NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in millions, except where noted and per share amounts)
1Description of the Business and Segment Information
The Walt Disney Company, together with the subsidiaries through which businesses are conducted (the Company), is a diversified worldwide entertainment company with operations in three segments: Entertainment, Sports and Experiences.
The terms “Company”, “we”, “our” and “us” are used in this report to refer collectively to the parent company and the subsidiaries through which businesses are conducted.
DESCRIPTION OF THE BUSINESS
Entertainment
The Entertainment segment generally encompasses the Company’s non-sports focused global film and television content production and distribution activities.
The lines of business within Entertainment along with their significant business activities include the following:
•Linear Networks
◦Domestic: ABC Television Network (ABC Network); Disney, Freeform, FX and National Geographic (owned 73% by the Company) branded television channels; and eight owned ABC television stations
◦International: Disney, FX and National Geographic (owned 73% by the Company) branded television channels
◦A 50% equity investment in A+E Global Media (formerly A+E Television Networks) (A+E), which develops and distributes content globally
•Direct-to-Consumer
◦Disney+: a global direct-to-consumer (DTC) service that primarily offers general entertainment and family programming. Subscribers to both Disney+ and one of the ESPN DTC plans (see Sports segment discussion) can also access certain sports content through Disney+.
◦Hulu: a U.S. DTC service that offers general entertainment programming and a virtual multi-channel video programming distributor (vMPVD) service that includes live linear streams of various cable and broadcast networks (Hulu Live TV service). Subscribers to both Hulu and one of the ESPN DTC plans can also access certain sports content through Hulu.
•Content Sales/Licensing
◦Theatrical distribution
◦Sale/licensing of film and episodic content to television and video-on-demand (TV/VOD) services
◦Home entertainment distribution: electronic home video licenses, video-on-demand rentals and licensing of physical (DVD/Blu-ray discs) distribution rights
◦Intersegment allocation of revenues from the Experiences segment, which is meant to reflect royalties on consumer products merchandise licensing revenues generated on intellectual property (IP) created by the Entertainment segment
◦Staging and licensing of live entertainment events on Broadway and around the world (Stage Plays)
◦Music distribution
◦Post-production services by Industrial Light & Magic and Skywalker Sound
Entertainment also includes the following activities that are reported with Content Sales/Licensing:
•National Geographic magazine and online business (owned 73% by the Company)
•A 30% ownership interest in Tata Play Limited, which operates a direct-to-home satellite distribution platform in India
The revenues of Entertainment are as follows:
•Subscription fees - Fees charged to customers/subscribers for our DTC streaming services, including fees charged to multi-channel video programming distributors (i.e. cable, satellite and telecommunications providers and vMVPDs) (MVPDs) and other distributors
•Advertising - Sales of advertising time/space
•Affiliate fees - Fees charged to MVPDs for the right to deliver our programming to their customers. Linear Networks also generates revenues from fees charged to television stations affiliated with ABC Network.
•Theatrical distribution - Rentals from licensing our films to theaters
•TV/VOD and home entertainment distribution
◦Licensing fees for the right to use our film and episodic content
◦Electronic sales and rentals of film and episodic content through distributors
◦Fees from the licensing of physical distribution rights
•Other revenue - Revenues from licensing our music, ticket sales from stage play performances, fees from licensing our IP for use in stage plays, sales of post-production services and the allocation of consumer products merchandise licensing revenues
The expenses of Entertainment are as follows:
•Operating expenses, consisting of the following:
◦Programming and production costs, which include:
▪Amortization of capitalized production costs
▪Amortization of the costs of licensed programming rights
▪Subscriber-based fees for programming our Hulu Live TV service, including fees paid by Hulu to ESPN and the Entertainment linear networks business for the right to air their linear networks on Hulu Live TV
▪Production costs related to live programming (primarily news)
▪Participations and residual expenses
▪Fees paid to ESPN to program certain sports content on ABC Network and Disney+
◦Other operating expenses, which include technology support costs and distribution costs
•Selling, general and administrative costs, including marketing costs
•Depreciation and amortization
Sports
The Sports segment generally encompasses the Company’s sports-focused global television and DTC video streaming content production and distribution activities.
The lines of business within Sports include the following:
•ESPN (generally owned 80% by the Company) (See Note 4 for further information on potential future changes in ESPN ownership)
◦Domestic:
▪ESPN-branded television channels
▪ESPN DTC
▪ESPN on ABC (sports programmed on the ABC Network by ESPN)
◦International: ESPN-branded channels outside of the U.S.
The revenues of Sports are as follows:
•Affiliate and subscription fees
•Advertising
•Other revenue - Fees from the following activities: pay-per-view events on the ESPN DTC services, sub-licensing of sports rights, programming ESPN on ABC and licensing the ESPN brand
The expenses of Sports are as follows:
•Operating expenses, consisting of programming and production costs and other operating expenses. Programming and production costs include amortization of licensed sports rights and production costs related to live sports and other sports-related programming. Other operating expenses include technology support costs and distribution costs.
•Selling, general and administrative costs, including marketing costs
•Depreciation and amortization
Experiences
The lines of business within Experiences along with their significant business activities include the following:
•Parks & Experiences:
◦Domestic:
▪Theme parks and resorts:
•Walt Disney World Resort in Florida
•Disneyland Resort in California
▪Experiences
•Disney Cruise Line
•Disney Vacation Club, including Aulani, a Disney Resort & Spa in Hawaii
•National Geographic Expeditions (owned 73% by the Company) and Adventures by Disney
◦International:
▪Theme parks and resorts:
•Disneyland Paris
•Hong Kong Disneyland Resort (48% ownership interest and consolidated in our financial results)
•Shanghai Disney Resort (43% ownership interest and consolidated in our financial results)
•In addition, the Company licenses its IP to a third party that owns and operates Tokyo Disney Resort
•Consumer Products:
◦Licensing of our trade names, characters, visual, literary and other IP to various manufacturers, game developers, publishers and retailers throughout the world, for use on merchandise, published materials and games
◦Sale of branded merchandise through online, retail and wholesale businesses, and development and publishing of books, comic books and magazines (except National Geographic magazine, which is reported in Entertainment)
The revenues of Experiences are as follows:
•Theme park admissions - Sales of tickets for admission to our theme parks and for premium access to certain attractions
•Resorts and vacations - Sales of room nights at hotels, sales of cruise and other vacations and sales and rentals of vacation club properties
•Parks & Experiences merchandise, food and beverage - Sales of merchandise, food and beverages at our theme parks and resorts and cruise ships
•Merchandise licensing and retail:
◦Merchandise licensing - Royalties from licensing our IP for use on consumer goods
◦Retail - Sales of merchandise through internet shopping sites, at The Disney Store and to wholesalers
•Parks licensing and other - Revenues from sponsorships and co-branding opportunities, real estate rent and sales and royalties earned on Tokyo Disney Resort revenues
The expenses of Experiences are as follows:
•Operating expenses, consisting of operating labor, infrastructure costs, costs of goods sold and distribution costs and other operating expenses. Infrastructure costs include technology support costs, repairs and maintenance, utilities and fuel, property taxes, retail occupancy costs, insurance and transportation. Other operating expenses include costs for such items as supplies, commissions and entertainment offerings.
