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 March 29, 2025

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

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 class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

DIS

New 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 1,797,746,311 shares of common stock outstanding as of April 30, 2025.

THE WALT DISNEY COMPANY

Form 10-Q

For the Fiscal Quarter Ended March 29, 2025

TABLE OF CONTENTS

 

 

 

Page

PART I

ITEM 1.

Financial Statements

3

ITEM 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

34

ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

73

ITEM 4.

Controls and Procedures

73

PART II

ITEM 1.

Legal Proceedings

74

ITEM 1A.

Risk Factors

74

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

77

ITEM 5.

Other Items

78

ITEM 6.

Exhibits

79

SIGNATURE

80

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 the 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,” “forecasts,” “believes,” “estimates,” “anticipates,” “potential,” “continue,” “assumption” or “judgment” 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, including tariffs and other trade policies, 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;

•taxation; 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 2024 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 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

3

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

4

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 

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