1、May7,2024THEWALTDISNEYCOMPANYREPORTSSECONDQUARTERANDSIXMONTHSEARNINGSFORFISCAL2024BURBANK,Calif.TheWaltDisneyCompanytodayreportedearningsforitssecondquarterendedMarch30,2024.FinancialResultsfortheQuarter:Revenuesforthequarterincreasedto$22.1billionfrom$21.8billionintheprior-yearquarter.Dilutedearnin

2、gspershare(EPS)wasalossof$0.01forthecurrentquartercomparedtoincomeof$0.69intheprior-yearquarter.DilutedEPSdecreasedtoanominallossduetogoodwillimpairmentsinthequarter,partiallyoffsetbyhigheroperatingincomeatEntertainmentandExperiences.Excludingcertainitems(1),dilutedEPSforthequarterincreasedto$1.21fr

3、om$0.93intheprior-yearquarter.KeyPoints:Inthesecondfiscalquarterof2024,weachievedstrongdoubledigitpercentagegrowthinadjustedEPS(1),andmetorexceededourfinancialguidanceforthequarter.Asaresultofoutperformanceinthesecondquarter,ournewfullyearadjustedEPS(1)growthtargetisnow25%.Weremainontracktogeneratea

4、pproximately$14billionofcashprovidedbyoperationsandover$8billionoffreecashflow(1)thisfiscalyear.Werepurchased$1billionworthofsharesinthesecondquarterandlookforwardtocontinuingtoreturncapitaltoshareholders.TheEntertainmentDirect-to-Consumerbusinesswasprofitableinthesecondquarter.Whileweareexpectingso

5、fterEntertainmentDTCresultsinQ3tobedrivenbyDisney+Hotstar,wecontinuetoexpectourcombinedstreamingbusinessestobeprofitableinthefourthquarter,andtobeameaningfulfuturegrowthdriverforthecompany,withfurtherimprovementsinprofitabilityinfiscal2025.Disney+Coresubscribersincreasedbymorethan6millioninthesecond

6、quarter,andDisney+CoreARPUincreasedsequentiallyby44cents.Sportsoperatingincomedeclinedslightlyversustheprioryear,reflectingthetimingimpactofCollegeFootballPlayoffgamesatESPN,offsetbyimprovedresultsatStarIndia.TheExperiencesbusinesswasalsoagrowthdriverinthesecondquarter,withrevenuegrowthof10%,segment

7、operatingincomegrowthof12%,andmarginexpansionof60basispointsversustheprioryear.Althoughthethirdquarterssegmentoperatingincomeisexpectedtocomeinroughlycomparabletotheprioryear,wecontinuetoexpectrobustoperatingincomegrowthatExperiencesforthefullyear.FORIMMEDIATERELEASE1(1)DilutedEPSexcludingcertainite

8、ms(alsoreferredtohereinasadjustedEPS)andfreecashflowarenon-GAAPfinancialmeasures.ThemostcomparableGAAPmeasuresaredilutedEPSandcashprovidedbyoperations,respectively.Seethediscussiononpages17through21forhowwedefineandcalculatethesemeasuresandaquantitativereconciliationofhistoricalmeasuresthereofandthe

9、forward-lookingmeasureoffreecashflowtothemostdirectlycomparableGAAPmeasuresandwhytheCompanyisnotprovidingaforward-lookingquantitativereconciliationofdilutedEPSexcludingcertainitemstothemostcomparableGAAPmeasure.MessageFromOurCEO:“OurstrongperformanceinQ2,withadjustedEPS(1)up30%comparedtotheprioryear

10、,demonstrateswearedeliveringonourstrategicprioritiesandbuildingforthefuture,”saidRobertA.Iger,ChiefExecutiveOfficer,TheWaltDisneyCompany.“OurresultsweredriveninlargepartbyourExperiencessegmentaswellasourstreamingbusiness.Importantly,entertainmentstreamingwasprofitableforthequarter,andweremainontrack

11、toachieveprofitabilityinourcombinedstreamingbusinessesinQ4.“Lookingatourcompanyasawhole,itsclearthattheturnaroundandgrowthinitiativeswesetinmotionlastyearhavecontinuedtoyieldpositiveresults.Wehaveanumberofhighlyanticipatedtheatricalreleasesarrivingoverthenextfewmonths;ourtelevisionshowsareresonating

12、withaudiencesandcriticsalike;ESPNcontinuestobreakratingsrecordsaswefurtheritsevolutionintothepreeminentdigitalsportsplatform;andweareturbocharginggrowthinourExperiencesbusinesswithanumberofnear-andlong-termstrategicinvestments.”SUMMARIZEDFINANCIALRESULTSThefollowingtablesummarizessecondquarterresult

13、sforfiscal2024and2023:QuarterEndedSixMonthsEnded($inmillions,exceptpershareamounts)March30,2024April1,2023ChangeMarch30,2024April1,2023ChangeRevenues$22,083$21,815 1%$45,632$45,327 1%Incomebeforeincometaxes$657$2,123(69)%$3,528$3,896(9)%Totalsegmentoperatingincome(1)$3,845$3,285 17%$7,721$6,328 22%D

14、ilutedEPS$(0.01)$0.69nm$1.03$1.39(26)%DilutedEPSexcludingcertainitems(1)$1.21$0.93 30%$2.44$1.91 28%Cashprovidedbyoperations$3,666$3,236 13%$5,851$2,262 100%Freecashflow(1)$2,407$1,987 21%$3,293$(168)nm(1)Totalsegmentoperatingincome,dilutedEPSexcludingcertainitemsandfreecashflowarenon-GAAPfinancialm

15、easures.ThemostcomparableGAAPmeasuresareincomebeforeincometaxes,dilutedEPSandcashprovidedbyoperations,respectively.Seethediscussiononpages17through21forhowwedefineandcalculatethesemeasuresandareconciliationthereoftothemostdirectlycomparableGAAPmeasures.2SUMMARIZEDSEGMENTFINANCIALRESULTSThefollowingt

16、ablesummarizessecondquartersegmentrevenueandoperatingincomeforfiscal2024and2023:QuarterEndedSixMonthsEnded($inmillions)March30,2024April1,2023ChangeMarch30,2024April1,2023ChangeRevenues:Entertainment$9,796$10,309(5)%$19,777$20,984(6)%Sports4,3124,226 2%9,1478,866 3%Experiences8,3937,646 10%17,52516,

