|
|
|||
|
Decreases in prior year tax positions
|
(135
|
)
|
|
(55
|
)
|
|
(158
|
)
|
|||
|
Settlements with taxing authorities
|
(161
|
)
|
|
(31
|
)
|
|
(123
|
)
|
|||
|
Balance at the end of the year
|
$
|
648
|
|
|
$
|
832
|
|
|
$
|
844
|
|
|
10
|
Pension and Other Benefit Programs
|
|
|
Pension Plans
|
|
Postretirement Medical Plans
|
||||||||||||
|
|
September 29, 2018
|
|
September 30, 2017
|
|
September 29, 2018
|
|
September 30,
2017 |
||||||||
|
Projected benefit obligations
|
|
|
|
|
|
|
|
||||||||
|
Beginning obligations
|
$
|
(14,532
|
)
|
|
$
|
(14,480
|
)
|
|
$
|
(1,746
|
)
|
|
$
|
(1,759
|
)
|
|
Service cost
|
(350
|
)
|
|
(368
|
)
|
|
(10
|
)
|
|
(11
|
)
|
||||
|
Interest cost
|
(489
|
)
|
|
(447
|
)
|
|
(60
|
)
|
|
(56
|
)
|
||||
|
Actuarial gain
|
416
|
|
|
343
|
|
|
166
|
|
|
42
|
|
||||
|
Plan amendments and other
|
(12
|
)
|
|
(22
|
)
|
|
(10
|
)
|
|
(9
|
)
|
||||
|
Benefits paid
|
467
|
|
|
442
|
|
|
51
|
|
|
47
|
|
||||
|
Ending obligations
|
$
|
(14,500
|
)
|
|
$
|
(14,532
|
)
|
|
$
|
(1,609
|
)
|
|
$
|
(1,746
|
)
|
|
Fair value of plans’ assets
|
|
|
|
|
|
|
|
||||||||
|
Beginning fair value
|
$
|
12,325
|
|
|
$
|
10,401
|
|
|
$
|
696
|
|
|
$
|
614
|
|
|
Actual return on plan assets
|
579
|
|
|
1,056
|
|
|
34
|
|
|
61
|
|
||||
|
Contributions
|
335
|
|
|
1,348
|
|
|
45
|
|
|
61
|
|
||||
|
Benefits paid
|
(467
|
)
|
|
(442
|
)
|
|
(51
|
)
|
|
(47
|
)
|
||||
|
Expenses and other
|
(44
|
)
|
|
(38
|
)
|
|
7
|
|
|
7
|
|
||||
|
Ending fair value
|
$
|
12,728
|
|
|
$
|
12,325
|
|
|
$
|
731
|
|
|
$
|
696
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Underfunded status of the plans
|
$
|
(1,772
|
)
|
|
$
|
(2,207
|
)
|
|
$
|
(878
|
)
|
|
$
|
(1,050
|
)
|
|
Amounts recognized in the balance sheet
|
|
|
|
|
|
|
|
||||||||
|
Non-current assets
|
$
|
113
|
|
|
$
|
70
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Current liabilities
|
(51
|
)
|
|
(46
|
)
|
|
—
|
|
|
—
|
|
||||
|
Non-current liabilities
|
(1,834
|
)
|
|
(2,231
|
)
|
|
(878
|
)
|
|
(1,050
|
)
|
||||
|
|
$
|
(1,772
|
)
|
|
$
|
(2,207
|
)
|
|
$
|
(878
|
)
|
|
$
|
(1,050
|
)
|
|
|
Pension Plans
|
|
Postretirement Medical Plans
|
||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
|
Service cost
|
$
|
350
|
|
|
$
|
368
|
|
|
$
|
318
|
|
|
$
|
10
|
|
|
$
|
11
|
|
|
$
|
11
|
|
|
Interest cost
|
489
|
|
|
447
|
|
|
458
|
|
|
60
|
|
|
56
|
|
|
61
|
|
||||||
|
Expected return on plan assets
|
(901
|
)
|
|
(874
|
)
|
|
(747
|
)
|
|
(53
|
)
|
|
(49
|
)
|
|
(45
|
)
|
||||||
|
Amortization of prior year service costs
|
13
|
|
|
12
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
|
Recognized net actuarial loss
|
348
|
|
|
405
|
|
|
242
|
|
|
14
|
|
|
17
|
|
|
8
|
|
||||||
|
Net periodic benefit cost
|
$
|
299
|
|
|
$
|
358
|
|
|
$
|
285
|
|
|
$
|
31
|
|
|
$
|
35
|
|
|
$
|
34
|
|
|
|
Pension Plans
|
|
Postretirement
Medical Plans
|
|
Total
|
||||||
|
Prior service cost
|
$
|
(52
|
)
|
|
$
|
—
|
|
|
$
|
(52
|
)
|
|
Net actuarial loss
|
(4,184
|
)
|
|
(36
|
)
|
|
(4,220
|
)
|
|||
|
Total amounts included in AOCI
|
(4,236
|
)
|
|
(36
|
)
|
|
(4,272
|
)
|
|||
|
Prepaid / (accrued) pension cost
|
2,464
|
|
|
(842
|
)
|
|
1,622
|
|
|||
|
Net balance sheet liability
|
$
|
(1,772
|
)
|
|
$
|
(878
|
)
|
|
$
|
(2,650
|
)
|
|
|
Pension Plans
|
|
Postretirement Medical Plans
|
|
Total
|
||||||
|
Prior service cost
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
(12
|
)
|
|
Net actuarial loss
|
(260
|
)
|
|
—
|
|
|
(260
|
)
|
|||
|
Total
|
$
|
(272
|
)
|
|
$
|
—
|
|
|
$
|
(272
|
)
|
|
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 29, 2018
|
|||||||||||||
|
Description
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
Plan Asset Mix
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
|
Cash
|
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
57
|
|
|
—
|
%
|
|
Common and preferred stocks(1)
|
|
3,023
|
|
|
—
|
|
|
3,023
|
|
|
22
|
%
|
|||
|
Mutual funds
|
|
800
|
|
|
|
|
|
800
|
|
|
6
|
%
|
|||
|
Government and federal agency bonds, notes and MBS
|
|
2,019
|
|
|
488
|
|
|
2,507
|
|
|
19
|
%
|
|||
|
Corporate bonds
|
|
—
|
|
|
573
|
|
|
573
|
|
|
4
|
%
|
|||
|
Other mortgage- and asset-backed securities
|
|
—
|
|
|
86
|
|
|
86
|
|
|
1
|
%
|
|||
|
Derivatives and other, net
|
|
3
|
|
|
(1
|
)
|
|
2
|
|
|
—
|
%
|
|||
|
Total investments in the fair value hierarchy
|
|
$
|
5,902
|
|
|
$
|
1,146
|
|
|
$
|
7,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Assets valued at NAV as a practical expedient:
|
|
|
|
|
|
|
|
|
|||||||
|
Common collective funds
|
|
|
|
|
|
2,778
|
|
|
21
|
%
|
|||||
|
Alternative investments
|
|
|
|
|
|
2,363
|
|
|
18
|
%
|
|||||
|
Money market funds and other
|
|
|
|
|
|
1,270
|
|
|
9
|
%
|
|||||
|
Total investments at fair value
|
|
|
|
|
|
$
|
13,459
|
|
|
100
|
%
|
||||
|
|
|
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
|
%
|
|||
|
Other 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
|
%
|
||||
|
(1)
|
Includes 2.8 million shares of Company common stock valued at $332 million (2% of total plan assets) and 2.9 million shares valued at $282 million (2% of total plan assets) at September 29, 2018 and September 30, 2017, respectively.
|
|
|
Pension
Plans
|
|
Postretirement
Medical Plans(1)
|
||||
|
2019
|
$
|
534
|
|
|
$
|
51
|
|
|
2020
|
544
|
|
|
54
|
|
||
|
2021
|
579
|
|
|
58
|
|
||
|
2022
|
618
|
|
|
63
|
|
||
|
2023
|
656
|
|
|
68
|
|
||
|
2024 – 2028
|
3,827
|
|
|
404
|
|
||
|
(1)
|
Estimated future benefit payments are net of expected Medicare subsidy receipts of $80 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
|
$
|
241
|
|
|
$
|
2,680
|
|
|
$
|
135
|
|
|
$
|
(23
|
)
|
|
$
|
(213
|
)
|
|
1 ppt increase
|
(229
|
)
|
|
(2,275
|
)
|
|
(135
|
)
|
|
30
|
|
|
283
|
|
|||||
|
•
|
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.
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Pension plans
|
$
|
144
|
|
|
$
|
127
|
|
|
$
|
126
|
|
|
Health & welfare plans
|
172
|
|
|
160
|
|
|
167
|
|
|||
|
Total contributions
|
$
|
316
|
|
|
$
|
287
|
|
|
$
|
293
|
|
|
11
|
Equity
|
|
Per Share
|
|
Total Paid
|
|
Payment Timing
|
|
Related to Fiscal Period
|
|
$0.84
|
|
$1.2 billion
|
|
Fourth Quarter of Fiscal 2018
|
|
First Half 2018
|
|
$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
|
|
$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
|
|
Fiscal year
|
|
Shares acquired
|
|
Total paid
|
|
2018
|
|
35 million
|
|
$3.6 billion
|
|
2017
|
|
89 million
|
|
$9.4 billion
|
|
2016
|
|
74 million
|
|
$7.5 billion
|
|
|
|
|
|
|
Unrecognized
Pension and Postretirement Medical Expense |
|
Foreign
Currency Translation and Other |
|
AOCI
|
||||||||||
|
|
Market Value Adjustments
|
|
|||||||||||||||||
|
|
Investments
|
|
Cash Flow Hedges
|
|
|||||||||||||||
|
AOCI, before tax
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Balance at October 3, 2015
|
$
|
21
|
|
|
$
|
523
|
|
|
$
|
(4,002
|
)
|
|
$
|
(431
|
)
|
|
$
|
(3,889
|
)
|
|
Unrealized gains (losses) arising during the period
|
23
|
|
|
(297
|
)
|
|
(2,122
|
)
|
|
(90
|
)
|
|
(2,486
|
)
|
|||||
|
Reclassifications of realized net (gains) losses to net income
|
—
|
|
|
(264
|
)
|
|
265
|
|
|
—
|
|
|
1
|
|
|||||
|
Balance at October 1, 2016
|
$
|
44
|
|
|
$
|
(38
|
)
|
|
$
|
(5,859
|
)
|
|
$
|
(521
|
)
|
|
$
|
(6,374
|
)
|
|
Unrealized gains (losses) arising during the period
|
(2
|
)
|
|
124
|
|
|
521
|
|
|
(2
|
)
|
|
641
|
|
|||||
|
Reclassifications of net (gains) losses to net income
|
(27
|
)
|
|
(194
|
)
|
|
432
|
|
|
—
|
|
|
211
|
|
|||||
|
Balance at September 30, 2017
|
$
|
15
|
|
|
$
|
(108
|
)
|
|
$
|
(4,906
|
)
|
|
$
|
(523
|
)
|
|
$
|
(5,522
|
)
|
|
Unrealized gains (losses) arising during the period
|
9
|
|
|
250
|
|
|
203
|
|
|
(204
|
)
|
|
258
|
|
|||||
|
Reclassifications of net (gains) losses to net income
|
—
|
|
|
35
|
|
|
380
|
|
|
—
|
|
|
415
|
|
|||||
|
Balance at September 29, 2018
|
$
|
24
|
|
|
$
|
177
|
|
|
$
|
(4,323
|
)
|
|
$
|
(727
|
)
|
|
$
|
(4,849
|
)
|
|
|
|
|
|
|
Unrecognized
Pension and Postretirement Medical Expense |
|
Foreign
Currency Translation and Other |
|
AOCI
|
||||||||||
|
|
Market Value Adjustments
|
|
|||||||||||||||||
|
|
Investments
|
|
Cash Flow Hedges
|
|
|||||||||||||||
|
Tax on AOCI
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Balance at October 3, 2015
|
$
|
(8
|
)
|
|
$
|
(189
|
)
|
|
$
|
1,505
|
|
|
$
|
160
|
|
|
$
|
1,468
|
|
|
Unrealized gains (losses) arising during the period
|
(10
|
)
|
|
104
|
|
|
801
|
|
|
32
|
|
|
927
|
|
|||||
|
Reclassifications of realized net (gains) losses to net income
|
—
|
|
|
98
|
|
|
(98
|
)
|
|
—
|
|
|
—
|
|
|||||
|
Balance at October 1, 2016
|
$
|
(18
|
)
|
|
$
|
13
|
|
|
$
|
2,208
|
|
|
$
|
192
|
|
|
$
|
2,395
|
|
|
Unrealized gains (losses) arising during the period
|
1
|
|
|
(39
|
)
|
|
(209
|
)
|
|
(76
|
)
|
|
(323
|
)
|
|||||
|
Reclassifications of net (gains) losses to net income
|
10
|
|
|
72
|
|
|
(160
|
)
|
|
—
|
|
|
(78
|
)
|
|||||
|
Balance at September 30, 2017
|
$
|
(7
|
)
|
|
$
|
46
|
|
|
$
|
1,839
|
|
|
$
|
116
|
|
|
$
|
1,994
|
|
|
Unrealized gains (losses) arising during the period
|
(2
|
)
|
|
(66
|
)
|
|
(47
|
)
|
|
(13
|
)
|
|
(128
|
)
|
|||||
|
Reclassifications of net (gains) losses to net income
|
—
|
|
|
(12
|
)
|
|
(102
|
)
|
|
—
|
|
|
(114
|
)
|
|||||
|
Balance at September 29, 2018
|
$
|
(9
|
)
|
|
$
|
(32
|
)
|
|
$
|
1,690
|
|
|
$
|
103
|
|
|
$
|
1,752
|
|
|
|
|
|
|
|
Unrecognized
Pension and Postretirement Medical Expense |
|
Foreign
Currency Translation and Other |
|
AOCI
|
||||||||||
|
|
Market Value Adjustments
|
|
|||||||||||||||||
|
|
Investments
|
|
Cash Flow Hedges
|
|
|||||||||||||||
|
AOCI, after tax
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Balance at October 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 October 1, 2016
|
$
|
26
|
|
|
$
|
(25
|
)
|
|
$
|
(3,651
|
)
|
|
$
|
(329
|
)
|
|
$
|
(3,979
|
)
|
|
Unrealized gains (losses) arising during the period
|
(1
|
)
|
|
85
|
|
|
312
|
|
|
(78
|
)
|
|
318
|
|
|||||
|
Reclassifications of net (gains) losses to net income
|
(17
|
)
|
|
(122
|
)
|
|
272
|
|
|
—
|
|
|
133
|
|
|||||
|
Balance at September 30, 2017
|
$
|
8
|
|
|
$
|
(62
|
)
|
|
$
|
(3,067
|
)
|
|
$
|
(407
|
)
|
|
$
|
(3,528
|
)
|
|
Unrealized gains (losses) arising during the period
|
7
|
|
|
184
|
|
|
156
|
|
|
(217
|
)
|
|
130
|
|
|||||
|
Reclassifications of net (gains) losses to net income
|
—
|
|
|
23
|
|
|
278
|
|
|
—
|
|
|
301
|
|
|||||
|
Balance at September 29, 2018
|
$
|
15
|
|
|
$
|
145
|
|
|
$
|
(2,633
|
)
|
|
$
|
(624
|
)
|
|
$
|
(3,097
|
)
|
|
Gains/(losses) in net income:
|
|
Affected line item in the Consolidated Statements of Income:
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Investments, net
|
|
Interest expense, net
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
Estimated tax
|
|
Income taxes
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|||
|
|
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
|
Cash flow hedges
|
|
Primarily revenue
|
|
(35
|
)
|
|
194
|
|
|
264
|
|
|||
|
Estimated tax
|
|
Income taxes
|
|
12
|
|
|
(72
|
)
|
|
(98
|
)
|
|||
|
|
|
|
|
(23
|
)
|
|
122
|
|
|
166
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
|
Pension and postretirement medical expense
|
|
Cost and expenses
|
|
(380
|
)
|
|
(432
|
)
|
|
(265
|
)
|
|||
|
Estimated tax
|
|
Income taxes
|
|
102
|
|
|
160
|
|
|
98
|
|
|||
|
|
|
|
|
(278
|
)
|
|
(272
|
)
|
|
(167
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
|
Total reclassifications for the period
|
|
|
|
$
|
(301
|
)
|
|
$
|
(133
|
)
|
|
$
|
(1
|
)
|
|
12
|
Equity-Based Compensation
|
|
|
2018
|
|
2017
|
|
2016
|
|||
|
Risk-free interest rate
|
2.4
|
%
|
|
2.6
|
%
|
|
2.3
|
%
|
|
Expected volatility
|
23
|
%
|
|
22
|
%
|
|
26
|
%
|
|
Dividend yield
|
1.57
|
%
|
|
1.58
|
%
|
|
1.32
|
%
|
|
Termination rate
|
4.8
|
%
|
|
4.0
|
%
|
|
4.0
|
%
|
|
Exercise multiple
|
1.75
|
|
|
1.62
|
|
|
1.62
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Stock option
|
$
|
87
|
|
|
$
|
90
|
|
|
$
|
93
|
|
|
RSUs
|
306
|
|
|
274
|
|
|
293
|
|
|||
|
Total equity-based compensation expense (1)
|
393
|
|
|
364
|
|
|
386
|
|
|||
|
Tax impact
|
(99
|
)
|
|
(123
|
)
|
|
(131
|
)
|
|||
|
Reduction in net income
|
$
|
294
|
|
|
$
|
241
|
|
|
$
|
255
|
|
|
Equity-based compensation expense capitalized during the period
|
$
|
70
|
|
|
$
|
78
|
|
|
$
|
78
|
|
|
Tax benefit reported in cash flow from financing activities (2)
|
n/a
|
|
|
n/a
|
|
|
$
|
208
|
|
||
|
(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 2018 and 2017 is not applicable as the Company adopted new accounting guidance in fiscal 2017.