•Selling, general and administrative costs, including marketing costs
•Depreciation and amortization
India Joint Venture
On November 14, 2024, the Company and Reliance Industries Limited (RIL) formed a joint venture, JioStar India Private Limited, (the India joint venture) that combined the Company’s Star-branded and other general entertainment and sports television channels and Disney+ Hotstar direct-to-consumer service in India (Star India) with certain media and entertainment businesses controlled by RIL (the Star India Transaction). The Company owns 37% of the India joint venture and recognizes its share of the joint venture’s results in “Equity in the income of investees.” Star India results through November 14, 2024 were consolidated in the Company’s financial results and reported in the Entertainment and Sports segments. See Note 4 for additional information.
SEGMENT INFORMATION
Our operating segments report separate financial information, including segment revenues and operating income, which is evaluated regularly by the Chief Executive Officer, the Chief Operating Decision Maker (CODM), to allocate resources and to assess performance by monitoring results against those set out in our planning processes. We do not present a measure of total assets for our reportable segments as this information is not used by the CODM to allocate resources and assess performance.
Segment operating results reflect earnings before corporate and unallocated shared expenses, restructuring and impairment charges, net other income, net interest expense, income taxes and noncontrolling interests. Segment operating income generally includes equity in the income of investees, except for our India joint venture, and acquisition accounting amortization of TFCF Corporation (TFCF) and Hulu assets (i.e. intangible assets and the fair value step-up for film and episodic costs) recognized in
connection with the TFCF acquisition 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, segment operating income and significant segment expenses are as follows:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Revenues | | | | | |
Entertainment | | | | | |
Third parties | $ | 42,018 | | | $ | 40,775 | | | $ | 40,258 | |
Amounts eliminated in consolidation | 448 | | | 411 | | | 377 | |
| 42,466 | | | 41,186 | | | 40,635 | |
Sports | | | | | |
Third parties | 16,251 | | | 16,435 | | | 16,091 | |
Amounts eliminated in consolidation | 1,421 | | | 1,184 | | | 1,020 | |
| 17,672 | | | 17,619 | | | 17,111 | |
Experiences | 36,156 | | | 34,151 | | | 32,549 | |
Eliminations | (1,869) | | | (1,595) | | | (1,397) | |
Total revenues | $ | 94,425 | | | $ | 91,361 | | | $ | 88,898 | |
Segment operating income (loss) | | | | | |
Entertainment | $ | 4,674 | | | $ | 3,923 | | | $ | 1,444 | |
Sports | 2,882 | | | 2,406 | | | 2,465 | |
Experiences | 9,995 | | | 9,272 | | | 8,954 | |
Total segment operating income(1) | $ | 17,551 | | | $ | 15,601 | | | $ | 12,863 | |
(1)Equity in the income of investees is included in segment operating income as follows:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
Entertainment | $ | 439 | | | $ | 529 | | | $ | 685 | |
Sports | 67 | | | 58 | | | 55 | |
Experiences | — | | | — | | | (2) | |
| Equity in the income of investees included in segment operating income | 506 | | | 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 | |
(a) Restructuring and impairment charges in fiscal 2023 include the impact of a content license agreement termination with A+E, which generated a gain at A+E. The Company’s 50% interest of this gain was $56 million (A+E gain).
| | | | | | | | | | | | | | | | | |
| Supplemental information about significant segment expenses | 2025 | | 2024 | | 2023 |
| Entertainment | | | | | |
| Programming and production costs | $ | 22,273 | | | $ | 22,385 | | | $ | 23,912 | |
Other segment operating expenses(1) | 5,400 | | | 5,347 | | | 5,804 | |
| Selling, general, administrative and other | 9,733 | | | 9,326 | | | 9,404 | |
| Depreciation and amortization | 825 | | | 734 | | | 756 | |
| Total Entertainment costs and expenses | 38,231 | | | 37,792 | | | 39,876 | |
| Sports | | | | | |
| Programming and production costs | 12,492 | | | 12,983 | | | 12,373 | |
Other segment operating expenses(2) | 986 | | | 951 | | | 941 | |
| Selling, general, administrative and other | 1,331 | | | 1,298 | | | 1,314 | |
| Depreciation and amortization | 48 | | | 39 | | | 73 | |
| Total Sports costs and expenses | 14,857 | | | 15,271 | | | 14,701 | |
| Experiences | | | | | |
| Operating labor | 8,948 | | | 8,392 | | | 7,550 | |
| Infrastructure costs | 3,511 | | | 3,363 | | | 3,127 | |
| Costs of goods sold and distribution costs | 3,253 | | | 3,319 | | | 3,357 | |
Other segment operating expenses(3) | 3,512 | | | 3,282 | | | 3,095 | |
| Selling, general, administrative and other | 4,114 | | | 3,944 | | | 3,675 | |
| Depreciation and amortization | 2,823 | | | 2,579 | | | 2,789 | |
| Total Experiences costs and expenses | 26,161 | | | 24,879 | | | 23,593 | |
Eliminations(4) | (1,869) | | | (1,595) | | | (1,397) | |
| Corporate and unallocated shared expenses | 1,646 | | | 1,435 | | | 1,147 | |
TFCF and Hulu acquisition amortization(5) | 1,567 | | | 1,665 | | | 1,986 | |
| Total costs and expenses | $ | 80,593 | | | $ | 79,447 | | | $ | 79,906 | |
(1)Other operating expenses of Entertainment include technology support costs, distribution costs and costs of goods sold.
(2)Other operating expenses of Sports include technology support costs and distribution costs.
(3)Other operating expenses of Experiences include costs for supplies, commissions and entertainment offerings.
(4)Reflects fees paid by (a) Hulu to ESPN and the Entertainment linear networks business for the right to air their networks on Hulu Live TV and (b) ABC Network and Disney+ to ESPN to program certain sports content on ABC Network and Disney+. The offset is included in Entertainment programming and production costs.
(5)Excludes amortization of TFCF intangible assets related to equity investees.
A reconciliation of segment operating income to income before income taxes is as follows:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Segment operating income | $ | 17,551 | | | $ | 15,601 | | | $ | 12,863 | |
| Corporate and unallocated shared expenses | (1,646) | | | (1,435) | | | (1,147) | |
Equity in the loss of India joint venture | (202) | | | — | | | — | |
Restructuring and impairment charges(1) | (819) | | | (3,595) | | | (3,836) | |
Other income (expense), net(2) | — | | | (65) | | | 96 | |
| Interest expense, net | (1,305) | | | (1,260) | | | (1,209) | |
TFCF and Hulu acquisition amortization(3) | (1,576) | | | (1,677) | | | (1,998) | |
| | | | | |
Income before income taxes | $ | 12,003 | | | $ | 7,569 | | | $ | 4,769 | |
(1)Net of the A+E Gain in fiscal 2023.
(2)“Other income (expense), net” for fiscal 2024 and 2023 includes charges related to a legal ruling of $65 million and $101 million, respectively. Fiscal 2023 includes a gain of $169 million to adjust our investment in DraftKings, Inc. to fair value. The Company sold the DraftKings investment in fiscal 2023.
