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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 30, 2023
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission File Number 001-38842
twdcimagea01a01a01a01a14.jpg
Delaware 83-0940635
State or Other Jurisdiction of I.R.S. Employer Identification
Incorporation or Organization
500 South Buena Vista Street
Burbank, California 91521
Address of Principal Executive Offices and Zip Code
(818) 560-1000
Registrant’s Telephone Number, Including Area Code
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueDISNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes      No  ☒
There were 1,834,302,235 shares of common stock outstanding as of January 31, 2024.



Cautionary Note on Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or our future financial or operating performance and may include statements concerning, among other things, financial results; business plans (including statements regarding new services and products and future expenditures, costs and investments); future liabilities and other obligations; impairments and amortization; estimates of financial impact of certain items, accounting treatment, events or circumstances; competition and seasonality on our businesses and results of operations; and capital allocation, including share repurchases and dividends. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “would,” “should,” “expects,” “plans,” “could,” “intends,” “target,” “projects,” “believes,” “estimates,” “anticipates,” “potential,” “continue” or “assumption” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These statements reflect our current views with respect to future events and are based on assumptions as of the date of this report. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements.
Such differences may result from actions taken by the Company, including restructuring or strategic initiatives (including capital investments, asset acquisitions or dispositions, new or expanded business lines or cessation of certain operations), our execution of our business plans (including the content we create and intellectual properties (IP) we invest in, our pricing decisions, our cost structure and our management and other personnel decisions), our ability to quickly execute on cost rationalization while preserving revenue, the discovery of additional information or other business decisions, as well as from developments beyond the Company’s control, including:
the occurrence of subsequent events;
deterioration in domestic and global economic conditions or failure of conditions to improve as anticipated;
deterioration in or pressures from competitive conditions, including competition to create or acquire content, competition for talent and competition for advertising revenue;
consumer preferences and acceptance of our content, offerings, pricing model and price increases, and corresponding subscriber additions and churn, and the market for advertising sales on our direct-to-consumer services and linear networks;
health concerns and their impact on our businesses and productions;
international, political or military developments;
regulatory and legal developments;
technological developments;
labor markets and activities, including work stoppages;
adverse weather conditions or natural disasters; and
availability of content.
Such developments may further affect entertainment, travel and leisure businesses generally and may, among other things, affect (or further affect, as applicable):
our operations, business plans or profitability, including direct-to-consumer profitability;
demand for our products and services;
the performance of the Company’s content;
our ability to create or obtain desirable content at or under the value we assign the content;
the advertising market for programming;
income tax expense; and
performance of some or all Company businesses either directly or through their impact on those who distribute our products.
Additional factors include those described in our 2023 Annual Report on Form 10-K, including under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business,” in our subsequent quarterly reports on Form 10-Q, including under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in our subsequent filings with the Securities and Exchange Commission.
A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances. You should not place undue reliance on the forward-looking statements. Unless required by federal securities laws, we assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made.
2


PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
THE WALT DISNEY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited; in millions, except per share data)
 Quarter Ended
 December 30,
2023
December 31,
2022
Revenues:
Services$20,975 $20,997 
Products2,574 2,515 
Total revenues23,549 23,512 
Costs and expenses:
Cost of services (exclusive of depreciation and amortization)
(13,922)(14,781)
Cost of products (exclusive of depreciation and amortization)
(1,665)(1,605)
Selling, general, administrative and other(3,783)(3,827)
Depreciation and amortization(1,243)(1,306)
Total costs and expenses(20,613)(21,519)
Restructuring and impairment charges (69)
Other expense, net
 (42)
Interest expense, net(246)(300)
Equity in the income of investees181 191 
Income before income taxes
2,871 1,773 
Income taxes
(720)(412)
Net income2,151 1,361 
Net income attributable to noncontrolling interests
(240)(82)
Net income attributable to Disney$1,911    $1,279 
Earnings per share attributable to Disney:
Diluted$1.04 $0.70 
Basic$1.04 $0.70 
Weighted average number of common and common equivalent shares outstanding:
Diluted1,835 1,827 
Basic1,832 1,825 
See Notes to Condensed Consolidated Financial Statements
3


THE WALT DISNEY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited; in millions)
 
