Walt Disney DIS · USD

Equity in the income of investees is included in segment operating income as follows:202520242023Entertainment$439 $529 $685 Sports67 58 55 Experiences— — (2) Equity in the income of investees included in segment operating income506 587 738 Equity in the loss of India joint venture(202) — — A+E Gain(a)— — 56 Amortization of TFCF intangible assets related to equity investees(9) (12) (12) Equity in the income of investees$295 $575 $782

RevenuesThe following table presents our revenues by segment and major source: 2025EntertainmentSportsExperiencesEliminationsTotalSubscription and affiliate fees$27,120$11,944$—$(1,285)$37,779Advertising6,6794,444——11,123Theme park admissions——11,707—11,707Retail and wholesale sales of merchandise, food and beverage——9,642—9,642Resort and vacations——9,210—9,210Merchandise licensing643—3,236—3,879TV/VOD and home entertainment distribution3,507267——3,774Theatrical distribution licensing2,592———2,592Other1,9251,0172,361(584)4,719$42,466$17,672$36,156$(1,869)$94,4252024EntertainmentSportsExperiencesEliminationsTotalSubscription and affiliate fees$25,668$12,068$—$(1,183)$36,553Advertising7,5064,388——11,894Theme park admissions——11,171—11,171Retail and wholesale sales of merchandise, food and beverage——9,204—9,204Resort and vacations——8,375—8,375Merchandise licensing642—3,142—3,784TV/VOD and home entertainment distribution3,051305——3,356Theatrical distribution licensing2,266———2,266Other2,0538582,259(412)4,758$41,186$17,619$34,151$(1,595)$91,3612023EntertainmentSportsExperiencesEliminationsTotalSubscription and affiliate fees$23,789$12,107$—$(1,084)$34,812Advertising7,5943,9204—11,518Theme park admissions——10,423—10,423Retail and wholesale sales of merchandise, food and beverage——8,921—8,921Resort and vacations——7,949—7,949Merchandise licensing619—2,509—3,128TV/VOD and home entertainment distribution3,576347——3,923Theatrical distribution licensing3,174———3,174Other1,8837372,743(313)5,050$40,635$17,111$32,549$(1,397)$88,898The following table presents our revenues by segment and primary geographical markets:2025EntertainmentSportsExperiencesEliminationsTotalAmericas$33,815$17,266$27,218$(1,869)$76,430Europe6,3172924,481—11,090Asia Pacific2,3341144,457—6,905$42,466$17,672$36,156$(1,869)$94,4252024EntertainmentSportsExperiencesEliminationsTotalAmericas$31,722$16,432$25,603$(1,595)$72,162Europe5,8053964,078—10,279Asia Pacific3,6597914,470—8,920$41,186$17,619$34,151$(1,595)$91,3612023EntertainmentSportsExperiencesEliminationsTotalAmericas$31,414$16,000$25,188$(1,397)$71,205Europe5,4753703,688—9,533Asia Pacific3,7467413,673—8,160$40,635$17,111$32,549$(1,397)$88,898Revenues recognized in the current and prior year 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 fiscal 2025, $1.

Commitments and ContingenciesCommitmentsThe Company has various contractual commitments for rights to sports, films and other programming, totaling approximately $91.8 billion, including approximately $2.4 billion for available programming as of September 27, 2025. The Company also has contractual commitments for the construction of cruise ships, creative talent and employment agreements and unrecognized tax benefits. Creative talent and employment agreements include obligations to actors, producers, sports, television and radio personalities and executives. Contractual commitments for sports programming rights, other programming rights and other commitments including cruise ships and creative talent are as follows:Fiscal Year:Sports Programming(1)OtherProgrammingOtherTotal2026$9,894 $2,951 $4,162 $17,007 20279,797 1,645 2,240 13,682 20289,540 1,243 2,011 12,794 20299,101 792 1,766 11,659 20309,134 244 1,023 10,401 Thereafter36,610 816 1,119 38,545 $84,076 $7,691 $12,321 $104,088 (1)Primarily relates to rights for NBA, college football (including bowl games and the College Football Playoff) and basketball, NFL, tennis, soccer, WWE, NHL, WNBA and golf. Certain sports programming rights have payments that are variable based primarily on revenues and are not included in the table above.Legal MattersOn 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.