|
|
|
2018
|
|||||
|
|
Shares
|
|
Weighted
Average
Exercise Price
|
|||
|
Outstanding at beginning of year
|
24
|
|
|
$
|
76.68
|
|
|
Awards forfeited
|
(1
|
)
|
|
107.69
|
|
|
|
Awards granted
|
4
|
|
|
111.48
|
|
|
|
Awards exercised
|
(3
|
)
|
|
58.09
|
|
|
|
Outstanding at end of year
|
24
|
|
|
$
|
84.14
|
|
|
Exercisable at end of year
|
14
|
|
|
$
|
69.06
|
|
|
|
|
|
|
|
|
|
Vested
|
|||||||||||
|
|
Range of Exercise Prices
|
|
Number of
Options
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Years of
Contractual
Life
|
|||||||||||
|
|
|
$
|
—
|
|
—
|
$
|
45
|
|
|
|
3
|
|
|
$
|
38.13
|
|
|
2.8
|
|
|
|
$
|
46
|
|
—
|
$
|
60
|
|
|
|
3
|
|
|
50.75
|
|
|
4.2
|
|
|
|
|
$
|
61
|
|
—
|
$
|
90
|
|
|
|
3
|
|
|
72.94
|
|
|
5.2
|
|
|
|
|
$
|
91
|
|
—
|
$
|
115
|
|
|
|
5
|
|
|
101.92
|
|
|
7.0
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
Expected to Vest
|
|||||||||||
|
|
Range of Exercise Prices
|
|
Number of
Options (1)
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Years of
Contractual
Life
|
|||||||||||
|
|
|
$
|
90
|
|
—
|
$
|
105
|
|
|
|
1
|
|
|
$
|
93.09
|
|
|
6.5
|
|
|
|
$
|
106
|
|
—
|
$
|
110
|
|
|
|
3
|
|
|
105.24
|
|
|
8.3
|
|
|
|
|
$
|
111
|
|
—
|
$
|
115
|
|
|
|
5
|
|
|
112.05
|
|
|
8.6
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
||||||
|
(1)
|
Number of options expected to vest is total unvested options less estimated forfeitures.
|
|
|
2018
|
|||||
|
|
Units
|
|
Weighted
Average
Grant-Date
Fair Value
|
|||
|
Unvested at beginning of year
|
9
|
|
|
$
|
101.17
|
|
|
Granted (1)
|
5
|
|
|
109.05
|
|
|
|
Vested
|
(4
|
)
|
|
113.21
|
|
|
|
Forfeited
|
(1
|
)
|
|
107.23
|
|
|
|
Unvested at end of year (2)
|
9
|
|
|
$
|
108.74
|
|
|
13
|
Detail of Certain Balance Sheet Accounts
|
|
Current receivables
|
|
September 29,
2018 |
|
September 30,
2017 |
||||
|
|
|
|
|
|||||
|
Accounts receivable
|
|
$
|
8,268
|
|
|
$
|
7,611
|
|
|
Other
|
|
1,258
|
|
|
1,209
|
|
||
|
Allowance for doubtful accounts
|
|
(192
|
)
|
|
(187
|
)
|
||
|
|
|
$
|
9,334
|
|
|
$
|
8,633
|
|
|
Other current assets
|
|
|
|
|
||||
|
Prepaid expenses
|
|
$
|
476
|
|
|
$
|
445
|
|
|
Other
|
|
159
|
|
|
143
|
|
||
|
|
|
$
|
635
|
|
|
$
|
588
|
|
|
Parks, resorts and other property
|
|
|
|
|
||||
|
Attractions, buildings and improvements
|
|
$
|
28,995
|
|
|
$
|
28,644
|
|
|
Furniture, fixtures and equipment
|
|
19,400
|
|
|
18,908
|
|
||
|
Land improvements
|
|
5,911
|
|
|
5,593
|
|
||
|
Leasehold improvements
|
|
932
|
|
|
898
|
|
||
|
|
|
55,238
|
|
|
54,043
|
|
||
|
Accumulated depreciation
|
|
(30,764
|
)
|
|
(29,037
|
)
|
||
|
Projects in progress
|
|
3,942
|
|
|
2,145
|
|
||
|
Land
|
|
1,124
|
|
|
1,255
|
|
||
|
|
|
$
|
29,540
|
|
|
$
|
28,406
|
|
|
Intangible assets
|
|
|
|
|
||||
|
Character/franchise intangibles and copyrights
|
|
$
|
5,829
|
|
|
$
|
5,829
|
|
|
Other amortizable intangible assets
|
|
1,213
|
|
|
1,154
|
|
||
|
Accumulated amortization
|
|
(2,070
|
)
|
|
(1,828
|
)
|
||
|
Net amortizable intangible assets
|
|
4,972
|
|
|
5,155
|
|
||
|
FCC licenses
|
|
602
|
|
|
602
|
|
||
|
Trademarks
|
|
1,218
|
|
|
1,218
|
|
||
|
Other indefinite lived intangible assets
|
|
20
|
|
|
20
|
|
||
|
|
|
$
|
6,812
|
|
|
$
|
6,995
|
|
|
Other non-current assets
|
|
September 29,
2018 |
|
September 30,
2017 |
||||
|
|
|
|
|
|||||
|
Receivables
|
|
$
|
1,928
|
|
|
$
|
1,688
|
|
|
Prepaid expenses
|
|
919
|
|
|
233
|
|
||
|
Other
|
|
518
|
|
|
469
|
|
||
|
|
|
$
|
3,365
|
|
|
$
|
2,390
|
|
|
Accounts payable and other accrued liabilities
|
|
|
|
|
||||
|
Accounts payable
|
|
$
|
6,503
|
|
|
$
|
6,305
|
|
|
Payroll and employee benefits
|
|
2,189
|
|
|
1,819
|
|
||
|
Other
|
|
787
|
|
|
731
|
|
||
|
|
|
$
|
9,479
|
|
|
$
|
8,855
|
|
|
Other long-term liabilities
|
|
|
|
|
||||
|
Pension and postretirement medical plan liabilities
|
|
$
|
2,712
|
|
|
$
|
3,281
|
|
|
Other
|
|
3,878
|
|
|
3,162
|
|
||
|
|
|
$
|
6,590
|
|
|
$
|
6,443
|
|
|
14
|
Commitments and Contingencies
|
|
|
Broadcast
Programming
|
|
Operating
Leases
|
|
Other
|
|
Total
|
||||||||
|
2019
|
$
|
7,340
|
|
|
$
|
681
|
|
|
$
|
1,793
|
|
|
$
|
9,814
|
|
|
2020
|
7,475
|
|
|
571
|
|
|
1,269
|
|
|
9,315
|
|
||||
|
2021
|
7,277
|
|
|
470
|
|
|
568
|
|
|
8,315
|
|
||||
|
2022
|
5,317
|
|
|
381
|
|
|
1,095
|
|
|
6,793
|
|
||||
|
2023
|
4,363
|
|
|
261
|
|
|
901
|
|
|
5,525
|
|
||||
|
Thereafter
|
12,841
|
|
|
1,220
|
|
|
1,668
|
|
|
15,729
|
|
||||
|
|
$
|
44,613
|
|
|
$
|
3,584
|
|
|
$
|
7,294
|
|
|
$
|
55,491
|
|
|
2019
|
$
|
24
|
|
|
2020
|
21
|
|
|
|
2021
|
19
|
|
|
|
2022
|
18
|
|
|
|
2023
|
16
|
|
|
|
Thereafter
|
442
|
|
|
|
Total minimum obligations
|
540
|
|
|
|
Less amount representing interest
|
(386
|
)
|
|
|
Present value of net minimum obligations
|
154
|
|
|
|
Less current portion
|
(12
|
)
|
|
|
Long-term portion
|
$
|
142
|
|
|
15
|
Fair Value Measurement
|
|
|
|
Fair Value Measurement at September 29, 2018
|
||||||||||||||
|
Description
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
Assets
|
|
|
|
|
|
|
||||||||||
|
Investments
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38
|
|
|
Derivatives
|
|
|
|
|
|
|
|
|
||||||||
|
Interest rate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
Foreign exchange
|
|
—
|
|
|
469
|
|
|
—
|
|
|
469
|
|
||||
|
Other
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
|
Derivatives
|
|
|
|
|
|
|
|
|
||||||||
|
Interest rate
|
|
—
|
|
|
(410
|
)
|
|
—
|
|
|
(410
|
)
|
||||
|
Foreign exchange
|
|
—
|
|
|
(274
|
)
|
|
—
|
|
|
(274
|
)
|
||||
|
Total recorded at fair value
|
|
$
|
38
|
|
|
$
|
(200
|
)
|
|
$
|
—
|
|
|
$
|
(162
|
)
|
|
Fair value of borrowings
|
|
$
|
—
|
|
|
$
|
19,826
|
|
|
$
|
1,171
|
|
|
$
|
20,997
|
|
|
|
|
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
|
|
|
16
|
Derivative Instruments
|
|
|
As of September 29, 2018
|
||||||||||||||
|
|
Current
Assets
|
|
Other Assets
|
|
Other
Current
Liabilities
|
|
Other Long-
Term
Liabilities
|
||||||||
|
Derivatives designated as hedges
|
|
|
|
|
|
|
|
||||||||
|
Foreign exchange
|
$
|
166
|
|
|
$
|
169
|
|
|
$
|
(80
|
)
|
|
$
|
(39
|
)
|
|
Interest rate
|
—
|
|
|
—
|
|
|
(329
|
)
|
|
—
|
|
||||
|
Other
|
13
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
|
Derivatives not designated as hedges
|
|
|
|
|
|
|
|
||||||||
|
Foreign exchange
|
38
|
|
|
96
|
|
|
(95
|
)
|
|
(60
|
)
|
||||
|
Interest Rate
|
—
|
|
|
—
|
|
|
—
|
|
|
(81
|
)
|
||||
|
Gross fair value of derivatives
|
217
|
|
|
267
|
|
|
(504
|
)
|
|
(180
|
)
|
||||
|
Counterparty netting
|
(158
|
)
|
|
(227
|
)
|
|
254
|
|
|
131
|
|
||||
|
Cash collateral (received)/paid
|
—
|
|
|
—
|
|
|
135
|
|
|
5
|
|
||||
|
Net derivative positions
|
$
|
59
|
|
|
$
|
40
|
|
|
$
|
(115
|
)
|
|
$
|
(44
|
)
|
|
|
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
|
)
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Gain (loss) on interest rate swaps
|
$
|
(230
|
)
|
|
$
|
(211
|
)
|
|
$
|
18
|
|
|
Gain (loss) on hedged borrowings
|
230
|
|
|
211
|
|
|
(18
|
)
|
|||
|
|
Costs and Expenses
|
|
Interest expense, net
|
|
Income Tax Expense
|
||||||||||||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
Net gains (losses) on foreign currency denominated assets and liabilities
|
$
|
(146
|
)
|
|
$
|
105
|
|
|
$
|
2
|
|
|
$
|
39
|
|
|
$
|
(13
|
)
|
|
$
|
(2
|
)
|
|
$
|
29
|
|
|
$
|
3
|
|
|
$
|
49
|
|
|
Net gains (losses) on foreign exchange risk management contracts not designated as hedges
|
104
|
|
|
(120
|
)
|
|
(65
|
)
|
|
(46
|
)
|
|
11
|
|
|
—
|
|
|
(19
|
)
|
|
24
|
|
|
(24
|
)
|
|||||||||
|
Net gains (losses)
|
$
|
(42
|
)
|
|
$
|
(15
|
)
|
|
$
|
(63
|
)
|
|
$
|
(7
|
)
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
$
|
10
|
|
|
$
|
27
|
|
|
$
|
25
|
|
|
17
|
Restructuring and Impairment Charges
|
|
18
|
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.