17、191 8%Eliminations(2)(418)(366)(14)%(817)(714)(14)%Totalrevenues$22,083$21,815 1%$45,632$45,327 1%Segmentoperatingincome(loss):Entertainment$781$455 72%$1,655$800 100%Sports778794(2)%675630 7%Experiences2,2862,036 12%5,3914,898 10%Totalsegmentoperatingincome(1)$3,845$3,285 17%$7,721$6,328 22%(1)Tota

18、lsegmentoperatingincomeisanon-GAAPfinancialmeasure.ThemostcomparableGAAPmeasureisincomebeforeincometaxes.Seethediscussiononpages17through21.(2)ReflectsfeespaidbyDirect-to-ConsumertoSportsandotherEntertainmentbusinessesfortherighttoairtheirlinearnetworksonHuluLiveandfeespaidbyEntertainmenttoSportstop

19、rogramsportsontheABCNetworkandStar+.DISCUSSIONOFSECONDQUARTERSEGMENTRESULTSEntertainmentRevenueandoperatingincomefortheEntertainmentsegmentareasfollows:QuarterEndedChangeSixMonthsEnded($inmillions)March30,2024April1,2023March30,2024April1,2023ChangeRevenues:LinearNetworks$2,765$2,999(8)%$5,568$6,201

20、(10)%Direct-to-Consumer5,6424,983 13%11,188 9,805 14%ContentSales/LicensingandOther1,3892,327(40)%3,021 4,978(39)%$9,796$10,309(5)%$19,777$20,984(6)%Operatingincome(loss):LinearNetworks$752$959(22)%$1,988$2,289(13)%Direct-to-Consumer47(587)nm(91)(1,571)94%ContentSales/LicensingandOther(18)83nm(242)8

21、2nm$781$455 72%$1,655$800 100%3TheincreaseinEntertainmentoperatingincomeinthecurrentquartercomparedtotheprior-yearquarterwasduetoimprovedresultsatDirect-to-Consumer,partiallyoffsetbydeclinesatLinearNetworksandContentSales/LicensingandOther.LinearNetworksLinearNetworksrevenuesandoperatingincomeareasf

22、ollows:QuarterEndedChange($inmillions)March30,2024April1,2023RevenueDomestic$2,269$2,440(7)%International496559(11)%$2,765$2,999(8)%OperatingincomeDomestic$520$635(18)%International92165(44)%Equityintheincomeofinvestees140159(12)%$752$959(22)%DomesticThedecreaseindomesticoperatingincomeinthecurrentq

23、uartercomparedtotheprior-yearquarterwasdueto:Loweraffiliaterevenueprimarilyduetoadecreaseinsubscribersincludingtheimpactofthenon-renewalofcarriageofcertainnetworksbyanaffiliate,partiallyoffsetbyhighercontractualrates Adeclineinadvertisingrevenueattributabletoadecreaseinimpressionsreflectingloweraver

24、ageviewership,partiallyoffsetbyhigherratesInternationalLowerinternationaloperatingincomewasduetoadecreaseinaffiliaterevenueprimarilyattributabletofewersubscribersandcontractualratedecreases.EquityintheIncomeofInvesteesIncomefromequityinvesteesdecreasedduetolowerincomefromA+ETelevisionNetworks(A+E)at

25、tributabletodecreasesinadvertisingandaffiliaterevenue.Direct-to-ConsumerDirect-to-Consumerrevenuesandoperatingincome(loss)areasfollows:QuarterEndedChange($inmillions)March30,2024April1,2023Revenue$5,642$4,983 13%Operatingincome(loss)$47$(587)nmTheimprovementinoperatingresultsinthecurrentquartercompa

26、redtotheprior-yearquarterwasdueto:Subscriptionrevenuegrowthattributabletohigherratesduetoincreasesinretailpricingacrossourstreamingservices,andsubscribergrowthatDisney+Core4 Lowerdistributioncosts Anincreaseinadvertisingrevenueduetohigherimpressions,partiallyoffsetbylowerrates Highermarketingcosts A

27、nincreaseinprogrammingandproductioncostsduetomoreprogrammingonourservicesandhighersubscriber-basedfeesforprogrammingtheHuluLiveTVservice,partiallyoffsetbyloweraveragecostsperhourofcontentavailableonourservicesTheincreaseinHuluLiveTVsubscriber-basedfeeswasduetorateincreasesandmoresubscribersSecondQua

28、rterofFiscal2024ComparisontoFirstQuarterofFiscal2024Inadditiontorevenue,costsandoperatingincome,managementusesthefollowingkeymetricstoanalyzetrendsandevaluatetheoverallperformanceofourDisney+andHuludirect-to-consumer(DTC)productofferings(1),andwebelievethesemetricsareusefultoinvestorsinanalyzingtheb

29、usiness.Thefollowingtablesandrelateddiscussionareonasequentialquarterbasis.Paidsubscribers(1)at:(inmillions)March30,2024December30,2023ChangeDisney+Domestic(U.S.andCanada)54.046.1 17%International(excludingDisney+Hotstar)(1)63.665.2(2)%Disney+Core(2)117.6111.3 6%Disney+Hotstar36.038.3(6)%HuluSVODOnl

30、y45.845.1 2%LiveTV+SVOD4.54.6(2)%TotalHulu(2)50.249.7 1%AverageMonthlyRevenuePerPaidSubscriber(1)forthequarterended:March30,2024December30,2023ChangeDisney+Domestic(U.S.andCanada)$8.00$8.15(2)%International(excludingDisney+Hotstar)(1)6.665.91 13%Disney+Core7.286.84 6%Disney+Hotstar0.701.28(45)%HuluS

31、VODOnly11.8412.29(4)%LiveTV+SVOD95.0193.61 1%(1)Seediscussiononpage16DTCProductDescriptionsandKeyDefinitions(2)TotalmaynotequalthesumofthecolumnduetoroundingDomesticDisney+averagemonthlyrevenueperpaidsubscriberdecreasedfrom$8.15to$8.00duetoahighermixofwholesalesubscribers,partiallyoffsetbyincreasesi