Primarily relates to rights for NBA, college football (including bowl games and the College Football Playoff) and basketball, NFL, tennis, soccer, WWE, NHL, WNBA and golf. Certain sports programming rights have payments that are variable based primarily on revenues and are not included in the table above.

Income TaxesIncome Before Income Taxes by Domestic and Foreign SubsidiariesIncome Before Income Taxes202520242023Domestic subsidiaries (including U.S. exports)$9,535 $5,754 $3,086 Foreign subsidiaries2,468 1,815 1,683 $12,003 $7,569 $4,769 Provision for Income Taxes: Current and DeferredIncome Tax Expense (Benefit)Current202520242023Federal$(130) $1,393 $1,475 State413 237 402 Foreign, including foreign withholding taxes906 973 867 1,189 2,603 2,744 DeferredFederal(2,171) (764) (1,180) State(527) 54 4 Foreign81 (97) (189) (2,617) (807) (1,365) Income tax expense (benefit)$(1,428) $1,796 $1,379 Deferred Tax Assets and LiabilitiesComponents of Deferred Tax (Assets) and LiabilitiesSeptember 27, 2025September 28, 2024Deferred tax assetsNet operating losses and tax credit carryforwards(1)$(3,629) $(3,444) Accrued liabilities(1,011) (1,199) Licensing revenues(807) (130) Lease liabilities(786) (862) Other(413) (655) Total deferred tax assets(6,646) (6,290) Deferred tax liabilitiesDepreciable, amortizable and other property3,998 6,584 Investment in U.S. entities916 1,102 Investment in foreign entities879 465 Right-of-use lease assets628 692 Other89 78 Total deferred tax liabilities6,510 8,921 Net deferred tax (asset) liability before valuation allowance(2)(136) 2,631 Valuation allowance2,931 2,991 Net deferred tax liability$2,795 $5,622 (1)Further details on our net operating losses and tax credit carryforwards are as follows: September 27, 2025International Theme Park net operating losses$(1,515) U.S. foreign tax credits(945) State net operating losses and tax credit carryforwards(701) Other(468) Total net operating losses and tax credit carryforwards(a)$(3,629) (a) Approximately $2.3 billion of these carryforwards do not expire and are primarily related to loss carryforwards at Disneyland Paris. Approximately $1.2 billion expire between fiscal 2026 and fiscal 2035 and are primarily related to U.S. foreign tax credits.(2)In fiscal 2025, the Company completed the acquisition of NBCU’s interest in Hulu. At the close of the transaction, Hulu’s U.S. income tax classification changed, and the Company recognized a non-cash tax benefit of approximately $3.3 billion.Valuation AllowanceThe following table details the change in valuation allowance for fiscal 2025, 2024 and 2023 (in billions):Balance at Beginning of PeriodIncreases (Decreases) to Tax ExpenseOther ChangesBalance at End of PeriodYear ended September 27, 2025$3.0 $(0.1) $— $2.9 Year ended September 28, 20243.

LeasesThe Company’s operating leases primarily consist of real estate and equipment, including office space for general and administrative purposes, production facilities, land, cruise terminals, retail outlets and distribution centers for consumer products. The Company also has finance leases, primarily for broadcast equipment and land.Some of our leases include renewal and/or termination options. If it is reasonably certain that a renewal or termination option will be exercised, the exercise of the option is considered in calculating the term of the lease. As of September 27, 2025 and September 28, 2024, our operating leases had a weighted-average remaining lease term of approximately 11 years and 10 years, respectively, and our finance leases had a weighted-average remaining lease term of approximately 39 years and 35 years, respectively. As of September 27, 2025 and September 28, 2024, the weighted-average incremental borrowing rate for our operating leases was 4.1% and 4.0%, respectively, and for our finance leases was 6.8% and 6.7%, respectively. At both September 27, 2025 and September 28, 2024, total estimated future lease payments for non-cancelable lease agreements that have not commenced were not material.The Company’s operating and finance right-of-use assets and lease liabilities are as follows:September 27, 2025September 28, 2024Right-of-use assets(1)Operating leases$3,170 $3,376 Finance leases221 246 Total right-of-use assets$3,391 $3,622 Short-term lease liabilities(2)Operating leases$525 $744 Finance leases21 30 546 774 Long-term lease liabilities(3)Operating leases2,710 2,768 Finance leases141 160 2,851 2,928 Total lease liabilities$3,397 $3,702 (1)Included in “Other assets” in the Consolidated Balance Sheet.(2)Included in “Accounts payable and other accrued liabilities” in the Consolidated Balance Sheet.(3)Included in “Other long-term liabilities” in the Consolidated Balance Sheet.The components of lease costs are as follows:202520242023Finance lease costAmortization of right-of-use assets$23 $36 $39 Interest on lease liabilities25 13 15 Operating lease cost 773 926 820 Variable fees and other(1)527 555 444 Total lease cost$1,348 $1,530 $1,318 (1)Includes variable lease payments related to our operating and finance leases and costs of leases with initial terms of less than one year.