|
|
19
|
Condensed Consolidating Financial Information
|
|
|
TWDC
|
|
Legacy Disney
|
|
Non-Guarantor Subsidiaries
|
|
Reclassifications & Eliminations
|
|
Total
|
||||||||||
|
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
59,520
|
|
|
$
|
(86
|
)
|
|
$
|
59,434
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Operating expenses
|
—
|
|
|
—
|
|
|
(32,726
|
)
|
|
—
|
|
|
(32,726
|
)
|
|||||
|
Selling, general, administrative and other
|
—
|
|
|
(615
|
)
|
|
(8,245
|
)
|
|
—
|
|
|
(8,860
|
)
|
|||||
|
Depreciation and amortization
|
—
|
|
|
(1
|
)
|
|
(3,010
|
)
|
|
—
|
|
|
(3,011
|
)
|
|||||
|
Total costs and expenses
|
—
|
|
|
(616
|
)
|
|
(43,981
|
)
|
|
—
|
|
|
(44,597
|
)
|
|||||
|
Restructuring and impairment charges
|
—
|
|
|
—
|
|
|
(33
|
)
|
|
—
|
|
|
(33
|
)
|
|||||
|
Allocations to non-guarantor subsidiaries
|
—
|
|
|
576
|
|
|
(576
|
)
|
|
—
|
|
|
—
|
|
|||||
|
Other income, net
|
—
|
|
|
41
|
|
|
474
|
|
|
86
|
|
|
601
|
|
|||||
|
Interest expense, net
|
—
|
|
|
(698
|
)
|
|
124
|
|
|
—
|
|
|
(574
|
)
|
|||||
|
Equity in the income (loss) of investees, net
|
—
|
|
|
—
|
|
|
(102
|
)
|
|
—
|
|
|
(102
|
)
|
|||||
|
Income before taxes
|
—
|
|
|
(697
|
)
|
|
15,426
|
|
|
—
|
|
|
14,729
|
|
|||||
|
Income taxes
|
—
|
|
|
79
|
|
|
(1,742
|
)
|
|
—
|
|
|
(1,663
|
)
|
|||||
|
Earnings from subsidiary entities
|
—
|
|
|
13,216
|
|
|
—
|
|
|
(13,216
|
)
|
|
—
|
|
|||||
|
Consolidated net income
|
—
|
|
|
12,598
|
|
|
13,684
|
|
|
(13,216
|
)
|
|
13,066
|
|
|||||
|
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(468
|
)
|
|
—
|
|
|
(468
|
)
|
|||||
|
Net income excluding noncontrolling interests
|
$
|
—
|
|
|
$
|
12,598
|
|
|
$
|
13,216
|
|
|
$
|
(13,216
|
)
|
|
$
|
12,598
|
|
|
Comprehensive income excluding noncontrolling interests
|
$
|
—
|
|
|
$
|
13,029
|
|
|
$
|
13,037
|
|
|
$
|
(13,037
|
)
|
|
$
|
13,029
|
|
|
|
TWDC
|
|
Legacy Disney
|
|
Non-Guarantor Subsidiaries
|
|
Reclassifications & Eliminations
|
|
Total
|
||||||||||
|
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54,952
|
|
|
$
|
185
|
|
|
$
|
55,137
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Operating expenses
|
—
|
|
|
—
|
|
|
(30,306
|
)
|
|
—
|
|
|
(30,306
|
)
|
|||||
|
Selling, general, administrative and other
|
—
|
|
|
(450
|
)
|
|
(7,726
|
)
|
|
—
|
|
|
(8,176
|
)
|
|||||
|
Depreciation and amortization
|
—
|
|
|
(1
|
)
|
|
(2,781
|
)
|
|
—
|
|
|
(2,782
|
)
|
|||||
|
Total costs and expenses
|
—
|
|
|
(451
|
)
|
|
(40,813
|
)
|
|
—
|
|
|
(41,264
|
)
|
|||||
|
Restructuring and impairment charges
|
—
|
|
|
—
|
|
|
(98
|
)
|
|
—
|
|
|
(98
|
)
|
|||||
|
Allocations to non-guarantor subsidiaries
|
—
|
|
|
405
|
|
|
(405
|
)
|
|
—
|
|
|
—
|
|
|||||
|
Other income, net
|
—
|
|
|
163
|
|
|
100
|
|
|
(185
|
)
|
|
78
|
|
|||||
|
Interest expense, net
|
—
|
|
|
(510
|
)
|
|
125
|
|
|
—
|
|
|
(385
|
)
|
|||||
|
Equity in the income (loss) of investees, net
|
—
|
|
|
—
|
|
|
320
|
|
|
—
|
|
|
320
|
|
|||||
|
Income before taxes
|
—
|
|
|
(393
|
)
|
|
14,181
|
|
|
—
|
|
|
13,788
|
|
|||||
|
Income taxes
|
—
|
|
|
126
|
|
|
(4,548
|
)
|
|
—
|
|
|
(4,422
|
)
|
|||||
|
Earnings from subsidiary entities
|
—
|
|
|
9,247
|
|
|
—
|
|
|
(9,247
|
)
|
|
—
|
|
|||||
|
Consolidated net income
|
—
|
|
|
8,980
|
|
|
9,633
|
|
|
(9,247
|
)
|
|
9,366
|
|
|||||
|
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(386
|
)
|
|
—
|
|
|
(386
|
)
|
|||||
|
Net income excluding noncontrolling interests
|
$
|
—
|
|
|
$
|
8,980
|
|
|
$
|
9,247
|
|
|
$
|
(9,247
|
)
|
|
$
|
8,980
|
|
|
Comprehensive income excluding noncontrolling interests
|
$
|
—
|
|
|
$
|
9,431
|
|
|
$
|
9,153
|
|
|
$
|
(9,153
|
)
|
|
$
|
9,431
|
|
|
|
TWDC
|
|
Legacy Disney
|
|
Non-Guarantor Subsidiaries
|
|
Reclassifications & Eliminations
|
|
Total
|
||||||||||
|
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
55,287
|
|
|
$
|
345
|
|
|
$
|
55,632
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Operating expenses
|
—
|
|
|
—
|
|
|
(29,993
|
)
|
|
—
|
|
|
(29,993
|
)
|
|||||
|
Selling, general, administrative and other
|
—
|
|
|
(488
|
)
|
|
(8,266
|
)
|
|
—
|
|
|
(8,754
|
)
|
|||||
|
Depreciation and amortization
|
—
|
|
|
(1
|
)
|
|
(2,526
|
)
|
|
—
|
|
|
(2,527
|
)
|
|||||
|
Total costs and expenses
|
—
|
|
|
(489
|
)
|
|
(40,785
|
)
|
|
—
|
|
|
(41,274
|
)
|
|||||
|
Restructuring and impairment charges
|
—
|
|
|
—
|
|
|
(156
|
)
|
|
—
|
|
|
(156
|
)
|
|||||
|
Allocations to non-guarantor subsidiaries
|
—
|
|
|
365
|
|
|
(365
|
)
|
|
—
|
|
|
—
|
|
|||||
|
Other income, net
|
—
|
|
|
332
|
|
|
13
|
|
|
(345
|
)
|
|
—
|
|
|||||
|
Interest expense, net
|
—
|
|
|
(434
|
)
|
|
174
|
|
|
—
|
|
|
(260
|
)
|
|||||
|
Equity in the income (loss) of investees, net
|
—
|
|
|
—
|
|
|
926
|
|
|
—
|
|
|
926
|
|
|||||
|
Income before taxes
|
—
|
|
|
(226
|
)
|
|
15,094
|
|
|
—
|
|
|
14,868
|
|
|||||
|
Income taxes
|
—
|
|
|
77
|
|
|
(5,155
|
)
|
|
—
|
|
|
(5,078
|
)
|
|||||
|
Earnings from subsidiary entities
|
—
|
|
|
9,540
|
|
|
—
|
|
|
(9,540
|
)
|
|
—
|
|
|||||
|
Consolidated net income
|
—
|
|
|
9,391
|
|
|
9,939
|
|
|
(9,540
|
)
|
|
9,790
|
|
|||||
|
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(399
|
)
|
|
—
|
|
|
(399
|
)
|
|||||
|
Net income excluding noncontrolling interests
|
$
|
—
|
|
|
$
|
9,391
|
|
|
$
|
9,540
|
|
|
$
|
(9,540
|
)
|
|
$
|
9,391
|
|
|
Comprehensive income excluding noncontrolling interests
|
$
|
—
|
|
|
$
|
7,833
|
|
|
$
|
9,479
|
|
|
$
|
(9,479
|
)
|
|
$
|
7,833
|
|
|
|
TWDC
|
|
Legacy Disney
|
|
Non-Guarantor Subsidiaries
|
|
Reclassifications & Eliminations
|
|
Total
|
||||||||||
|
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
1,367
|
|
|
$
|
2,783
|
|
|
$
|
—
|
|
|
$
|
4,150
|
|
|
Receivables, net
|
—
|
|
|
155
|
|
|
9,179
|
|
|
—
|
|
|
9,334
|
|
|||||
|
Inventories
|
—
|
|
|
4
|
|
|
1,388
|
|
|
—
|
|
|
1,392
|
|
|||||
|
Television costs and advances
|
—
|
|
|
—
|
|
|
1,314
|
|
|
—
|
|
|
1,314
|
|
|||||
|
Other current assets
|
—
|
|
|
152
|
|
|
483
|
|
|
—
|
|
|
635
|
|
|||||
|
Total current assets
|
—
|
|
|
1,678
|
|
|
15,147
|
|
|
—
|
|
|
16,825
|
|
|||||
|
Film and television costs
|
—
|
|
|
—
|
|
|
7,888
|
|
|
—
|
|
|
7,888
|
|
|||||
|
Investments in subsidiaries
|
—
|
|
|
149,880
|
|
|
—
|
|
|
(149,880
|
)
|
|
—
|
|
|||||
|
Other investments
|
—
|
|
|
—
|
|
|
2,899
|
|
|
—
|
|
|
2,899
|
|
|||||
|
Parks, resorts and other property, net
|
—
|
|
|
12
|
|
|
29,528
|
|
|
—
|
|
|
29,540
|
|
|||||
|
Intangible assets, net
|
—
|
|
|
—
|
|
|
6,812
|
|
|
—
|
|
|
6,812
|
|
|||||
|
Goodwill
|
—
|
|
|
—
|
|
|
31,269
|
|
|
—
|
|
|
31,269
|
|
|||||
|
Intercompany receivables
|
—
|
|
|
—
|
|
|
79,793
|
|
|
(79,793
|
)
|
|
—
|
|
|||||
|
Other assets
|
—
|
|
|
911
|
|
|
3,178
|
|
|
(724
|
)
|
|
3,365
|
|
|||||
|
Total assets
|
$
|
—
|
|
|
$
|
152,481
|
|
|
$
|
176,514
|
|
|
$
|
(230,397
|
)
|
|
$
|
98,598
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Accounts payable and other accrued liabilities
|
$
|
—
|
|
|
$
|
688
|
|
|
$
|
8,791
|
|
|
$
|
—
|
|
|
$
|
9,479
|
|
|
Current portion of borrowings
|
—
|
|
|
3,751
|
|
|
39
|
|
|
—
|
|
|
3,790
|
|
|||||
|
Deferred revenues and other
|
—
|
|
|
115
|
|
|
4,476
|
|
|
—
|
|
|
4,591
|
|
|||||
|
Total current liabilities
|
—
|
|
|
4,554
|
|
|
13,306
|
|
|
—
|
|
|
17,860
|
|
|||||
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Borrowings
|
$
|
—
|
|
|
$
|
15,676
|
|
|
$
|
1,408
|
|
|
$
|
—
|
|
|
$
|
17,084
|
|
|
Deferred income taxes
|
—
|
|
|
—
|
|
|
3,833
|
|
|
(724
|
)
|
|
3,109
|
|
|||||
|
Other long-term liabilities
|
—
|
|
|
3,685
|
|
|
2,905
|
|
|
—
|
|
|
6,590
|
|
|||||
|
Intercompany payables
|
—
|
|
|
79,793
|
|
|
—
|
|
|
(79,793
|
)
|
|
—
|
|
|||||
|
Total non-current liabilities
|
—
|
|
|
99,154
|
|
|
8,146
|
|
|
(80,517
|
)
|
|
26,783
|
|
|||||
|
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
1,123
|
|
|
—
|
|
|
1,123
|
|
|||||
|
Total Disney Shareholders’ equity
|
—
|
|
|
48,773
|
|
|
149,880
|
|
|
(149,880
|
)
|
|
48,773
|
|
|||||
|
Noncontrolling interests
|
—
|
|
|
—
|
|
|
4,059
|
|
|
—
|
|
|
4,059
|
|
|||||
|
Total equity
|
—
|
|
|
48,773
|
|
|
153,939
|
|
|
(149,880
|
)
|
|
52,832
|
|
|||||
|
Total liabilities and equity
|
$
|
—
|
|
|
$
|
152,481
|
|
|
$
|
176,514
|
|
|
$
|
(230,397
|
)
|
|
$
|
98,598
|
|
|
|
TWDC
|
|
Legacy Disney
|
|
Non-Guarantor Subsidiaries
|
|
Reclassifications & Eliminations
|
|
Total
|
||||||||||
|
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
667
|
|
|
$
|
3,350
|
|
|
$
|
—
|
|
|
$
|
4,017
|
|
|
Receivables, net
|
—
|
|
|
307
|
|
|
8,326
|
|
|
—
|
|
|
8,633
|
|
|||||
|
Inventories
|
—
|
|
|
4
|
|
|
1,369
|
|
|
—
|
|
|
1,373
|
|
|||||
|
Television costs and advances
|
—
|
|
|
—
|
|
|
1,278
|
|
|
—
|
|
|
1,278
|
|
|||||
|
Other current assets
|
—
|
|
|
110
|
|
|
478
|
|
|
—
|
|
|
588
|
|
|||||
|
Total current assets
|
—
|
|
|
1,088
|
|
|
14,801
|
|
|
—
|
|
|
15,889
|
|
|||||
|
Film and television costs
|
—
|
|
|
—
|
|
|
7,481
|
|
|
—
|
|
|
7,481
|
|
|||||
|
Investments in subsidiaries
|
—
|
|
|
135,370
|
|
|
—
|
|
|
(135,370
|
)
|
|
—
|
|
|||||
|
Other investments
|
—
|
|
|
—
|
|
|
3,202
|
|
|
—
|
|
|
3,202
|
|
|||||
|
Parks, resorts and other property, net
|
—
|
|
|
9
|
|
|
28,397
|
|
|
—
|
|
|
28,406
|
|
|||||
|
Intangible assets, net
|
—
|
|
|
—
|
|
|
6,995
|
|
|
—
|
|
|
6,995
|
|
|||||
|
Goodwill
|
—
|
|
|
—
|
|
|
31,426
|
|
|
—
|
|
|
31,426
|
|
|||||
|
Intercompany receivables
|
—
|
|
|
257
|
|
|
69,864
|
|
|
(70,121
|
)
|
|
—
|
|
|||||
|
Other assets
|
—
|
|
|
1,217
|
|
|
2,306
|
|
|
(1,133
|
)
|
|
2,390
|
|
|||||
|
Total assets
|
$
|
—
|
|
|
$
|
137,941
|
|
|
$
|
164,472
|
|
|
$
|
(206,624
|
)
|
|
$
|
95,789
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Accounts payable and other accrued liabilities
|
$
|
—
|
|
|
$
|
440
|
|
|
$
|
8,415
|
|
|
$
|
—
|
|
|
$
|
8,855
|
|
|
Current portion of borrowings
|
—
|
|
|
4,577
|
|
|
1,595
|
|
|
—
|
|
|
6,172
|
|
|||||
|
Deferred revenues and other
|
—
|
|
|
131
|
|
|
4,437
|
|
|
—
|
|
|
4,568
|
|
|||||
|
Total current liabilities
|
—
|
|
|
5,148
|
|
|
14,447
|
|
|
—
|
|
|
19,595
|
|
|||||
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Borrowings
|
$
|
—
|
|
|
$
|
17,672
|
|
|
$
|
1,447
|
|
|
$
|
—
|
|
|
$
|
19,119
|
|
|
Deferred income taxes
|
—
|
|
|
—
|
|
|
5,613
|
|
|
(1,133
|
)
|
|
4,480
|
|
|||||
|
Other long-term liabilities
|
—
|
|
|
3,942
|
|
|
2,501
|
|
|
—
|
|
|
6,443
|
|
|||||
|
Intercompany payables
|
—
|
|
|
69,864
|
|
|
257
|
|
|
(70,121
|
)
|
|
—
|
|
|||||
|
Total non-current liabilities
|
—
|
|
|
91,478
|
|
|
9,818
|
|
|
(71,254
|
)
|
|
30,042
|
|
|||||
|
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
1,148
|
|
|
—
|
|
|
1,148
|
|
|||||
|
Total Disney Shareholders’ equity
|
—
|
|
|
41,315
|
|
|
135,370
|
|
|
(135,370
|
)
|
|
41,315
|
|
|||||
|
Noncontrolling interests
|
—
|
|
|
—
|
|
|
3,689
|
|
|
—
|
|
|
3,689
|
|
|||||
|
Total equity
|
—
|
|
|
41,315
|
|
|
139,059
|
|
|
(135,370
|
)
|
|
45,004
|
|
|||||
|
Total liabilities and equity
|
$
|
—
|
|
|
$
|
137,941
|
|
|
$
|
164,472
|
|
|
$
|
(206,624
|
)
|
|
$
|
95,789
|
|
|
|
TWDC
|
|
Legacy Disney
|
|
Non-Guarantor Subsidiaries
|
|
Reclassifications & Eliminations
|
|
Total
|
||||||||||
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash provided by operations
|
$
|
—
|
|
|
$
|
336
|
|
|
$
|
14,149
|
|
|
$
|
(190
|
)
|
|
$
|
14,295
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Investments in parks, resorts and other property
|
—
|
|
|
(3
|
)
|
|
(4,462
|
)
|
|
—
|
|
|
(4,465
|
)
|
|||||
|
Acquisitions
|
—
|
|
|
—
|
|
|
(1,581
|
)
|
|
—
|
|
|
(1,581
|
)
|
|||||
|
Intercompany investing activities, net
|
—
|
|
|
(1,327
|
)
|
|
—
|
|
|
1,327
|
|
|
—
|
|
|||||
|
Other
|
—
|
|
|
—
|
|
|
710
|
|
|
—
|
|
|
710
|
|
|||||
|
Cash used in investing activities
|
—
|
|
|
(1,330
|
)
|
|
(5,333
|
)
|
|
1,327
|
|
|
(5,336
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Commercial paper, net
|
—
|
|
|
(1,768
|
)
|
|
—
|
|
|
—
|
|
|
(1,768
|
)
|
|||||
|
Borrowings
|
—
|
|
|
997
|
|
|
59
|
|
|
—
|
|
|
1,056
|
|
|||||
|
Reduction of borrowings
|
—
|
|
|
(1,800
|
)
|
|
(71
|
)
|
|
—
|
|
|
(1,871
|
)
|
|||||
|
Dividends
|
—
|
|
|
(2,515
|
)
|
|
(190
|
)
|
|
190
|
|
|
(2,515
|
)
|
|||||
|
Repurchases of common stock
|
—
|
|
|
(3,577
|
)
|
|
—
|
|
|
—
|
|
|
(3,577
|
)
|
|||||
|
Proceeds from exercise of stock options
|
—
|
|
|
210
|
|
|
—
|
|
|
—
|
|
|
210
|
|
|||||
|
Intercompany financing, net
|
—
|
|
|
10,343
|
|
|
(9,016
|
)
|
|
(1,327
|
)
|
|
—
|
|
|||||
|
Contributions from noncontrolling interest holders
|
—
|
|
|
—
|
|
|
399
|
|
|
—
|
|
|
399
|
|
|||||
|
Other
|
—
|
|
|
(222
|
)
|
|
(555
|
)
|
|
—
|
|
|
(777
|
)
|
|||||
|
Cash used in financing activities
|
—
|
|
|
1,668
|
|
|
(9,374
|
)
|
|
(1,137
|
)
|
|
(8,843
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Impact of exchange rates on cash, cash equivalents and restricted cash
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
(25
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Change in cash, cash equivalents and restricted cash
|
—
|
|
|
674
|
|
|
(583
|
)
|
|
—
|
|
|
91
|
|
|||||
|
Cash, cash equivalents and restricted cash, beginning of year
|
—
|
|
|
693
|
|
|
3,371
|
|
|
—
|
|
|
4,064
|
|
|||||
|
Cash, cash equivalents and restricted cash, end of year
|
$
|
—
|
|
|
$
|
1,367
|
|
|
$
|
2,788
|
|
|
$
|
—
|
|
|
$
|
4,155
|
|
|
|
TWDC
|
|
Legacy Disney
|
|
Non-Guarantor Subsidiaries
|
|
Reclassifications & Eliminations
|
|
Total
|
||||||||||
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash provided by operations
|
$
|
—
|
|
|
$
|
753
|
|
|
$
|
13,461
|
|
|
$
|
(1,871
|
)
|
|
$
|
12,343
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Investments in parks, resorts and other property
|
—
|
|
|
(7
|
)
|
|
(3,616
|
)
|
|
—
|
|
|
(3,623
|
)
|
|||||
|
Acquisitions
|
—
|
|
|
—
|
|
|
(417
|
)
|
|
—
|
|
|
(417
|
)
|
|||||
|
Intercompany investing activities, net
|
—
|
|
|
(1,856
|
)
|
|
—
|
|
|
1,856
|
|
|
—
|
|
|||||
|
Other
|
—
|
|
|
15
|
|
|
(86
|
)
|
|
—
|
|
|
(71
|
)
|
|||||
|
Cash used in investing activities
|
—
|
|
|
(1,848
|
)
|
|
(4,119
|
)
|
|
1,856
|
|
|
(4,111
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Commercial paper, net
|
—
|
|
|
1,247
|
|
|
—
|
|
|
—
|
|
|
1,247
|
|
|||||
|
Borrowings
|
—
|
|
|
4,741
|
|
|
79
|
|
|
—
|
|
|
4,820
|
|
|||||
|
Reduction of borrowings
|
—
|
|
|
(1,850
|
)
|
|
(514
|
)
|
|
—
|
|
|
(2,364
|
)
|
|||||
|
Dividends
|
—
|
|
|
(2,445
|
)
|
|
(1,871
|
)
|
|
1,871
|
|
|
(2,445
|
)
|
|||||
|
Repurchases of common stock
|
—
|
|
|
(9,368
|
)
|
|
—
|
|
|
—
|
|
|
(9,368
|
)
|
|||||
|
Proceeds from exercise of stock options
|
—
|
|
|
276
|
|
|
—
|
|
|
|
|
|
276
|
|
|||||
|
Intercompany financing, net
|
—
|
|
|
8,394
|
|
|
(6,538
|
)
|
|
(1,856
|
)
|
|
—
|
|
|||||
|
Contributions from noncontrolling interest holders
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
|||||
|
Other
|
—
|
|
|
(266
|
)
|
|
(876
|
)
|
|
—
|
|
|
(1,142
|
)
|
|||||
|
Cash used in financing activities
|
—
|
|
|
729
|
|
|
(9,703
|
)
|
|
15
|
|
|
(8,959
