Item 1. Financial Statements

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Item 1. Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited; in millions, except per share data)


	Quarter Ended				Six Months Ended
	March 29, 2025		March 30, 2024		March 29, 2025		March 30, 2024
Revenues:
Services	$	21,258	$	19,757	$	43,306	$	40,732
Products	2,363		2,326		5,005		4,900
Total revenues	23,621		22,083		48,311		45,632
Costs and expenses:
Cost of services (exclusive of depreciation and amortization)	(13,378)		(12,663)		(27,167)		(26,585)
Cost of products (exclusive of depreciation and amortization)	(1,432)		(1,509)		(3,049)		(3,174)
Selling, general, administrative and other	(3,981)		(3,790)		(7,911)		(7,573)
Depreciation and amortization	(1,324)		(1,242)		(2,600)		(2,485)
Total costs and expenses	(20,115)		(19,204)		(40,727)		(39,817)
Restructuring and impairment charges	(109)		(2,052)		(252)		(2,052)

Interest expense, net	(346)		(311)		(713)		(557)
Equity in the income of investees	36		141		128		322
Income before income taxes	3,087		657		6,747		3,528
Income taxes	314		(441)		(702)		(1,161)


Net income	3,401		216		6,045		2,367
Net income attributable to noncontrolling interests	(126)		(236)		(216)		(476)

Net income (loss) attributable to The Walt Disney Company (Disney)	$	3,275	$	(20)	$	5,829	$	1,891

Earnings (loss) per share attributable to Disney:



Diluted	$	1.81	$	(0.01)	$	3.21	$	1.03



Basic	$	1.81	$	(0.01)	$	3.22	$	1.03

Weighted average number of common and common equivalent shares outstanding:
Diluted	1,814		1,834		1,816		1,838
Basic	1,808		1,834		1,810		1,833

See Notes to Condensed Consolidated Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited; in millions)


	Quarter Ended				Six Months Ended
	March 29, 2025		March 30, 2024		March 29, 2025		March 30, 2024
Net income	$	3,401	$	216	$	6,045	$	2,367
Other comprehensive income (loss), net of tax:
Market value adjustments for hedges	(253)		115		109		(204)
Pension and postretirement medical plan adjustments	18		(24)		43		(45)
Foreign currency translation and other	54		(119)		606		55
Other comprehensive income (loss)	(181)		(28)		758		(194)
Comprehensive income	3,220		188		6,803		2,173
Net income attributable to noncontrolling interests	(126)		(236)		(216)		(476)
Other comprehensive income (loss) attributable to noncontrolling interests	(8)		21		64		(23)
Comprehensive income (loss) attributable to Disney	$	3,086	$	(27)	$	6,651	$	1,674

See Notes to Condensed Consolidated Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited; in millions, except per share data)


	March 29, 2025		September 28, 2024
ASSETS
Current assets
Cash and cash equivalents	$	5,852	$	6,002
Receivables, net	12,571		12,729
Inventories	1,999		2,022
Content advances	1,063		2,097

Other current assets	1,250		2,391


Total current assets	22,735		25,241
Produced and licensed content costs	31,820		32,312
Investments	8,794		4,459
Parks, resorts and other property
Attractions, buildings and equipment	79,721		76,674
Accumulated depreciation	(47,532)		(45,506)
	32,189		31,168
Projects in progress	5,740		4,728
Land	1,166		1,145
	39,095		37,041
Intangible assets, net	10,006		10,739
Goodwill	73,313		73,326


Other assets	10,070		13,101
Total assets	$	195,833	$	196,219

LIABILITIES AND EQUITY
Current liabilities
Accounts payable and other accrued liabilities	$	20,729	$	21,070
Current portion of borrowings	6,446		6,845
Deferred revenue and other	6,854		6,684


Total current liabilities	34,029		34,599
Borrowings	36,443		38,970
Deferred income taxes	6,298		6,277


Other long-term liabilities	10,297		10,851
Commitments and contingencies (Note 13)

Equity
Preferred stock	—		—
Common stock, $0.01 par value, Authorized – 4.6 billion shares, Issued – 1.9 billion shares	59,199		58,592
Retained earnings	53,733		49,722
Accumulated other comprehensive loss	(2,877)		(3,699)

Treasury stock, at cost, 63 million shares at March 29, 2025 and 47 million shares at September 28, 2024	(5,716)		(3,919)
Total Disney Shareholders’ equity	104,339		100,696
Noncontrolling interests	4,427		4,826
Total equity	108,766		105,522
Total liabilities and equity	$	195,833	$	196,219

See Notes to Condensed Consolidated Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited; in millions)


	Six Months Ended
	March 29, 2025		March 30, 2024
OPERATING ACTIVITIES
Net income	$	6,045	$	2,367
Depreciation and amortization	2,600		2,485
Impairments of goodwill, produced and licensed content and other assets	240		2,038

Deferred income taxes	93		(211)
Equity in the income of investees	(128)		(322)
Cash distributions received from equity investees	79		300
Net change in produced and licensed content costs and advances	1,889		1,699

Equity-based compensation	647		675

Other, net	(35)		(6)
Changes in operating assets and liabilities:
Receivables	(367)		(156)
Inventories	(1)		26
Other assets	10		(185)
Accounts payable and other liabilities	(1,025)		(1,075)
Income taxes	(89)		(1,784)
Cash provided by operations	9,958		5,851

INVESTING ACTIVITIES
Investments in parks, resorts and other property	(4,328)		(2,558)


Other, net	(145)		5
Cash used in investing activities	(4,473)		(2,553)

FINANCING ACTIVITIES
Commercial paper borrowings (payments), net	(791)		42
Borrowings	1,057		133
Reduction of borrowings	(2,913)		(645)
Dividends	(905)		(549)
Repurchases of common stock	(1,785)		(1,001)


Acquisition of redeemable noncontrolling interests	—		(8,610)
Other, net	(216)		(194)
Cash used in financing activities	(5,553)		(10,824)







Impact of exchange rates on cash, cash equivalents and restricted cash	(76)		17

Change in cash, cash equivalents and restricted cash	(144)		(7,509)
Cash, cash equivalents and restricted cash, beginning of period	6,102			14,235
Cash, cash equivalents and restricted cash, end of period	$	5,958	$	6,726

See Notes to Condensed Consolidated Financial Statements

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 December 28, 2024	1,810	$	58,868	$	50,468		$	(2,688)	$	(4,715)	$	101,933	$	4,806	$	106,739
Comprehensive income (loss)	—	—		3,275			(189)		—		3,086		135		3,221
Equity compensation activity	1	320		—			—		—		320		—		320

Dividends	—	7		(7)			—		—		—		—		—


Common stock repurchases	(9)	—		—			—		(991)		(991)		—		(991)



Distributions and other	(1)	4		(3)			—		(10)		(9)		(514)		(523)
Balance at March 29, 2025	1,801	$	59,199	$	53,733		$	(2,877)	$	(5,716)	$	104,339	$	4,427	$	108,766

Balance at December 30, 2023	1,834	$	57,640	$	47,490		$	(3,502)	$	(907)	$	100,721	$	4,780	$	105,501
Comprehensive income (loss)	—	—		(20)			(7)		—		(27)		181		154
Equity compensation activity	1	383		—			—		—		383		—		383

Dividends	—	4		(826)			—		—		(822)		—		(822)
Contributions	—	—		—			—		—		—		1		1



Common stock repurchases	(9)	—		—			—		(1,001)		(1,001)		—		(1,001)

Distributions and other	—	1		5			—		(8)		(2)		(451)		(453)
Balance at March 30, 2024	1,826	$	58,028	$	46,649		$	(3,509)	$	(1,916)	$	99,252	$	4,511	$	103,763

(1)Shares are net of treasury shares.

(2)Excludes redeemable noncontrolling interests.