(3)TFCF and Hulu acquisition amortization is as follows:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
Amortization of intangible assets | $ | 1,307 | | | $ | 1,394 | | | $ | 1,547 | |
Step-up of film and episodic costs | 260 | | | 271 | | | 439 | |
Intangibles related to TFCF equity investees | 9 | | | 12 | | | 12 | |
| $ | 1,576 | | | $ | 1,677 | | | $ | 1,998 | |
Capital expenditures, depreciation expense and amortization of intangible assets are as follows:
| | | | | | | | | | | | | | | | | |
| Capital expenditures | 2025 | | 2024 | | 2023 |
Entertainment | $ | 1,155 | | | $ | 977 | | | $ | 1,032 | |
Sports | 3 | | | 10 | | | 15 | |
Experiences | | | | | |
| Domestic | 5,271 | | | 2,710 | | | 2,203 | |
| International | 1,158 | | | 949 | | | 822 | |
| Corporate | 437 | | | 766 | | | 897 | |
| Total capital expenditures | $ | 8,024 | | | $ | 5,412 | | | $ | 4,969 | |
| Depreciation expense | | | | | |
Entertainment | $ | 773 | | | $ | 681 | | | $ | 669 | |
Sports | 48 | | | 39 | | | 73 | |
Experiences | | | | | |
| Domestic | 1,933 | | | 1,744 | | | 2,011 | |
| International | 782 | | | 726 | | | 669 | |
| Amounts included in segment operating income | 2,715 | | | 2,470 | | | 2,680 | |
| Corporate | 323 | | | 244 | | | 204 | |
| Total depreciation expense | $ | 3,859 | | | $ | 3,434 | | | $ | 3,626 | |
| Amortization of intangible assets | | | | | |
Entertainment | $ | 52 | | | $ | 53 | | | $ | 87 | |
| | | | | |
Experiences | 108 | | | 109 | | | 109 | |
| Amounts included in segment operating income | 160 | | | 162 | | | 196 | |
| TFCF and Hulu | 1,307 | | | 1,394 | | | 1,547 | |
| Total amortization of intangible assets | $ | 1,467 | | | $ | 1,556 | | | $ | 1,743 | |
Long-lived assets(1) by geographical markets are as follows:
| | | | | | | | | | | |
| September 27, 2025 | | September 28, 2024 |
| Americas | $ | 61,888 | | | $ | 62,107 | |
| Europe | 13,227 | | | 10,299 | |
| Asia Pacific | 10,799 | | | 6,535 | |
| $ | 85,914 | | | $ | 78,941 | |
(1)Long-lived assets are primarily parks, resorts and other property, produced and licensed content costs, right-of-use lease assets, equity method investments and benefit plans in a net asset position.
2Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements of the Company include the accounts of The Walt Disney Company and its majority-owned or controlled subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.
The Company enters into relationships with or makes investments in other entities that may be variable interest entities (VIE). A VIE is consolidated in the financial statements if the Company has the power to direct activities that most significantly impact the economic performance of the VIE and has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant (as defined by ASC 810-10-25-38) to the VIE. Hong Kong Disneyland Resort and Shanghai Disney Resort (together, the Asia Theme Parks) are VIEs in which the Company has less than 50% equity ownership. Company subsidiaries (the Management Companies) have management agreements with the Asia Theme Parks, which provide the Management Companies, subject to certain protective rights of joint venture partners, with the ability to direct the day-to-day operating activities and the development of business strategies that we believe most significantly impact the economic performance of the Asia Theme Parks. In addition, the Management Companies receive management fees under these arrangements that we believe could be significant to the Asia Theme Parks. Therefore, the Company has consolidated the Asia Theme Parks in its financial statements.
Reporting Period
The Company’s fiscal year ends on the Saturday closest to September 30 and consists of fifty-two weeks with the exception that approximately every six years, we have a fifty-three week year. When a fifty-three week year occurs, the Company reports the additional week in the fourth quarter. Fiscal 2025, 2024 and 2023 were fifty-two week years. Fiscal 2026 will be a fifty-three week year.
Reclassifications
Certain reclassifications have been made in the fiscal 2024 and fiscal 2023 financial statements and notes to conform to the fiscal 2025 presentation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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.
Revenues and Costs from Services and Products
The Company generates revenue from the sale of both services and tangible products and revenues and operating costs are classified under these two categories in the Consolidated Statements of Income. Certain costs related to both the sale of services and tangible products are not specifically allocated between the service or tangible product revenue streams but are instead attributed to the principal revenue stream. The cost of services and tangible products exclude depreciation and amortization.
Significant service revenues include:
•Subscription fees
•Affiliate fees
•Advertising revenues
•Admissions to our theme parks, charges for room nights at hotels and sales of cruise vacation packages
•Revenue from the licensing and distribution of film and television properties
•Royalties from licensing our IP for use on consumer goods, published materials and in multi-platform games
Significant operating costs related to the sale of services include:
•Programming and production costs
•Distribution costs
•Operating labor
•Facilities and infrastructure costs
Significant tangible product revenues include:
•The sale of food, beverages and merchandise
•The sale of books, comic books and magazines
Significant operating costs related to the sale of tangible products include:
•Costs of goods sold
•Operating labor
•Distribution costs
•Retail occupancy costs
Revenue Recognition
The Company’s revenue recognition policies are as follows:
•Subscription fees are recognized ratably over the term of the subscription.
•Affiliate fees are recognized as the programming is provided based on contractually specified per subscriber rates and the actual number of the affiliate’s customers receiving the programming. For affiliate contracts with fixed license fees, the fees are recognized ratably over the contract term. If an affiliate contract includes a minimum guaranteed license fee, the guaranteed license fee is recognized ratably over the guaranteed period and any fees earned in excess of the guarantee are recognized as earned once the minimum guarantee has been exceeded. Affiliate agreements may also include a license to use the network programming for on demand viewing. As the fees charged under these contracts are generally based on a contractually specified per subscriber rate for the number of underlying subscribers of the affiliate, revenues are recognized as earned.
•Advertising sales are recognized as revenue, net of agency commissions, when commercials are aired. For contracts that contain a guaranteed number of impressions, revenues are recognized based on impressions delivered. When the guaranteed number of impressions is not met (“ratings shortfall”), revenues are not recognized for the ratings shortfall until the additional impressions are delivered.
•Theme park admissions are recognized when the tickets are used. Sales of annual passes are recognized ratably over the period for which the pass is available for use.
•Resorts and vacations sales are recognized as revenue as the services are provided. Sales of vacation club properties are recognized as revenue upon the later of when title transfers to the customer or when construction activity is deemed complete.
•Merchandise, food and beverage sales are recognized at the time of sale. Sales from our branded internet shopping sites and to wholesalers are recognized upon delivery. We estimate returns and customer incentives based upon historical return experience, current economic trends and projections of consumer demand for our products.
•Merchandise licensing fees are recognized as revenue as earned based on the contractual royalty rate applied to the licensee’s underlying product sales. For licenses with minimum guaranteed license fees, the excess of the minimum guaranteed amount over actual royalties earned (“shortfall”) is recognized straight-line over the remaining license period once an expected shortfall is probable.
•Theatrical distribution licensing fees are recognized as revenue based on the contractual royalty rate applied to the distributor’s underlying sales from exhibition of the film.