32、nretailpricing.5InternationalDisney+(excludingDisney+Hotstar)averagemonthlyrevenueperpaidsubscriberincreasedfrom$5.91to$6.66duetoincreasesinretailpricingandalowermixofsubscriberstopromotionalofferings.Disney+Hotstaraveragemonthlyrevenueperpaidsubscriberdecreasedfrom$1.28to$0.70duetoloweradvertisingr

33、evenue.HuluSVODOnlyaveragemonthlyrevenueperpaidsubscriberdecreasedfrom$12.29to$11.84duetoloweradvertisingrevenue,partiallyoffsetbyincreasesinretailpricing.HuluLiveTV+SVODaveragemonthlyrevenueperpaidsubscriberincreasedfrom$93.61to$95.01duetoincreasesinretailpricingandalowermixofsubscriberstopromotion

34、alofferings,partiallyoffsetbyloweradvertisingrevenue.ContentSales/LicensingandOtherContentSales/LicensingandOtherrevenuesandoperatingincome(loss)areasfollows:QuarterEndedChange($inmillions)March30,2024April1,2023Revenue$1,389$2,327(40)%Operatingincome(loss)$(18)$83nmThedecreaseinoperatingresultswasd

35、ueto:LowertheatricaldistributionresultsastherewerenosignificanttitlesreleasedinthecurrentquartercomparedtoAnt-ManandtheWasp:Quantumaniaintheprior-yearquarter.Theprior-yearquarteralsoincludedthebenefitoftheongoingperformanceofAvatar:TheWayofWater,whichwasreleasedinDecember2022.Higherfilmcostimpairmen

36、tsinthecurrentquarter6SportsSportsrevenuesandoperatingincome(loss)areasfollows:QuarterEndedChange($inmillions)March30,2024April1,2023RevenueESPNDomestic$3,866$3,733 4%International341366(7)%4,2074,099 3%StarIndia105127(17)%$4,312$4,226 2%Operatingincome(loss)ESPNDomestic$780$858(9)%International19 1

37、9%799 877(9)%StarIndia(27)(99)73%Equityintheincomeofinvestees6 16(63)%$778$794(2)%DomesticESPNLowerdomesticESPNoperatingresultsinthecurrentquartercomparedtotheprior-yearquarterweredueto:AnincreaseinprogrammingandproductioncostsattributabletohighercostsforCollegeFootballPlayoff(CFP)programmingasaresu

38、ltofairinganadditionalgameinthecurrentquarterduetotiming.Inthecurrentquarter,weairedthechampionshipgame,twosemi-finalgamesandonehostgamecomparedtotheairingofthechampionshipgameandtwohostgamesintheprior-yearquarter.Loweraffiliaterevenuedrivenbyfewersubscribers,partiallyoffsetbycontractualrateincrease

39、s Advertisingrevenuegrowthprimarilyduetoincreasesinratesand,toalesserextent,averageviewership.TheseincreasesincludebenefitsfromtheadditionalCFPgameandanadditionalNFLplayoffgameinthecurrentquarter.GrowthinESPN+subscriptionrevenueduetohigherrates7StarIndiaThedecreaseinoperatinglossatStarIndiawasduetol

40、owerprogrammingandproductioncostsattributabletothenon-renewalofBoardofControlforCricketinIndiarights,partiallyoffsetbyanincreaseincostsforIndianPremierLeaguematchesduetomorematchesairedinthecurrentquartercomparedtotheprior-yearquarter.SecondQuarterofFiscal2024ComparisontoFirstQuarterofFiscal2024Inad

41、ditiontorevenue,costsandoperatingincome,managementusesthefollowingkeymetricstoanalyzetrendsandevaluatetheoverallperformanceofourESPN+DTCproductoffering(1),andwebelievethesemetricsareusefultoinvestorsinanalyzingthebusiness.Thefollowingtableandrelateddiscussionareonasequentialquarterbasis.March30,2024

42、December30,2023ChangePaidsubscribers(1)at:(inmillions)24.825.2(2)%AverageMonthlyRevenuePerPaidSubscriber(1)forthequarterended:$6.30$6.09 3%(1)Seediscussiononpage16DTCProductDescriptionsandKeyDefinitionsTheincreaseinESPN+averagemonthlyrevenueperpaidsubscriberwasduetoincreasesinretailpricingandhighera

43、dvertisingrevenue.ExperiencesExperiencesrevenuesandoperatingincomeareasfollows:QuarterEndedChange($inmillions)March30,2024April1,2023RevenueParks&ExperiencesDomestic$5,958$5,572 7%International1,522 1,184 29%ConsumerProducts913 890 3%$8,393$7,646 10%OperatingincomeParks&ExperiencesDomestic$1,607$1,5

44、19 6%International292 156 87%ConsumerProducts387 361 7%$2,286$2,036 12%DomesticParksandExperiencesTheincreaseinoperatingincomeatourdomesticparksandexperienceswasduetohigherresultsatWaltDisneyWorldResortandDisneyCruiseLine,partiallyoffsetbylowerresultsatDisneylandResort.AtWaltDisneyWorldResort,higher

45、resultsinthecurrentquartercomparedtotheprior-yearquarterweredueto:IncreasedguestspendingattributabletohigheraverageticketpricesHighercostsduetoinflation,partiallyoffsetbylowerdepreciationandcostsavinginitiatives8 GrowthatDisneyCruiseLinewasduetoanincreaseinaverageticketprices,partiallyoffsetbyhigher

46、costs ThedecreaseinoperatingresultsatDisneylandResortwasdueto:HighercostsdrivenbyinflationAnincreaseinguestspendingattributabletohigheraverageticketpricesanddailyhotelroomratesHighervolumesduetoattendancegrowth,partiallyoffsetbyloweroccupiedroomnightsInternationalParksandExperiencesHigherinternation

47、alparksandexperiencesoperatingresultsweredueto:AnincreaseinoperatingresultsatHongKongDisneylandResortattributableto:Guestspendinggrowthduetoincreasesinaverageticketpricesandfood,beverageandmerchandisespendingHighervolumesresultingfromincreasesinattendanceandoccupiedroomnights.Volumegrowthbenefittedf

48、romadditionaldaysofoperationsinthecurrentquarteraswellastheopeningofWorldofFrozeninNovember2023IncreasedcostsdrivenbyinflationandnewguestofferingsConsumerProductsTheincreaseinconsumerproductsoperatingresultswasdrivenbyhighergameslicensingrevenue.OTHERFINANCIALINFORMATIONDTCStreamingBusinessesRevenue