See Notes to Condensed Consolidated Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited; in millions)


	Six Months Ended
	Equity Attributable to Disney
	Shares(1)	Common Stock		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Treasury Stock		Total Disney Equity		Non-controlling Interests(2)		Total Equity
Balance at September 28, 2024	1,812	$	58,592	$	49,722		$	(3,699)	$	(3,919)	$	100,696	$	4,826	$	105,522
Comprehensive income	—	—		5,829			822		—		6,651		153		6,804
Equity compensation activity	6	596		—			—		—		596		—		596

Dividends	—	7		(1,814)			—		—		(1,807)		—		(1,807)







Common stock repurchases	(16)	—		—			—		(1,785)		(1,785)		—		(1,785)


Distributions and other	(1)	4		(4)			—		(12)		(12)		(552)		(564)
Balance at March 29, 2025	1,801	$	59,199	$	53,733		$	(2,877)	$	(5,716)	$	104,339	$	4,427	$	108,766

Balance at September 30, 2023	1,830	$	57,383	$	46,093		$	(3,292)	$	(907)	$	99,277	$	4,680	$	103,957
Comprehensive income (loss)	—	—		1,891			(217)		—		1,674		310		1,984
Equity compensation activity	5	633		—			—		—		633		—		633

Dividends	—	4		(1,375)			—		—		(1,371)		—		(1,371)
Contributions	—	—		—			—		—		—		1		1
Common stock repurchases	(9)	—		—			—		(1,001)		(1,001)		—		(1,001)









Distributions and other	—	8		40			—		(8)		40		(480)		(440)
Balance at March 30, 2024	1,826	$	58,028	$	46,649		$	(3,509)	$	(1,916)	$	99,252	$	4,511	$	103,763

(1)Shares are net of treasury shares.

(2)Excludes redeemable noncontrolling interests.

See Notes to Condensed Consolidated Financial Statements

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 six months ended March 29, 2025 are not necessarily indicative of the results that may be expected for the year ending September 27, 2025.

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 2024 Annual Report on Form 10-K.

Variable Interest Entities

The Company enters into relationships with or makes investments in other entities that may be variable interest entities (VIE). A VIE is consolidated in our financial statements if the Company has the power to direct activities that most significantly impact the economic performance of the VIE and has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant (as defined by ASC 810-10-25-38) to the VIE. Hong Kong Disneyland Resort and Shanghai Disney Resort (together the Asia Theme Parks, see Note 6) are VIEs in which the Company has less than 50% equity ownership. Company subsidiaries (the Management Companies) have management agreements with the Asia Theme Parks, which provide the Management Companies, subject to certain protective rights of joint venture partners, with the ability to direct the day-to-day operating activities and the development of business strategies that we believe most significantly impact the economic performance of the Asia Theme Parks. In addition, the Management Companies receive management fees under these arrangements that we believe could be significant to the Asia Theme Parks. Therefore, the Company has consolidated the Asia Theme Parks in its financial statements.

Redeemable Noncontrolling Interest

Hulu LLC

The Company has a 67% ownership interest in Hulu LLC (Hulu), a direct-to-consumer (DTC) streaming service provider. In November 2023, NBC Universal (NBCU) exercised its right to require the Company to purchase NBCU’s 33% interest in Hulu at a redemption value based on NBCU’s equity ownership percentage of the greater of Hulu’s equity fair value or a guaranteed floor value of $27.5 billion. In connection with the redemption, the Company will pay NBCU 50% of the future tax benefits from the amortization of the purchase of NBCU’s interest in Hulu as the Company’s cash tax benefits are realized, generally over a 15-year period. In December 2023, the Company paid NBCU $8.6 billion, which reflected the guaranteed floor value less NBCU’s unpaid capital call contributions. If Hulu’s equity fair value is determined pursuant to a contractual appraisal process to be higher than the guaranteed floor value, the Company is required to pay NBCU its share of the difference between the equity fair value and the guaranteed floor value.

During the initial phase of the appraisal process, the Company’s appraiser arrived at a valuation that falls below the guaranteed floor value, while NBCU’s appraiser arrived at a valuation substantially in excess of the guaranteed floor value. The final equity fair value, which is expected to be determined before the end of the Company’s third quarter of fiscal 2025, will take into account the valuation of a third appraiser pursuant to an appraisal process as resolved by a confidential arbitration decision. If the third appraiser’s equity fair value determination were equal to or below the guaranteed floor value, the Company would not be required to pay NBCU any additional amount. Conversely, if the third appraiser’s equity fair value determination were consistent with the NBCU’s appraiser’s valuation, the Company would be required to pay NBCU an additional amount of approximately $5 billion as its share of the difference between the equity fair value and the guaranteed floor value. If the third appraiser’s equity fair value determination were between the valuations of the Company’s and NBCU’s appraisers, the incremental amount would likewise be between zero and approximately $5 billion.

Any incremental amount determined to be payable to NBCU to acquire NBCU’s interest in Hulu and any related adjustments to the value of the future tax benefits that will be shared with NBCU would be recorded as “Net income attributable to noncontrolling interests” and thus reduce “Net income attributable to Disney” in the Condensed Consolidated Statements of Operations in the period recorded, which we expect will occur in the Company’s third quarter of fiscal 2025.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Concurrent with the expected completion of the acquisition in the third quarter of fiscal 2025, Hulu’s partnership tax status will terminate and, as a result, the Company expects to recognize a non-cash tax benefit of approximately $3.3 billion.

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 2024 financial statements and notes to conform to the fiscal 2025 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 generally 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.

Segment revenues and segment operating income are as follows:


	Quarter Ended				Six Months Ended
	March 29, 2025		March 30, 2024		March 29, 2025		March 30, 2024
Revenues:
Entertainment
Third parties	$	10,565	$	9,691	$	21,326	$	19,572
Intersegment	117		105		228		205
	10,682		9,796		21,554		19,777
Sports
Third parties	4,167		3,999		8,681		8,535
Intersegment	367		313		703		612
	4,534		4,312		9,384		9,147
Experiences	8,889		8,393		18,304		17,525
Eliminations	(484)		(418)		(931)		(817)
Total segment revenues	$	23,621	$	22,083	$	48,311	$	45,632
Segment operating income:
Entertainment	$	1,258	$	781	$	2,961	$	1,655
Sports	687		778		934		675
Experiences	2,491		2,286		5,601		5,391
Total segment operating income	$	4,436	$	3,845	$	9,496	$	7,721

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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


	Quarter Ended				Six Months Ended
	March 29, 2025		March 30, 2024		March 29, 2025		March 30, 2024
Entertainment	$	124	$	138	$	242	$	309
Sports	18		6		28		19

Equity in the income of investees included in segment operating income	142		144		270		328

Equity in the loss of India joint venture	(103)		—		(136)		—
Amortization of TFCF intangible assets related to an equity investee	(3)		(3)		(6)		(6)
Equity in the income of investees, net	$	36	$	141	$	128	$	322

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


	Quarter Ended				Six Months Ended
	March 29, 2025		March 30, 2024		March 29, 2025		March 30, 2024
Segment operating income	$	4,436	$	3,845	$	9,496	$	7,721

Corporate and unallocated shared expenses	(395)		(391)		(855)		(699)
Equity in the loss of India joint venture	(103)		—		(136)		—
Restructuring and impairment charges(1)	(109)		(2,052)		(252)		(2,052)

Interest expense, net	(346)		(311)		(713)		(557)
TFCF and Hulu Acquisition Amortization(2)	(396)		(434)		(793)		(885)


Income before income taxes	$	3,087	$	657	$	6,747	$	3,528

(1)See Notes 4 and 16 for a discussion of amounts in restructuring and impairment charges.

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


	Quarter Ended				Six Months Ended
	March 29, 2025		March 30, 2024		March 29, 2025		March 30, 2024
Amortization of intangible assets	$	327	$	362	$	654	$	742
Step-up of film and television costs	66		69		133		137
Intangibles related to a TFCF equity investee	3		3		6		6
	$	396	$	434	$	793	$	885

Goodwill

The changes in the carrying amount of goodwill are as follows:


	Entertainment		Sports		Experiences		Total




Balance at September 28, 2024	$	51,290	$	16,486	$	5,550	$	73,326








Currency translation adjustments and other, net	(13)		—		—		(13)
Balance at March 29, 2025	$	51,277	$	16,486	$	5,550	$	73,313

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 revenues by segment and major source:


	Quarter Ended March 29, 2025
	Entertainment		Sports		Experiences		Eliminations		Total
Subscription fees	$	5,215	$	428	$	—	$	—	$	5,643
Affiliate fees	1,643		2,652		—		(332)		3,963
Advertising	1,598		1,157		—		—		2,755
Theme park admissions	—		—		2,919		—		2,919
Resorts and vacations	—		—		2,359		—		2,359
Retail and wholesale sales of merchandise, food and beverage	—		—		2,333		—		2,333
Merchandise licensing	148		—		704		—		852
TV/VOD and home entertainment distribution	948		50		—		—		998
Theatrical distribution licensing	646		—		—		—		646