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Impact of exchange rates on cash, cash equivalents and restricted cash
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
31
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Change in cash, cash equivalents and restricted cash
|
—
|
|
|
(366
|
)
|
|
(330
|
)
|
|
—
|
|
|
(696
|
)
|
|||||
|
Cash, cash equivalents and restricted cash, beginning of year
|
—
|
|
|
1,059
|
|
|
3,701
|
|
|
—
|
|
|
4,760
|
|
|||||
|
Cash, cash equivalents and restricted cash, end of year
|
$
|
—
|
|
|
$
|
693
|
|
|
$
|
3,371
|
|
|
$
|
—
|
|
|
$
|
4,064
|
|
|
|
TWDC
|
|
Legacy Disney
|
|
Non-Guarantor Subsidiaries
|
|
Reclassifications & Eliminations
|
|
Total
|
||||||||||
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash provided by operations
|
$
|
—
|
|
|
$
|
(385
|
)
|
|
$
|
13,756
|
|
|
$
|
(235
|
)
|
|
$
|
13,136
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Investments in parks, resorts and other property
|
—
|
|
|
(12
|
)
|
|
(4,761
|
)
|
|
—
|
|
|
(4,773
|
)
|
|||||
|
Acquisitions
|
—
|
|
|
—
|
|
|
(850
|
)
|
|
—
|
|
|
(850
|
)
|
|||||
|
Intercompany investing activities, net
|
—
|
|
|
(617
|
)
|
|
—
|
|
|
617
|
|
|
—
|
|
|||||
|
Other
|
—
|
|
|
(74
|
)
|
|
(61
|
)
|
|
—
|
|
|
(135
|
)
|
|||||
|
Cash used in investing activities
|
—
|
|
|
(703
|
)
|
|
(5,672
|
)
|
|
617
|
|
|
(5,758
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Commercial paper, net
|
—
|
|
|
(920
|
)
|
|
—
|
|
|
—
|
|
|
(920
|
)
|
|||||
|
Borrowings
|
—
|
|
|
4,948
|
|
|
1,117
|
|
|
—
|
|
|
6,065
|
|
|||||
|
Reduction of borrowings
|
—
|
|
|
(2,000
|
)
|
|
(205
|
)
|
|
—
|
|
|
(2,205
|
)
|
|||||
|
Dividends
|
—
|
|
|
(2,313
|
)
|
|
(235
|
)
|
|
235
|
|
|
(2,313
|
)
|
|||||
|
Repurchases of common stock
|
—
|
|
|
(7,499
|
)
|
|
—
|
|
|
—
|
|
|
(7,499
|
)
|
|||||
|
Proceeds from exercise of stock options
|
—
|
|
|
259
|
|
|
—
|
|
|
—
|
|
|
259
|
|
|||||
|
Intercompany financing, net
|
—
|
|
|
8,624
|
|
|
(8,007
|
)
|
|
(617
|
)
|
|
—
|
|
|||||
|
Other
|
—
|
|
|
(42
|
)
|
|
(565
|
)
|
|
—
|
|
|
(607
|
)
|
|||||
|
Cash used in financing activities
|
—
|
|
|
1,057
|
|
|
(7,895
|
)
|
|
(382
|
)
|
|
(7,220
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Impact of exchange rates on cash, cash equivalents and restricted cash
|
—
|
|
|
—
|
|
|
(123
|
)
|
|
—
|
|
|
(123
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Change in cash, cash equivalents and restricted cash
|
—
|
|
|
(31
|
)
|
|
66
|
|
|
—
|
|
|
35
|
|
|||||
|
Cash, cash equivalents and restricted cash, beginning of year
|
—
|
|
|
1,090
|
|
|
3,635
|
|
|
—
|
|
|
4,725
|
|
|||||
|
Cash, cash equivalents and restricted cash, end of year
|
$
|
—
|
|
|
$
|
1,059
|
|
|
$
|
3,701
|
|
|
$
|
—
|
|
|
$
|
4,760
|
|
|
(unaudited)
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
||||||||
|
2018
|
|
|
|
|
|
|
|
|
|
||||||||
|
Revenues
|
|
$
|
15,351
|
|
|
$
|
14,548
|
|
|
$
|
15,228
|
|
|
$
|
14,307
|
|
|
|
Segment operating income (5)
|
|
3,986
|
|
|
4,237
|
|
|
4,189
|
|
|
3,277
|
|
|
||||
|
Net income
|
|
4,473
|
|
|
3,115
|
|
|
3,059
|
|
|
2,419
|
|
|
||||
|
Net income attributable to Disney
|
|
4,423
|
|
|
2,937
|
|
|
2,916
|
|
|
2,322
|
|
|
||||
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||
|
Diluted
|
|
$
|
2.91
|
|
(1)
|
$
|
1.95
|
|
(2)
|
$
|
1.95
|
|
(3)
|
$
|
1.55
|
|
(4)
|
|
Basic
|
|
2.93
|
|
|
1.95
|
|
|
1.96
|
|
|
1.56
|
|
|
||||
|
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
|
|
|
||||
|
(1)
|
Results for the first quarter of fiscal 2018 included an estimated net benefit from the Deferred Remeasurement, partially offset by the Deemed Repatriation Tax as a result of the Tax Act (Tax Act Estimate), which had a favorable impact of $1.00 on diluted earnings per share, and a gain from the sale of property rights, which had a favorable impact of $0.03 on diluted earnings per share. These favorable impacts were partially offset by restructuring and impairment charges, which had an adverse impact of $0.01 on diluted earnings per share.
|
|
(2)
|
Results for the second quarter of fiscal 2018 included a net benefit of updating prior-period Tax Act estimate, which had a favorable impact of $0.09 on diluted earnings per share, and proceeds from legal insurance recoveries, which had a favorable impact of $0.02 on diluted earnings per share. These favorable impacts were partially offset by restructuring and impairment charges, which had an adverse impact of $0.01 per diluted earnings per share.
|
|
(3)
|
Results for the third quarter of fiscal 2018 included a net benefit of updating prior-period Tax Act estimate, which had a favorable impact of $0.07 on diluted earnings per share. 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.
|
|
(4)
|
Results for the fourth quarter of fiscal 2018 included a gain in connection with the sale of real estate, which had a favorable impact of $0.25 on diluted earnings per share, partially offset by equity investment impairments, which had an adverse impact of $0.11 per diluted earnings per share, and the impact of updating prior-period Tax Act estimate, which had an adverse impact of $0.06 per diluted earnings per share. 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, partially offset by restructuring and impairment charges, which had an adverse impact of $0.04 per diluted earnings per share.
|
|
(5)
|
Segment operating results reflect earnings before the corporate and unallocated shared expenses, restructuring and impairment charges, other income, net, interest expense, net, income taxes and noncontrolling interests.
|
|
|
Quarter Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
|
Revenues:
|
|
|
|
||||
|
Services
|
$
|
12,866
|
|
|
$
|
12,984
|
|
|
Products
|
2,437
|
|
|
2,367
|
|
||
|
Total revenues
|
15,303
|
|
|
15,351
|
|
||
|
Costs and expenses:
|
|
|
|
||||
|
Cost of services (exclusive of depreciation and amortization)
|
(7,564
|
)
|
|
(7,324
|
)
|
||
|
Cost of products (exclusive of depreciation and amortization)
|
(1,437
|
)
|
|
(1,405
|
)
|
||
|
Selling, general, administrative and other
|
(2,152
|
)
|
|
(2,087
|
)
|
||
|
Depreciation and amortization
|
(732
|
)
|
|
(742
|
)
|
||
|
Total costs and expenses
|
(11,885
|
)
|
|
(11,558
|
)
|
||
|
Restructuring and impairment charges
|
—
|
|
|
(15
|
)
|
||
|
Other income
|
—
|
|
|
53
|
|
||
|
Interest expense, net
|
(63
|
)
|
|
(129
|
)
|
||
|
Equity in the income of investees
|
76
|
|
|
43
|
|
||
|
Income before income taxes
|
3,431
|
|
|
3,745
|
|
||
|
Income taxes
|
(645
|
)
|
|
728
|
|
||
|
Net income
|
2,786
|
|
|
4,473
|
|
||
|
Less: Net (income) loss attributable to noncontrolling interests
|
2
|
|
|
(50
|
)
|
||
|
Net income attributable to The Walt Disney Company (Disney)
|
$
|
2,788
|
|
|
$
|
4,423
|
|
|
|
|
|
|
||||
|
Earnings per share attributable to Disney:
|
|
|
|
||||
|
Diluted
|
$
|
1.86
|
|
|
$
|
2.91
|
|
|
|
|
|
|
||||
|
Basic
|
$
|
1.87
|
|
|
$
|
2.93
|
|
|
|
|
|
|
||||
|
Weighted average number of common and common equivalent shares outstanding:
|
|
|
|
||||
|
Diluted
|
1,498
|
|
|
1,521
|
|
||
|
|
|
|
|
||||
|
Basic
|
1,490
|
|
|
1,512
|
|
||
|
|
|
|
|
||||
|
Dividends declared per share
|
$
|
0.88
|
|
|
$
|
0.84
|
|
|
|
Quarter Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
|
Net income
|
$
|
2,786
|
|
|
$
|
4,473
|
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
||||
|
Market value adjustments for investments
|
—
|
|
|
(1
|
)
|
||
|
Market value adjustments for hedges
|
(9
|
)
|
|
18
|
|
||
|
Pension and postretirement medical plan adjustments
|
53
|
|
|
61
|
|
||
|
Foreign currency translation and other
|
(21
|
)
|
|
87
|
|
||
|
Other comprehensive income
|
23
|
|
|
165
|
|
||
|
Comprehensive income
|
2,809
|
|
|
4,638
|
|
||
|
Net (income) loss attributable to noncontrolling interests, including redeemable noncontrolling interests
|
2
|
|
|
(50
|
)
|
||
|
Other comprehensive (income) attributable to noncontrolling interests
|
(2
|
)
|
|
(41
|
)
|
||
|
Comprehensive income attributable to Disney
|
$
|
2,809
|
|
|
$
|
4,547
|
|
|
|
December 29,
2018 |
|
September 29,
2018 |
||||
|
ASSETS
|
|
|
|
||||
|
Current assets
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
4,455
|
|
|
$
|
4,150
|
|
|
Receivables
|
10,123
|
|
|
9,334
|
|
||
|
Inventories
|
1,357
|
|
|
1,392
|
|
||
|
Television costs and advances
|
824
|
|
|
1,314
|
|
||
|
Other current assets
|
778
|
|
|
635
|
|
||
|
Total current assets
|
17,537
|
|
|
16,825
|
|
||
|
Film and television costs
|
8,177
|
|
|
7,888
|
|
||
|
Investments
|
2,970
|
|
|
2,899
|
|
||
|
Parks, resorts and other property
|
|
|
|
||||
|
Attractions, buildings and equipment
|
55,385
|
|
|
55,238
|
|
||
|
Accumulated depreciation
|
(31,069
|
)
|
|
(30,764
|
)
|
||
|
|
24,316
|
|
|
24,474
|
|
||
|
Projects in progress
|
4,336
|
|
|
3,942
|
|
||
|
Land
|
1,145
|
|
|
1,124
|
|
||
|
|
29,797
|
|
|
29,540
|
|
||
|
Intangible assets, net
|
6,747
|
|
|
6,812
|
|
||
|
Goodwill
|
31,289
|
|
|
31,269
|
|
||
|
Other assets
|
3,424
|
|
|
3,365
|
|
||
|
Total assets
|
$
|
99,941
|
|
|
$
|
98,598
|
|
|
|
|
|
|
||||
|
LIABILITIES AND EQUITY
|
|
|
|
||||
|
Current liabilities
|
|
|
|
||||
|
Accounts payable and other accrued liabilities
|
$
|
10,696
|
|
|
$
|
9,479
|
|
|
Current portion of borrowings
|
3,489
|
|
|
3,790
|
|
||
|
Deferred revenue and other
|
3,434
|
|
|
4,591
|
|
||
|
Total current liabilities
|
17,619
|
|
|
17,860
|
|
||
|
Borrowings
|
17,176
|
|
|
17,084
|
|
||
|
Deferred income taxes
|
3,177
|
|
|
3,109
|
|
||
|
Other long-term liabilities
|
6,452
|
|
|
6,590
|
|
||
|
Commitments and contingencies (Note 12)
|
|
|
|
|
|
||
|
Redeemable noncontrolling interests
|
1,124
|
|
|
1,123
|
|
||
|
Equity
|
|
|
|
||||
|
Preferred stock
|
—
|
|
|
—
|
|
||
|
Common stock, $0.01 par value,
Authorized – 4.6 billion shares, Issued – 2.9 billion shares |
36,799
|
|
|
36,779
|
|
||
|
Retained earnings
|
84,887
|
|
|
82,679
|
|
||
|
Accumulated other comprehensive loss
|
(3,782
|
)
|
|
(3,097
|
)
|
||
|
|
117,904
|
|
|
116,361
|
|
||
|
Treasury stock, at cost, 1.4 billion shares
|
(67,588
|
)
|
|
(67,588
|
)
|
||
|
Total Disney Shareholders’ equity
|
50,316
|
|
|
48,773
|
|
||
|
Noncontrolling interests
|
4,077
|
|
|
4,059
|
|
||
|
Total equity
|
54,393
|
|
|
52,832
|
|
||
|
Total liabilities and equity
|
$
|
99,941
|
|
|
$
|
98,598
|
|
|
|
Quarter Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
|
OPERATING ACTIVITIES
|
|
|
|
||||
|
Net income
|
$
|
2,786
|
|
|
$
|
4,473
|
|
|
Depreciation and amortization
|
732
|
|
|
742
|
|
||
|
Deferred income taxes
|
46
|
|
|
(1,726
|
)
|
||
|
Equity in the income of investees
|
(76
|
)
|
|
(43
|
)
|
||
|
Cash distributions received from equity investees
|
170
|
|
|
170
|
|
||
|
Net change in film and television costs and advances
|
468
|
|
|
34
|
|
||
|
Equity-based compensation
|
92
|
|
|
94
|
|
||
|
Other
|
61
|
|
|
139
|
|
||
|
Changes in operating assets and liabilities:
|
|
|
|
||||
|
Receivables
|
(1,078
|
)
|
|
(1,378
|
)
|
||
|
Inventories
|
32
|
|
|
65
|
|
||
|
Other assets
|
25
|
|
|
(29
|
)
|
||
|
Accounts payable and other liabilities
|
(1,289
|
)
|
|
(1,160
|
)
|
||
|
Income taxes
|
130
|
|
|
856
|
|
||
|
Cash provided by operations
|
2,099
|
|
|
2,237
|
|
||
|
|
|
|
|
||||
|
INVESTING ACTIVITIES
|
|
|
|
||||
|
Investments in parks, resorts and other property
|
(1,195
|
)
|
|
(981
|
)
|
||
|
Other
|
(141
|
)
|
|
(62
|
)
|
||
|
Cash used in investing activities
|
(1,336
|
)
|
|
(1,043
|
)
|
||
|
|
|
|
|
||||
|
FINANCING ACTIVITIES
|
|
|
|
||||
|
Commercial paper borrowings/(payments), net
|
(302
|
)
|
|
1,140
|
|
||
|
Borrowings
|
—
|
|
|
1,025
|
|
||
|
Reduction of borrowings
|
—
|
|
|
(1,330
|
)
|
||
|
Repurchases of common stock
|
—
|
|
|
(1,313
|
)
|
||
|
Proceeds from exercise of stock options
|
37
|
|
|
50
|
|
||
|
Other
|
(146
|
)
|
|
(156
|
)
|
||
|
Cash used in financing activities
|
(411
|
)
|
|
(584
|
)
|
||
|
|
|
|
|
||||
|
Impact of exchange rates on cash, cash equivalents and restricted cash
|
(44
|
)
|
|
21
|
|
||
|
|
|
|
|
||||
|
Change in cash, cash equivalents and restricted cash
|
308
|
|
|
631
|
|
||
|
Cash, cash equivalents and restricted cash, beginning of period
|
4,155
|
|
|
4,064
|
|
||
|
Cash, cash equivalents and restricted cash, end of period
|
$
|
4,463
|
|
|
$
|
4,695
|
|
|
|
|
Quarter Ended
|
|||||||||||||||||||||||||||||
|
|
|
Equity Attributable to Disney
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
Shares
|
|
Common Stock
|
|
Retained Earnings
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
Treasury Stock
|
|
Total Disney Equity
|
|
Non-controlling
Interests (1)
|
|
Total
Equity
|
|||||||||||||||||
|
Balance at September 29, 2018
|
|
1,488
|
|
|
$
|
36,779
|
|
|
$
|
82,679
|
|
|
$
|
(3,097
|
)
|
|
$
|
(67,588
|
)
|
|
$
|
48,773
|
|
|
$
|
4,059
|
|
|
$
|
52,832
|
|
|
Comprehensive income
|
|
—
|
|
|
—
|
|
|
2,788
|
|
|
21
|
|
|
—
|
|
|
2,809
|
|
|
(1
|
)
|
|
2,808
|
|
|||||||
|
Equity compensation activity
|
|
2
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|||||||
|
Dividends
|
|
—
|
|
|
—
|
|
|
(1,310
|
)
|
|
—
|
|
|
—
|
|
|
(1,310
|
)
|
|
—
|
|
|
(1,310
|
)
|
|||||||
|
Contributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
20
|
|
|||||||
|
Adoption of new accounting standards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
|
|
—
|
|
|
—
|
|
|
691
|
|
|
(691
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
Intra-Entity Transfers of Assets Other Than Inventory
|
|
—
|
|
|
—
|
|
|
129
|
|
|
—
|
|
|
—
|
|
|
129
|
|
|
—
|
|
|
129
|
|
|||||||
|
Revenues from Contracts with Customers
|
|
—
|
|
|
—
|
|
|
(116
|
)
|
|
—
|
|
|
—
|
|
|
(116
|
)
|
|
—
|
|
|
(116
|
)
|
|||||||
|
Other
|
|
—
|
|
|
—
|
|
|
22
|
|
|
(15
|
)
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||||
|
Distributions and other
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(1
|
)
|
|
3
|
|
|||||||
|
Balance at December 29, 2018
|
|
1,490
|
|
|
$
|
36,799
|
|
|
$
|
84,887
|
|
|
$
|
(3,782
|
)
|
|
$
|
(67,588
|
)
|
|
$
|
50,316
|
|
|
$
|
4,077
|
|
|
$
|
54,393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Balance at September 30, 2017
|
|
1,517
|
|
|
$
|
36,248
|
|
|
$
|
72,606
|
|
|
$
|
(3,528
|
)
|
|
$
|
(64,011
|
)
|
|
$
|
41,315
|
|
|
$
|
3,689
|
|
|
$
|
45,004
|
|
|
Comprehensive income
|
|
—
|
|
|
—
|
|
|
4,423
|
|
|
124
|
|
|
—
|
|
|
4,547
|
|
|
97
|
|
|
4,644
|
|
|||||||
|
Equity compensation activity
|
|
3
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||||
|
Common stock repurchases
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,313
|
)
|
|
(1,313
|
)
|
|
—
|
|
|
(1,313
|
)
|
|||||||
|
Dividends
|
|
—
|
|
|
—
|
|
|
(1,266
|
)
|
|
—
|
|
|
—
|
|
|
(1,266
|
)
|
|
—
|
|
|
(1,266
|
)
|
|||||||
|
Distributions and other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|||||||
|
Balance at December 30, 2017
|
|
1,507
|
|
|
$
|
36,254
|
|
|
$
|
75,763
|
|
|
$
|
(3,404
|
)
|
|
$
|
(65,324
|
)
|
|
$
|
43,289
|
|
|
$
|
3,794
|
|
|
$
|
47,083
|
|
|
(1)
|
Excludes redeemable noncontrolling interest
|
|
1.