•TV/VOD distribution fixed license fees are recognized as revenue when the content is available for use by the licensee. License fees based on the underlying sales of the licensee are recognized as revenue based on the contractual royalty rate applied to the licensee sales.
For TV/VOD licenses that include multiple titles with a fixed license fee across all titles, each title is considered a separate performance obligation. The fixed license fee is allocated to each title at contract inception and the allocated license fee is recognized as revenue when the title is available for use by the licensee.
When the license contains a minimum guaranteed license fee across all titles, the license fees earned by titles in excess of their allocated amount are deferred until the minimum guaranteed license fee across all titles is exceeded. Once the minimum guaranteed license fee is exceeded, revenue is recognized as earned based on the licensee’s underlying sales.
TV/VOD distribution contracts may limit the licensee’s use of a title to certain defined periods of time during the contract term. In these instances, each period of availability is generally considered a separate performance obligation. For these contracts, the fixed license fee is allocated to each period of availability at contract inception based on relative standalone selling price using management’s best estimate. Revenue is recognized at the start of each availability period when the content is made available for use by the licensee.
When the term of an existing agreement is renewed or extended, revenues related to the renewal period or extension are recognized when the licensed content becomes available under the renewal or extension.
•Home entertainment sales in electronic formats are recognized as revenue when the content is available for use by the consumer. Fees from the licensing of physical home entertainment distribution rights are recognized as revenue as earned based on the contractual royalty rate applied to the licensee’s underlying product sales. Sales in physical formats through distributors are recognized as revenue on the later of the delivery date or the date that the product can be sold by retailers.
•Taxes collected from customers and remitted to governmental authorities are excluded from revenue.
•Shipping and handling fees collected from customers are recorded as revenue and the related shipping expenses are recorded in cost of products upon delivery of the product to the consumer.
Allowance for Credit Losses
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 supportable forecasts of future economic conditions.
Advertising Expense
Advertising costs are expensed as incurred. Advertising expense for fiscal 2025, 2024 and 2023 was $6.5 billion, $6.1 billion and $6.4 billion, respectively. The increase in advertising expense for fiscal 2025 compared to fiscal 2024 was due to an increase in theatrical marketing costs. The decrease in advertising expense for fiscal 2024 compared to fiscal 2023 was due to a decrease in theatrical marketing costs.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and marketable securities with original maturities of three months or less. Cash and cash equivalents subject to contractual restrictions and not readily available are classified as restricted cash.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Consolidated Balance Sheet to the total of the amounts in the Consolidated Statements of Cash Flows.
| | | | | | | | | | | | | | | | | | | | |
| | September 27, 2025 | | September 28, 2024 | | September 30, 2023 |
| Cash and cash equivalents | | $ | 5,695 | | $ | 6,002 | | $ | 14,182 |
| | | | | | |
| | | | | | |
Restricted cash included in other assets | | 104 | | 100 | | 53 |
| | | | | | |
Total cash, cash equivalents and restricted cash in the statement of cash flows | | $ | 5,799 | | $ | 6,102 | | $ | 14,235 |
Investments
Investments in equity securities with a readily determinable fair value, not accounted for under the equity method, are recorded at that value with unrealized gains and losses included in earnings. For equity securities without a readily determinable fair value, the investment is recorded at cost, less any impairment, plus or minus adjustments related to observable transactions for the same or similar securities, with unrealized gains and losses included in earnings.
For equity method investments, the Company regularly reviews its investments to determine whether there is a decline in fair value below book value. If there is a decline that is other-than-temporary, the investment is written down to fair value.
Translation Policy
Generally, the U.S. dollar is the functional currency for our international film and episodic content distribution and licensing businesses and the branded international channels and DTC streaming services. Generally, the local currency is the functional currency for the Asia Theme Parks, Disneyland Paris, international sports channels and international locations of The Disney Store.
For U.S. dollar functional currency locations, foreign currency assets and liabilities are remeasured into U.S. dollars at end-of-period exchange rates, except for non-monetary balance sheet accounts, which are remeasured at historical exchange rates. Revenue and expenses are remeasured at average exchange rates in effect during each period, except for those revenues
and expenses related to the non-monetary balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from foreign currency remeasurement are included in income.
For local currency functional locations, assets and liabilities are translated at end-of-period rates while revenues and expenses are translated at average rates in effect during the period. Equity is translated at historical rates and the resulting cumulative translation adjustments are included as a component of accumulated other comprehensive income (loss) (AOCI).
Inventories
Inventory primarily includes vacation timeshare units, merchandise, food, materials and supplies. Carrying amounts of vacation ownership units are recorded at the lower of cost or net realizable value. Carrying amounts of merchandise, food, materials and supplies inventories are generally determined on a moving average cost basis and are recorded at the lower of cost or net realizable value.
Film and Television Content Costs
The Company classifies its capitalized produced and acquired/licensed content costs as long-term assets (“Produced and licensed content costs” in the Consolidated Balance Sheet) and classifies advances for live programming rights made prior to the live event as short-term assets (“Content advances” in the Consolidated Balance Sheet). For produced content, we capitalize all direct costs incurred in the physical production of a film, as well as allocations of production overhead and capitalized interest. For licensed and acquired content, we capitalize the license fee or acquisition cost, respectively. 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)
The determination of the predominant monetization strategy is made at commencement of production based on the means by which we derive third-party revenues from use of the content. Imputed title by title license fees that may be necessary for other purposes are established as required for those purposes.
We generally classify content that is initially intended for use on our DTC streaming services or Linear Networks as group assets. We generally classify content initially intended for theatrical release or for sale to third-party licensees as individual assets. The classification of content as individual or group only changes if there is a significant change to the title’s monetization strategy relative to its initial assessment (e.g. content that was initially intended for license to a third party is instead used on an owned DTC service). When there is a significant change in monetization strategy, the title’s capitalized content costs are tested for impairment.
Production costs for content that is predominantly monetized individually are amortized based upon the ratio of the current period’s revenues to the estimated remaining total revenues (Ultimate Revenues). For film productions, Ultimate Revenues include revenues from all sources that will be earned within ten years from the date of the initial theatrical release, including imputed license fees for content that is used on our DTC streaming services. For episodic series that are classified as individual, Ultimate Revenues include revenues that will be earned within ten years, including imputed license fees for content that is used on our DTC streaming services, from delivery of the first episode, or if still in production, five years from delivery of the most recent episode, if later. Participations and residuals are expensed over the applicable product life cycle based upon the ratio of the current period’s revenues to the estimated remaining total revenues for each production.
Production costs that are predominantly monetized as a group are amortized based on projected usage, generally resulting in an accelerated or straight-line amortization pattern. Adjustments to projected usage are applied prospectively in the period of the change. Participations and residuals are generally expensed in line with the pattern of usage.
Licensed rights to film and television content and other programs are expensed on an accelerated or straight-line basis over their useful life or over the number of times the program is expected to be aired, as appropriate. We amortize rights costs for multi-year sports programming arrangements during the applicable seasons based on the estimated relative value of each year in the arrangement. If annual contractual payments related to each season approximate each season’s estimated relative value, we expense the related contractual payments during the applicable season.