Other	484		247		574		(152)		1,153
	$	10,682	$	4,534	$	8,889	$	(484)	$	23,621


	Quarter Ended March 30, 2024
	Entertainment		Sports		Experiences		Eliminations		Total
Subscription fees	$	4,805	$	417	$	—	$	—	$	5,222
Affiliate fees	1,759		2,678		—		(299)		4,138
Advertising	1,771		950		—		—		2,721
Theme park admissions	—		—		2,806		—		2,806
Resorts and vacations	—		—		2,101		—		2,101
Retail and wholesale sales of merchandise, food and beverage	—		—		2,266		—		2,266
Merchandise licensing	136		—		652		—		788
TV/VOD and home entertainment distribution	669		70		—		—		739
Theatrical distribution licensing	123		—		—		—		123

Other	533		197		568		(119)		1,179
	$	9,796	$	4,312	$	8,393	$	(418)	$	22,083


	Six Months Ended March 29, 2025
	Entertainment		Sports		Experiences		Eliminations		Total
Subscription fees	$	10,280	$	855	$	—	$	—	$	11,135
Affiliate fees	3,298		5,282		—		(653)		7,927
Advertising	3,496		2,499		—		—		5,995
Theme park admissions	—		—		6,006		—		6,006
Resorts and vacations	—		—		4,580		—		4,580
Retail and wholesale sales of merchandise, food and beverage	—		—		4,905		—		4,905
Merchandise licensing	313		—		1,631		—		1,944
TV/VOD and home entertainment distribution	1,891		128		—		—		2,019
Theatrical distribution licensing	1,288		—		—		—		1,288

Other	988		620		1,182		(278)		2,512
	$	21,554	$	9,384	$	18,304	$	(931)	$	48,311

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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


	Six Months Ended March 30, 2024
	Entertainment		Sports		Experiences		Eliminations		Total
Subscription fees	$	9,312	$	832	$	—	$	—	$	10,144
Affiliate fees	3,525		5,347		—		(592)		8,280
Advertising	3,768		2,301		—		—		6,069
Theme park admissions	—		—		5,788		—		5,788
Resorts and vacations	—		—		4,219		—		4,219
Retail and wholesale sales of merchandise, food and beverage	—		—		4,743		—		4,743
Merchandise licensing	328		—		1,619		—		1,947
TV/VOD and home entertainment distribution	1,414		127		—		—		1,541
Theatrical distribution licensing	374		—		—		—		374

Other	1,056		540		1,156		(225)		2,527
	$	19,777	$	9,147	$	17,525	$	(817)	$	45,632

The following table presents revenues by segment and primary geographical markets:


	Quarter Ended March 29, 2025
	Entertainment		Sports		Experiences		Eliminations		Total
Americas	$	8,556	$	4,443	$	6,970	$	(484)	$	19,485
Europe	1,573		72		805		—		2,450
Asia Pacific	553		19		1,114		—		1,686
Total revenues	$	10,682	$	4,534	$	8,889	$	(484)	$	23,621

	Quarter Ended March 30, 2024
	Entertainment		Sports		Experiences		Eliminations		Total
Americas	$	7,640	$	4,115	$	6,304	$	(418)	$	17,641
Europe	1,383		75		823		—		2,281
Asia Pacific	773		122		1,266		—		2,161
Total revenues	$	9,796	$	4,312	$	8,393	$	(418)	$	22,083

	Six Months Ended March 29, 2025
	Entertainment		Sports		Experiences		Eliminations		Total
Americas	$	17,048	$	9,159	$	14,091	$	(931)	$	39,367
Europe	3,224		149		1,932		—		5,305
Asia Pacific	1,282		76		2,281		—		3,639
Total revenues	$	21,554	$	9,384	$	18,304	$	(931)	$	48,311

	Six Months Ended March 30, 2024
	Entertainment		Sports		Experiences		Eliminations		Total
Americas	$	15,228	$	8,473	$	13,341	$	(817)	$	36,225
Europe	2,792		254		1,845		—		4,891
Asia Pacific	1,757		420		2,339		—		4,516
Total revenues	$	19,777	$	9,147	$	17,525	$	(817)	$	45,632

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 content made available to distributors and licensees in previous reporting periods. For the quarter ended March 29, 2025, $0.6 billion was recognized related to performance obligations satisfied as of December 28, 2024. For the six-months ended March 29, 2025, $0.6 billion was recognized related to performance obligations satisfied as of September 28, 2024. For the quarter ended March 30, 2024, $0.3 billion was recognized related to performance obligations satisfied as of December 30, 2023. For the six months ended March 30, 2024, $0.6 billion was recognized related to performance obligations satisfied as of September 30, 2023.

As of March 29, 2025, revenue for unsatisfied performance obligations expected to be recognized in the future is $15 billion, primarily for IP to be made available in the future under existing agreements with merchandise and co-branding licensees and sponsors, DTC wholesalers, television station affiliates and sports sublicensees. Of this amount, we expect to

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

recognize approximately $3 billion in the remainder of fiscal 2025, $5 billion in fiscal 2026, $3 billion in fiscal 2027 and $4 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 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:


	March 29, 2025		September 28, 2024



Accounts receivable
Current	$	10,890	$	10,463
Non-current	1,048		1,040
Allowance for credit losses	(118)		(118)
Deferred revenues
Current	6,347		5,587
Non-current	866		858

For the quarter and six months ended March 29, 2025, the Company recognized revenue of $1.0 billion and $4.5 billion, respectively, that was included in the September 28, 2024 deferred revenue balance. For the quarter and six months ended March 30, 2024, the Company recognized revenue of $0.9 billion and $4.4 billion, respectively, that was included in the September 30, 2023 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 vacation club properties and film and television program rights (TV/VOD licensing). The balance of vacation club receivables recorded in other non-current assets was $0.7 billion at both March 29, 2025 and September 28, 2024. The balance of TV/VOD licensing receivables recorded in other non-current assets was $0.3 billion at both March 29, 2025 and September 28, 2024. The allowance for credit losses for vacation club and TV/VOD licensing receivables and related activity for the periods ended March 29, 2025 and September 28, 2024 were not material.

**4.**Acquisitions and Dispositions

fuboTV Inc.

On January 6, 2025, the Company and fuboTV Inc. (Fubo), a publicly traded virtual multichannel video distributor (vMVPD), entered into a definitive agreement to combine certain of Hulu Live TV’s assets, including its carriage agreements, subscription agreements and related data, advertising and sponsorship agreements and intellectual property exclusively related to the “Live TV” brand, with Fubo (the Fubo Transaction). As a result, the Company will have a 70% interest in Fubo and the right to appoint a majority of Fubo’s Board of Directors, with the remaining 30% interest retained by Fubo shareholders.

The Fubo Transaction is expected to close in the first half of 2026, subject to customary closing conditions, including regulatory approvals and approval by Fubo shareholders. If closing has not occurred by April 2026 (extended to October 2026 if all other closing conditions, except those relating to regulatory approvals, have been satisfied), the Company or Fubo may terminate the transaction. A $130 million termination fee will be payable by the Company to Fubo if the transaction is terminated under certain circumstances, including due to the Company’s breach of the definitive agreement or the failure to obtain certain regulatory approvals. A $50 million termination fee will be payable by Fubo to the Company if the transaction is

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

terminated under certain other circumstances, including if Fubo shareholders do not approve the transaction under certain conditions.

Upon completion of the Fubo Transaction, the Company will be the exclusive distributor of the Hulu Live TV service under a five year distribution agreement and will pay a wholesale fee to Fubo based on Fubo’s cost to program Hulu Live TV. In addition, the Company will sell advertising for the Hulu Live TV service and Fubo platform for a fee.

In addition, the Company, Fox Corporation (Fox) and Warner Bros. Discovery, Inc. (WBD) reached a settlement with Fubo related to Fubo’s antitrust claims (see Note 13 for additional detail) and collectively paid $220 million to Fubo in January 2025. Fox and WBD have also agreed to reimburse a portion of the $130 million termination fee to the Company if it becomes payable.

Further, the Company agreed to provide Fubo a senior unsecured term loan of up to $145 million (expected to be funded in January 2026) (the Fubo Term Loan). If the Company funds the Fubo Term Loan and the Fubo Transaction is not consummated, Fox and WBD will participate in a portion of the Fubo Term Loan by providing loans to the Company with substantially the same economic terms as the Fubo Term Loan.

Star India

On November 14, 2024, the Company and Reliance Industries Limited (RIL) completed the formation of a joint venture (India joint venture) that combines the Company’s Star-branded and other general entertainment and sports television channels and direct-to-consumer Disney+ Hotstar service in India (Star India) with certain media and entertainment businesses controlled by RIL (the Star India Transaction). RIL has an effective 56% controlling interest in the joint venture with 37% held by the Company and 7% by Bodhi Tree Systems, a third party investment company.