49、andoperatinglossforourcombinedDTCstreamingbusinesses,whichconsistoftheDirect-to-ConsumerlineofbusinessattheEntertainmentsegmentandESPN+attheSportssegment,areasfollows:QuarterEndedChange($inmillions)March30,2024April1,2023Revenue$6,188$5,514 12%Operatingloss(1)$(18)$(659)97%(1)DTCstreamingbusinesseso

50、peratinglossisnotafinancialmeasuredefinedbyGAAP.ThemostcomparableGAAPmeasuresaresegmentoperatingincomefortheEntertainmentsegmentandSportssegment.Seethediscussiononpage21forhowwedefineandcalculatethismeasureandareconciliationofittothemostdirectlycomparableGAAPmeasures.CorporateandUnallocatedSharedExp

51、ensesCorporateandunallocatedsharedexpensesincreased$112millionforthequarter,from$279millionto$391million,primarilyattributableto:Highercostsrelatedtoourproxysolicitationandannualshareholdermeeting Increasedcompensationcosts OthercostinflationRestructuringandImpairmentChargesInthecurrentquarter,theCo

52、mpanyrecordedchargesof$2,052millionduetogoodwillimpairmentsrelatedtoStarIndiaandentertainmentlinearnetworks.TheimpairmentatStarIndiawasa9resultoftheCompanyenteringintoabindingagreementinthecurrentquartertocontributeourStarIndiaoperationsintoanewjointventure.Intheprior-yearquarter,theCompanyrecordedc

53、hargesof$152millionprimarilyforseverance.OtherIncome,netIntheprior-yearquarter,theCompanyrecordeda$149milliongaintoadjustitsinvestmentinDraftKings,Inc.tofairvalue.InterestExpense,netInterestexpense,netwasasfollows:QuarterEnded($inmillions)March30,2024April1,2023ChangeInterestexpense$(501)$(504)1%Int

54、erestincome,investmentincomeandother190182 4%Interestexpense,net$(311)$(322)3%EquityintheIncomeofInvesteesEquityintheincomeofinvesteeswasasfollows:QuarterEnded($inmillions)March30,2024April1,2023ChangeAmountsincludedinsegmentresults:Entertainment$138$160(14)%Sports616(63)%AmortizationofTFCFintangibl

55、eassetsrelatedtoequityinvestees(3)(3)%Equityintheincomeofinvestees$141$173(18)%Incomefromequityinvesteesdecreased$32million,to$141millionfrom$173million,duetolowerincomefromA+E.IncomeTaxesTheeffectiveincometaxratewasasfollows:QuarterEndedMarch30,2024April1,2023Incomebeforeincometaxes$657$2,123 Incom

56、etaxexpense441 635 Effectiveincometaxrate 67.1%29.9%Theincreaseintheeffectiveincometaxratewasduetoanunfavorableimpactfromthegoodwillimpairmentsrecognizedinthecurrentquarter,whicharenottaxdeductible,partiallyoffsetbythebenefitfromadjustmentsrelatedtoprioryears,whichwerefavorableinthecurrentquarterand

57、unfavorableintheprior-yearquarter.10NoncontrollingInterestsNetincomeattributabletononcontrollinginterestswasasfollows:QuarterEnded($inmillions)March30,2024April1,2023ChangeNetincomeattributabletononcontrollinginterests$(236)$(217)(9)%Theincreaseinnetincomeattributabletononcontrollinginterestswasprim

58、arilyduetoimprovedresultsatHongKongDisneylandResort,partiallyoffsetbythecomparisontotheaccretionofNBCUniversalsinterestinHuluintheprior-yearquarterwithnoaccretioninthecurrentquarteraswehadfullyaccretedtotheamountpaidinDecember2023.Netincomeattributabletononcontrollinginterestsisdeterminedonincomeaft

59、erroyaltiesandmanagementfees,financingcostsandincometaxes,asapplicable.CashFlowCashprovidedbyoperationsandfreecashflowwereasfollows:SixMonthsEnded($inmillions)March30,2024April1,2023ChangeCashprovidedbyoperations$5,851$2,262$3,589Investmentsinparks,resortsandotherproperty(2,558)(2,430)(128)Freecashf

60、low(1)$3,293$(168)$3,461(1)FreecashflowisnotafinancialmeasuredefinedbyGAAP.ThemostcomparableGAAPmeasureiscashprovidedbyoperations.Seethediscussiononpages17through21.Cashprovidedbyoperationsincreased$3.6billionto$5.9billioninthecurrentperiodfrom$2.3billionintheprior-yearperiod.Theincreasewasduetolowe

61、rfilmandtelevisionproductionspendingandthetimingofpaymentsforsportsrights.Theincreasealsoreflectedlowercollateralpaymentsrelatedtoourhedgingprogram,apaymentintheprior-yearperiodrelatedtotheterminationofcontentlicensesinfiscal2022andhigheroperatingincomeatExperiences.Theseincreaseswerepartiallyoffset

62、bypaymentinthecurrentperiodoffiscal2023federalandCaliforniaincometaxes,whichweredeferredpursuanttoreliefprovidedbytheInternalRevenueServiceandCaliforniaStateBoardofEqualizationasaresultof2023winterstormsinCalifornia.11CapitalExpendituresandDepreciationExpenseInvestmentsinparks,resortsandotherpropert

63、ywereasfollows:SixMonthsEnded($inmillions)March30,2024April1,2023Entertainment$522$541Sports17ExperiencesDomestic1,1981,024International466410TotalExperiences1,6641,434Corporate371448Totalinvestmentsinparks,resortsandotherproperty$2,558$2,430Capitalexpendituresincreasedto$2.6billionfrom$2.4billiondu

64、etohigherspendonnewattractionsandcruiseshipfleetexpansionattheExperiencessegment.Depreciationexpensewasasfollows:SixMonthsEnded($inmillions)March30,2024April1,2023Entertainment$332$304Sports2229ExperiencesDomestic850907International353333TotalExperiences1,2031,240Corporate105100Totaldepreciationexpe

65、nse$1,662$1,67312THEWALTDISNEYCOMPANYCONDENSEDCONSOLIDATEDSTATEMENTSOFOPERATIONS(unaudited;$inmillions,exceptpersharedata)QuarterEndedSixMonthsEndedMarch30,2024April1,2023March30,2024April1,2023Revenues$22,083$21,815$45,632$45,327Costsandexpenses(19,204)(19,540)(39,817)(41,059)Restructuringandimpair