|
Principles of Consolidation
|
|
2.
|
Description of Business and Segment Information
|
|
•
|
Media Networks;
|
|
•
|
Parks, Experiences & Consumer Products;
|
|
•
|
Studio Entertainment; and
|
|
•
|
Direct-to-Consumer & International
|
|
•
|
Significant operations:
|
|
◦
|
Disney, ESPN and Freeform branded domestic cable networks
|
|
◦
|
ABC branded broadcast television network and eight owned domestic television stations
|
|
◦
|
Television programming, production and distribution
|
|
◦
|
A 50% equity investment in A+E Television Networks (A+E), which operates a variety of cable channels including A&E, HISTORY and Lifetime
|
|
•
|
Significant revenues:
|
|
◦
|
Affiliate fees - Fees charged to multi-channel video programming distributors (i.e. cable, satellite, telecommunications and digital over-the-top (e.g. Hulu, YouTube TV) service providers) (“MVPDs”) and to television stations affiliated with the ABC Network for the right to deliver our programming to their customers
|
|
◦
|
Advertising - Sales of ad time/space on our domestic networks and related platforms, except non-ratings-based advertising on digital platforms (“ratings-based ad sales”), and the sale of time on our domestic television stations. Ratings-based ad sales are generally determined using viewership measured with Nielsen ratings. Non-ratings-based advertising on digital platforms will be reported by DTCI as discussed in the DTCI section
|
|
◦
|
TV/SVOD distribution - Licensing fees and other revenues for the right to use our television programs and productions and content transactions with other Company segments (“program sales”)
|
|
•
|
Significant expenses:
|
|
◦
|
Operating expenses consisting primarily of programming and production costs, participations and residuals expense, technical support costs, operating labor, and distribution costs
|
|
◦
|
Selling, general and administrative costs
|
|
◦
|
Depreciation and amortization
|
|
•
|
Significant operations:
|
|
◦
|
Parks & Experiences:
|
|
▪
|
Theme parks and resorts, which include: Walt Disney World Resort in Florida; Disneyland Resort in California; Disneyland Paris; and 47% and 43% interests in Hong Kong Disneyland Resort and Shanghai Disney Resort, respectively, all of which are consolidated in our results. Additionally, the Company licenses our intellectual property to a third party to operate Tokyo Disney Resort
|
|
▪
|
Disney Cruise Line, Disney Vacation Club and Aulani, a Disney Resort & Spa in Hawaii
|
|
◦
|
Consumer Products:
|
|
▪
|
Licensing of our trade names, characters, visual, literary and other intellectual properties to various manufacturers, game developers, publishers and retailers throughout the world
|
|
▪
|
Sale of branded merchandise through retail, online and wholesale businesses, and development and publishing of books, magazines, comic books and games. As of the end of fiscal 2018, the Company had substantially exited the vertical games development business
|
|
•
|
Significant revenues:
|
|
◦
|
Theme park admissions - Sales of tickets for admission to our theme parks
|
|
◦
|
Parks & Experiences merchandise, food and beverage - Sales of merchandise, food and beverages at our theme parks and resorts and cruise ships
|
|
◦
|
Resorts and vacations - Sales of room nights at hotels, sales of cruise vacations and sales and rentals of vacation club properties
|
|
◦
|
Merchandise licensing and retail
|
|
▪
|
Merchandise licensing - Royalties from intellectual property licensing
|
|
▪
|
Retail - Sales of merchandise at The Disney Stores and through branded internet shopping sites, as well as, to wholesalers (including sales of published materials and games)
|
|
◦
|
Parks licensing and other - Revenues from sponsorships and co-branding opportunities, real estate rent and sales, and royalties from Tokyo Disney Resort
|
|
•
|
Significant expenses:
|
|
◦
|
Operating expenses consisting primarily of operating labor, costs of goods sold, infrastructure costs, supplies, commissions and entertainment offerings. Infrastructure costs include information systems expense, repairs and maintenance, utilities and fuel, property taxes, retail occupancy costs, insurance, and transportation
|
|
◦
|
Selling, general and administrative costs
|
|
◦
|
Depreciation and amortization
|
|
•
|
Significant operations:
|
|
◦
|
Motion picture production and distribution under the Walt Disney Pictures, Pixar, Marvel, Lucasfilm and Touchstone banners
|
|
◦
|
Development, production and licensing of live entertainment events on Broadway and around the world (“Stage plays”)
|
|
•
|
Significant revenues:
|
|
◦
|
Theatrical distribution - Rentals from licensing our motion pictures to theaters
|
|
◦
|
Home entertainment - Sale of our motion pictures to retailers and distributors in physical (DVD and Blu-ray) and electronic formats
|
|
◦
|
TV/SVOD distribution and other - Licensing fees and other revenue for the right to use our motion picture productions, content transactions with other Company segments, ticket sales from stage plays and fees from licensing our intellectual properties for use in live entertainment productions
|
|
•
|
Significant expenses:
|
|
◦
|
Operating expenses consisting primarily of amortization of production, participations and residuals costs, distribution costs and costs of sales
|
|
◦
|
Selling, general and administrative costs
|
|
◦
|
Depreciation and amortization
|
|
•
|
Significant operations:
|
|
◦
|
Disney and ESPN branded international television networks and channels (“International Channels”)
|
|
◦
|
Direct-to-consumer (DTC) businesses:
|
|
▪
|
ESPN+ streaming service, which was launched in April 2018
|
|
▪
|
Disney+ streaming service, which we plan to launch in late 2019
|
|
◦
|
Other Company branded digital content distribution platforms and services
|
|
◦
|
BAMTech LLC (BAMTech) (owned 75% by the Company since September 25, 2017), which provides streaming technology services
|
|
◦
|
Equity investments:
|
|
▪
|
A 30% interest in Hulu, which aggregates acquired television and film entertainment content and original content produced by Hulu and distributes it digitally to internet-connected devices
|
|
▪
|
A 21% effective ownership in Vice Group Holdings, Inc. (Vice), which is a media company that targets millennial audiences. Vice operates Viceland, which is owned 50% by Vice and 50% by A+E
|
|
•
|
Significant revenues:
|
|
◦
|
Affiliate fees - Fees charged to MVPDs for the right to deliver our International Channels to their customers
|
|
◦
|
Advertising - Sales of ad time/space on our International Channels. Sales of non-ratings based ad time/space on digital platforms (“addressable ad sales”). In general, addressable ad sales are delivered using technology that allows for dynamic insertion of advertisements into video content, which can be targeted to specific viewer groups
|
|
◦
|
Subscription fees and other - Fees charged to customers/subscribers for our DTC streaming and other services and fees charged for streaming technology services
|
|
•
|
Significant expenses:
|
|
◦
|
Operating expenses consisting primarily of programming and production costs (including programming, production and branded digital content obtained from other Company segments), technical support costs, operating labor and distribution costs
|
|
◦
|
Selling, general and administrative costs
|
|
◦
|
Depreciation and amortization
|
|
|
Quarter Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
|
Revenues (1):
|
|
|
|
||||
|
Media Networks
|
$
|
5,921
|
|
|
$
|
5,555
|
|
|
Parks, Experiences & Consumer Products
|
6,824
|
|
|
6,527
|
|
||
|
Studio Entertainment
|
1,824
|
|
|
2,509
|
|
||
|
Direct-to-Consumer & International
|
918
|
|
|
931
|
|
||
|
Eliminations(2)
|
(184
|
)
|
|
(171
|
)
|
||
|
|
$
|
15,303
|
|
|
$
|
15,351
|
|
|
Segment operating income (1):
|
|
|
|
||||
|
Media Networks
|
$
|
1,330
|
|
|
$
|
1,243
|
|
|
Parks, Experiences & Consumer Products
|
2,152
|
|
|
1,954
|
|
||
|
Studio Entertainment
|
309
|
|
|
825
|
|
||
|
Direct-to-Consumer & International
|
(136
|
)
|
|
(42
|
)
|
||
|
Eliminations
|
—
|
|
|
6
|
|
||
|
|
$
|
3,655
|
|
|
$
|
3,986
|
|
|
(1)
|
Studio Entertainment revenues and operating income include an allocation of Parks, Experiences & Consumer Products 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 Parks, Experiences & Consumer Products revenues and operating income was $154 million and $171 million for the quarters ended December 29, 2018 and December 30, 2017, respectively.
|
|
(2)
|
Intersegment content transactions are as follows:
|
|
|
Quarter Ended
|
||||||
|
(in millions)
|
December 29,
2018 |
|
December 30,
2017 |
||||
|
Revenues
|
|
|
|
||||
|
Studio Entertainment:
|
|
|
|
||||
|
Content transactions with Media Networks
|
$
|
(21
|
)
|
|
$
|
(31
|
)
|
|
Content transactions with Direct-to-Consumer & International
|
(18
|
)
|
|
(8
|
)
|
||
|
Media Networks:
|
|
|
|
||||
|
Content transactions with Direct-to-Consumer & International
|
(145
|
)
|
|
(132
|
)
|
||
|
Total revenues
|
$
|
(184
|
)
|
|
$
|
(171
|
)
|
|
|
Quarter Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
|
Media Networks
|
$
|
179
|
|
|
$
|
159
|
|
|
Parks, Experiences & Consumer Products
|
(12
|
)
|
|
(7
|
)
|
||
|
Direct-to-Consumer & International
|
(91
|
)
|
|
(109
|
)
|
||
|
Equity in the income / (loss) of investees
|
$
|
76
|
|
|
$
|
43
|
|
|
|
Quarter Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
|
Segment operating income
|
$
|
3,655
|
|
|
$
|
3,986
|
|
|
Corporate and unallocated shared expenses
|
(161
|
)
|
|
(150
|
)
|
||
|
Restructuring and impairment charges
|
—
|
|
|
(15
|
)
|
||
|
Other income
|
—
|
|
|
53
|
|
||
|
Interest expense, net
|
(63
|
)
|
|
(129
|
)
|
||
|
Income before income taxes
|
$
|
3,431
|
|
|
$
|
3,745
|
|
|
3.
|
Revenues
|
|
•
|
For television and film content licensing agreements with multiple availability windows with the same licensee, the Company now defers more revenue to future windows than under the previous accounting guidance.
|
|
•
|
For licenses of character images, brands and trademarks with minimum guaranteed license fees, the excess of the minimum guaranteed amount over actual amounts earned based on a percentage of the licensee’s underlying sales (“minimum guarantee shortfall”) is now recognized straight-line over the remaining license period once an expected shortfall is identified. Previously, shortfalls were recognized at the end of the contract period.
|
|
•
|
For licenses that include multiple television and film titles with a minimum guaranteed license fee across all titles that earns out against the aggregate fees based on the licensee’s underlying sales, the Company now allocates the minimum guaranteed license fee to each title at contract inception and recognizes the allocated license fee as revenue when the title is made available to the customer. License fees earned in excess of the allocated minimum guaranteed amount by title are deferred until the aggregate contractual minimum guarantee is exceeded and then recognized as revenue as earned based on the licensee’s underlying sales. Previously, license fees were 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, revenues are now recognized when the licensed content becomes available under the renewal or extension. Previously, revenues were recognized when the agreement was renewed or extended.
|
|
|
September 29, 2018
|
|
December 29, 2018
|
||||||||||||||||||||
|
|
Fiscal 2018 Ending Balances as Reported
|
|
Effect of Adoption
|
|
Q1 2019 Opening Balances
|
|
Balances Assuming
Historical Accounting
|
|
Q1 2019 Impact of New Revenue Standard
|
|
Q1 2019 Ending Balances as Reported
|
||||||||||||
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Receivables - current/non-current
|
$
|
11,262
|
|
|
$
|
(241
|
)
|
|
$
|
11,021
|
|
|
$
|
12,030
|
|
|
$
|
(102
|
)
|
|
$
|
11,928
|
|
|
Film and television costs and advances - current/non-current
|
9,202
|
|
|
48
|
|
|
9,250
|
|
|
8,968
|
|
|
33
|
|
|
9,001
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Accounts payable and other accrued liabilities
|
9,479
|
|
|
1,039
|
|
|
10,518
|
|
|
9,799
|
|
|
897
|
|
|
10,696
|
|
||||||
|
Deferred revenue and other
|
4,591
|
|
|
(1,082
|
)
|
|
3,509
|
|
|
4,342
|
|
|
(908
|
)
|
|
3,434
|
|
||||||
|
Deferred income taxes
|
3,109
|
|
|
(34
|
)
|
|
3,075
|
|
|
3,208
|
|
|
(31
|
)
|
|
3,177
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Equity
|
52,832
|
|
|
(116
|
)
|
|
52,716
|
|
|
54,420
|
|
|
(27
|
)
|
|
54,393
|
|
||||||
|
|
Quarter ended December 29, 2018
|
||||||||||
|
|
Results Assuming
Historical Accounting
|
|
Impact of New Revenue Standard
|
|
Reported
|
||||||
|
Revenues
|
$
|
15,109
|
|
|
$
|
194
|
|
|
$
|
15,303
|
|
|
Cost and Expenses
|
(11,806
|
)
|
|
(79
|
)
|
|
(11,885
|
)
|
|||
|
Income Taxes
|
(619
|
)
|
|
(26
|
)
|
|
(645
|
)
|
|||
|
Net Income
|
2,697
|
|
|
89
|
|
|
2,786
|
|
|||
|
•
|
Affiliate fees - Fees charged to affiliates (i.e., MVPDs or television stations) for the right to deliver our television network programming on a continuous basis to their customers are recognized as the programming is provided based on contractually specified per subscriber rates and the actual number of the affiliate’s customers receiving the programming.