The Company deconsolidated Star India’s assets and liabilities on November 14, 2024, and recognized the fair value of its interest in the India joint venture as an equity method investment. We recorded non-cash impairment charges of $0.1 billion and $1.3 billion in “Restructuring and impairment charges” in the first quarter of fiscal 2025 and in the second quarter of fiscal 2024, respectively, to reflect Star India’s assets and liabilities at fair value less costs to sell. In addition, we recognized a non-cash tax charge of $0.2 billion in the first quarter of fiscal 2025 in connection with the close of the transaction.

**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.


	March 29, 2025		September 28, 2024
Cash and cash equivalents	$	5,852	$	6,002
Restricted cash included in:
Other current assets	7		—
Other assets	99		100

Total cash, cash equivalents and restricted cash in the statement of cash flows	$	5,958	$	6,102

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Borrowings

During the six months ended March 29, 2025, the Company’s borrowing activity was as follows:


	September 28, 2024		Borrowings		Payments		Other Activity		March 29, 2025
Commercial paper with original maturities less than three months(1)	$	727	$	996	$	—	$	4	$	1,727
Commercial paper with original maturities greater than three months	2,313		487		(2,274)		(38)		488
U.S. dollar denominated borrowings	40,496		1,057		(1,949)		(98)		39,506


Asia Theme Parks borrowings	1,292		—		(39)		(93)		1,160
Foreign currency denominated borrowings and other(2)	987		—		(925)		(54)		8
	$	45,815	$	2,540	$	(5,187)	$	(279)	$	42,889

(1)Borrowings and reductions of borrowings are reported net.

(2)The other activity is attributable to market value adjustments for debt with qualifying hedges.

At March 29, 2025, 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 February 2026	$	5,250	$	—	$	5,250

Facility expiring March 2027	4,000		—		4,000
Facility expiring March 2029	3,000		—		3,000
Total	$	12,250	$	—	$	12,250

The Company had a $5.25 billion bank facility that was scheduled to expire in February 2025. During the quarter, this facility was refinanced with a new $5.25 billion bank facility maturing in February 2026.

The Company’s bank 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 Ratings and S&P Global Ratings ranging from 0.63% to 1.10%. The bank facilities contain 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 March 29, 2025, 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 March 29, 2025, the Company has $0.5 billion of outstanding letters of credit, of which none were issued under this facility. Outstanding letters of credit at Star India totaling $1.0 billion at March 29, 2025 that were entered into prior to the Star India Transaction are guaranteed by the Company through calendar 2025.

Cruise Ship Credit Facilities

In November 2024, in connection with the delivery of the Disney Treasure, the Company borrowed $1.1 billion with a fixed interest rate of 3.80%. Payments are due semi-annually over a 12-year term.

The Company has a credit facility for $1.1 billion that may be utilized to finance a significant portion of the contract price of the Disney Destiny, which is currently scheduled to be delivered in fiscal 2026. If utilized, the loan will have a fixed interest rate of 3.74%, payable semi-annually over a 12-year term.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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 Operations and consist of the following:


	Quarter Ended				Six Months Ended
	March 29, 2025		March 30, 2024		March 29, 2025		March 30, 2024
Interest expense	$	(471)	$	(501)	$	(958)	$	(1,029)
Interest and investment income	60		87		114		269
Net periodic pension and postretirement benefit costs (other than service costs)	65		103		131		203
Interest expense, net	$	(346)	$	(311)	$	(713)	$	(557)

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:


	March 29, 2025		September 28, 2024
Cash and cash equivalents	$	389	$	510
Other current assets	214		178
Total current assets	603		688
Parks, resorts and other property	5,904		6,141
Other assets	227		217
Total assets	$	6,734	$	7,046

Current liabilities	$	572	$	695
Long-term borrowings	1,160		1,292
Other long-term liabilities	457		409
Total liabilities	$	2,189	$	2,396

The following table summarizes the International Theme Parks’ revenues and costs and expenses included in the Company’s Condensed Consolidated Statements of Operations for the six months ended March 29, 2025:



Revenues	$	2,867
Costs and expenses	(2,385)

Asia Theme Parks’ royalty and management fees of $145 million for the six months ended March 29, 2025 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 six months ended March 29, 2025 were $700 million provided by operating activities, $557 million used in investing activities and $40 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 WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company and HKSAR have provided loans to Hong Kong Disneyland Resort with outstanding balances of $41 million and $27 million, respectively. The interest rate on both loans is three month HIBOR (Hong Kong Interbank Offered Rate) 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 ($347 million), which bears interest at a rate of three month HIBOR plus 1.25% and matures in 2028. The line of credit does not have a balance outstanding.

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 $922 million bearing interest at 8% and are scheduled to mature in 2036 with earlier payments required based on available cash flows. In addition, early repayment is permitted. The loan is eliminated in consolidation. 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% and maturing in 2033. At March 29, 2025, the line of credit balance was not significant.

Shendi has provided Shanghai Disney Resort with loans totaling 8.2 billion yuan (approximately $1.1 billion), bearing interest at 8% and scheduled to mature in 2036 with earlier payments required based on available cash flows. In addition, early repayment is 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% and maturing in 2033. At March 29, 2025, the line of credit balance was not significant.

**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)

Total capitalized produced and licensed content by predominant monetization strategy is as follows:


	As of March 29, 2025						As of September 28, 2024
	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total		Predominantly Monetized Individually		Predominantly Monetized as a Group		Total
Produced content
Released, less amortization	$	4,774	$	14,118	$	18,892	$	4,568	$	13,621	$	18,189
Completed, not released	91		1,728		1,819		16		2,265		2,281
In-process	4,364		3,516		7,880		4,352		4,067		8,419
In development or pre-production	299		69		368		196		73		269
	$	9,528	$	19,431	28,959		$	9,132	$	20,026	29,158






Licensed content - Television programming rights and advances					3,924						5,251
Total produced and licensed content					$	32,883					$	34,409

Current portion					$	1,063					$	2,097
Non-current portion					$	31,820					$	32,312

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Amortization of produced and licensed content is as follows:


	Quarter Ended				Six Months Ended
	March 29, 2025		March 30, 2024		March 29, 2025		March 30, 2024
Produced content
Predominantly monetized individually	$	839	$	611	$	1,535	$	1,379
Predominantly monetized as a group	1,733		1,752		3,546		3,546
	2,572		2,363		5,081		4,925
Licensed programming rights and advances	3,504		3,366		7,601		7,956
Total produced and licensed content costs(1)	$	6,076	$	5,729	$	12,682	$	12,881

(1)Primarily included in “Costs of services” in the Condensed Consolidated Statements of Operations

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

**8.**Income Taxes

Deferred Tax Assets and Liabilities

The Company records deferred income tax assets and liabilities with respect to temporary differences in accounting treatment of items for financial reporting purposes and income tax purposes. The Company’s deferred tax assets and liabilities by major category as of March 29, 2025 and September 28, 2024 were as follows:


	March 29, 2025		September 28, 2024
Deferred tax assets
Net operating losses and tax credit carryforwards(1)	$	(3,230)	$	(3,444)
Accrued liabilities	(1,033)		(1,199)
Lease liabilities	(827)		(862)
Licensing revenues	(109)		(130)
Other	(512)		(655)
Total deferred tax assets	(5,711)		(6,290)
Deferred tax liabilities
Depreciable, amortizable and other property	5,965		6,584
Investment in U.S. entities(2)	1,037		1,102
Investment in foreign entities	759		465
Right-of-use lease assets	662		692



Other	70		78
Total deferred tax liabilities	8,493		8,921
Net deferred tax liability before valuation allowance	2,782		2,631
Valuation allowance	2,948		2,991
Net deferred tax liability	$	5,730	$	5,622

(1)Further details on our net operating losses and tax credit carryforwards are as follows:


	March 29, 2025
International Theme Park net operating losses	$	(1,441)
U.S. foreign tax credits	(836)
State net operating losses and tax credit carryforwards	(602)
Other	(351)
Total net operating losses and tax credit carryforwards(a)	$	(3,230)

(a) Approximately $2.0 billion of these carryforwards do not expire. Approximately $1.1 billion expire between fiscal 2026 and fiscal 2035, primarily related to U.S. foreign tax credits.

(2)Amounts are, in part, due to the tax status of these entities. In the third quarter of the current fiscal year, the Company expects to complete the acquisition of NBCU’s interest in Hulu. Concurrently, Hulu’s partnership tax status will terminate, and, as a result, the Company expects to recognize a non-cash tax benefit of approximately $3.3 billion.

Valuation Allowance

The Company records deferred income tax assets and liabilities with respect to temporary differences in the accounting treatment of items for financial reporting purposes and for income tax purposes. Where, based on the weight of available evidence, it is more likely than not that some amount of recorded deferred tax assets will not be realized, a valuation allowance is established for the amount that, in management’s judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized.