66、mentcharges(2,052)(152)(2,052)(221)Otherincome,net149107Interestexpense,net(311)(322)(557)(622)Equityintheincomeofinvestees4Incomebeforeincometaxes6572,1233,5283,896Incometaxes(441)(635)(1,161)(1,047)Netincome2161,4882,3672,849Netincomeattributabletononcontrollinginterests(236)(217)(476)(

67、299)Netincome(loss)attributabletoTheWaltDisneyCompany(Disney)$(20)$1,271$1,891$2,550Earnings(loss)pershareattributabletoDisney:Diluted$(0.01)$0.69$1.03$1.39Basic$(0.01)$0.70$1.03$1.40Weightedaveragenumberofcommonandcommonequivalentsharesoutstanding:Diluted1,8341,8311,8381,829Basic1,8341,8281,8331,82

68、713THEWALTDISNEYCOMPANYCONDENSEDCONSOLIDATEDBALANCESHEETS(unaudited;$inmillions,exceptpersharedata)March30,2024September30,2023ASSETSCurrentassetsCashandcashequivalents$6,635$14,182Receivables,net12,02612,330Inventories1,9481,963Contentadvances1,9213,002Othercurrentassets2,1061,286Totalcurrentassets

69、24,63632,763Producedandlicensedcontentcosts32,59033,591Investments3,0073,080Parks,resortsandotherpropertyAttractions,buildingsandequipment72,17370,090Accumulateddepreciation(44,065)(42,610)28,10827,480Projectsinprogress6,2436,285Land1,1741,17635,52534,941Intangibleassets,net11,47413,061Goodwill73,91

70、477,067Otherassets13,96411,076Totalassets$195,110$205,579LIABILITIESANDEQUITYCurrentliabilitiesAccountspayableandotheraccruedliabilities$18,798$20,671Currentportionofborrowings6,7894,330Deferredrevenueandother7,2876,138Totalcurrentliabilities32,87431,139Borrowings39,51042,101Deferredincometaxes6,860

71、7,258Otherlong-termliabilities12,10312,069CommitmentsandcontingenciesRedeemablenoncontrollinginterests9,055EquityPreferredstockCommonstock,$0.01parvalue,Authorized4.6billionshares,Issued1.9billionsharesatMarch30,2024and1.8billionsharesatSeptember30,202358,02857,383Retainedearnings46,64946,093Accumul

72、atedothercomprehensiveloss(3,509)(3,292)Treasurystock,atcost,27millionsharesatMarch30,2024and19millionsharesatSeptember30,2023(1,916)(907)TotalDisneyShareholdersequity99,25299,277Noncontrollinginterests4,5114,680Totalequity103,763103,957Totalliabilitiesandequity$195,110$205,57914THEWALTDISNEYCOMPANY

73、CONDENSEDCONSOLIDATEDSTATEMENTSOFCASHFLOWS(unaudited;$inmillions)SixMonthsEndedMarch30,2024April1,2023OPERATINGACTIVITIESNetincome$2,367$2,849Depreciationandamortization2,4852,616Goodwillimpairment2,038Deferredincometaxes(211)(46)Equityintheincomeofinvestees(322)(364)Cashdistributionsreceivedfromequ

74、ityinvestees300363Netchangeinproducedandlicensedcontentcostsandadvances1,699(824)Equity-basedcompensation675570Other,net(6)(320)ChangesinoperatingassetsandliabilitiesReceivables(156)(413)Inventories26(107)Otherassets(185)(345)Accountspayableandotherliabilities(1,075)(2,133)Incometaxes(1,784)416Cashp

75、rovidedbyoperations5,8512,262INVESTINGACTIVITIESInvestmentsinparks,resortsandotherproperty(2,558)(2,430)Other,net5(111)Cashusedininvestingactivities(2,553)(2,541)FINANCINGACTIVITIESCommercialpaperborrowings,net42714Borrowings13370Reductionofborrowings(645)(1,000)Dividends(549)Repurchasesofcommonstoc

76、k(1,001)Contributionsfromnoncontrollinginterests178Acquisitionofredeemablenoncontrollinginterests(8,610)(900)Other,net(194)(188)Cashusedinfinancingactivities(10,824)(1,126)Impactofexchangeratesoncash,cashequivalentsandrestrictedcash17197Changeincash,cashequivalentsandrestrictedcash(7,509)(1,208)Cash

77、,cashequivalentsandrestrictedcash,beginningofperiod14,23511,661Cash,cashequivalentsandrestrictedcash,endofperiod$6,726$10,45315DTCPRODUCTDESCRIPTIONSANDKEYDEFINITIONSProductofferingsIntheU.S.,Disney+,ESPN+andHuluSVODOnlyareeachofferedasastandaloneserviceortogetheraspartofvariousmulti-productoffering

78、s.HuluLiveTV+SVODincludesDisney+andESPN+.Disney+isavailableinmorethan150countriesandterritoriesoutsidetheU.S.andCanada.InIndiaandcertainotherSoutheastAsiancountries,theserviceisbrandedDisney+Hotstar.IncertainLatinAmericancountries,weofferDisney+aswellasStar+,ageneralentertainmentSVODservice,whichisa

79、vailableonastandalonebasisortogetherwithDisney+(Combo+).Dependingonthemarket,ourservicescanbepurchasedonourwebsitesorthroughthird-partyplatforms/appsorareavailableviawholesalearrangements.PaidsubscribersPaidsubscribersreflectsubscribersforwhichwerecognizedsubscriptionrevenue.Subscribersceasetobeapai

80、dsubscriberasoftheireffectivecancellationdateorasaresultofafailedpaymentmethod.Subscriberstomulti-productofferingsintheU.S.arecountedasapaidsubscriberforeachserviceincludedinthemulti-productofferingandsubscriberstoHuluLiveTV+SVODarecountedasonepaidsubscriberforeachoftheHuluLiveTV+SVOD,Disney+andESPN

81、+services.InLatinAmerica,ifasubscriberhaseitherthestandaloneDisney+orStar+serviceorsubscribestoCombo+,thesubscriberiscountedasoneDisney+paidsubscriber.Subscribersincludethosewhoreceiveanentitlementtoaservicethroughwholesalearrangements,includingthoseforwhichtheserviceisavailabletoeachsubscriberofane