Acquisitions and DispositionsNFL media assetsIn October 2025, ESPN and NFL Enterprises LLC reached a binding agreement for ESPN to acquire the NFL Network and certain other media assets owned and controlled by NFL Enterprises LLC, including NFL’s RedZone Channel pay TV distribution and NFL Fantasy, in exchange for a 10% noncontrolling interest of ESPN (the NFL Transaction). The NFL Transaction is expected to close in calendar year 2026, subject to certain regulatory approvals, including from federal and foreign antitrust authorities, and other customary closing conditions. Upon consummation of the NFL Transaction, the Company would have an effective 72% interest in ESPN, with Hearst Corporation (Hearst) and NFL Enterprises LLC holding 18% and 10%, respectively.FuboTV Inc.On October 29, 2025, the Company and FuboTV Inc. (Fubo), a publicly traded vMVPD, combined certain of Hulu Live TV 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). The Company acquired Fubo to enhance and expand our vMVPD offering and provide consumers with more high-quality offerings, choice and increased flexibility.The Company contributed certain Hulu Live TV assets to a newly formed entity, Fubo Operations LLC (Newco), that is jointly owned by the Company and Fubo in exchange for units in Newco (Newco Units) representing a 70% equity interest in Newco on a fully diluted basis, and Fubo issued the Company shares of Fubo Class B Common Stock, a newly created vote-only class of Fubo common stock representing a 70% voting interest in Fubo on a fully diluted basis. As a result, the Company has a 70% economic interest in the combined operations, a 70% voting interest in Fubo and the right to appoint a majority of Fubo’s Board of Directors. The remaining 30% equity interest in Fubo is retained by Fubo public shareholders.Based on the closing price of Fubo common stock of $3.69 on October 29, 2025, the estimated fair value of Fubo is $1.3 billion, which will be allocated to tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values with the excess recorded as goodwill. The Company is in the process of finalizing the valuation of the assets acquired, liabilities assumed, and noncontrolling interests.

Risk Management and StrategyWe have implemented processes for assessing, identifying and managing material risks from cybersecurity threats as part of our overall risk management program. Our cybersecurity program is informed by the National Institute of Standards and Technology Cybersecurity Framework and other applicable globally recognized standards. We use a layered defense model, incorporating a wide range of technologies and practices in an effort to prevent, detect and mitigate threats. These measures include intrusion detection and prevention systems, multi-factor authentication, account management and access controls, encryption and endpoint protection tools. We also implement threat detection and response solutions. To address emerging threats, we employ automated monitoring, vulnerability scans and patch management processes, network monitoring and defenses, antivirus/antimalware protections and network segmentations. Regular assessments, such as penetration tests, security audits and table-top exercises, are conducted to identify vulnerabilities and promote incident response and risk mitigation. We also provide privacy and information security trainings for our employees on a recurring basis. From time to time, we engage auditors, assessors, consultants and other third parties to assist with assessing, identifying and managing cybersecurity risks, including assisting us to conduct some of the foregoing assessments. Our cybersecurity risk management processes also are informed by intelligence received from law enforcement and other governmental agencies, private sector intelligence networks, recognized cybersecurity and intelligence firms and other third-party sources, and as appropriate we engage outside counsel to advise on regulatory compliance and other cybersecurity risk management efforts.In addition, we have processes designed to oversee and identify cybersecurity risks associated with our use of third-party service providers. Where appropriate based on the data and intellectual property to which these providers are reasonably expected to have access, we conduct security assessments and due diligence reviews of third-party systems for compliance with our security standards, and we include data protection language in our agreements with these third parties.