 Quarter Ended
 December 30,
2023
December 31,
2022
Net income$2,151 $1,361 
Other comprehensive income (loss), net of tax:
Market value adjustments for hedges(319)(542)
Pension and postretirement medical plan adjustments
(21)1    
Foreign currency translation and other
174 227 
Other comprehensive loss
(166)(314)
Comprehensive income
1,985 1,047 
Net income attributable to noncontrolling interests
(240)(82)
Other comprehensive income attributable to noncontrolling interests(44)(45)
Comprehensive income attributable to Disney$1,701    $920 
See Notes to Condensed Consolidated Financial Statements




4


THE WALT DISNEY COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited; in millions, except per share data)
December 30,
2023
September 30,
2023
ASSETS
Current assets
Cash and cash equivalents$7,192 $14,182 
Receivables, net14,115 12,330 
Inventories1,954 1,963 
Content advances1,409 3,002 
Other current assets1,301 1,286 
Total current assets25,971 32,763 
Produced and licensed content costs32,725 33,591 
Investments3,084 3,080 
Parks, resorts and other property
Attractions, buildings and equipment72,096    70,090    
Accumulated depreciation(43,575)(42,610)
28,521 27,480 
Projects in progress5,618 6,285 
Land1,182 1,176 
35,321 34,941 
Intangible assets, net12,639 13,061 
Goodwill77,066 77,067 
Other assets10,968 11,076 
Total assets$197,774 $205,579 
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and other accrued liabilities$18,676 $20,671 
Current portion of borrowings6,087 4,330 
Deferred revenue and other6,270 6,138 
Total current liabilities31,033 31,139 
Borrowings41,603 42,101 
Deferred income taxes7,041 7,258 
Other long-term liabilities12,596 12,069 
Commitments and contingencies (Note 13)
Redeemable noncontrolling interests 9,055 
Equity
Preferred stock
  
Common stock, $0.01 par value, Authorized – 4.6 billion shares, Issued – 1.9 billion shares at December 30, 2023 and 1.8 billion shares at September 30, 2023
57,640 57,383 
Retained earnings47,490 46,093 
Accumulated other comprehensive loss(3,502)(3,292)
Treasury stock, at cost, 19 million shares
(907)(907)
Total Disney Shareholders’ equity100,721 99,277 
Noncontrolling interests4,780 4,680 
Total equity105,501 103,957 
Total liabilities and equity$197,774 $205,579 
See Notes to Condensed Consolidated Financial Statements
5


THE WALT DISNEY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited; in millions)
 Quarter Ended
December 30,
2023
December 31,
2022
OPERATING ACTIVITIES
Net income
$2,151 $1,361 
Depreciation and amortization1,243    1,306 
Deferred income taxes(51)   (15)
Equity in the income of investees(181)(191)
Cash distributions received from equity investees153 176    
Net change in produced and licensed content costs and advances2,642 558 
Equity-based compensation308 270 
Other, net(64)(163)
Changes in operating assets and liabilities:
Receivables(1,554)(1,423)
Inventories8 (88)
Other assets30 (443)
Accounts payable and other liabilities(1,396)(2,378)
Income taxes(1,104)56 
Cash provided by (used in) operations
2,185 (974)
INVESTING ACTIVITIES
Investments in parks, resorts and other property(1,299)(1,181)
Other, net53 (111)
Cash used in investing activities
(1,246)(1,292)
FINANCING ACTIVITIES
Commercial paper borrowings, net
1,046 799 
Borrowings 67 
Reduction of borrowings(309)(1,000)
Contributions from / sale of noncontrolling interest 178 
Acquisition of redeemable noncontrolling interest(8,610)(900)
Other, net(133)(187)
Cash used in financing activities
(8,006)(1,043)
Impact of exchange rates on cash, cash equivalents and restricted cash79 164 
Change in cash, cash equivalents and restricted cash(6,988)(3,145)
Cash, cash equivalents and restricted cash, beginning of period14,235  11,661  
Cash, cash equivalents and restricted cash, end of period$7,247 $8,516 
See Notes to Condensed Consolidated Financial Statements
6