82、xistingcontentdistributiontier.WhenweaggregatethetotalnumberofpaidsubscribersacrossourDTCstreamingservices,werefertothemaspaidsubscriptions.InternationalDisney+(excludingDisney+Hotstar)InternationalDisney+(excludingDisney+Hotstar)includestheDisney+serviceoutsidetheU.S.andCanadaandtheStar+serviceinLa

83、tinAmerica.AverageMonthlyRevenuePerPaidSubscriberHuluandESPN+averagemonthlyrevenueperpaidsubscriberiscalculatedbasedontheaverageofthemonthlyaveragepaidsubscribersforeachmonthintheperiod.Themonthlyaveragepaidsubscribersiscalculatedasthesumofthebeginningofthemonthandendofthemonthpaidsubscribercount,di

84、videdbytwo.Disney+averagemonthlyrevenueperpaidsubscriberiscalculatedusingadailyaverageofpaidsubscribersfortheperiod.Revenueincludessubscriptionfees,advertising(excludingrevenueearnedfromsellingadvertisingspotstootherCompanybusinesses)andpremiumandfeatureadd-onrevenuebutexcludesPay-Per-Viewrevenue.Ad

85、vertisingrevenuegeneratedbycontentononeDTCstreamingservicethatisaccessedthroughanotherDTCstreamingservicebysubscriberstobothstreamingservicesisallocatedbetweenbothstreamingservices.Theaveragerevenueperpaidsubscriberisnetofdiscountsonofferingsthatcarrymorethanoneservice.Revenueisallocatedtoeachservic

86、ebasedontherelativeretailorwholesalepriceofeachserviceonastandalonebasis.HuluLiveTV+SVODrevenueisallocatedtotheSVODservicesbasedonthewholesalepriceoftheHuluSVODOnly,Disney+andESPN+multi-productoffering.Ingeneral,wholesalearrangementshavealoweraveragemonthlyrevenueperpaidsubscriberthansubscribersthat

87、weacquiredirectlyorthroughthird-partyplatforms.16NON-GAAPFINANCIALMEASURESThisearningsreleasepresentsdilutedEPSexcludingcertainitems(alsoreferredtoasadjustedEPS),totalsegmentoperatingincome,freecashflow,andDTCstreamingbusinessesoperatingincome(loss),allofwhichareimportantfinancialmeasuresfortheCompa

88、ny,butarenotfinancialmeasuresdefinedbyGAAP.ThesemeasuresshouldbereviewedinconjunctionwiththemostcomparableGAAPfinancialmeasuresandarenotpresentedasalternativemeasuresofdilutedEPS,incomebeforeincometaxes,cashprovidedbyoperations,orEntertainmentandSportssegmentoperatingincome(loss)asdeterminedinaccord

89、ancewithGAAP.DilutedEPSexcludingcertainitems,totalsegmentoperatingincome,freecashflow,andDTCstreamingbusinessesoperatingincome(loss)aswehavecalculatedthemmaynotbecomparabletosimilarlytitledmeasuresreportedbyothercompanies.OurdefinitionsandcalculationsofdilutedEPSexcludingcertainitems,totalsegmentope

90、ratingincome,freecashflow,andDTCstreamingbusinessesoperatingincome(loss),aswellasquantitativereconciliationsofeachofthesehistoricalmeasuresandtheforward-lookingmeasureoffreecashflowtothemostdirectlycomparableGAAPfinancialmeasureareprovidedbelow.TheCompanyisnotprovidingtheforward-lookingmeasurefordil

91、utedEPS,whichisthemostdirectlycomparableGAAPmeasuretodilutedEPSexcludingcertainitems,oraquantitativereconciliationofforward-lookingdilutedEPSexcludingcertainitemstothatmostdirectlycomparableGAAPmeasure.TheCompanyisunabletopredictorestimatewithreasonablecertaintytheultimateoutcomeofcertainsignificant

92、itemsrequiredforsuchGAAPmeasurewithoutunreasonableeffort.InformationaboutotheradjustingitemsthatiscurrentlynotavailabletotheCompanycouldhaveapotentiallyunpredictableandsignificantimpactonfutureGAAPfinancialresults.DilutedEPSexcludingcertainitemsTheCompanyusesdilutedEPSexcluding(1)certainitemsaffecti

93、ngcomparabilityofresultsfromperiodtoperiodand(2)amortizationofTFCFandHuluintangibleassets,includingpurchaseaccountingstep-upadjustmentsforreleasedcontent,tofacilitatetheevaluationoftheperformanceoftheCompanysoperationsexclusiveoftheseitems,andtheseadjustmentsreflecthowseniormanagementisevaluatingseg

94、mentperformance.TheCompanybelievesthatprovidingdilutedEPSexclusiveofcertainitemsimpactingcomparabilityisusefultoinvestors,particularlywheretheimpactoftheexcludeditemsissignificantinrelationtoreportedearningsandbecausethemeasureallowsforcomparabilitybetweenperiodsoftheoperatingperformanceoftheCompany

95、sbusinessandallowsinvestorstoevaluatetheimpactoftheseitemsseparately.TheCompanyfurtherbelievesthatprovidingdilutedEPSexclusiveofamortizationofTFCFandHuluintangibleassetsassociatedwiththeacquisitionin2019isusefultoinvestorsbecausetheTFCFandHuluacquisitionwasconsiderablylargerthantheCompanyshistoricac

96、quisitionswithasignificantlygreateracquisitionaccountingimpact.17ThefollowingtablereconcilesreporteddilutedEPStodilutedEPSexcludingcertainitemsforthesecondquarter:($inmillionsexceptEPS)Pre-TaxIncome/LossTaxBenefit/Expense(1)After-TaxIncome/Loss(2)DilutedEPS(3)Changevs.prior-yearperiodQuarterEndedMar

97、ch30,2024Asreported$657$(441)$216$(0.01)n/mExclude:Restructuringandimpairmentcharges(4)2,052(121)1,9311.06AmortizationofTFCFandHuluintangibleassetsandfairvaluestep-uponfilmandtelevisioncosts(5)434(101)3330.17Excludingcertainitems$3,143$(663)$2,480$1.21 30%QuarterEndedApril1,2023Asreported$2,123$(635