Acquired film and television libraries are generally amortized on a straight-line basis over 20 years from the date of acquisition. Acquired film and television libraries include content that was initially released three or more years prior to its acquisition, except it excludes the prior seasons of episodic programming still in production at the date of its acquisition.
Amortization of capitalized costs for produced content begins in the month the content is first released, while amortization of capitalized costs for licensed content commences when the license period begins and the content is first aired or available for
use on our DTC services. Amortization of content assets is primarily included in “Cost of services” in the Consolidated Statements of Income.
The costs of produced and licensed film and television content are subject to regular recoverability assessments. Production costs for content that is predominantly monetized individually are tested for impairment at the individual title level by comparing that title’s unamortized costs to the estimated present value of discounted cash flows directly attributable to the title. To the extent the title’s unamortized costs exceed the present value of discounted cash flows, an impairment charge is recorded for the excess. Cost of content that is predominantly monetized as a group is tested for impairment by comparing the present value of the discounted cash flows of the group to the aggregate unamortized costs of the group. The group is established by identifying the lowest level for which cash flows are independent of the cash flows of other produced and licensed content. If the unamortized costs exceed the present value of discounted cash flows, an impairment charge is recorded for the excess and allocated to individual titles based on the relative carrying value of each title in the group. If there are no plans to continue to use an individual film or television program that is part of a group, the unamortized cost of the individual title is written down to its estimated fair value. Licensed content is included as part of the group within which it is monetized for purposes of impairment testing.
Content Production Incentives
The Company receives tax incentives from U.S. (state and local) and foreign government agencies to encourage the production of film, episodic and streaming content. The incentives are largely received as tax credits, which are recognized as a reduction to produced and licensed content costs when there is reasonable assurance of collection (presented as “Produced and licensed content costs” in the Consolidated Balance Sheets), resulting in a reduction to programming and production costs (presented as “Costs of services” in the Consolidated Statements of Income) over the asset’s amortization period.
Internal-Use Software Costs
The Company expenses costs incurred in the preliminary project stage of developing or acquiring internal use software, such as research and feasibility studies as well as costs incurred in the post-implementation/operational stage, such as maintenance and training. Capitalization of software development costs occurs only after the preliminary-project stage is complete, management authorizes the project and it is probable that the project will be completed and the software will be used for the function intended. As of September 27, 2025 and September 28, 2024, capitalized software costs, net of accumulated amortization, totaled $1.2 billion and $1.3 billion, respectively. The capitalized costs are amortized on a straight-line basis over the estimated useful life of the software, generally up to 5 years.
Parks, Resorts and Other Property
Parks, resorts and other property are carried at historical cost. Depreciation is computed on the straight-line method, generally over the following estimated useful lives:
| | | | | | | | |
| Attractions, buildings and improvements | | 20 – 40 years |
| Furniture, fixtures and equipment | | 3 – 25 years |
| Land improvements | | 20 – 40 years |
| Leasehold improvements | | Life of lease or asset life if less |
Leases
The Company determines whether a contract is a lease at contract inception or for a modified contract at the modification date. At inception or modification, the Company calculates the present value of operating lease payments using the Company’s incremental borrowing rate applicable to the lease, which is determined by estimating what it would cost the Company to borrow a collateralized amount equal to the total lease payments over the lease term based on the contractual terms of the lease and the location of the leased asset. Our leases may require us to make fixed rental payments, variable lease payments based on usage or sales and fixed non-lease costs relating to the leased asset. Variable lease payments are generally not included in the measurement of the right-of-use asset and lease liability. Fixed non-lease costs, for example common-area maintenance costs, are included in the measurement of the right-of-use asset and lease liability as the Company does not separate lease and non-lease components.
Goodwill, Other Intangible Assets and Long-Lived Assets
The Company is required to test goodwill and other indefinite-lived intangible assets for impairment on an annual basis and if current events or circumstances require, on an interim basis. The Company performs its annual test of goodwill and indefinite-lived intangible assets for impairment in its fiscal fourth quarter.
Goodwill is allocated to various reporting units, which are an operating segment or one level below the operating segment. To test goodwill for impairment, the Company first performs a qualitative assessment to determine if it is more likely
than not that the carrying amount of a reporting unit exceeds its fair value. If it is, a quantitative assessment is required. Alternatively, the Company may bypass the qualitative assessment and perform a quantitative impairment test.
The qualitative assessment requires the consideration of factors such as recent market transactions, macroeconomic conditions and changes in projected future cash flows of the reporting unit.
The quantitative assessment compares the fair value of each goodwill reporting unit to its carrying amount, and to the extent the carrying amount exceeds the fair value, an impairment of goodwill is recognized for the excess up to the amount of goodwill allocated to the reporting unit.
The impairment test for goodwill requires judgment related to the identification of reporting units, the assignment of assets and liabilities to reporting units including goodwill and the determination of fair value of the reporting units.
When performing a quantitative assessment, we generally use a present value technique (discounted cash flows) corroborated by market multiples when available and as appropriate to determine the fair value of our reporting units, The discounted cash flow analyses are sensitive to our estimated projected future cash flows as well as the discount rates used to calculate their present value. Our future cash flows are based on internal forecasts for each reporting unit, which consider projected inflation and other economic indicators, as well as industry growth projections. Significant judgments and assumptions in the discounted cash flow model relate to projections of future revenues and certain operating expenses, operating margins, terminal growth rates and discount rates. Discount rates for each reporting unit are determined based on the inherent risks of each reporting unit’s underlying operations. We believe our estimates are consistent with how a marketplace participant would value our reporting units. If we had established different reporting units or utilized different valuation methodologies or assumptions, the impairment test results could differ.
In fiscal 2025, the Company performed a qualitative assessment of goodwill for impairment for all reporting units. Based on these assessments, we concluded that it was more likely than not that the estimated fair values of our reporting units were higher than their carrying values and that the performance of a quantitative impairment test was not required.
To test other indefinite-lived intangible assets for impairment, the Company first performs a qualitative assessment to determine if it is more likely than not that the carrying amount of each of its indefinite-lived intangible assets exceeds its fair value. If it is, a quantitative assessment is required. Alternatively, the Company may bypass the qualitative assessment and perform a quantitative impairment test.
The qualitative assessment requires the consideration of factors such as recent market transactions, macroeconomic conditions and changes in projected future cash flows.
The quantitative assessment compares the fair value of an indefinite-lived intangible asset to its carrying amount. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized for the excess. Fair values of indefinite-lived intangible assets are determined based on discounted cash flows or appraised values, as appropriate. The Company has determined that there are currently no legal, competitive, economic or other factors that materially limit the useful life of our trademarks and FCC licenses, which are our most significant indefinite-lived intangible assets.
Finite-lived intangible assets are generally amortized on a straight-line basis over periods of 5 to 40 years. The costs to periodically renew our intangible assets are expensed as incurred.