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


 Quarter Ended
Equity Attributable to Disney
 
Shares(1)
Common Stock
Retained Earnings
Accumulated
Other
Comprehensive
Income
(Loss)
Treasury Stock
Total Disney Equity
Non-controlling
 Interests(2)
Total
Equity
Balance at September 30, 20231,830 $57,383 $46,093 $(3,292)$(907)$99,277 $4,680 $103,957 
Comprehensive income (loss)— — 1,911 (210)— 1,701 129 1,830 
Equity compensation activity4 250 — — — 250 — 250 
Dividends— — (549)— — (549)— (549)
Distributions and other— 7 35 — — 42 (29)13 
Balance at December 30, 20231,834 $57,640 $47,490 $(3,502)$(907)$100,721 $4,780 $105,501 
Balance at October 1, 20221,824 $56,398 $43,636 $(4,119)$(907)$95,008 $3,871 $98,879 
Comprehensive income (loss)— — 1,279    (359)— 920 (16)904 
Equity compensation activity2 180 — — — 180 — 180 
Contributions— — — — — — 178 178 
Distributions and other— 1 40 — — 41 (47)(6)
Balance at December 31, 20221,826 $56,579 $44,955 $(4,478)$(907)$96,149 $3,986 $100,135 
(1)Shares are net of treasury shares.
(2)Excludes redeemable noncontrolling interests.
See Notes to Condensed Consolidated Financial Statements


7


THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)
 
1.Principles of Consolidation
These Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. We believe that we have included all normal recurring adjustments necessary for a fair statement of the results for the interim period. Operating results for the quarter ended December 30, 2023 are not necessarily indicative of the results that may be expected for the year ending September 28, 2024.
The terms “Company,” “Disney,” “we,” “us,” and “our” are used in this report to refer collectively to the parent company, The Walt Disney Company, as well as the subsidiaries through which its various businesses are actually conducted.
These financial statements should be read in conjunction with the Company’s 2023 Annual Report on Form 10-K.
Variable Interest Entities
The Company enters into relationships with or makes investments in other entities that may be variable interest entities (VIE). A VIE is consolidated in the financial statements if the Company has the power to direct activities that most significantly impact the economic performance of the VIE and has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant (as defined by ASC 810-10-25-38) to the VIE. Hong Kong Disneyland Resort and Shanghai Disney Resort (together the Asia Theme Parks) are VIEs in which the Company has less than 50% equity ownership. Company subsidiaries (the Management Companies) have management agreements with the Asia Theme Parks, which provide the Management Companies, subject to certain protective rights of joint venture partners, with the ability to direct the day-to-day operating activities and the development of business strategies that we believe most significantly impact the economic performance of the Asia Theme Parks. In addition, the Management Companies receive management fees under these arrangements that we believe could be significant to the Asia Theme Parks. Therefore, the Company has consolidated the Asia Theme Parks in its financial statements.
Redeemable Noncontrolling Interest
Hulu LLC
In November 2023, NBC Universal (NBCU) exercised its right to require the Company to purchase NBCU’s 33% interest in Hulu LLC (Hulu), a direct-to-consumer (DTC) streaming service provider, at a redemption value based on NBCU’s equity ownership percentage of the greater of Hulu’s equity fair value or a guaranteed floor value of $27.5 billion. In connection with the redemption, the Company will pay NBCU 50% of the future tax benefits from the amortization of the purchase of NBCU’s interest in Hulu that will generally arise over a 15-year period. In December 2023, the Company paid NBCU $8.6 billion, which reflected the guaranteed floor value less NBCU’s unpaid capital call contributions.
Based on valuation procedures agreed upon by NBCU and the Company, Hulu’s equity fair value for purposes of determining the redemption payment is not expected to be finalized until later in calendar 2024. If Hulu’s equity fair value is determined to be higher than the guaranteed floor value, the Company is required to pay NBCU its share of the difference between the equity fair value and the guaranteed floor value.
The Company is required to accrete NBCU’s interest to the estimated redemption value and has accreted to the guaranteed floor value. If the redemption value is higher than the guaranteed floor value, we would record the increment as “Net income attributable to noncontrolling interests” and thus reduce “Net income attributable to Disney” in the Condensed Consolidated Statements of Income. Estimating the redemption value prior to its final determination requires management to make significant judgments related to assessing the fair value of Hulu.
BAMTech LLC
In November 2022, the Company purchased Major League Baseball’s (MLB) 15% redeemable noncontrolling interest in BAMTech LLC (BAMTech), which holds the Company’s domestic DTC sports business, for $900 million (MLB buy-out). MLB’s interest was recorded in the Company’s financial statements at $828 million prior to the MLB buy-out. The $72 million difference was recorded as an increase in “Net income attributable to noncontrolling interests” in the Condensed Consolidated Statements of Income.
8

THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)
During the three months ended December 31, 2022, Hearst Corporation (Hearst) contributed $178 million to the domestic DTC sports business to fund its 20% share of the MLB buy-out.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results may differ from those estimates.
Reclassifications
Certain reclassifications have been made in the fiscal 2023 financial statements and notes to conform to the fiscal 2024 presentation.
2.Segment Information
The Company’s operations are reported in three segments: Entertainment, Sports and Experiences, for which separate financial information is evaluated regularly by the Chief Executive Officer to allocate resources and assess performance.
Segment operating results reflect earnings before corporate and unallocated shared expenses, restructuring and impairment charges, net other income/expense, net interest expense, income taxes and noncontrolling interests. Segment operating income includes equity in the income of investees and excludes amortization of intangible assets and the fair value step-up for film and television costs recognized in connection with the acquisition of TFCF Corporation (TFCF) and Hulu in fiscal 2019 (TFCF and Hulu acquisition amortization). Corporate and unallocated shared expenses principally consist of corporate functions, executive management and certain unallocated administrative support functions.
Segment operating results include allocations of certain costs, including information technology, pension, legal and other shared services costs, which are allocated based on metrics designed to correlate with consumption.
9

THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

Segment revenues and segment operating income are as follows:
 Quarter Ended
 December 30,
2023
December 31,
2022
Revenues:
Entertainment
Third parties$9,881   $10,584   
Intersegment100   91   
9,981   10,675   
Sports
Third parties4,536   4,383   
Intersegment299   257   
4,835   4,640   
Experiences9,132   8,545   
Eliminations(399)  (348)  
Total segment revenues$23,549   $23,512   
Segment operating income:
Entertainment$874   $345   
Sports(103)  (164)  
Experiences3,105   2,862   
Total segment operating income(1)
$3,876   $3,043   
(1) Equity in the income of investees is included in segment operating income as follows:
 Quarter Ended
 December 30,
2023
December 31,
2022
Entertainment$171   $193   
Sports13 3  
Experiences (2) 
Equity in the income of investees included in segment operating income184 194 
Amortization of TFCF intangible assets related to equity investees(3)(3)
Equity in the income of investees, net$181 $191 
10

THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

A reconciliation of segment operating income to income before income taxes is as follows:
 Quarter Ended
 December 30,
2023
December 31,
2022
Segment operating income$3,876 $3,043   
Corporate and unallocated shared expenses(308)  (280)
Restructuring and impairment charges(1)
 (69)
Other expense, net(2)
 (42)
Interest expense, net(246)(300)
TFCF and Hulu acquisition amortization(3)
(451)(579)
Income before income taxes
$2,871 $1,773 
(1)See Note 16 for a discussion of amounts in restructuring and impairment charges.
(2)See Note 4 for a discussion of amounts in other expense, net.
(3)TFCF and Hulu acquisition amortization is as follows:
Quarter Ended
December 30,
2023
December 31,
2022
Amortization of intangible assets$380 $417   
Step-up of film and television costs68   159 
Intangibles related to TFCF equity investees3   3 
$451 $579 
Goodwill
The changes in the carrying amount of goodwill are as follows:
EntertainmentSportsExperiencesTotal
Balance at September 30, 2023$55,031 $16,486 $5,550 $77,067 
Currency translation adjustments and other, net(1)  (1)
Balance at December 30, 2023$55,030 $16,486 $5,550 $77,066 
11

THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

3.Revenues
The following table presents our revenues by segment and major source:
Quarter Ended December 30, 2023
EntertainmentSportsExperiencesEliminationsTotal
Affiliate fees$1,766$2,669$— $(293)$4,142 
Subscription fees4,507415— — 4,922 
Advertising1,9971,351 — 3,348 
Theme park admissions2,982 — 2,982 
Resort and vacations2,118 — 2,118 
Retail and wholesale sales of merchandise, food and beverage2,477    —    2,477    
Merchandise licensing192967 — 1,159 
TV/VOD distribution licensing
53657— — 593 
Theatrical distribution licensing251— — 251 
Home entertainment209— — 209 
Other523343588 (106)1,348 
$9,981$4,835$9,132 $(399)$23,549 
Quarter Ended December 31, 2022
EntertainmentSportsExperiencesEliminationsTotal
Affiliate fees$1,873$2,653$— $(266)$4,260 
Subscription fees3,861379— — 4,240 
Advertising2,1801,2621 — 3,443 
Theme park admissions2,641 — 2,641 
Resort and vacations1,980 — 1,980 
Retail and wholesale sales of merchandise, food and beverage2,382    —    2,382 
Merchandise licensing191952 — 1,143 
TV/VOD distribution licensing
72476— — 800 
Theatrical distribution licensing1,140— — 1,140 
Home entertainment185— — 185 
Other521270589 (82)1,298 
$10,675 $4,640 $8,545 $(348)$23,512 
    The following table presents our revenues by segment and primary geographical markets:
Quarter Ended December 30, 2023
EntertainmentSportsExperiencesEliminationsTotal
Americas$7,588 $4,358 $7,037 $(399)$18,584 
Europe1,409    179    1,022        2,610    
Asia Pacific984 298 1,073  2,355 
Total revenues$9,981 $4,835 $9,132 $(399)$23,549 
Quarter Ended December 31, 2022
EntertainmentSportsExperiencesEliminationsTotal
Americas$8,150 $4,315 $6,854 $(348)$18,971 
Europe1,499    126    1,015        2,640    
Asia Pacific1,026 199 676  1,901 
Total revenues$10,675 $4,640 $8,545 $(348)$23,512 
Revenues recognized in the current and prior-year periods from performance obligations satisfied (or partially satisfied) in previous reporting periods primarily relate to revenues earned on TV/VOD licenses for titles made available to the licensee in previous reporting periods. For the quarter ended December 30, 2023, $0.3 billion was recognized related to performance obligations satisfied as of September 30, 2023. For the quarter ended December 31, 2022, $0.3 billion was recognized related to performance obligations satisfied as of October 1, 2022.
12

THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

As of December 30, 2023, revenue for unsatisfied performance obligations expected to be recognized in the future is $14 billion, primarily for IP or advertising time to be made available in the future under existing agreements with merchandise and co-branding licensees and sponsors, television station affiliates, DTC wholesalers, advertisers and sports sublicensees. Of this amount, we expect to recognize approximately $5 billion in the remainder of fiscal 2024, $5 billion in fiscal 2025, $2 billion in fiscal 2026 and $2 billion thereafter. These amounts include only fixed consideration or minimum guarantees and do not include amounts related to (i) contracts with an original expected term of one year or less (such as most advertising contracts) or (ii) licenses of IP that are solely based on the sales of the licensee.
When the timing of the Company’s revenue recognition is different from the timing of customer payments, the Company recognizes either a contract asset (customer payment is subsequent to revenue recognition and subject to the Company satisfying additional performance obligations) or deferred revenue (customer payment precedes the Company satisfying the performance obligations). Consideration due under contracts with payment in arrears is recognized as accounts receivable. Deferred revenues are recognized as (or when) the Company performs under the contract. The Company’s contract assets and activity for the current and prior-year periods were not material.
Accounts receivable and deferred revenues from contracts with customers are as follows:
December 30,
2023
September 30,
2023
Accounts receivable
Current$11,810   $10,279   
Non-current1,191 1,212 
Allowance for credit losses(156)(154)
Deferred revenues
Current5,641 5,568 
Non-current952 977 
For the quarter ended December 30, 2023, the Company recognized revenue of $3.4 billion that was included in the September 30, 2023 deferred revenue balance. For the quarter ended December 31, 2022, the Company recognized revenue of $3.4 billion that was included in the October 1, 2022 deferred revenue balance. Amounts deferred generally relate to theme park admissions and vacation packages, DTC subscriptions and advances related to merchandise and TV/VOD licenses.
We evaluate our allowance for credit losses and estimate collectability of current and non-current accounts receivable based on historical bad debt experience, our assessment of the financial condition of individual companies with which we do business, current market conditions, and reasonable and supportable forecasts of future economic conditions. In times of economic turmoil, our estimates and judgments with respect to the collectability of our receivables are subject to greater uncertainty than in more stable periods.
The Company has accounts receivable with original maturities greater than one year related to the sale of film and television program rights (TV/VOD licensing) and vacation club properties. These receivables are discounted to present value at contract inception and the related revenues are recognized at the discounted amount. The balance of TV/VOD licensing receivables recorded in other non-current assets was $0.5 billion at December 30, 2023 and $0.6 billion at September 30, 2023. The balance of vacation club receivables recorded in other non-current assets was $0.7 billion at both December 30, 2023 and September 30, 2023. The allowance for credit losses for TV/VOD licensing and vacation club receivables and related activity for the periods ended December 30, 2023 and September 30, 2023 were not material.
13

THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

4.Other Expense, net
Other expense, net is as follows:
 Quarter Ended
 December 30,
2023
December 31,
2022
DraftKings loss$ $(70)
Other
 28 
Other expense, net
$ $(42)
In the prior-year quarter, the Company recognized a $70 million non-cash loss to adjust its investment in DraftKings, Inc. (DraftKings) to fair value.
5.Cash, Cash Equivalents, Restricted Cash and Borrowings
Cash, Cash Equivalents and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets to the total of the amounts reported in the Condensed Consolidated Statements of Cash Flows.
December 30,
2023
September 30,
2023
Cash and cash equivalents$7,192 $14,182 
Restricted cash included in other assets
55 53 
Total cash, cash equivalents and restricted cash in the statement of cash flows$7,247 $14,235 
Borrowings
During the quarter ended December 30, 2023, the Company’s borrowing activity was as follows: 
September 30,
2023
BorrowingsPaymentsOther
Activity
December 30,
2023
Commercial paper with original maturities less than three months$289 $542 $ $5 $836 
Commercial paper with original maturities greater than three months1,187 754 (250)16 1,707 
U.S. dollar denominated notes
43,504  (295)(39)43,170 
Asia Theme Parks borrowings
1,308        (14)   50    1,344    
Foreign currency denominated debt and other(1)
143   490 633 
$46,431 $1,296 $(559)$522 $47,690 
(1)The other activity is attributable to market value adjustments for debt with qualifying hedges.
At December 30, 2023, the Company’s bank facilities, which are with a syndicate of lenders and support our commercial paper borrowings, were as follows:
Committed
Capacity
Capacity
Used
Unused
Capacity
Facility expiring March 2024$5,250 $ $5,250 
Facility expiring March 20253,000  3,000 
Facility expiring March 20274,000  4,000 
Total$12,250 $ $12,250 
These facilities allow for borrowings at rates based on the Secured Overnight Financing Rate (SOFR), and at other variable rates for non-U.S. dollar denominated borrowings, plus a fixed spread that varies with the Company’s debt ratings assigned by Moody’s Investors Service and Standard and Poor’s ranging from 0.655% to 1.225%. The bank facilities contain
14

THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

only one financial covenant relating to interest coverage of three times earnings before interest, taxes, depreciation and amortization, including both intangible amortization and amortization of our film and television production and programming costs. On December 30, 2023, the Company met this covenant by a significant margin. The bank facilities specifically exclude certain entities, including the Asia Theme Parks, from any representations, covenants or events of default. The Company also has the ability to issue up to $500 million of letters of credit under the facility expiring in March 2027, which if utilized, reduces available borrowings under this facility. As of December 30, 2023, the Company has $1.7 billion of outstanding letters of credit, of which none were issued under this facility.
Cruise Ship Credit Facilities
The Company has credit facilities to finance a significant portion of the contract price of two new cruise ships, which are scheduled to be delivered in fiscal 2025 and fiscal 2026. Under the facilities, $1.1 billion became available beginning in August 2023 and $1.1 billion is available beginning in August 2024. Each tranche of financing may be utilized within a period of 18 months from the initial availability date. If utilized, the interest rates will be fixed at 3.80% and 3.74%, respectively, and the loan and interest will be payable semi-annually over a 12-year period from the borrowing date. Early repayment is permitted subject to cancellation fees.
Interest expense, net
Interest expense (net of amounts capitalized), interest and investment income, and net periodic pension and postretirement benefit costs (other than service costs) (see Note 9) are reported net in the Condensed Consolidated Statements of Income and consist of the following:
Quarter Ended
December 30,
2023
December 31,
2022
Interest expense$(528)$(465)
Interest and investment income182    79    
Net periodic pension and postretirement benefit costs (other than service costs)100 86 
Interest expense, net$(246)$(300)
Interest and investment income includes gains and losses on certain publicly traded and non-public investments, investment impairments and interest earned on cash and cash equivalents and certain receivables.
6.International Theme Parks
The Company has a 48% ownership interest in the operations of Hong Kong Disneyland Resort and a 43% ownership interest in the operations of Shanghai Disney Resort. The Asia Theme Parks together with Disneyland Paris are collectively referred to as the International Theme Parks.
The following table summarizes the carrying amounts of the Asia Theme Parks’ assets and liabilities included in the Company’s Condensed Consolidated Balance Sheets:
 December 30,
2023
September 30,
2023
Cash and cash equivalents$426 $504 
Other current assets184 159 
Total current assets610 663 
Parks, resorts and other property6,212    6,150    
Other assets223 234 
Total assets$7,045 $7,047 
Current liabilities$710 $720 
Long-term borrowings1,344 1,308 
Other long-term liabilities398 392 
Total liabilities$2,452 $2,420 
15

THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

The following table summarizes the International Theme Parks’ revenues and costs and expenses included in the Company’s Condensed Consolidated Statements of Income for the quarter ended December 30, 2023:
Revenues$1,362 
Costs and expenses(1,123)   
Asia Theme Parks’ royalty and management fees of $67 million for the quarter ended December 30, 2023 are eliminated in consolidation, but are considered in calculating earnings attributable to noncontrolling interests.
International Theme Parks’ cash flows included in the Company’s Condensed Consolidated Statements of Cash Flows for the quarter ended December 30, 2023 were $352 million provided by operating activities, $239 million used in investing activities and $12 million used in financing activities.
Hong Kong Disneyland Resort
The Government of the Hong Kong Special Administrative Region (HKSAR) and the Company have a 52% and a 48% equity interest in Hong Kong Disneyland Resort, respectively.
The Company and HKSAR have provided loans to Hong Kong Disneyland Resort with outstanding balances of $166 million and $111 million, respectively. The interest rate on both loans is three month HIBOR plus 2%, and the scheduled maturity date is September 2025. The Company’s loan is eliminated in consolidation.
The Company has provided Hong Kong Disneyland Resort with a revolving credit facility of HK $2.7 billion ($346 million), which bears interest at a rate of three month HIBOR plus 1.25% and matures in December 2028. The line of credit was fully repaid during the quarter ended December 30, 2023. The Company’s line of credit is eliminated in consolidation.
Shanghai Disney Resort
Shanghai Shendi (Group) Co., Ltd (Shendi) and the Company have 57% and 43% equity interests in Shanghai Disney Resort, respectively. A management company, in which the Company has a 70% interest and Shendi a 30% interest, operates Shanghai Disney Resort.
The Company has provided Shanghai Disney Resort with loans totaling $978 million, bearing interest at rates up to 8% and maturing in 2036, with early repayment permitted. The Company has also provided Shanghai Disney Resort with a 1.9 billion yuan (approximately $0.3 billion) line of credit bearing interest at 8%. The line of credit was fully repaid during the quarter ended December 30, 2023. These balances are eliminated in consolidation.
Shendi has provided Shanghai Disney Resort with loans totaling 8.8 billion yuan (approximately $1.2 billion), bearing interest at rates up to 8% and maturing in 2036, with early repayment permitted. Shendi has also provided Shanghai Disney Resort with a 2.6 billion yuan (approximately $0.4 billion) line of credit bearing interest at 8%. The line of credit was fully repaid during the quarter ended December 30, 2023.
7.Produced and Acquired/Licensed Content Costs and Advances
The Company classifies its capitalized produced and acquired/licensed content costs as long-term assets and classifies advances for live programming rights made prior to the live event as short-term assets. For purposes of amortization and impairment, the capitalized content costs are classified based on their predominant monetization strategy as follows:
Individual - lifetime value is predominantly derived from third-party revenues that are directly attributable to the specific film or television title (e.g. theatrical revenues or sales to third-party television programmers)
Group - lifetime value is predominantly derived from third-party revenues that are attributable only to a bundle of titles (e.g. subscription revenue for a DTC service or affiliate fees for a cable television network)
16

THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

Total capitalized produced and licensed content by predominant monetization strategy is as follows:
As of December 30, 2023As of September 30, 2023
Predominantly Monetized IndividuallyPredominantly Monetized
as a Group
TotalPredominantly Monetized IndividuallyPredominantly Monetized
as a Group
Total
Produced content
Released, less amortization$4,911 $13,725 $18,636 $4,968 $13,555 $18,523 
Completed, not released 1,713 1,713 70 1,786 1,856 
In-process3,157   5,394   8,551   3,331   6,120   9,451   
In development or pre-production262 132 394 279 133 412 
$8,330 $20,964 29,294 $8,648 $21,594 30,242 
Licensed content - Television programming rights and advances4,840 6,351 
Total produced and licensed content$34,134 $36,593 
Current portion$1,409 $3,002 
Non-current portion$32,725 $33,591 
Amortization of produced and licensed content is as follows:
Quarter Ended
December 30,
2023
December 31,
2022
Produced content
Predominantly monetized individually$768$1,157 
Predominantly monetized as a group1,7942,160   
2,5623,317 
Licensed programming rights and advances4,5904,539 
Total produced and licensed content costs(1)
$7,152$7,856 
(1)Primarily included in “Costs of services” in the Condensed Consolidated Statements of Income.
8.Income Taxes
Unrecognized Tax Benefits
The Company’s gross unrecognized tax benefits (before interest and penalties) at both December 30, 2023 and September 30, 2023, were $2.5 billion. In the next twelve months, it is reasonably possible that our unrecognized tax benefits could change due to resolutions of open tax matters, which would reduce our unrecognized tax benefits by $0.3 billion.
17

THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

9.Pension and Other Benefit Programs
The components of net periodic benefit cost (income) are as follows:
 Pension PlansPostretirement Medical Plans
 Quarter EndedQuarter Ended
 December 30,
2023
December 31,
2022
December 30,
2023
December 31,
2022
Service costs$62 $65 $ $1 
Other costs (benefits):
Interest costs208   196   14   20   
Expected return on plan assets(284)(288)(14)(15)
Amortization of previously deferred service costs2 2 (22) 
Recognized net actuarial loss5 5 (9)(6)
Total other costs (benefits)(69)(85)(31)(1)
Net periodic benefit cost (income)$(7)$(20)$(31)$ 
During the quarter ended December 30, 2023, the Company did not make any material contributions to its pension and postretirement medical plans and does not currently expect to make any material contributions for the remainder of fiscal 2024. Final minimum funding requirements for fiscal 2024 will be determined based on a January 1, 2024 funding actuarial valuation, which is expected to be received in the fourth quarter of fiscal 2024.
10.Earnings Per Share
Diluted earnings per share amounts are based upon the weighted average number of common and common equivalent shares outstanding during the period and are calculated using the treasury stock method for equity-based compensation awards (Awards). A reconciliation of the weighted average number of common and common equivalent shares outstanding and the number of Awards excluded from the diluted earnings per share calculation, as they were anti-dilutive, are as follows:
 Quarter Ended
 December 30,
2023
December 31,
2022
Shares (in millions):
Weighted average number of common and common equivalent shares outstanding (basic)1,832   1,825   
Weighted average dilutive impact of Awards3 2 
Weighted average number of common and common equivalent shares outstanding (diluted)1,835 1,827 
Awards excluded from diluted earnings per share39 26 
11.Equity
On November 30, 2023, the Board of Directors declared a cash dividend of $0.30 per share ($549 million) with respect to the second half of fiscal 2023, which was paid in January 2024 to shareholders of record as of December 11, 2023.
On February 7, 2024, the Board of Directors declared a cash dividend of $0.45 per share with respect to the first half of fiscal 2024, which will be paid on July 25, 2024 to shareholders of record as of July 8, 2024.
Effective February 7, 2024, the Board of Directors authorized a new share repurchase program for the Company to repurchase a total of 400 million shares of its common stock. The Company plans to target repurchases of $3 billion in fiscal 2024. The repurchase program does not have an expiration date.
18

THE WALT DISNEY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited; tabular dollars in millions, except for per share data)

The following tables summarize the changes in each component of accumulated other comprehensive income (loss) (AOCI) including our proportional share of equity method investee amounts:
 Market Value Adjustments for HedgesUnrecognized
Pension and 
Postretirement
Medical 
Expense
Foreign
Currency
Translation
and Other
AOCI
AOCI, before tax
First quarter of fiscal 2024
Balance at September 30, 2023$259 $(2,172)$(1,974)$(3,887)
Quarter Ended December 30, 2023:
Unrealized gains (losses) arising during the period(277)(3)137 (143)
Reclassifications of realized net (gains) losses to net income(140)(24) (164)
Balance at December 30, 2023$(158)$(2,199)$(1,837)$(4,194)
First quarter of fiscal 2023
Balance at October 1, 2022$804 $(3,770)$(2,014)$(4,980)
Quarter Ended December 31, 2022:
Unrealized gains (losses) arising during the period(475)       146    (329)   
Reclassifications of realized net (gains) losses to net income(218)1 42 (175)
Balance at December 31, 2022$111 $(3,769)$(1,826)$(5,484)
 Market Value Adjustments for HedgesUnrecognized
Pension and 
Postretirement
Medical 
Expense
Foreign
Currency
Translation
and Other
AOCI
Tax on AOCI
First quarter of fiscal 2024
Balance at September 30, 2023$(64)$517 $142 $595 
Quarter Ended December 30, 2023:
Unrealized gains (losses) arising during the period66  (7)59 
Reclassifications of realized net (gains) losses to net income32 6  38 
Balance at December 30, 2023$34 $523 $135 $692 
First quarter of fiscal 2023
Balance at October 1, 2022$(179)$901 $139 $861 
Quarter Ended December 31, 2022:
Unrealized gains (losses) arising during the period100        8    108    
Reclassifications of realized net (gains) losses to net income51  (14)