98、)$1,488$0.69Exclude:AmortizationofTFCFandHuluintangibleassetsandfairvaluestep-uponfilmandtelevisioncosts(5)558(130)4280.23Restructuringandimpairmentcharges(4)152(35)1170.06Otherincome,net(6)(149)35(114)(0.06)Excludingcertainitems$2,684$(765)$1,919$0.93(1)Taxbenefit/expenseisdeterminedusingthetaxrate

99、applicabletotheindividualitem.(2)Beforenoncontrollinginterestshare.(3)Netofnoncontrollinginterestshare,whereapplicable.Totalmaynotequalthesumofthecolumnduetorounding.(4)Chargesinthecurrentquarterincludedimpairmentsofgoodwill($2,038million).Chargesintheprior-yearquarterwereprimarilyforseverance.(5)Fo

100、rthecurrentquarter,intangibleassetamortizationwas$362million,step-upamortizationwas$69millionandamortizationofintangibleassetsrelatedtoTFCFequityinvesteeswas$3million.Fortheprior-yearquarter,intangibleassetamortizationwas$408million,step-upamortizationwas$147millionandamortizationofintangibleassetsr

101、elatedtoTFCFequityinvesteeswas$3million.(6)DraftKingsgain($149million).18ThefollowingtablereconcilesreporteddilutedEPSfromcontinuingoperationstodilutedEPSexcludingcertainitemsforthesix-monthperiod:($inmillionsexceptEPS)Pre-TaxIncome/LossTaxBenefit/Expense(1)After-TaxIncome/Loss(2)DilutedEPS(3)Change

102、vs.prioryearSixMonthsEndedMarch30,2024:Asreported$3,528$(1,161)$2,367$1.03 (26)%Exclude:Restructuringandimpairmentcharges(4)2,052(121)1,9311.06AmortizationofTFCFandHuluintangibleassetsandfairvaluestep-uponfilmandtelevisioncosts(5)885(206)6790.36 Excludingcertainitems$6,465$(1,488)$4,977$2.44 28%SixM

103、onthsEndedApril1,2023:Asreported$3,896$(1,047)$2,849$1.39Exclude:AmortizationofTFCFandHuluintangibleassetsandfairvaluestep-uponfilmandtelevisioncosts(5)1,137(264)8730.47Restructuringandimpairmentcharges(4)221(43)1780.10Otherincome,net(6)(107)18(89)(0.05)Excludingcertainitems$5,147$(1,336)$3,811$1.91

104、(1)Taxbenefit/expenseisdeterminedusingthetaxrateapplicabletotheindividualitem.(2)Beforenoncontrollinginterestshare.(3)Netofnoncontrollinginterestshare,whereapplicable.Totalmaynotequalthesumofthecolumnduetorounding.(4)Chargesforthecurrentperiodincludedimpairmentsofgoodwill($2,038million).Chargesforth

105、eprior-yearperiodincludedseverance($125million)andexitingourbusinessesinRussia($69million).(5)Forthecurrentperiod,intangibleassetamortizationwas$742million,step-upamortizationwas$137millionandamortizationofintangibleassetsrelatedtoTFCFequityinvesteeswas$6million.Fortheprior-yearperiod,intangibleasse

106、tamortizationwas$825million,step-upamortizationwas$306millionandamortizationofintangibleassetsrelatedtoTFCFequityinvesteeswas$6million.(6)Fortheprior-yearperiod,otherincome,netwasduetotheDraftKingsgain($79million)andagainonthesaleofabusiness($28million).19TotalsegmentoperatingincomeTheCompanyevaluat

107、estheperformanceofitsoperatingsegmentsbasedonsegmentoperatingincome,andmanagementusestotalsegmentoperatingincomeasameasureoftheperformanceofoperatingbusinessesseparatefromnon-operatingfactors.TheCompanybelievesthatinformationabouttotalsegmentoperatingincomeassistsinvestorsbyallowingthemtoevaluatecha

108、ngesintheoperatingresultsoftheCompanysportfolioofbusinessesseparatefromnon-operationalfactorsthataffectnetincome,thusprovidingseparateinsightintobothoperationsandotherfactorsthataffectreportedresults.Thefollowingtablereconcilesincomebeforeincometaxestototalsegmentoperatingincome:QuarterEndedSixMonth

109、sEnded($inmillions)March30,2024April1,2023ChangeMarch30,2024April1,2023ChangeIncomebeforeincometaxes$657$2,123(69)%$3,528$3,896(9)%Add(subtract):Corporateandunallocatedsharedexpenses391279(40)%699559(25)%Restructuringandimpairmentcharges2,052152(100)%2,052221(100)%Otherincome,net(149)(100)%(107)(100

110、)%Interestexpense,net311322 3%557622 10%AmortizationofTFCFandHuluintangibleassetsandfairvaluestep-uponfilmandtelevisioncosts434558 22%8851,137 22%Totalsegmentoperatingincome$3,845$3,285 17%$7,721$6,328 22%FreecashflowTheCompanyusesfreecashflow(cashprovidedbyoperationslessinvestmentsinparks,resortsan

111、dotherproperty),amongothermeasures,toevaluatetheabilityofitsoperationstogeneratecashthatisavailableforpurposesotherthancapitalexpenditures.Managementbelievesthatinformationaboutfreecashflowprovidesinvestorswithanimportantperspectiveonthecashavailabletoservicedebtobligations,makestrategicacquisitions

112、andinvestmentsandpaydividendsorrepurchaseshares.ThefollowingtablepresentsasummaryoftheCompanysconsolidatedcashflows:QuarterEndedSixMonthsEnded($inmillions)March30,2024April1,2023March30,2024April1,2023Cashprovidedbyoperations$3,666$3,236$5,851$2,262Cashusedininvestingactivities(1,307)(1,249)(2,553)(

113、2,541)Cashusedinfinancingactivities(2,818)(83)(10,824)(1,126)Impactofexchangeratesoncash,cashequivalentsandrestrictedcash(62)3317197Changeincash,cashequivalentsandrestrictedcash(521)1,937(7,509)(1,208)Cash,cashequivalentsandrestrictedcash,beginningofperiod7,2478,51614,23511,661Cash,cashequivalentsan