The Company expects its aggregate annual amortization expense for finite-lived intangible assets for fiscal 2026 through 2030 to be as follows:
| | | | | |
| 2026 | $ | 979 |
| 2027 | 903 |
| 2028 | 838 |
| 2029 | 778 |
| 2030 | 510 |
The Company tests long-lived assets, including amortizable intangible assets, for impairment whenever events or changes in circumstances (triggering events) indicate that the carrying amount may not be recoverable. Once a triggering event has occurred, the impairment test employed is based on whether the Company’s intent is to hold the asset for continued use or to hold the asset for sale. The impairment test for assets held for use requires a comparison of the estimated undiscounted future cash flows expected to be generated over the useful life of the significant assets of an asset group to the carrying amount of the asset group. An asset group is generally established by identifying the lowest level of cash flows generated by a group of assets that are largely independent of the cash flows of other assets and could include assets used across multiple businesses. If the carrying amount of an asset group exceeds the estimated undiscounted future cash flows, an impairment would be measured as
the difference between the fair value of the asset group and the carrying amount of the asset group. For assets held for sale, to the extent the carrying amount is greater than the asset’s fair value less costs to sell, an impairment loss is recognized for the difference.
The Company recorded non-cash impairment charges in fiscal 2025, 2024 and 2023 that are further described in Note 18.
Financial Risk Management Contracts
In the normal course of business, the Company employs a variety of financial instruments (derivatives) including interest rate and cross-currency swap agreements and forward and option contracts to manage its exposure to fluctuations in interest rates, foreign currency exchange rates and commodity prices.
The Company formally documents all relationships between hedges and hedged items as well as its risk management objectives and strategies for undertaking various hedge transactions. The Company primarily enters into two types of derivatives: hedges of fair value exposure and hedges of cash flow exposure. Hedges of fair value exposure are entered into in order to hedge the fair value of a recognized asset, liability, or a firm commitment. Hedges of cash flow exposure are entered into in order to hedge a forecasted transaction (e.g. forecasted revenue) or the variability of cash flows to be paid or received, related to a recognized liability or asset (e.g. floating-rate debt).
The Company designates and assigns the derivatives as hedges of forecasted transactions, specific assets or specific liabilities. When hedged assets or liabilities are sold or extinguished or the forecasted transactions being hedged impact earnings or are no longer expected to occur, the Company recognizes the gain or loss on the designated derivatives.
The Company’s hedge positions are measured at fair value on the balance sheet. Realized gains and losses from hedges are classified in the income statement consistent with the accounting treatment of the items being hedged. The Company accrues the differential for interest rate swaps to be paid or received under the agreements as interest rates change as adjustments to interest expense over the lives of the swaps. Gains and losses on the termination of effective swap agreements, prior to their original maturity, are deferred and amortized to interest expense over the remaining term of the underlying hedged transactions.
The Company enters into derivatives that are not designated as hedges and do not qualify for hedge accounting. These derivatives are intended to offset certain economic exposures of the Company and are carried at fair value with changes in value recorded in earnings. Cash flows from hedging activities are classified in the Consolidated Statements of Cash Flows under the same category as the cash flows from the related assets, liabilities or forecasted transactions (see Notes 8 and 17).
Income Taxes
Deferred income tax assets and liabilities are recorded 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.
A tax position must meet a minimum probability threshold before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.
Earnings Per Share
The Company presents both basic and diluted earnings per share (EPS) amounts. Basic EPS is calculated by dividing net income attributable to Disney by the weighted average number of common shares outstanding during the year. Diluted EPS is based upon the weighted average number of common and common equivalent shares outstanding during the year, which is calculated using the treasury-stock method for equity-based awards (Awards). Common equivalent shares are excluded from the computation in periods for which they have an anti-dilutive effect. Stock options for which the exercise price exceeds the average market price over the period are anti-dilutive and, accordingly, are excluded from the calculation.
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:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
Weighted average number of common and common equivalent shares outstanding (basic) | 1,804 | | 1,825 | | 1,828 |
Weighted average dilutive impact of Awards | 7 | | 6 | | 2 |
Weighted average number of common and common equivalent shares outstanding (diluted) | 1,811 | | 1,831 | | 1,830 |
| Awards excluded from diluted earnings per share | 13 | | 24 | | 24 |
3Revenues
The following table presents our revenues by segment and major source:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2025 |
| Entertainment | | Sports | | Experiences | | Eliminations | | | | Total |
| Subscription and affiliate fees | $ | 27,120 | | $ | 11,944 | | $ | — | | $ | (1,285) | | | | $ | 37,779 |
| Advertising | 6,679 | | 4,444 | | — | | — | | | | 11,123 |
| Theme park admissions | — | | — | | 11,707 | | — | | | | 11,707 |
| Retail and wholesale sales of merchandise, food and beverage | — | | — | | 9,642 | | — | | | | 9,642 |
| Resort and vacations | — | | — | | 9,210 | | — | | | | 9,210 |
| Merchandise licensing | 643 | | — | | 3,236 | | — | | | | 3,879 |
| TV/VOD and home entertainment distribution | 3,507 | | 267 | | — | | — | | | | 3,774 |
| Theatrical distribution licensing | 2,592 | | — | | — | | — | | | | 2,592 |
| Other | 1,925 | | 1,017 | | 2,361 | | (584) | | | | 4,719 |
| $ | 42,466 | | $ | 17,672 | | $ | 36,156 | | $ | (1,869) | | | | $ | 94,425 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2024 |
| Entertainment | | Sports | | Experiences | | Eliminations | | | | Total |
| Subscription and affiliate fees | $ | 25,668 | | $ | 12,068 | | $ | — | | $ | (1,183) | | | | $ | 36,553 |
| Advertising | 7,506 | | 4,388 | | — | | — | | | | 11,894 |
| Theme park admissions | — | | — | | 11,171 | | — | | | | 11,171 |
| Retail and wholesale sales of merchandise, food and beverage | — | | — | | 9,204 | | — | | | | 9,204 |
| Resort and vacations | — | | — | | 8,375 | | — | | | | 8,375 |
| Merchandise licensing | 642 | | — | | 3,142 | | — | | | | 3,784 |
| TV/VOD and home entertainment distribution | 3,051 | | 305 | | — | | — | | | | 3,356 |
| Theatrical distribution licensing | 2,266 | | — | | — | | — | | | | 2,266 |
| Other | 2,053 | | 858 | | 2,259 | | (412) | | | | 4,758 |
| $ | 41,186 | | $ | 17,619 | | $ | 34,151 | | $ | (1,595) | | | | $ | 91,361 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2023 |
| Entertainment | | Sports | | Experiences | | Eliminations | | | | Total |
| Subscription and affiliate fees | $ | 23,789 | | $ | 12,107 | | $ | — | | $ | (1,084) | | | | $ | 34,812 |
| Advertising | 7,594 | | 3,920 | | 4 | | — | | | | 11,518 |
| Theme park admissions | — | | — | | 10,423 | | — | | | | 10,423 |
| Retail and wholesale sales of merchandise, food and beverage | — | | — | | 8,921 | | — | | | | 8,921 |