Unrecognized Tax Benefits

The Company’s gross unrecognized tax benefits (before interest and penalties) decreased $0.9 billion, from $2.0 billion at September 28, 2024 to $1.1 billion at March 29, 2025. In the next twelve months, it is reasonably possible that our

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

unrecognized tax benefits could change due to resolutions of open tax matters, which would reduce our unrecognized tax benefits by $0.2 billion.

**9.**Pension and Other Benefit Programs

The components of net periodic benefit cost (income) are as follows:


	Pension Plans								Postretirement Medical Plans
	Quarter Ended				Six Months Ended				Quarter Ended				Six Months Ended
	Mar. 29, 2025		Mar. 30, 2024		Mar. 29, 2025		Mar. 30, 2024		Mar. 29, 2025		Mar. 30, 2024		Mar. 29, 2025		Mar. 30, 2024
Service costs	$	66	$	63	$	131	$	125	$	—	$	—	$	—	$	—
Other costs (benefits):
Interest costs	197		209		392		417		11		13		22		27
Expected return on plan assets	(291)		(285)		(581)		(569)		(15)		(15)		(30)		(29)
Amortization of previously deferred service costs (credits)	2		2		2		4		(23)		(23)		(45)		(45)
Recognized net actuarial loss (gain)	61		5		123		10		(7)		(9)		(14)		(18)
Total other costs (benefits)	(31)		(69)		(64)		(138)		(34)		(34)		(67)		(65)
Net periodic benefit cost (income)	$	35	$	(6)	$	67	$	(13)	$	(34)	$	(34)	$	(67)	$	(65)

During the six months ended March 29, 2025, 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 2025. Final minimum funding requirements for fiscal 2025 will be determined based on a January 1, 2025 funding actuarial valuation, which is expected to be received in the fourth quarter of fiscal 2025.

**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		Six Months Ended
	March 29, 2025	March 30, 2024	March 29, 2025	March 30, 2024
Shares (in millions):
Weighted average number of common and common equivalent shares outstanding (basic)	1,808	1,834	1,810	1,833
Weighted average dilutive impact of Awards(1)	6	—	6	5
Weighted average number of common and common equivalent shares outstanding (diluted)	1,814	1,834	1,816	1,838
Awards excluded from diluted earnings per share	13	27	15	30

(1)Amounts exclude all potential common and common equivalent shares for periods when there is a net loss from continuing operations.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

**11.**Equity

The Company declared the following dividends in fiscal 2025 and 2024:


Per Share	Amount	Payment Date
$0.50	$0.9 billion	July 23, 2025(1)
$0.50	$0.9 billion	January 16, 2025
$0.45	$0.8 billion	July 25, 2024
$0.30	$0.5 billion	January 10, 2024

(1)Amount represents our estimate of the dividend that will be paid on July 23, 2025. The actual amount will be determined based on shareholders of record at June 24, 2025.

Share Repurchase Program

Effective February 7, 2024, the Board of Directors authorized the Company to repurchase a total of 400 million shares of its common stock. During the quarter and six months ended March 29, 2025, the Company repurchased 9.4 million and 16.5 million shares of its common stock for $1.0 billion and $1.8 billion, respectively (amount excludes the one percent excise tax on stock repurchases imposed by the Inflation Reduction Act of 2022). During the quarter and six months ended March 30, 2024, the Company repurchased 8.9 million shares of its common stock for $1.0 billion. As of March 29, 2025, the Company had remaining authorization in place to repurchase approximately 355 million additional shares. The repurchase program does not have an expiration date.

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 Hedges		Unrecognized Pension and Postretirement Medical Expense		Foreign Currency Translation and Other		AOCI

AOCI, before tax
Second quarter of fiscal 2025
Balance at December 28, 2024	$	152	$	(2,210)	$	(1,197)	$	(3,255)
Quarter Ended March 29, 2025:
Unrealized gains (losses) arising during the period	(213)		(7)		50		(170)
Reclassifications of realized net (gains) losses to net income	(117)		33		—		(84)
Balance at March 29, 2025	$	(178)	$	(2,184)	$	(1,147)	$	(3,509)

Second quarter of fiscal 2024
Balance at December 30, 2023	$	(158)	$	(2,199)	$	(1,837)	$	(4,194)
Quarter Ended March 30, 2024:
Unrealized gains (losses) arising during the period	244		(6)		(107)		131
Reclassifications of realized net (gains) losses to net income	(92)		(24)		—		(116)

Balance at March 30, 2024	$	(6)	$	(2,229)	$	(1,944)	$	(4,179)

Six months ended fiscal 2025
Balance at September 28, 2024	$	(319)	$	(2,243)	$	(1,855)	$	(4,417)
Six Months Ended March 29, 2025:
Unrealized gains (losses) arising during the period	346		(7)		(196)		143
Reclassifications of realized net (gains) losses to net income	(205)		66		—		(139)
Star India Transaction	—		—		904		904
Balance at March 29, 2025	$	(178)	$	(2,184)	$	(1,147)	$	(3,509)

Six months ended fiscal 2024
Balance at September 30, 2023	$	259	$	(2,172)	$	(1,974)	$	(3,887)
Six Months Ended March 30, 2024:
Unrealized gains (losses) arising during the period	(33)		(9)		30		(12)
Reclassifications of realized net (gains) losses to net income	(232)		(48)		—		(280)

Balance at March 30, 2024	$	(6)	$	(2,229)	$	(1,944)	$	(4,179)

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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


	Market Value Adjustments for Hedges		Unrecognized Pension and Postretirement Medical Expense		Foreign Currency Translation and Other		AOCI

Tax on AOCI
Second quarter of fiscal 2025
Balance at December 28, 2024	$	(38)	$	523	$	82	$	567
Quarter Ended March 29, 2025:
Unrealized gains (losses) arising during the period	50		—		(4)		46
Reclassifications of realized net (gains) losses to net income	27		(8)		—		19
Balance at March 29, 2025	$	39	$	515	$	78	$	632

Second quarter of fiscal 2024
Balance at December 30, 2023	$	34	$	523	$	135	$	692
Quarter Ended March 30, 2024:
Unrealized gains (losses) arising during the period	(58)		—		9		(49)
Reclassifications of realized net (gains) losses to net income	21		6		—		27

Balance at March 30, 2024	$	(3)	$	529	$	144	$	670

Six months ended fiscal 2025
Balance at September 28, 2024	$	71	$	531	$	116	$	718
Six Months Ended March 29, 2025:
Unrealized gains (losses) arising during the period	(80)		—		20		(60)
Reclassifications of realized net (gains) losses to net income	48		(16)		—		32
Star India Transaction	—		—		(58)		(58)
Balance at March 29, 2025	$	39	$	515	$	78	$	632

Six months ended fiscal 2024
Balance at September 30, 2023	$	(64)	$	517	$	142	$	595
Six Months Ended March 30, 2024:
Unrealized gains (losses) arising during the period	8		—		2		10
Reclassifications of realized net (gains) losses to net income	53		12		—		65

Balance at March 30, 2024	$	(3)	$	529	$	144	$	670

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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


	Market Value Adjustments for Hedges		Unrecognized Pension and Postretirement Medical Expense		Foreign Currency Translation and Other		AOCI

AOCI, after tax
Second quarter of fiscal 2025
Balance at December 28, 2024	$	114	$	(1,687)	$	(1,115)	$	(2,688)
Quarter Ended March 29, 2025:
Unrealized gains (losses) arising during the period	(163)		(7)		46		(124)
Reclassifications of realized net (gains) losses to net income	(90)		25		—		(65)
Balance at March 29, 2025	$	(139)	$	(1,669)	$	(1,069)	$	(2,877)

Second quarter of fiscal 2024
Balance at December 30, 2023	$	(124)	$	(1,676)	$	(1,702)	$	(3,502)
Quarter Ended March 30, 2024:
Unrealized gains (losses) arising during the period	186		(6)		(98)		82
Reclassifications of realized net (gains) losses to net income	(71)		(18)		—		(89)

Balance at March 30, 2024	$	(9)	$	(1,700)	$	(1,800)	$	(3,509)

Six months ended fiscal 2025
Balance at September 28, 2024	$	(248)	$	(1,712)	$	(1,739)	$	(3,699)
Six Months Ended March 29, 2025:
Unrealized gains (losses) arising during the period	266		(7)		(176)		83
Reclassifications of realized net (gains) losses to net income	(157)		50		—		(107)
Star India Transaction	—		—		846		846
Balance at March 29, 2025	$	(139)	$	(1,669)	$	(1,069)	$	(2,877)