114、drestrictedcash,endofperiod$6,726$10,453$6,726$10,45320ThefollowingtablereconcilestheCompanysconsolidatedcashprovidedbyoperationstofreecashflow:QuarterEndedSixMonthsEnded($inmillions)March30,2024April1,2023ChangeMarch30,2024April1,2023ChangeCashprovidedbyoperations$3,666$3,236$430$5,851$2,262$3,589

115、Investmentsinparks,resortsandotherproperty(1,259)(1,249)(10)(2,558)(2,430)(128)Freecashflow$2,407$1,987$420$3,293$(168)$3,461ThefollowingtablereconcilestheCompanysconsolidatedestimatedforward-lookingcashprovidedbyoperationstoestimatedforward-lookingfreecashflowforfullyearfiscal2024:(estimated$inbill

116、ions)Fullyearfiscal2024Cashprovidedbyoperations$14 Investmentsinparks,resortsandotherproperty(6)Freecashflow$8 DTCStreamingBusinessesTheCompanyusescombinedDTCstreamingbusinessesoperatingincome(loss)becauseitbelievesthatthismeasureallowsinvestorstoevaluatetheperformanceofitsportfolioofstreamingbusine

117、ssesandtrackprogressagainsttheCompanysgoalofreachingprofitabilityinthefourthquarteroffiscal2024atitscombinedstreamingbusinesses.ThefollowingtablesreconcileEntertainmentandSportssegmentoperatingincome(loss)totheDTCstreamingbusinessesoperatingloss:QuarterEndedMarch30,2024April1,2023($inmillions)Entert

118、ainmentSportsDTCStreamingBusinessesEntertainmentSportsDTCStreamingBusinessesLinearNetworks$752$843$959$866DTCstreamingbusinesses(Direct-to-ConsumerandESPN+businesses)47(65)$(18)(587)(72)$(659)ContentSales/LicensingandOther(18)83Segmentoperatingincome(loss)$781$778$455$794SixMonthsEndedMarch30,2024Ap

119、ril1,2023EntertainmentSportsDTCStreamingBusinessesEntertainmentSportsDTCStreamingBusinessesLinearNetworks$1,988$818$2,289$771DTCstreamingbusinesses(Direct-to-ConsumerandESPN+businesses)(91)(143)$(234)(1,571)(141)$(1,712)ContentSales/LicensingandOther(242)82Segmentoperatingincome$1,655$675$800$63021F

120、ORWARD-LOOKINGSTATEMENTSCertainstatementsandinformationinthisearningsreleasemayconstitute“forward-lookingstatements”withinthemeaningofthePrivateSecuritiesLitigationReformActof1995,includingstatementsregardingfinancialperformance,earningsexpectations,expecteddriversandguidance,includingfutureoperatin

121、gincome,adjustedEPS,freecashflow,capitalallocation,includingsharerepurchases,plansfordirect-to-consumerprofitabilityandtiming;valueof,andopportunitiesforgrowthbasedon,ourintellectualproperty,contentofferings,businessesandassets;businessplans;plans,expectations,strategicprioritiesandinitiatives,consu

122、mersentiment,behaviorordemandanddriversofgrowthandprofitabilityandotherstatementsthatarenothistoricalinnature.Anyinformationthatisnothistoricalinnatureincludedinthisearningsreleaseissubjecttochange.Thesestatementsaremadeonthebasisofmanagementsviewsandassumptionsregardingfutureeventsandbusinessperfor

123、manceasofthetimethestatementsaremade.Managementdoesnotundertakeanyobligationtoupdatethesestatements.Actualresultsmaydiffermateriallyfromthoseexpressedorimplied.SuchdifferencesmayresultfromactionstakenbytheCompany,includingrestructuringorstrategicinitiatives(includingcapitalinvestments,assetacquisiti

124、onsordispositions,neworexpandedbusinesslinesorcessationofcertainoperations),ourexecutionofourbusinessplans(includingthecontentwecreateandIPweinvestin,ourpricingdecisions,ourcoststructureandourmanagementandotherpersonneldecisions),ourabilitytoquicklyexecuteoncostrationalizationwhilepreservingrevenue,

125、thediscoveryofadditionalinformationorotherbusinessdecisions,aswellasfromdevelopmentsbeyondtheCompanyscontrol,including:theoccurrenceofsubsequentevents;deteriorationindomesticandglobaleconomicconditionsorfailureofconditionstoimproveasanticipated;deteriorationinorpressuresfromcompetitiveconditions,inc

126、ludingcompetitiontocreateoracquirecontent,competitionfortalentandcompetitionforadvertisingrevenue;consumerpreferencesandacceptanceofourcontent,offerings,pricingmodelandpriceincreases,andcorrespondingsubscriberadditionsandchurn,andthemarketforadvertisingsalesonourDTCservicesandlinearnetworks;healthco

127、ncernsandtheirimpactonourbusinessesandproductions;international,politicalormilitarydevelopments;regulatoryandlegaldevelopments;technologicaldevelopments;labormarketsandactivities,includingworkstoppages;adverseweatherconditionsornaturaldisasters;andavailabilityofcontent.Suchdevelopmentsmayfurtheraffe

128、ctentertainment,travelandleisurebusinessesgenerallyandmay,amongotherthings,affect(orfurtheraffect,asapplicable):ouroperations,businessplansorprofitability,includingdirect-to-consumerprofitability;demandforourproductsandservices;theperformanceoftheCompanyscontent;ourabilitytocreateorobtaindesirableco

129、ntentatorunderthevalueweassignthecontent;theadvertisingmarketforprogramming;incometaxexpense;andperformanceofsomeorallCompanybusinesseseitherdirectlyorthroughtheirimpactonthosewhodistributeourproducts.AdditionalfactorsaresetforthintheCompanysAnnualReportonForm10-KfortheyearendedSeptember30,2023,incl

130、udingunderthecaptions“RiskFactors,”“ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations,”and“Business,”quarterlyreportsonForm10-Q,includingunderthecaptions“RiskFactors”and“ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations,”andsubsequentfilingswiththeSe

131、curitiesandExchangeCommission.Theterms“Company,”“we,”and“our”areusedinthisreporttorefercollectivelytotheparentcompanyandthesubsidiariesthroughwhichourvariousbusinessesareactuallyconducted.22CONFERENCECALLINFORMATIONInconjunctionwiththisrelease,TheWaltDisneyCompanywillhostaconferencecalltoday,May7,2024,at8:30AMEDT/5:30AMPDTviaaliveWebcast.ToaccesstheW