|
|
•
|
Subscription fees - Fees charged to customers/subscribers for our DTC streaming and other services are recognized ratably over the term of the subscription.
|
|
•
|
Advertising - Sales of advertising time/space on our television networks, digital platforms, and television stations are recognized as revenue, net of agency commissions, when commercials are aired on television or delivered online. The performance obligation in advertising agreements is the delivery of ad time/space and may include a guaranteed number of impressions. When a contract contains a guaranteed number of impressions and the guaranteed number of impressions is not met (“ratings shortfall”), revenues are not recognized for the ratings shortfall until the guaranteed impressions are provided through the delivery of additional advertising time/space.
|
|
•
|
Theme park admissions - Sales of theme park tickets are recognized when the tickets are used. Sales of annual passes are recognized ratably over the period for which the pass is available for use.
|
|
•
|
Resorts and vacations - Sales of hotel room nights and cruise vacations and rentals of vacation club properties are recognized as the services are provided to the guest. Sales of vacation club properties are recognized when title to the property transfers to the customer.
|
|
•
|
Merchandise, food and beverage - Sales of merchandise, food and beverages at our theme parks and resorts, cruise ships and Disney Stores are recognized at the time of sale. Sales from our branded internet shopping sites and to wholesalers are recognized upon delivery. We estimate returns and customer incentives based upon historical return experience, current economic trends and projections of consumer demand for our products.
|
|
•
|
TV/SVOD distribution licensing - Fees charged for the right to use our television and motion picture productions are recognized as revenue when the content is available for use by the licensee. Contractual license fees may be for a fixed amount, based on performance in previous distribution windows (e.g., box office receipts) or based on underlying sales of the licensee.
|
|
•
|
Theatrical distribution licensing - Fees charged for licensing of our motion pictures to theaters are recognized as revenue based on the contractual royalty rate applied to the theater’s underlying sales from exhibition of the film.
|
|
•
|
Merchandise licensing - Fees charged for the use of our trade names and characters in connection with the sale of a licensee’s products are recognized as revenue as the products are sold by the licensee applying a contractual royalty rate to the licensee sales. For licenses with minimum guaranteed license fees, the excess of the minimum guaranteed
|
|
•
|
Home entertainment - Sales of our motion pictures to retailers and distributors in physical formats (DVD and Blu-ray) are recognized as revenue on the later of the delivery date or the date that the product can be sold by retailers. We reduce home entertainment revenues for estimated future returns of merchandise and sales incentives based upon historical return experience, current economic trends and projections of consumer demand for our products. Sales of our motion pictures in electronic formats are recognized as revenue when the product is available for use by the consumer.
|
|
•
|
Taxes - Taxes collected from customers and remitted to governmental authorities are excluded from revenue.
|
|
•
|
Shipping and handling - Fees collected from customers for shipping and handling are recorded as revenue upon delivery of the product to the consumer. The related shipping expenses are recorded in cost of products upon delivery of the product to the customer.
|
|
|
Quarter Ended December 29, 2018
|
||||||||||||||||||||||
|
|
Media
Networks
|
|
Parks, Experiences
& Consumer Products
|
|
Studio
Entertainment
|
|
Direct-to-Consumer & International
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
|
Affiliate fees
|
$
|
3,075
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
323
|
|
|
$
|
—
|
|
|
$
|
3,398
|
|
|
Advertising
|
2,023
|
|
|
2
|
|
|
—
|
|
|
417
|
|
|
|
|
|
2,442
|
|
||||||
|
Theme park admissions
|
—
|
|
|
1,933
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,933
|
|
||||||
|
Resort and vacations
|
—
|
|
|
1,531
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,531
|
|
||||||
|
Retail and wholesale sales of merchandise, food and beverage
|
—
|
|
|
2,122
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,122
|
|
||||||
|
TV/SVOD distribution licensing
|
722
|
|
|
—
|
|
|
605
|
|
|
34
|
|
|
(184
|
)
|
|
1,177
|
|
||||||
|
Theatrical distribution licensing
|
—
|
|
|
—
|
|
|
373
|
|
|
—
|
|
|
—
|
|
|
373
|
|
||||||
|
Merchandise licensing
|
—
|
|
|
741
|
|
|
154
|
|
|
15
|
|
|
—
|
|
|
910
|
|
||||||
|
Home entertainment
|
—
|
|
|
—
|
|
|
425
|
|
|
28
|
|
|
—
|
|
|
453
|
|
||||||
|
Other
|
101
|
|
|
495
|
|
|
267
|
|
|
101
|
|
|
—
|
|
|
964
|
|
||||||
|
Total revenues
|
$
|
5,921
|
|
|
$
|
6,824
|
|
|
$
|
1,824
|
|
|
$
|
918
|
|
|
$
|
(184
|
)
|
|
$
|
15,303
|
|
|
|
Quarter Ended December 30, 2017(1)
|
||||||||||||||||||||||
|
|
Media
Networks
|
|
Parks, Experiences
& Consumer Products
|
|
Studio
Entertainment
|
|
Direct-to-Consumer & International
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
|
Affiliate fees
|
$
|
2,867
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
338
|
|
|
$
|
—
|
|
|
$
|
3,205
|
|
|
Advertising
|
1,963
|
|
|
2
|
|
|
—
|
|
|
411
|
|
|
—
|
|
|
2,376
|
|
||||||
|
Theme park admissions
|
—
|
|
|
1,832
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,832
|
|
||||||
|
Resort and vacations
|
—
|
|
|
1,463
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,463
|
|
||||||
|
Retail and wholesale sales of merchandise, food and beverage
|
—
|
|
|
2,059
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,059
|
|
||||||
|
TV/SVOD distribution licensing
|
624
|
|
|
—
|
|
|
519
|
|
|
25
|
|
|
(171
|
)
|
|
997
|
|
||||||
|
Theatrical distribution licensing
|
—
|
|
|
—
|
|
|
1,169
|
|
|
—
|
|
|
—
|
|
|
1,169
|
|
||||||
|
Merchandise licensing
|
—
|
|
|
776
|
|
|
171
|
|
|
18
|
|
|
—
|
|
|
965
|
|
||||||
|
Home entertainment
|
—
|
|
|
—
|
|
|
361
|
|
|
30
|
|
|
—
|
|
|
391
|
|
||||||
|
Other
|
101
|
|
|
395
|
|
|
289
|
|
|
109
|
|
|
—
|
|
|
894
|
|
||||||
|
Total revenues
|
$
|
5,555
|
|
|
$
|
6,527
|
|
|
$
|
2,509
|
|
|
$
|
931
|
|
|
$
|
(171
|
)
|
|
$
|
15,351
|
|
|
(1)
|
The table presents our revenues by segment and major source under historical accounting.
|
|
|
Quarter Ended December 29, 2018
|
||||||||||||||||||||||
|
|
Media
Networks
|
|
Parks, Experiences
& Consumer Products
|
|
Studio
Entertainment
|
|
Direct-to-Consumer & International
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
|
United States and Canada
|
$
|
5,509
|
|
|
$
|
5,142
|
|
|
$
|
1,038
|
|
|
$
|
404
|
|
|
$
|
(164
|
)
|
|
$
|
11,929
|
|
|
Europe
|
152
|
|
|
1,065
|
|
|
413
|
|
|
180
|
|
|
(15
|
)
|
|
1,795
|
|
||||||
|
Asia Pacific
|
79
|
|
|
551
|
|
|
286
|
|
|
118
|
|
|
(5
|
)
|
|
1,029
|
|
||||||
|
Latin America
|
181
|
|
|
66
|
|
|
87
|
|
|
216
|
|
|
—
|
|
|
550
|
|
||||||
|
Total revenues
|
$
|
5,921
|
|
|
$
|
6,824
|
|
|
$
|
1,824
|
|
|
$
|
918
|
|
|
$
|
(184
|
)
|
|
$
|
15,303
|
|
|
|
December 29,
2018 |
|
September 30,
2018 |
||||
|
Contract assets
|
$
|
146
|
|
|
$
|
89
|
|
|
Accounts Receivable
|
|
|
|
||||
|
Current
|
9,543
|
|
|
8,553
|
|
||
|
Non-current
|
1,561
|
|
|
1,640
|
|
||
|
Allowance for doubtful accounts
|
(230
|
)
|
|
(226
|
)
|
||
|
Deferred revenues
|
|
|
|
||||
|
Current
|
2,968
|
|
|
2,926
|
|
||
|
Non-current
|
514
|
|
|
609
|
|
||
|
4.
|
Acquisitions
|
|
|
Media
Networks
|
|
Parks and
Resorts
|
|
Studio
Entertainment
|
|
Consumer
Products & Interactive Media
|
|
Parks, Experiences & Consumer Products
|
|
Direct-to-Consumer & International
|
|
Total
|
||||||||||||||
|
Balance at Sep. 29, 2018
|
$
|
19,388
|
|
|
$
|
291
|
|
|
$
|
7,164
|
|
|
$
|
4,426
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31,269
|
|
|
Segment recast (1)
|
(3,399
|
)
|
|
(291
|
)
|
|
(70
|
)
|
|
(4,426
|
)
|
|
4,487
|
|
|
3,699
|
|
|
—
|
|
|||||||
|
Other, net
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
20
|
|
|||||||
|
Balance at Dec. 29, 2018
|
$
|
15,989
|
|
|
$
|
—
|
|
|
$
|
7,103
|
|
|
$
|
—
|
|
|
$
|
4,487
|
|
|
$
|
3,710
|
|
|
$
|
31,289
|
|
|
5.
|
Cash, Cash Equivalents, Restricted Cash and Borrowings
|
|
|
|
December 29,
2018 |
|
September 29,
2018 |
||||
|
Cash and cash equivalents
|
|
$
|
4,455
|
|
|
$
|
4,150
|
|
|
Restricted cash included in:
|
|
|
|
|
||||
|
Other current assets
|
|
4
|
|
|
1
|
|
||
|
Other assets
|
|
4
|
|
|
4
|
|
||
|
Total cash, cash equivalents and restricted cash in the statement of cash flows
|
|
$
|
4,463
|
|
|
$
|
4,155
|
|
|
|
September 29,
2018 |
|
Borrowings
|
|
Payments
|
|
Other
Activity
|
|
December 29,
2018 |
||||||||||
|
Commercial paper with original maturities less than three months(1)
|
$
|
50
|
|
|
$
|
548
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
599
|
|
|
Commercial paper with original maturities greater than three months
|
955
|
|
|
99
|
|
|
(950
|
)
|
|
(4
|
)
|
|
100
|
|
|||||
|
U.S. and European medium-term notes
|
17,942
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
17,947
|
|
|||||
|
Asia Theme Parks borrowings
|
1,145
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
1,160
|
|
|||||
|
Foreign currency denominated debt and other(2)
|
782
|
|
|
1
|
|
|
—
|
|
|
76
|
|
|
859
|
|
|||||
|
Total
|
$
|
20,874
|
|
|
$
|
648
|
|
|
$
|
(950
|
)
|
|
$
|
93
|
|
|
$
|
20,665
|
|
|
(1)
|
Borrowings and reductions of borrowings are reported net.
|
|
(2)
|
The other activity is due to market value adjustments for debt with qualifying hedges, partially offset by the impact of changes in foreign currency exchange rates.
|
|
|
Committed
Capacity
|
|
Capacity
Used
|
|
Unused
Capacity
|
||||||
|
Facility expiring March 2020
|
$
|
6,000
|
|
|
$
|
—
|
|
|
$
|
6,000
|
|
|
Facility expiring March 2021
|
2,250
|
|
|
—
|
|
|
2,250
|
|
|||
|
Facility expiring March 2023
|
4,000
|
|
|
—
|
|
|
4,000
|
|
|||
|
Total
|
$
|
12,250
|
|
|
$
|
—
|
|
|
$
|
12,250
|
|
|
|
Quarter Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
|
Interest expense
|
$
|
(163
|
)
|
|
$
|
(146
|
)
|
|
Interest and investment income
|
75
|
|
|
17
|
|
||
|
Net periodic pension and postretirement benefit costs (other than service costs)
|
25
|
|
|
—
|
|
||
|
Interest expense, net
|
$
|
(63
|
)
|
|
$
|
(129
|
)
|
|
6.
|
International Theme Parks
|
|
|
December 29, 2018
|
|
September 29, 2018
|
||||
|
Cash and cash equivalents
|
$
|
737
|
|
|
$
|
834
|
|
|
Other current assets
|
364
|
|
|
400
|
|
||
|
Total current assets
|
1,101
|
|
|
1,234
|
|
||
|
Parks, resorts and other property
|
8,947
|
|
|
8,973
|
|
||
|
Other assets
|
107
|
|
|
103
|
|
||
|
Total assets (1)
|
$
|
10,155
|
|
|
$
|
10,310
|
|
|
|
|
|
|
||||
|
Current liabilities
|
$
|
769
|
|
|
$
|
921
|
|
|
Long-term borrowings
|
1,121
|
|
|
1,106
|
|
||
|
Other long-term liabilities
|
348
|
|
|
382
|
|
||
|
Total liabilities (1)
|
$
|
2,238
|
|
|
$
|
2,409
|
|
|
(1)
|
Total assets of the Asia Theme Parks were $8 billion at both December 29, 2018 and September 29, 2018 including parks, resorts and other property of $7 billion. Total liabilities of the Asia Theme Parks were $2 billion at both December 29, 2018 and September 29, 2018.
|
|
|
December 29, 2018
|
||
|
Revenues
|
$
|
910
|
|
|
Costs and expenses
|
(891
|
)
|
|
|
Equity in the loss of investees
|
(12
|
)
|
|
|
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 was 24.5%. The Company’s statutory federal tax rate is 21.0% for fiscal 2019 (and thereafter).
|
|
•
|
The Company remeasured its U.S. federal deferred tax assets and liabilities at the rate that the Company expects to be in effect when those deferred taxes are realized (either 24.5% if in 2018 or 21.0% thereafter) (Deferred Remeasurement). The Company recognized a benefit of approximately $2.2 billion from the Deferred Remeasurement, the majority of which was recognized in the first quarter of fiscal 2018. The amount recognized for the quarter ended December 29, 2018 was not material.
|
|
•
|
A one-time tax is due on certain accumulated foreign earnings (Deemed Repatriation Tax), which is payable over eight years. The effective 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 $0.4 billion, the majority of which was recognized in the first quarter of fiscal 2018. The amount recognized for the quarter ended December 29, 2018 was not material. Generally there will no longer be a U.S. federal income tax cost arising from the repatriation of foreign earnings.
|
|
•
|
The Company is eligible to claim an immediate deduction for investments in qualified fixed assets acquired and film and television productions that commenced after September 27, 2017 and placed in service by the end of fiscal 2022. The immediate deduction phases out for assets placed in service in fiscal 2023 through fiscal 2027.
|
|
•
|
Beginning in fiscal 2019:
|
|
◦
|
The domestic production activity deduction is eliminated.
|
|
◦
|
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%.
|
|
◦
|
Certain foreign earnings will be taxed at a minimum effective rate of approximately 13%, which increases to approximately 16% in 2025. The Company’s policy is to expense the tax on these earnings in the period the earnings are taxable in the U.S.
|
|
8.
|
Pension and Other Benefit Programs
|
|
|
Pension Plans
|
|
Postretirement Medical Plans
|
||||||||||||
|
|
Quarter Ended
|
|
Quarter Ended
|
||||||||||||
|
|
December 29, 2018
|
|
December 30, 2017
|
|
December 29, 2018
|
|
December 30, 2017
|
||||||||
|
Service costs
|
$
|
83
|
|
|
$
|
88
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
Other costs (benefits):
|
|
|
|
|
|
|
|
||||||||
|
Interest costs
|
145
|
|
|
123
|
|
|
16
|
|
|
15
|
|
||||
|
Expected return on plan assets
|
(239
|
)
|
|
(225
|
)
|
|
(14
|
)
|
|
(13
|
)
|
||||
|
Amortization of prior-year service costs
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||
|
Recognized net actuarial loss
|
64
|
|
|
87
|
|
|
—
|
|
|
3
|
|
||||
|
Total other costs (benefits)
|
(27
|
)
|
|
(12
|
)
|
|
2
|
|
|
5
|
|
||||
|
Net periodic benefit cost
|
$
|
56
|
|
|
$
|
76
|
|
|
$
|
4
|
|
|
$
|
8
|
|
|
9.