Six months ended fiscal 2024
Balance at September 30, 2023	$	195	$	(1,655)	$	(1,832)	$	(3,292)
Six Months Ended March 30, 2024:
Unrealized gains (losses) arising during the period	(25)		(9)		32		(2)
Reclassifications of realized net (gains) losses to net income	(179)		(36)		—		(215)

Balance at March 30, 2024	$	(9)	$	(1,700)	$	(1,800)	$	(3,509)

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Details about AOCI components reclassified to net income are as follows:


Gain (loss) in net income:	Affected line item in the Condensed Consolidated Statements of Operations:	Quarter Ended				Six Months Ended
	March 29, 2025	March 30, 2024		March 29, 2025		March 30, 2024
Market value adjustments, primarily cash flow hedges	Primarily revenue	$	117	$	92	$	205	$	232
Estimated tax	Income taxes	(27)		(21)		(48)		(53)
		90		71		157		179


Pension and postretirement medical expense	Interest expense, net	(33)		24		(66)		48
Estimated tax	Income taxes	8		(6)		16		(12)
		(25)		18		(50)		36





Total reclassifications for the period		$	65	$	89	$	107	$	215

**12.**Equity-Based Compensation

Compensation expense related to stock options and restricted stock units (RSUs) is as follows:


	Quarter Ended				Six Months Ended
	March 29, 2025		March 30, 2024		March 29, 2025		March 30, 2024
Stock options	$	17	$	20	$	33	$	37
RSUs	313		347		614		638
Total equity-based compensation expense(1)	$	330	$	367	$	647	$	675
Equity-based compensation expense capitalized during the period	$	46	$	58	$	90	$	102

(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.

Unrecognized compensation cost related to unvested stock options and RSUs was $118 million and $2.5 billion, respectively, as of March 29, 2025.

During the six months ended March 29, 2025, the Company made equity compensation grants consisting of 2.4 million stock options and 14.2 million RSUs with weighted average grant date fair values of $37.98 and $109.20, respectively. During the six months ended March 30, 2024, the weighted average grant date fair values for stock options and RSUs were $32.10 and $94.25, respectively.

**13.**Commitments and Contingencies

Legal Matters

On May 12, 2023, a private securities class action lawsuit was filed in the U.S. District Court for the Central District of California against the Company, its former Chief Executive Officer, Robert Chapek, its former Chief Financial Officer, Christine M. McCarthy, and the former Chairman of the Disney Media and Entertainment Distribution segment, Kareem Daniel on behalf of certain purchasers of securities of the Company (the “Securities Class Action”). On November 6, 2023, a consolidated complaint was filed in the same action, adding Robert Iger, the Company’s Chief Executive Officer, as a defendant. Claims in the Securities Class Action include (i) violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder against all defendants, (ii) violations of Section 20A of the Exchange Act against Iger and McCarthy, and (iii) violations of Section 20(a) of the Exchange Act against all defendants. Plaintiffs in the Securities Class Action allege purported misstatements and omissions concerning, and a scheme to conceal, accurate costs and subscriber growth of the Disney+ platform. Plaintiffs seek unspecified damages, plus interest and costs and fees. The Company intends to defend against the lawsuit vigorously. It filed a motion to dismiss the complaint for failure to state a claim on December 21, 2023, which was granted in part (dismissing the Section 20A claim against Iger) and otherwise denied on February 19, 2025. On March 28, 2025,

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

the Company filed a motion for judgment on the pleadings, for which a hearing is scheduled for July 29, 2025. The lawsuit is in the early stages and at this time we cannot reasonably estimate the amount of any possible loss.

Three shareholder derivative complaints have been filed. The first, in which Hugues Gervat is the plaintiff, was filed on August 4, 2023, in the U.S. District Court for the Central District of California. The second, in which Stourbridge Investments LLC is the plaintiff, was filed on August 23, 2023 in the U.S. District Court for the District of Delaware. And the third, in which Audrey McAdams is the Plaintiff, was filed on December 15, 2023, in the U.S. District Court for the Central District of California. Each named The Walt Disney Company as a nominal defendant and alleged claims on its behalf against the Company’s Chief Executive Officer, Robert Iger; its former Chief Executive Officer, Robert Chapek; its former Chief Financial Officer, Christine M. McCarthy; the former Chairman of the Disney Media and Entertainment Distribution segment, Kareem Daniel, and ten current and former members of the Disney Board (Susan E. Arnold; Mary T. Barra; Safra A. Catz; Amy L. Chang; Francis A. deSouza; Michael B.G. Froman; Maria Elena Lagomasino; Calvin R. McDonald; Mark G. Parker; and Derica W. Rice). Along with alleged violations of Sections 10(b), 14(a), 20(a), and Rule 10b-5 of the Securities Exchange Act, premised on similar allegations as the Securities Class Action, plaintiffs seek to recover under various theories including breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement and waste. On October 24, 2023, the Stourbridge action was voluntarily dismissed and, on November 16, 2023, was refiled in Delaware state court alleging analogous theories of liability based on state law. The Gervat and McAdams actions were consolidated on April 29, 2024. The actions have been stayed pending development of the Securities Class Action, with the Stourbridge action being stayed most recently on March 6, 2025 and the Gervat/McAdams stayed on April 11, 2025 through May 27, 2025, the date of a scheduling conference. The actions seek declarative and injunctive relief, an award of unspecified damages to The Walt Disney Company and other costs and fees. The Company intends to defend against these lawsuits vigorously. The lawsuits are in the early stages, and at this time we cannot reasonably estimate the amount of any possible loss.

On November 18, 2022, a private antitrust putative class action lawsuit was filed in the U.S. District Court for the Northern District of California against the Company on behalf of a putative class of certain subscribers to YouTube TV (the “Biddle Action”). The plaintiffs in the Biddle Action asserted a claim under Section 1 of the Sherman Act based on allegations that Disney uses certain pricing and packaging provisions in its carriage agreements with vMVPDs to increase prices for and reduce output of certain services offered by vMVPDs. On November 30, 2022, a second private antitrust putative class action lawsuit was filed in the U.S. District Court for the Northern District of California against the Company on behalf of a putative class of certain subscribers to DirecTV Stream (the “Fendelander Action”), making similar allegations. The Company filed motions to dismiss for failure to state a claim in both the Biddle Action and Fendelander Action on January 31, 2023. On September 30, 2023, the court issued an order granting in part and denying in part the Company’s motions to dismiss both cases and, on October 13, 2023, the court issued an order consolidating both cases. On October 16, 2023, plaintiffs filed a consolidated amended putative class action complaint (the “Consolidated Complaint”). The Consolidated Complaint asserts claims under Section 1 of the Sherman Act and certain Arizona, California, Florida, Illinois, Iowa, Massachusetts, Michigan, Nevada, New York, North Carolina, and Tennessee antitrust laws based on substantially similar allegations as the Biddle Action and the Fendelander Action. The Consolidated Complaint seeks injunctive relief, unspecified money damages and costs and fees. The Company intends to defend against the lawsuits vigorously and filed a motion to dismiss the Consolidated Complaint for failure to state a claim on December 1, 2023. The Company’s motion to dismiss the Consolidated Complaint was granted in part and denied in part on June 25, 2024. On September 12, 2024, the Court entered a case management order setting, among other dates, plaintiffs’ deadline to file their class certification motion for March 27, 2026. In a May 2, 2025 joint case management statement to the court, plaintiffs’ counsel in the Biddle Action stated plans to move to amend the operative complaint to add parties and claims, including a class of fuboTV subscribers, and a challenge under Section 7 of the Clayton Act to Disney’s pending transaction with Fubo. The court has scheduled a case management conference for May 15, 2025.