| Resort and vacations | — | | — | | 7,949 | | — | | | | 7,949 |
| Merchandise licensing | 619 | | — | | 2,509 | | — | | | | 3,128 |
| TV/VOD and home entertainment distribution | 3,576 | | 347 | | — | | — | | | | 3,923 |
| Theatrical distribution licensing | 3,174 | | — | | — | | — | | | | 3,174 |
| Other | 1,883 | | 737 | | 2,743 | | (313) | | | | 5,050 |
| $ | 40,635 | | $ | 17,111 | | $ | 32,549 | | $ | (1,397) | | | | $ | 88,898 |
The following table presents our revenues by segment and primary geographical markets:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2025 |
| Entertainment | | Sports | | Experiences | | Eliminations | | Total |
| Americas | $ | 33,815 | | $ | 17,266 | | $ | 27,218 | | $ | (1,869) | | $ | 76,430 |
| Europe | 6,317 | | 292 | | 4,481 | | — | | 11,090 |
| Asia Pacific | 2,334 | | 114 | | 4,457 | | — | | 6,905 |
| | | | | | | | | |
| $ | 42,466 | | $ | 17,672 | | $ | 36,156 | | $ | (1,869) | | $ | 94,425 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2024 |
| Entertainment | | Sports | | Experiences | | Eliminations | | Total |
| Americas | $ | 31,722 | | $ | 16,432 | | $ | 25,603 | | $ | (1,595) | | $ | 72,162 |
| Europe | 5,805 | | 396 | | 4,078 | | — | | 10,279 |
| Asia Pacific | 3,659 | | 791 | | 4,470 | | — | | 8,920 |
| | | | | | | | | |
| $ | 41,186 | | $ | 17,619 | | $ | 34,151 | | $ | (1,595) | | $ | 91,361 |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2023 |
| Entertainment | | Sports | | Experiences | | Eliminations | | Total |
| Americas | $ | 31,414 | | $ | 16,000 | | $ | 25,188 | | $ | (1,397) | | $ | 71,205 |
| Europe | 5,475 | | 370 | | 3,688 | | — | | 9,533 |
| Asia Pacific | 3,746 | | 741 | | 3,673 | | — | | 8,160 |
| | | | | | | | | |
| $ | 40,635 | | $ | 17,111 | | $ | 32,549 | | $ | (1,397) | | $ | 88,898 |
| | | | | | | | | |
| | | | | | | | | |
Revenues 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, $1.0 billion was recognized related to performance obligations satisfied prior to September 28, 2024. For fiscal 2024, $1.0 billion was recognized related to performance obligations satisfied prior to September 30, 2023. For fiscal 2023, $0.9 billion was recognized related to performance obligations satisfied prior to October 1, 2022.
As of September 27, 2025, revenue for unsatisfied performance obligations expected to be recognized in the future is $16 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 recognize approximately $7 billion in fiscal 2026, $4 billion in fiscal 2027, $2 billion in fiscal 2028 and $3 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:
| | | | | | | | | | | |
| September 27,
2025 | | September 28,
2024 |
| | | |
| | | |
| | | |
| Accounts Receivable | | | |
| Current | $ | 10,544 | | | $ | 10,463 | |
| Non-current | 985 | | | 1,040 | |
| Allowance for credit losses | (126) | | | (118) | |
| Deferred revenues | | | |
| Current | 5,689 | | | 5,587 | |
| Non-current | 785 | | | 858 | |
For fiscal 2025, 2024 and 2023, the Company recognized revenue of $5.3 billion, $5.2 billion and $5.1 billion, respectively, that was included in the deferred revenue balance at September 28, 2024, September 30, 2023 and October 1, 2022, respectively. Amounts deferred generally relate to theme park admissions and vacation packages, DTC subscriptions and advances related to merchandise and TV/VOD licenses.
The Company has accounts receivable of $1.0 billion at both September 27, 2025 and September 28, 2024 with original maturities greater than one year primarily related to the sale of vacation club properties. The receivables are recorded in other non-current assets. The allowance for credit losses for these receivables and additions to/write-offs against the allowance for fiscal 2025 and 2024 were not material.
4.Acquisitions and Dispositions
NFL media assets
In 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.
The Company will include Fubo’s financial results in the Company’s Consolidated Financial Statements effective from October 29, 2025.
Pursuant to an agreement entered into as part of the Fubo Transaction, the Company is the exclusive distributor of the Hulu Live TV service for five years (renewable for an additional five-year term by mutual agreement) and pays a wholesale fee
to Fubo based on Fubo’s cost to program Hulu Live TV. Under the same agreement, the Company manages the marketing for the Hulu Live TV service and sells advertising for the Hulu Live TV service and Fubo platform for a fee.
Further, the Company agreed to provide Fubo a senior unsecured term loan of up to $145 million (available to be funded in January 2026).
Star India
On November 14, 2024, the Company and RIL formed the India Joint Venture that combines the Company’s Star India business with certain media and entertainment businesses controlled by RIL. 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 $1.5 billion in “Restructuring and impairment charges” in fiscal 2025 and 2024, respectively, to reflect Star India at its fair value less costs to sell. In addition, we recognized a non-cash tax charge of approximately $0.2 billion in fiscal 2025 in connection with the close of the transaction.
Hulu LLC
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 December 2023, the Company paid NBCU $8.6 billion, which reflected the guaranteed floor value less NBCU’s unpaid capital call contributions.
In fiscal 2025, following the completion of an appraisal process to determine Hulu’s equity fair value, the Company paid NBCU an incremental $0.4 billion, reflecting NBCU’s share of Hulu’s equity fair value above the guaranteed floor, giving the Company 100% ownership of Hulu. The additional amount was recognized in “Net income attributable to noncontrolling interests” in the Consolidated Statements of Income.
The Company will also 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 starting in fiscal 2026.
At the close of the transaction in fiscal 2025, Hulu’s U.S. income tax classification changed, which resulted in the recognition of a non-cash tax benefit of approximately $3.3 billion in “Income taxes” in the Consolidated Statements of Income.
BAMTech LLC
In November 2022, the Company purchased MLB’s 15% redeemable noncontrolling interest in BAMTech LLC, which holds the Company’s domestic DTC sports business, for $900 million (MLB buy-out). MLB’s interest was recorded in the Company’s financial statements at $828 million prior to the MLB buy-out. The $72 million difference was recorded as an increase in “Net income from continuing operations attributable to noncontrolling interests” in the Consolidated Statements of Income.
During the fiscal year ended 2023, Hearst contributed $710 million to the domestic DTC sports business, to fund its 20% share of the MLB buy-out and the domestic DTC sports business’s operating cash requirements, which had been funded by the Company through intercompany loans.
Goodwill
The changes in the carrying amount of goodwill are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Entertainment | | Sports | | Experiences | | Star India | | Total |
| Balance at Sep. 30, 2023 | $ | 55,031 | | | $ | 16,486 | | | $ | 5,550 | | | $ | — | | | $ | 77,067 | |
| Allocation to Star India | (2,445) | | | — | | | — | | | 2,445 | | | — | |
Impairments(1) | (1,287) | | | — | | | — | | | (1,335) | | | (2,622) | |
| Reclassification to held for sale | — | | | — | | | — | | | (1,106) | | | (1,106) | |
| Currency translation adjustments and other, net | (9) | | | — | | | — | | | (4) | | | (13) | |
| Balance at Sep. 28, 2024 | $ | 51,290 | | | $ | 16,486 | | | $ | 5,550 | | | $ | — | | | $ | 73,326 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Currency translation adjustments and other, net | (32) | | | — | | | — | | | — | | | (32) | |
| Balance at Sep. 27, 2025 | $ | 51,258 | | | $ | 16,486 | | | $ | 5,550 | | | $ | — | | | $ | 73,294 | |
(1)Fiscal 2024 reflects impairments related to entertainment linear networks and Star India (see Note 18).