|
Earnings Per Share
|
|
|
Quarter Ended
|
||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||
|
Shares (in millions):
|
|
|
|
||
|
Weighted average number of common and common equivalent shares outstanding (basic)
|
1,490
|
|
|
1,512
|
|
|
Weighted average dilutive impact of Awards
|
8
|
|
|
9
|
|
|
Weighted average number of common and common equivalent shares outstanding (diluted)
|
1,498
|
|
|
1,521
|
|
|
Awards excluded from diluted earnings per share
|
11
|
|
|
16
|
|
|
10.
|
Equity
|
|
Per Share
|
|
Total Paid
|
|
Payment Timing
|
|
Related to Fiscal Period
|
|
$0.88
|
$1.3 billion
|
Second quarter of Fiscal 2019
|
Second Half of 2018
|
|||
|
$0.84
|
$1.2 billion
|
Fourth Quarter of Fiscal 2018
|
First Half of 2018
|
|||
|
$0.84
|
$1.3 billion
|
Second Quarter of Fiscal 2018
|
Second Half of 2017
|
|||
|
$0.78
|
$1.2 billion
|
Fourth Quarter of Fiscal 2017
|
First Half of 2017
|
|||
|
|
|
|
|
|
Unrecognized
Pension and Postretirement Medical Expense |
|
Foreign
Currency Translation and Other |
|
AOCI
|
||||||||||
|
|
Market Value Adjustments
|
|
|||||||||||||||||
|
AOCI, before tax
|
Investments
|
|
Cash Flow Hedges
|
|
|||||||||||||||
|
First quarter of fiscal 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Balance at September 29, 2018
|
$
|
24
|
|
|
$
|
177
|
|
|
$
|
(4,323
|
)
|
|
$
|
(727
|
)
|
|
$
|
(4,849
|
)
|
|
Quarter Ended December 29, 2018:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Unrealized gains (losses) arising during the period
|
—
|
|
|
27
|
|
|
—
|
|
|
(16
|
)
|
|
11
|
|
|||||
|
Reclassifications of realized net (gains) losses to net income
|
—
|
|
|
(39
|
)
|
|
69
|
|
|
—
|
|
|
30
|
|
|||||
|
Reclassifications to retained earnings
|
(24
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|||||
|
Balance at December 29, 2018
|
$
|
—
|
|
|
$
|
166
|
|
|
$
|
(4,254
|
)
|
|
$
|
(743
|
)
|
|
$
|
(4,831
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
First quarter of fiscal 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
|
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
|
)
|
|
|
|
|
|
|
Unrecognized
Pension and Postretirement Medical Expense |
|
Foreign
Currency Translation and Other |
|
AOCI
|
||||||||||
|
|
Market Value Adjustments
|
|
|||||||||||||||||
|
Tax on AOCI
|
Investments
|
|
Cash Flow Hedges
|
|
|||||||||||||||
|
First quarter of fiscal 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Balance at September 29, 2018
|
$
|
(9
|
)
|
|
$
|
(32
|
)
|
|
$
|
1,690
|
|
|
$
|
103
|
|
|
$
|
1,752
|
|
|
Quarter Ended December 29, 2018:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Unrealized gains (losses) arising during the period
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(7
|
)
|
|
(13
|
)
|
|||||
|
Reclassifications of realized net (gains) losses to net income
|
—
|
|
|
9
|
|
|
(16
|
)
|
|
—
|
|
|
(7
|
)
|
|||||
|
Reclassifications to retained earnings
|
9
|
|
|
(9
|
)
|
|
(667
|
)
|
|
(16
|
)
|
|
(683
|
)
|
|||||
|
Balance at December 29, 2018
|
$
|
—
|
|
|
$
|
(38
|
)
|
|
$
|
1,007
|
|
|
$
|
80
|
|
|
$
|
1,049
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
First quarter of fiscal 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
|
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
|
|
|
|
|
|
|
|
Unrecognized
Pension and Postretirement Medical Expense |
|
Foreign
Currency Translation and Other |
|
AOCI
|
||||||||||
|
|
Market Value Adjustments
|
|
|||||||||||||||||
|
AOCI, after tax
|
Investments
|
|
Cash Flow Hedges
|
|
|||||||||||||||
|
First quarter of fiscal 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Balance at September 29, 2018
|
$
|
15
|
|
|
$
|
145
|
|
|
$
|
(2,633
|
)
|
|
$
|
(624
|
)
|
|
$
|
(3,097
|
)
|
|
Quarter Ended December 29, 2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Unrealized gains (losses) arising during the period
|
—
|
|
|
21
|
|
|
—
|
|
|
(23
|
)
|
|
(2
|
)
|
|||||
|
Reclassifications of realized net (gains) losses to net income
|
—
|
|
|
(30
|
)
|
|
53
|
|
|
—
|
|
|
23
|
|
|||||
|
Reclassifications to retained earnings (1)
|
(15
|
)
|
|
(8
|
)
|
|
(667
|
)
|
|
(16
|
)
|
|
(706
|
)
|
|||||
|
Balance at December 29, 2018
|
$
|
—
|
|
|
$
|
128
|
|
|
$
|
(3,247
|
)
|
|
$
|
(663
|
)
|
|
$
|
(3,782
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
First quarter of fiscal 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
|
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
|
)
|
|
(1)
|
On September 30, 2018, the Company adopted a FASB standard, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, and elected to reclassify $691 million from AOCI to retained earnings in the quarter ended December 29, 2018.
|
|
Gains/(losses) in net income:
|
|
Affected line item in the
Condensed Consolidated
Statements of Income:
|
|
Quarter Ended
|
||||||
|
|
|
December 29,
2018 |
|
December 30,
2017 |
||||||
|
Cash flow hedges
|
|
Primarily revenue
|
|
$
|
39
|
|
|
$
|
(20
|
)
|
|
Estimated tax
|
|
Income taxes
|
|
(9
|
)
|
|
8
|
|
||
|
|
|
|
|
30
|
|
|
(12
|
)
|
||
|
|
|
|
|
|
|
|
||||
|
Pension and postretirement
medical expense
|
|
Costs and expenses
|
|
—
|
|
|
(96
|
)
|
||
|
|
|
Interest expense, net
|
|
(69
|
)
|
|
—
|
|
||
|
Estimated tax
|
|
Income taxes
|
|
16
|
|
|
35
|
|
||
|
|
|
|
|
(53
|
)
|
|
(61
|
)
|
||
|
|
|
|
|
|
|
|
||||
|
Total reclassifications for the period
|
|
|
|
$
|
(23
|
)
|
|
$
|
(73
|
)
|
|
11.
|
Equity-Based Compensation
|
|
|
Quarter Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
|
Stock options
|
$
|
19
|
|
|
$
|
23
|
|
|
RSUs
|
73
|
|
|
71
|
|
||
|
Total equity-based compensation expense (1)
|
$
|
92
|
|
|
$
|
94
|
|
|
Equity-based compensation expense capitalized during the period
|
$
|
16
|
|
|
$
|
19
|
|
|
(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 29, 2018
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
Assets
|
|
|
|
|
|
|
|
||||||||
|
Investments
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28
|
|
|
Derivatives
|
|
|
|
|
|
|
|
||||||||
|
Foreign exchange
|
—
|
|
|
508
|
|
|
—
|
|
|
508
|
|
||||
|
Other
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
|
Derivatives
|
|
|
|
|
|
|
|
||||||||
|
Interest rate
|
—
|
|
|
(284
|
)
|
|
—
|
|
|
(284
|
)
|
||||
|
Foreign exchange
|
—
|
|
|
(342
|
)
|
|
—
|
|
|
(342
|
)
|
||||
|
Other
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
||||
|
Total recorded at fair value
|
$
|
28
|
|
|
$
|
(127
|
)
|
|
$
|
—
|
|
|
$
|
(99
|
)
|
|
Fair value of borrowings
|
$
|
—
|
|
|
$
|
19,544
|
|
|
$
|
1,187
|
|
|
$
|
20,731
|
|
|
|
Fair Value Measurement at September 29, 2018
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
Assets
|
|
|
|
|
|
|
|
||||||||
|
Investments
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38
|
|
|
Derivatives
|
|
|
|
|
|
|
|
||||||||
|
Foreign exchange
|
—
|
|
|
469
|
|
|
—
|
|
|
469
|
|
||||
|
Other
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
|
Derivatives
|
|
|
|
|
|
|
|
||||||||
|
Interest rate
|
—
|
|
|
(410
|
)
|
|
—
|
|
|
(410
|
)
|
||||
|
Foreign exchange
|
—
|
|
|
(274
|
)
|
|
—
|
|
|
(274
|
)
|
||||
|
Total recorded at fair value
|
$
|
38
|
|
|
$
|
(200
|
)
|
|
$
|
—
|
|
|
$
|
(162
|
)
|
|
Fair value of borrowings
|
$
|
—
|
|
|
$
|
19,826
|
|
|
$
|
1,171
|
|
|
$
|
20,997
|
|
|
14.
|
Derivative Instruments
|
|
|
As of December 29, 2018
|
||||||||||||||
|
|
Current
Assets
|
|
Other Assets
|
|
Other Current Liabilities
|
|
Other Long-
Term
Liabilities
|
||||||||
|
Derivatives designated as hedges
|
|
|
|
|
|
|
|
||||||||
|
Foreign exchange
|
$
|
211
|
|
|
$
|
181
|
|
|
$
|
(72
|
)
|
|
$
|
(77
|
)
|
|
Interest rate
|
—
|
|
|
—
|
|
|
(221
|
)
|
|
—
|
|
||||
|
Other
|
2
|
|
|
—
|
|
|
(7
|
)
|
|
(4
|
)
|
||||
|
Derivatives not designated as hedges
|
|
|
|
|
|
|
|
||||||||
|
Foreign exchange
|
27
|
|
|
89
|
|
|
(140
|
)
|
|
(53
|
)
|
||||
|
Interest rate
|
—
|
|
|
—
|
|
|
—
|
|
|
(63
|
)
|
||||
|
Gross fair value of derivatives
|
240
|
|
|
270
|
|
|
(440
|
)
|
|
(197
|
)
|
||||
|
Counterparty netting
|
(145
|
)
|
|
(225
|
)
|
|
228
|
|
|
142
|
|
||||
|
Cash collateral (received)/paid
|
(3
|
)
|
|
—
|
|
|
104
|
|
|
15
|
|
||||
|
Net derivative positions
|
$
|
92
|
|
|
$
|
45
|
|
|
$
|
(108
|
)
|
|
$
|
(40
|
)
|
|
|
As of September 29, 2018
|
||||||||||||||
|
|
Current
Assets
|
|
Other Assets
|
|
Other Current Liabilities
|
|
Other Long-
Term
Liabilities
|
||||||||
|
Derivatives designated as hedges
|
|
|
|
|
|
|
|
||||||||
|
Foreign exchange
|
$
|
166
|
|
|
$
|
169
|
|
|
$
|
(80
|
)
|
|
$
|
(39
|
)
|
|
Interest rate
|
—
|
|
|
—
|
|
|
(329
|
)
|
|
—
|
|
||||
|
Other
|
13
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
|
Derivatives not designated as hedges
|
|
|
|
|
|
|
|
||||||||
|
Foreign exchange
|
38
|
|
|
96
|
|
|
(95
|
)
|
|
(60
|
)
|
||||
|
Interest rate
|
—
|
|
|
—
|
|
|
—
|
|
|
(81
|
)
|
||||
|
Gross fair value of derivatives
|
217
|
|
|
267
|
|
|
(504
|
)
|
|
(180
|
)
|
||||
|
Counterparty netting
|
(158
|
)
|
|
(227
|
)
|
|
254
|
|
|
131
|
|
||||
|
Cash collateral (received)/paid
|
—
|
|
|
—
|
|
|
135
|
|
|
5
|
|
||||
|
Net derivative positions
|
$
|
59
|
|
|
$
|
40
|
|
|
$
|
(115
|
)
|
|
$
|
(44
|
)
|
|
|
Carrying Amount of Hedged Borrowings (1)
|
|
Fair Value Adjustments Included
in Hedged Borrowings (1)
|
||||||||||||
|
|
December 29, 2018
|
|
September 29, 2018
|
|
December 29, 2018
|
|
September 29, 2018
|
||||||||
|
Borrowings:
|
|
|
|
|
|
|
|
||||||||
|
Current
|
$
|
1,590
|
|
|
$
|
1,585
|
|
|
$
|
(9
|
)
|
|
$
|
(14
|
)
|
|
Long-term
|
6,499
|
|
|
6,425
|
|
|
(177
|
)
|
|
(290
|
)
|
||||
|
|
$
|
8,089
|
|
|
$
|
8,010
|
|
|
$
|
(186
|
)
|
|
$
|
(304
|
)
|
|
(1)
|
Includes $40 million and $41 million of gains on terminated interest rate swaps as of December 29, 2018 and September 29, 2018, respectively.
|
|
|
Quarter Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
|
Gain (loss) on:
|
|
|
|
||||
|
Pay-floating swaps
|
$
|
117
|
|
|
$
|
(64
|
)
|
|
Borrowings hedged with pay-floating swaps
|
(117
|
)
|
|
64
|
|
||
|
Benefit (expense) associated with interest accruals on pay-floating swaps
|
(14
|
)
|
|
7
|
|
||
|
|
December 29,
2018 |
||
|
Gain/(loss) recognized in Other Comprehensive Income
|
$
|
50
|
|
|
Gain/(loss) reclassified from AOCI into the Statement of Income (1)
|
37
|
|
|
|
(1)
|
Primarily recorded in revenue.
|
|
|
Costs and Expenses
|
|
Interest expense, net
|
|
Income Tax expense
|
||||||||||||||||||
|
Quarter Ended:
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
|
December 29,
2018 |
|
December 30,
2017 |
||||||||||||
|
Net gain (loss) on foreign currency denominated assets and liabilities
|
$
|
(27
|
)
|
|
$
|
17
|
|
|
$
|
40
|
|
|
$
|
3
|
|
|
$
|
15
|
|
|
$
|
3
|
|
|
Net gain (loss) on foreign exchange risk management contracts not designated as hedges
|
24
|
|
|
(14
|
)
|
|
(39
|
)
|
|
(1
|
)
|
|
(18
|
)
|
|
(1
|
)
|
||||||
|
Net gain (loss)
|
$
|
(3
|
)
|
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
(3
|
)
|
|
$
|
2
|
|
|
15.
|
Restructuring and Impairment Charges and Other Income
|
|
16.