On January 14, 2025, a private antitrust putative class action lawsuit was filed in the U.S. District Court for the Southern District of New York against the Company on behalf of a putative class of certain subscribers to fuboTV (the “Unger Action”), making similar allegations to those in the now-consolidated Biddle and Fendelander Actions (consolidated lawsuit). The plaintiffs in Unger also alleged that Disney impermissibly bundles ESPN with other Disney networks and unjust enrichment. The Unger Action has since been transferred to the Northern District of California with the court finding it related to the Biddle and Fendelander Actions. The Unger plaintiffs filed an amended complaint on April 28, 2025, adding a named plaintiff and alleging essentially the same antitrust theories under the Sherman Act and the antitrust and consumer protection laws of thirty-seven states, the District of Columbia and Puerto Rico. The Unger plaintiffs seek damages and injunctive relief, including an injunction requiring the Company to segregate or divest any interest in Fubo and Hulu, or in the alternative, business assets relating to Fubo and Hulu + Live TV. The Company intends to defend against the lawsuit vigorously, and its motion to dismiss or answer the amended complaint currently is due by May 28, 2025. The court has scheduled a case management conference for May 15, 2025. The consolidated lawsuit and the Unger Action are in the early stages, and at this time we cannot reasonably estimate the amount of any possible loss.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

On February 20, 2024, a private antitrust lawsuit was filed in the U.S. District Court for the Southern District of New York against the Company (including affiliates ESPN, Inc., ESPN Enterprises, Inc., and Hulu, LLC), Fox, and WBD (collectively, “Defendants”), by fuboTV Inc. and fuboTV Media Inc. (together, “Fubo”). Fubo asserted claims under Section 1 of the Sherman Act, Section 7 of the Clayton Act, and New York antitrust law based on the theories that (a) a then planned joint venture between ESPN, Inc., Fox, and WBD, which would have distributed certain of Defendants’ linear networks to consumers (the “Sports Streaming JV”), would have harmed competition in alleged markets for the licensing of networks that offer live sports content and for streaming live pay television, (b) certain alleged practices by which the Company and Fox license their networks to vMVPDs as a bundle increase prices and reduce output for services offered by vMVPDs, and (c) certain alleged pricing provisions in Defendants’ carriage agreements with YouTube TV and Hulu + Live TV, as well as in Hulu + Live TV’s carriage agreements with non-Defendant programmers, increase prices for services offered by vMVPDs. On April 8, 2024, Fubo filed a motion for a preliminary injunction against Defendants to prevent the formation of the Sports Streaming JV. On April 29, 2024, Fubo filed an amended complaint to add allegations of a purported market for “skinny sports bundles”, which Fubo claimed the Sports Streaming JV would have monopolized after its launch. After a hearing on Fubo’s motion for preliminary injunction, the district court granted Fubo’s motion on August 16, 2024, and enjoined the launch of the Sports Streaming JV. On August 19, 2024, Defendants filed a notice of appeal to the United States Court of Appeals for the Second Circuit from the order for a preliminary injunction. The United States Court of Appeals for the Second Circuit granted Defendants’ motion to expedite the appeal. Defendants filed their initial appeal brief on September 20, 2024, Fubo filed its brief in opposition on November 4, 2024, and Defendants filed their reply brief on December 9, 2024. Oral argument was scheduled for January 6, 2025. Fubo further sought injunctive relief, unspecified money damages and costs and fees. On September 26, 2024, the Company filed a motion to dismiss Fubo’s claims brought under Section 1 of the Sherman Act and New York antitrust law, unrelated to the joint venture. The district court denied Defendants’ motions to dismiss on December 13, 2024. The Defendants reached a settlement with Fubo to resolve this litigation, and on January 6, 2025, filed with the district court a joint stipulation voluntarily dismissing the action with prejudice and extinguishing the preliminary injunction issued on August 16, 2024. The parties also filed on January 6, 2025 a joint stipulation dismissing the appeal, which the United States Court of Appeals for the Second Circuit so ordered on January 8, 2025.

In May 2024, the Company and NBCU entered into a confidential arbitration to resolve a dispute regarding the contractual appraisal process related to the determination of Hulu’s equity fair value, in which the parties sought declaratory relief, equitable relief and unspecified damages. In March 2025, the arbitrator issued a decision, concluding the arbitration. See Note 1 for a more detailed discussion of the valuation process and the determination of any potential incremental amount payable to NBCU to acquire their interest in Hulu.

The Company, together with, in some instances, certain of its directors and officers, is a defendant in various other legal actions involving copyright, patent, breach of contract and various other claims incident to the conduct of its businesses. Management does not believe that the Company has incurred a probable material loss by reason of any of those actions.

**14.**Fair Value Measurements

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants and is generally classified in one of the following categories:

Level 1 - Quoted prices for identical instruments in active markets

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations, in which all significant inputs and significant value drivers are observable in active markets

Level 3 - Valuations derived from valuation techniques, in which one or more significant inputs or significant value drivers are unobservable

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company’s assets and liabilities measured at fair value are summarized in the following tables by fair value measurement level:


	Fair Value Measurement at March 29, 2025
	Level 1		Level 2		Level 3		Total
Assets
Investments	$	—	$	82	$	—	$	82


Derivatives - Foreign exchange	—		676		—		676

Liabilities
Derivatives
Interest rate	—		(953)		—		(953)
Foreign exchange	—		(430)		—		(430)
Other	—		(3)		—		(3)

Other	—		(581)		—		(581)
Total recorded at fair value	$	—	$	(1,209)	$	—	$	(1,209)
Fair value of borrowings	$	—	$	37,182	$	2,219	$	39,401


	Fair Value Measurement at September 28, 2024
	Level 1		Level 2		Level 3		Total
Assets
Investments	$	—	$	94	$	—	$	94
Derivatives

Foreign exchange	—		569		—		569
Other	—		18		—		18

Liabilities
Derivatives
Interest rate	—		(983)		—		(983)
Foreign exchange	—		(588)		—		(588)
Other	—		(8)		—		(8)

Other	—		(591)		—		(591)
Total recorded at fair value	$	—	$	(1,489)	$	—	$	(1,489)
Fair value of borrowings	$	—	$	42,392	$	1,317	$	43,709

The fair values of Level 2 investments are primarily determined based on an internal valuation model that uses observable inputs such as stock trading price, volatility and risk free rate.

The fair values of Level 2 derivatives are primarily determined by internal discounted cash flow models that use observable inputs such as interest rates, yield curves and foreign currency exchange rates. Counterparty credit risk, which is mitigated by master netting agreements and collateral posting arrangements with certain counterparties, had an impact on derivative fair value estimates that was not material. The Company’s derivative financial instruments are discussed in Note 15.

Level 2 other liabilities are primarily arrangements that are valued based on the fair value of underlying investments, which are generally measured using Level 1 and Level 2 fair value techniques.

Level 2 borrowings, which include commercial paper, U.S. dollar denominated notes and certain foreign currency denominated borrowings, are valued based on quoted prices for similar instruments in active markets or identical instruments in markets that are not active.

Level 3 borrowings include the Asia Theme Parks and cruise ship borrowings, which are valued based on the current estimated borrowing costs, prevailing market interest rates and applicable credit risk.

The Company’s financial instruments also include cash, cash equivalents, receivables and accounts payable. The carrying values of these financial instruments approximate the fair values.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

**15.**Derivative Instruments

The Company manages its exposure to various risks relating to its ongoing business operations according to a risk management policy. The primary risks managed with derivative instruments are interest rate risk and foreign exchange risk.

The Company’s derivative positions measured at fair value (see Note 14) are summarized in the following tables:


	As of March 29, 2025
	Current Assets		Investments/ Other Assets		Other Current Liabilities		Other Long- Term Liabilities
Derivatives designated as hedges
Foreign exchange	$	350	$	230	$	(137)	$	(72)
Interest rate	—		—		(953)		—
Other	—		—		(3)		—
Derivatives not designated as hedges
Foreign exchange	95		1		(129)		(92)

Other	—		82		—		—
Gross fair value of derivatives	445		313		(1,222)		(164)
Counterparty netting	(391)		(204)		447		148
Cash collateral (received) paid	(8)		—		548		—
Net derivative positions	$	46	$	109	$	(227)	$	(16)


	As of September 28, 2024
	Current Assets		Investments/ Other Assets		Other Current Liabilities		Other Long- Term Liabilities
Derivatives designated as hedges
Foreign exchange	$	273	$	184	$	(164)	$	(149)
Interest rate	—		—		(983)		—
Other	—		—		(7)		(1)
Derivatives not designated as hedges
Foreign exchange	110		2		(273)		(2)

Other	18		94		—		—
Gross fair value of derivatives	401		280		(1,427)		(152)
Counterparty netting	(330)		(182)		396		116
Cash collateral (received) paid	(27)		—		679		—
Net derivative positions	$	44	$	98	$	(352)	$	(36)

Interest Rate Risk Management

The Company is exposed to the impact of interest rate changes primarily through its borrowing activities. The Company’s objective is to mitigate the impact of interest rate changes on earnings and cash flows and on the market value of its borrowings. In accordance with its policy, the Company targets its fixed-rate debt as a percentage of its net debt between a minimum and maximum percentage. The Company primarily uses pay-floating and pay-fixed interest rate swaps to facilitate its interest rate risk management activities.