|
New Accounting Pronouncements
|
|
•
|
Revenues from Contracts with Customers - See Note 3
|
|
•
|
Intra-Entity Transfers of Assets Other Than Inventory - See Note 7
|
|
•
|
Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost - See Note 8
|
|
•
|
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income - See Note 10
|
|
•
|
Recognition and Measurement of Financial Assets and Liabilities - See Note 10
|
|
•
|
Targeted Improvements to Accounting for Hedging Activities - The adoption of the new standard did not have a material impact on our consolidated financial statements
|
|
•
|
Arrangements contain a lease
|
|
•
|
The Company’s lease arrangements are operating or capital leases (financing)
|
|
•
|
Initial direct costs should be capitalized
|
|
•
|
Existing land easements are leases
|
|
•
|
Recognizing new right-of-use assets and lease liabilities on our balance sheet for our operating leases
|
|
•
|
Reclassifying a deferred gain of approximately $350 million related to a prior sale-leaseback transaction to retained earnings
|
|
17
|
Condensed Consolidating Financial Information
|
|
|
TWDC
|
|
Legacy Disney
|
|
Non-Guarantor Subsidiaries
|
|
Reclassifications & Eliminations
|
|
Total
|
||||||||||
|
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,248
|
|
|
$
|
55
|
|
|
$
|
15,303
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Operating expenses
|
—
|
|
|
—
|
|
|
(9,001
|
)
|
|
—
|
|
|
(9,001
|
)
|
|||||
|
Selling, general, administrative and other
|
—
|
|
|
(141
|
)
|
|
(2,011
|
)
|
|
—
|
|
|
(2,152
|
)
|
|||||
|
Depreciation and amortization
|
—
|
|
|
—
|
|
|
(732
|
)
|
|
—
|
|
|
(732
|
)
|
|||||
|
Total costs and expenses
|
—
|
|
|
(141
|
)
|
|
(11,744
|
)
|
|
—
|
|
|
(11,885
|
)
|
|||||
|
Restructuring and impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Allocations to non-guarantor subsidiaries
|
—
|
|
|
127
|
|
|
(127
|
)
|
|
—
|
|
|
—
|
|
|||||
|
Other income, net
|
—
|
|
|
76
|
|
|
(21
|
)
|
|
(55
|
)
|
|
—
|
|
|||||
|
Interest expense, net
|
(65
|
)
|
|
(125
|
)
|
|
127
|
|
|
—
|
|
|
(63
|
)
|
|||||
|
Equity in the income of investees
|
—
|
|
|
—
|
|
|
76
|
|
|
—
|
|
|
76
|
|
|||||
|
Income before taxes
|
(65
|
)
|
|
(63
|
)
|
|
3,559
|
|
|
—
|
|
|
3,431
|
|
|||||
|
Income taxes
|
12
|
|
|
12
|
|
|
(669
|
)
|
|
—
|
|
|
(645
|
)
|
|||||
|
Earnings from subsidiary entities
|
—
|
|
|
2,839
|
|
|
—
|
|
|
(2,839
|
)
|
|
—
|
|
|||||
|
Consolidated net income
|
(53
|
)
|
|
2,788
|
|
|
2,890
|
|
|
(2,839
|
)
|
|
2,786
|
|
|||||
|
Less: Net loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
|
Net income excluding noncontrolling interests
|
$
|
(53
|
)
|
|
$
|
2,788
|
|
|
$
|
2,892
|
|
|
$
|
(2,839
|
)
|
|
$
|
2,788
|
|
|
Comprehensive income excluding noncontrolling interests
|
$
|
(53
|
)
|
|
$
|
2,809
|
|
|
$
|
2,853
|
|
|
$
|
(2,800
|
)
|
|
$
|
2,809
|
|
|
|
TWDC
|
|
Legacy Disney
|
|
Non-Guarantor Subsidiaries
|
|
Reclassifications & Eliminations
|
|
Total
|
||||||||||
|
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,367
|
|
|
$
|
(16
|
)
|
|
$
|
15,351
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Operating expenses
|
—
|
|
|
—
|
|
|
(8,729
|
)
|
|
—
|
|
|
(8,729
|
)
|
|||||
|
Selling, general, administrative and other
|
—
|
|
|
(127
|
)
|
|
(1,960
|
)
|
|
—
|
|
|
(2,087
|
)
|
|||||
|
Depreciation and amortization
|
—
|
|
|
—
|
|
|
(742
|
)
|
|
—
|
|
|
(742
|
)
|
|||||
|
Total costs and expenses
|
—
|
|
|
(127
|
)
|
|
(11,431
|
)
|
|
—
|
|
|
(11,558
|
)
|
|||||
|
Restructuring and impairment charges
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||||
|
Allocations to non-guarantor subsidiaries
|
—
|
|
|
118
|
|
|
(118
|
)
|
|
—
|
|
|
—
|
|
|||||
|
Other income, net
|
—
|
|
|
(19
|
)
|
|
56
|
|
|
16
|
|
|
53
|
|
|||||
|
Interest expense, net
|
—
|
|
|
(141
|
)
|
|
12
|
|
|
—
|
|
|
(129
|
)
|
|||||
|
Equity in the income of investees
|
—
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
43
|
|
|||||
|
Income before taxes
|
—
|
|
|
(169
|
)
|
|
3,914
|
|
|
—
|
|
|
3,745
|
|
|||||
|
Income taxes
|
—
|
|
|
(36
|
)
|
|
764
|
|
|
—
|
|
|
728
|
|
|||||
|
Earnings from subsidiary entities
|
—
|
|
|
4,628
|
|
|
—
|
|
|
(4,628
|
)
|
|
—
|
|
|||||
|
Consolidated net income
|
—
|
|
|
4,423
|
|
|
4,678
|
|
|
(4,628
|
)
|
|
4,473
|
|
|||||
|
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
(50
|
)
|
|||||
|
Net income excluding noncontrolling interests
|
$
|
—
|
|
|
$
|
4,423
|
|
|
$
|
4,628
|
|
|
$
|
(4,628
|
)
|
|
$
|
4,423
|
|
|
Comprehensive income excluding noncontrolling interests
|
$
|
—
|
|
|
$
|
4,547
|
|
|
$
|
4,678
|
|
|
$
|
(4,678
|
)
|
|
$
|
4,547
|
|
|
|
TWDC
|
|
Legacy Disney
|
|
Non-Guarantor Subsidiaries
|
|
Reclassifications & Eliminations
|
|
Total
|
||||||||||
|
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
1,173
|
|
|
$
|
3,282
|
|
|
$
|
—
|
|
|
$
|
4,455
|
|
|
Receivables, net
|
—
|
|
|
136
|
|
|
9,987
|
|
|
—
|
|
|
10,123
|
|
|||||
|
Inventories
|
—
|
|
|
4
|
|
|
1,353
|
|
|
—
|
|
|
1,357
|
|
|||||
|
Television costs and advances
|
—
|
|
|
—
|
|
|
824
|
|
|
—
|
|
|
824
|
|
|||||
|
Other current assets
|
—
|
|
|
214
|
|
|
564
|
|
|
—
|
|
|
778
|
|
|||||
|
Total current assets
|
—
|
|
|
1,527
|
|
|
16,010
|
|
|
—
|
|
|
17,537
|
|
|||||
|
Film and television costs
|
—
|
|
|
—
|
|
|
8,177
|
|
|
—
|
|
|
8,177
|
|
|||||
|
Investments in subsidiaries
|
—
|
|
|
152,703
|
|
|
—
|
|
|
(152,703
|
)
|
|
—
|
|
|||||
|
Other investments
|
—
|
|
|
—
|
|
|
2,970
|
|
|
—
|
|
|
2,970
|
|
|||||
|
Parks, resorts and other property, net
|
—
|
|
|
12
|
|
|
29,785
|
|
|
—
|
|
|
29,797
|
|
|||||
|
Intangible assets, net
|
—
|
|
|
—
|
|
|
6,747
|
|
|
—
|
|
|
6,747
|
|
|||||
|
Goodwill
|
—
|
|
|
—
|
|
|
31,289
|
|
|
—
|
|
|
31,289
|
|
|||||
|
Intercompany receivables
|
—
|
|
|
—
|
|
|
79,768
|
|
|
(79,768
|
)
|
|
—
|
|
|||||
|
Other assets
|
—
|
|
|
853
|
|
|
3,203
|
|
|
(632
|
)
|
|
3,424
|
|
|||||
|
Total assets
|
$
|
—
|
|
|
$
|
155,095
|
|
|
$
|
177,949
|
|
|
$
|
(233,103
|
)
|
|
$
|
99,941
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Accounts payable and other accrued liabilities
|
$
|
33
|
|
|
$
|
2,074
|
|
|
$
|
8,589
|
|
|
$
|
—
|
|
|
$
|
10,696
|
|
|
Current portion of borrowings
|
—
|
|
|
3,450
|
|
|
39
|
|
|
—
|
|
|
3,489
|
|
|||||
|
Deferred revenues and other
|
—
|
|
|
126
|
|
|
3,308
|
|
|
—
|
|
|
3,434
|
|
|||||
|
Total current liabilities
|
33
|
|
|
5,650
|
|
|
11,936
|
|
|
—
|
|
|
17,619
|
|
|||||
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Borrowings
|
$
|
—
|
|
|
$
|
15,752
|
|
|
$
|
1,424
|
|
|
$
|
—
|
|
|
$
|
17,176
|
|
|
Deferred income taxes
|
—
|
|
|
—
|
|
|
3,809
|
|
|
(632
|
)
|
|
3,177
|
|
|||||
|
Other long-term liabilities
|
—
|
|
|
3,629
|
|
|
2,823
|
|
|
—
|
|
|
6,452
|
|
|||||
|
Intercompany payables
|
20
|
|
|
79,748
|
|
|
—
|
|
|
(79,768
|
)
|
|
—
|
|
|||||
|
Total non-current liabilities
|
20
|
|
|
99,129
|
|
|
8,056
|
|
|
(80,400
|
)
|
|
26,805
|
|
|||||
|
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
1,124
|
|
|
—
|
|
|
1,124
|
|
|||||
|
Total Disney Shareholders’ equity
|
(53
|
)
|
|
50,316
|
|
|
152,756
|
|
|
(152,703
|
)
|
|
50,316
|
|
|||||
|
Noncontrolling interests
|
—
|
|
|
—
|
|
|
4,077
|
|
|
—
|
|
|
4,077
|
|
|||||
|
Total equity
|
(53
|
)
|
|
50,316
|
|
|
156,833
|
|
|
(152,703
|
)
|
|
54,393
|
|
|||||
|
Total liabilities and equity
|
$
|
—
|
|
|
$
|
155,095
|
|
|
$
|
177,949
|
|
|
$
|
(233,103
|
)
|
|
$
|
99,941
|
|
|
|
TWDC
|
|
Legacy Disney
|
|
Non-Guarantor Subsidiaries
|
|
Reclassifications & Eliminations
|
|
Total
|
||||||||||
|
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
1,367
|
|
|
$
|
2,783
|
|
|
$
|
—
|
|
|
$
|
4,150
|
|
|
Receivables, net
|
—
|
|
|
155
|
|
|
9,179
|
|
|
—
|
|
|
9,334
|
|
|||||
|
Inventories
|
—
|
|
|
4
|
|
|
1,388
|
|
|
—
|
|
|
1,392
|
|
|||||
|
Television costs and advances
|
—
|
|
|
—
|
|
|
1,314
|
|
|
—
|
|
|
1,314
|
|
|||||
|
Other current assets
|
—
|
|
|
152
|
|
|
483
|
|
|
—
|
|
|
635
|
|
|||||
|
Total current assets
|
—
|
|
|
1,678
|
|
|
15,147
|
|
|
—
|
|
|
16,825
|
|
|||||
|
Film and television costs
|
—
|
|
|
—
|
|
|
7,888
|
|
|
—
|
|
|
7,888
|
|
|||||
|
Investments in subsidiaries
|
—
|
|
|
149,880
|
|
|
—
|
|
|
(149,880
|
)
|
|
—
|
|
|||||
|
Other investments
|
—
|
|
|
—
|
|
|
2,899
|
|
|
—
|
|
|
2,899
|
|
|||||
|
Parks, resorts and other property, net
|
—
|
|
|
12
|
|
|
29,528
|
|
|
—
|
|
|
29,540
|
|
|||||
|
Intangible assets, net
|
—
|
|
|
—
|
|
|
6,812
|
|
|
—
|
|
|
6,812
|
|
|||||
|
Goodwill
|
—
|
|
|
—
|
|
|
31,269
|
|
|
—
|
|
|
31,269
|
|
|||||
|
Intercompany receivables
|
—
|
|
|
—
|
|
|
79,793
|
|
|
(79,793
|
)
|
|
—
|
|
|||||
|
Other assets
|
—
|
|
|
911
|
|
|
3,178
|
|
|
(724
|
)
|
|
3,365
|
|
|||||
|
Total assets
|
$
|
—
|
|
|
$
|
152,481
|
|
|
$
|
176,514
|
|
|
$
|
(230,397
|
)
|
|
$
|
98,598
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Accounts payable and other accrued liabilities
|
$
|
—
|
|
|
$
|
688
|
|
|
$
|
8,791
|
|
|
$
|
—
|
|
|
$
|
9,479
|
|
|
Current portion of borrowings
|
—
|
|
|
3,751
|
|
|
39
|
|
|
—
|
|
|
3,790
|
|
|||||
|
Deferred revenues and other
|
—
|
|
|
115
|
|
|
4,476
|
|
|
—
|
|
|
4,591
|
|
|||||
|
Total current liabilities
|
—
|
|
|
4,554
|
|
|
13,306
|
|
|
—
|
|
|
17,860
|
|
|||||
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Borrowings
|
$
|
—
|
|
|
$
|
15,676
|
|
|
$
|
1,408
|
|
|
$
|
—
|
|
|
$
|
17,084
|
|
|
Deferred income taxes
|
—
|
|
|
—
|
|
|
3,833
|
|
|
(724
|
)
|
|
3,109
|
|
|||||
|
Other long-term liabilities
|
—
|
|
|
3,685
|
|
|
2,905
|
|
|
—
|
|
|
6,590
|
|
|||||
|
Intercompany payables
|
—
|
|
|
79,793
|
|
|
—
|
|
|
(79,793
|
)
|
|
—
|
|
|||||
|
Total non-current liabilities
|
—
|
|
|
99,154
|
|
|
8,146
|
|
|
(80,517
|
)
|
|
26,783
|
|
|||||
|
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
1,123
|
|
|
—
|
|
|
1,123
|
|
|||||
|
Total Disney Shareholders’ equity
|
—
|
|
|
48,773
|
|
|
149,880
|
|
|
(149,880
|
)
|
|
48,773
|
|
|||||
|
Noncontrolling interests
|
—
|
|
|
—
|
|
|
4,059
|
|
|
—
|
|
|
4,059
|
|
|||||
|
Total equity
|
—
|
|
|
48,773
|
|
|
153,939
|
|
|
(149,880
|
)
|
|
52,832
|
|
|||||
|
Total liabilities and equity
|
$
|
—
|
|
|
$
|
152,481
|
|
|
$
|
176,514
|
|
|
$
|
(230,397
|
)
|
|
$
|
98,598
|
|
|
|
TWDC
|
|
Legacy Disney
|
|
Non-Guarantor Subsidiaries
|
|
Reclassifications & Eliminations
|
|
Total
|
||||||||||
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash provided by operations
|
$
|
(20
|
)
|
|
$
|
135
|
|
|
$
|
1,984
|
|
|
$
|
—
|
|
|
$
|
2,099
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Investments in parks, resorts and other property
|
—
|
|
|
—
|
|
|
(1,195
|
)
|
|
—
|
|
|
(1,195
|
)
|
|||||
|
Intercompany investing activities, net
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
11
|
|
|
—
|
|
|||||
|
Other
|
—
|
|
|
—
|
|
|
(141
|
)
|
|
—
|
|
|
(141
|
)
|
|||||
|
Cash used in investing activities
|
—
|
|
|
(11
|
)
|
|
(1,336
|
)
|
|
11
|
|
|
(1,336
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Commercial paper, net
|
—
|
|
|
(302
|
)
|
|
—
|
|
|
—
|
|
|
(302
|
)
|
|||||
|
Proceeds from exercise of stock options
|
—
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|||||
|
Intercompany financing, net
|
20
|
|
|
75
|
|
|
(84
|
)
|
|
(11
|
)
|
|
—
|
|
|||||
|
Other
|
—
|
|
|
(125
|
)
|
|
(21
|
)
|
|
—
|
|
|
(146
|
)
|
|||||
|
Cash used in financing activities
|
20
|
|
|
(315
|
)
|
|
(105
|
)
|
|
(11
|
)
|
|
(411
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Impact of exchange rates on cash, cash equivalents and restricted cash
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
—
|
|
|
(44
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Change in cash, cash equivalents and restricted cash
|
—
|
|
|
(191
|
)
|
|
499
|
|
|
—
|
|
|
308
|
|
|||||
|
Cash, cash equivalents and restricted cash, beginning of period
|
—
|
|
|
1,367
|
|
|
2,788
|
|
|
—
|
|
|
4,155
|
|
|||||
|
Cash, cash equivalents and restricted cash, end of period
|
$
|
—
|
|
|
$
|
1,176
|
|
|
$
|
3,287
|
|
|
$
|
—
|
|
|
$
|
4,463
|
|
|
|
TWDC
|
|
Legacy Disney
|
|
Non-Guarantor Subsidiaries
|
|
Reclassifications & Eliminations
|
|
Total
|
||||||||||
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash provided by operations
|
$
|
—
|
|
|
$
|
1,255
|
|
|
$
|
982
|
|
|
$
|
—
|
|
|
$
|
2,237
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Investments in parks, resorts and other property
|
—
|
|
|
—
|
|
|
(981
|
)
|
|
—
|
|
|
(981
|
)
|
|||||
|
Other
|
—
|
|
|
—
|
|
|
(62
|
)
|
|
—
|
|
|
(62
|
)
|
|||||
|
Cash used in investing activities
|
—
|
|
|
—
|
|
|
(1,043
|
)
|
|
—
|
|
|
(1,043
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Commercial paper, net
|
—
|
|
|
1,140
|
|
|
—
|
|
|
—
|
|
|
1,140
|
|
|||||
|
Borrowings
|
—
|
|
|
997
|
|
|
28
|
|
|
—
|
|
|
1,025
|
|
|||||
|
Reduction of borrowings
|
—
|
|
|
(1,299
|
)
|
|
(31
|
)
|
|
—
|
|
|
(1,330
|
)
|
|||||
|
Repurchases of common stock
|
—
|
|
|
(1,313
|
)
|
|
—
|
|
|
—
|
|
|
(1,313
|
)
|
|||||
|
Proceeds from exercise of stock options
|
—
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|||||
|
Intercompany financing, net
|
—
|
|
|
(272
|
)
|
|
272
|
|
|
—
|
|
|
—
|
|
|||||
|
Other
|
—
|
|
|
(158
|
)
|
|
2
|
|
|
—
|
|
|
(156
|
)
|
|||||
|
Cash used in financing activities
|
—
|
|
|
(855
|
)
|
|
271
|
|
|
—
|
|
|
(584
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Impact of exchange rates on cash, cash equivalents and restricted cash
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Change in cash, cash equivalents and restricted cash
|
—
|
|
|
400
|
|
|
231
|
|
|
—
|
|
|
631
|
|
|||||
|
Cash, cash equivalents and restricted cash, beginning of period
|
—
|
|
|
693
|
|
|
3,371
|
|
|
—
|
|
|
4,064
|
|
|||||
|
Cash, cash equivalents and restricted cash, end of period
|
$
|
—
|
|
|
$
|
1,093
|
|
|
$
|
3,602
|
|
|
$
|
—
|
|
|
$
|
4,695
|
|