The Company designates pay-floating interest rate swaps as fair value hedges of fixed-rate borrowings effectively converting fixed-rate borrowings to variable-rate borrowings. The total notional amount of the Company’s pay-floating interest rate swaps at both March 29, 2025 and September 28, 2024 was $10.5 billion and $12.0 billion, respectively.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The following table summarizes fair value hedge adjustments to hedged borrowings:


	Carrying Amount of Hedged Borrowings				Fair Value Adjustments Included in Hedged Borrowings
	March 29, 2025		September 28, 2024		March 29, 2025		September 28, 2024
Borrowings:
Current	$	1,943	$	1,414	$	(55)	$	(10)
Long-term	8,128		10,128		(867)		(913)
	$	10,071	$	11,542	$	(922)	$	(923)

The following amounts are included in “Interest expense, net” in the Condensed Consolidated Statements of Operations:


	Quarter Ended				Six Months Ended
	March 29, 2025		March 30, 2024		March 29, 2025		March 30, 2024
Gain (loss) on:
Pay-floating swaps	$	187	$	(89)	$	(8)	$	343
Borrowings hedged with pay-floating swaps	(187)		89		8		(343)
Expense associated with interest accruals on pay-floating swaps	(98)		(153)		(209)		(307)

The Company may designate pay-fixed interest rate swaps as cash flow hedges of interest payments on floating-rate borrowings. Pay-fixed interest rate swaps effectively convert floating-rate borrowings to fixed-rate borrowings. The unrealized gains or losses from these cash flow hedges are deferred in AOCI and recognized in interest expense as the interest payments occur. The Company did not have pay-fixed interest rate swaps that were designated as cash flow hedges of interest payments at March 29, 2025 or at September 28, 2024, and gains and losses related to pay-fixed interest rate swaps recognized in earnings were not material for the quarters and six-month periods ended March 29, 2025 and March 30, 2024.

Foreign Exchange Risk Management

The Company transacts business globally and is subject to risks associated with foreign currency exchange rates. The Company’s objective is to reduce earnings and cash flow fluctuations associated with changes in foreign currency exchange rates, enabling management to focus on core business operations.

The Company enters into option and forward contracts to protect the value of its existing foreign currency assets, liabilities, firm commitments and forecasted but not firmly committed foreign currency transactions. In accordance with policy, the Company hedges its forecasted foreign currency transactions for periods generally not to exceed four years within an established minimum and maximum range of annual exposure. The gains and losses on these contracts offset changes in the U.S. dollar equivalent value of the related forecasted transaction, asset, liability or firm commitment. The principal currencies hedged are the euro, British pound, Japanese yen, Chinese yuan and Canadian dollar. Cross-currency swaps are used to effectively convert foreign currency denominated borrowings into U.S. dollar denominated borrowings.

The Company designates foreign exchange forward and option contracts as cash flow hedges of firmly committed and forecasted foreign currency transactions. As of March 29, 2025 and September 28, 2024, the notional amounts of the Company’s net foreign exchange cash flow hedges were $8.2 billion and $9.9 billion, respectively. Mark-to-market gains and losses on these contracts are deferred in AOCI and are recognized in earnings when the hedged transactions occur, offsetting changes in the value of the foreign currency transactions. Net deferred gains recorded in AOCI for contracts that will mature in

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

the next twelve months total $240 million. The following table summarizes the effect of foreign exchange cash flow hedges on AOCI:


	Quarter Ended				Six Months Ended
	March 29, 2025		March 30, 2024		March 29, 2025		March 30, 2024
Gain (loss) recognized in Other Comprehensive Income	$	(210)	$	237	$	352	$	(27)
Gain reclassified from AOCI into the Statements of Operations(1)	121		93		210		234

(1)Primarily recorded in revenue.

The Company may designate cross currency swaps as fair value hedges of foreign currency denominated borrowings. The impact from the change in foreign currency on both the cross currency swap and borrowing is recorded to “Interest expense, net.” The impact from interest rate changes is recorded in AOCI and is amortized over the life of the cross currency swap. As of March 29, 2025 and September 28, 2024, the total notional amount of the Company’s designated cross currency swaps was Canadian $1.3 billion ($0.9 billion) and Canadian $1.3 billion ($1.0 billion), respectively. The related gains or losses recognized in earnings for the quarters and six-month periods ended March 29, 2025 and March 30, 2024 were not material.

Foreign exchange risk management contracts with respect to foreign currency denominated assets and liabilities are not designated as hedges and do not qualify for hedge accounting. The net notional amount of these foreign exchange contracts at March 29, 2025 and September 28, 2024 were $3.2 billion and $3.4 billion, respectively. The related gains or losses recognized in costs and expenses on foreign exchange contracts that mitigated our exposure with respect to foreign currency denominated assets and liabilities for the quarters and six-month periods ended March 29, 2025 and March 30, 2024 were not material.

Commodity Price Risk Management

The Company is subject to the volatility of commodities prices and the Company designates certain commodity forward contracts as cash flow hedges of forecasted commodity purchases. Mark-to-market gains and losses on these contracts are deferred in AOCI and are recognized in earnings when the hedged transactions occur, offsetting changes in the value of commodity purchases. The notional amount of these commodities contracts at March 29, 2025 and September 28, 2024 and related gains or losses recognized in earnings for the quarters and six-month periods ended March 29, 2025 and March 30, 2024 were not material.

Risk Management – Other Derivatives Not Designated as Hedges

The Company enters into certain other risk management contracts that are not designated as hedges and do not qualify for hedge accounting. These contracts, which include certain total return swap contracts, are intended to offset economic exposures of the Company and are carried at market value with any changes in value recorded in earnings. The notional amounts of these contracts at March 29, 2025 and September 28, 2024 were $0.6 billion and $0.5 billion, respectively. The related gains or losses recognized in earnings for the quarters and six-month periods ended March 29, 2025 and March 30, 2024 were not material.

Contingent Features and Cash Collateral

The Company has master netting arrangements by counterparty with respect to certain derivative financial instrument contracts. The Company may be required to post collateral in the event that a net liability position with a counterparty exceeds limits defined by contract and that vary with the Company’s credit rating. In addition, these contracts may require a counterparty to post collateral to the Company in the event that a net receivable position with a counterparty exceeds limits defined by contract and that vary with the counterparty’s credit rating. If the Company’s or the counterparty’s credit ratings were to fall below investment grade, such counterparties or the Company would also have the right to terminate our derivative contracts, which could lead to a net payment to or from the Company for the aggregate net value by counterparty of our derivative contracts. The aggregate fair values of derivative instruments with credit-risk-related contingent features in a net liability position by counterparty were $0.8 billion and $1.1 billion at March 29, 2025 and September 28, 2024.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

**16.**Restructuring and Impairment Charges

The following amounts are recorded in “Restructuring and impairment charges” in the Condensed Consolidated Statements of Operations:

The quarter ended March 29, 2025 included impairment charges of $0.1 billion related to content.

The first quarter of fiscal 2025 and second quarter of fiscal 2024 included non-cash goodwill impairment charges of $0.1 billion and $1.3 billion related to the Star India Transaction (see Note 4 for additional information), respectively.

The second quarter of fiscal 2024 included a non-cash goodwill impairment charge of $0.7 billion related to the entertainment linear networks reporting unit.

**17.**New Accounting Pronouncements

Improvements to Reportable Segments Disclosures

In November 2023, the FASB issued guidance to enhance reportable segment disclosures by requiring the disclosure of significant expenses that are regularly provided to the chief operating decision maker (CODM) and included in the segment’s measure of profit or loss. It also requires an explanation of how the CODM uses the segment’s measure of profit or loss to assess segment performance and allocate resources. The guidance is effective for the Company for annual periods beginning in fiscal year 2025 and for interim periods beginning in fiscal year 2026 and requires retrospective adoption (with early adoption permitted). While the guidance will not have an effect on the Company’s Consolidated Statements of Operations or Consolidated Balance Sheets upon adoption, it will affect certain segment reporting disclosures in the Company’s fiscal 2025 annual report.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued guidance to enhance income tax disclosures. The new guidance requires an expanded effective tax rate reconciliation, the disclosure of cash taxes paid segregated between U.S. federal, U.S. state and foreign, with further disaggregation by jurisdiction if certain thresholds are met, and eliminates certain disclosures related to uncertain tax benefits. The new guidance is applicable beginning with the Company’s 2026 fiscal year.

Disaggregation of Income Statement Expense

In November 2024, the FASB issued guidance that requires the disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement line item. The guidance also requires disclosure of the total amount of selling expenses and the Company’s definition of selling expenses. The guidance is effective for the Company for annual periods beginning in fiscal year 2028 and for interim periods beginning in fiscal year 2029. The Company is currently assessing the impacts of the new guidance on its financial statement disclosures.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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