5Investments
Investments consist of the following:
| | | | | | | | | | | |
| September 27,
2025 | | September 28,
2024 |
| Investments, equity basis | $ | 6,319 | | | $ | 2,680 | |
| Investments, other | 1,778 | | | 1,779 | |
| $ | 8,097 | | $ | 4,459 |
Investments, Equity Basis
The Company’s significant equity investments include the India joint venture (37% ownership), A+E (50% ownership) and CTV Specialty Television, Inc. (30% ownership). As of September 27, 2025 and September 28, 2024, the book value of the Company’s equity method investments exceeded our share of the book value of the investees’ underlying net assets by approximately $1.6 billion and $0.5 billion, respectively, which represent amortizable intangible assets and goodwill arising from acquisitions. See Note 18 for impairments recorded on equity investments.
Investments, Other
As of both September 27, 2025 and September 28, 2024, the Company had securities without a readily determinable fair value of $1.7 billion, the most significant of which is an 8% interest in Epic Games, Inc. at $1.6 billion.
Gains, losses and impairments on securities are generally recorded in “Interest expense, net” in the Consolidated Statements of Income; these amounts were not material for fiscal 2025, 2024 and 2023.
6International 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 (together, the Asia Theme Parks), which are both VIEs consolidated in the Company’s financial statements. See Note 2 for the Company’s policy on consolidating VIEs. In addition, the Company has 100% ownership of Disneyland Paris. 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 Consolidated Balance Sheet:
| | | | | | | | | | | |
| | September 27, 2025 | | September 28, 2024 |
| Cash and cash equivalents | $ | 428 | | | $ | 510 | |
| Other current assets | 184 | | | 178 | |
| Total current assets | 612 | | | 688 | |
| Parks, resorts and other property | 6,060 | | | 6,141 | |
| Other assets | 287 | | | 217 | |
| Total assets | $ | 6,959 | | | $ | 7,046 | |
| | | |
| Current liabilities | $ | 734 | | | $ | 695 | |
| Long-term borrowings | 1,075 | | | 1,292 | |
| Other long-term liabilities | 489 | | | 409 | |
| Total liabilities | $ | 2,298 | | | $ | 2,396 | |
The following table summarizes the International Theme Parks’ revenues and costs and expenses included in the Company’s Consolidated Statements of Income for fiscal 2025:
| | | | | |
| Revenues | $ | 6,111 | |
| Costs and expenses | (4,963) | |
| |
Asia Theme Parks’ royalty and management fees of $323 million for fiscal 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 fiscal 2025 Consolidated Statements of Cash Flows were $1.8 billion provided by operating activities, $1.2 billion used in investing activities and $0.1 billion used in financing activities.
Hong Kong Disneyland Resort
The Government of the Hong Kong Special Administrative Region (HKSAR) and the Company have a 52% and a 48% equity interest in Hong Kong Disneyland Resort, respectively.
The Company 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.
Hong Kong Disneyland Resort is undergoing a multi-year expansion estimated to cost HK $10.9 billion ($1.4 billion). The Company and HKSAR have agreed to fund the expansion on an equal basis through equity contributions, which totaled $23 million and $18 million in fiscal 2025 and 2024, respectively. To date, the Company and HKSAR have funded a total of $814 million.
HKSAR has the right to receive additional shares over time to the extent Hong Kong Disneyland Resort exceeds certain return on asset performance targets. The amount of additional shares HKSAR can receive is capped on an annual basis and could decrease the Company’s equity interest by up to 6 percentage points over a period no shorter than 10 years.
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 $873 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 September 27, 2025, the line of credit does not have a balance outstanding.
Shendi has provided Shanghai Disney Resort with loans totaling 7.7 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 September 27, 2025, the line of credit does not have a balance outstanding.
7Produced and Acquired/Licensed Content Costs and Advances
Total capitalized produced and licensed content by predominant monetization strategy is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| As of September 27, 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 | $ | 4,624 | | | $ | 14,288 | | | $ | 18,912 | | | $ | 4,568 | | | $ | 13,621 | | | $ | 18,189 | |
| Completed, not released | 313 | | | 1,061 | | | 1,374 | | | 16 | | | 2,265 | | | 2,281 | |
| In-process | 4,082 | | | 3,633 | | | 7,715 | | | 4,352 | | | 4,067 | | | 8,419 | |
| In development or pre-production | 386 | | | 182 | | | 568 | | | 196 | | | 73 | | | 269 | |
| $ | 9,405 | | | $ | 19,164 | | | 28,569 | | | $ | 9,132 | | | $ | 20,026 | | | 29,158 | |
| Licensed content - Television Programming rights and advances | | | | | 4,821 | | | | | | | 5,251 | |
| Total produced and licensed content | | | | | $ | 33,390 | | | | | | | $ | 34,409 | |
| | | | | | | | | | | |
| Current portion | | | | | $ | 2,063 | | | | | | | $ | 2,097 | |
| Non-current portion | | | | | $ | 31,327 | | | | | | | $ | 32,312 | |
Amortization of produced and licensed content is as follows:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Produced content | | | | | |
| Predominantly monetized individually | $ | 3,338 | | $ | 3,311 | | $ | 3,999 |
| Predominantly monetized as a group | 7,072 | | 7,143 | | 7,862 |
| 10,410 | | 10,454 | | 11,861 |
| Licensed programming rights and advances | 12,876 | | 14,027 | | 13,405 |
Total produced and licensed content costs(1) | $ | 23,286 | | $ | 24,481 | | $ | 25,266 |
(1)Primarily included in “Costs of services” in the Consolidated Statements of Income. Fiscal 2025 and fiscal 2024 amounts exclude impairment charges for produced content of $109 million and $187 million respectively, and fiscal 2023 amounts exclude impairment charges of $2.0 billion for produced content and $257 million for licensed programming rights. These charges were recorded in “Restructuring and impairment charges” in the Consolidated Statements of Income (see Note 18).
Total expected amortization by fiscal year of completed (released and not released) produced, licensed and acquired film and television library content on the balance sheet as of September 27, 2025 is as follows:
| | | | | | | | | | | | | | | | | |
| Predominantly Monetized Individually | | Predominantly
Monetized
as a Group | | Total |
| Produced content | | | | | |
| Released | | | | | |
| 2026 | $ | 1,060 | | | $ | 3,382 | | | $ | 4,442 | |
| 2027 | 639 | | | 2,364 | | | 3,003 | |
| 2028 | 418 | | | 1,873 | | | 2,291 | |
| Completed, not released | | | | | |
| 2026 | 209 | | | 464 | | | 673 | |
| | | | | |
| Licensed content - Programming rights and advances | | | | | |
| 2026 | | | | | $ | 3,163 | |
| 2027 | | | | | 682 | |
| 2028 | | | | | 385 | |
Approximately $2.1 billion of accrued participations and residual liabilities will be paid in fiscal 2026.
At September 27, 2025, released content (less amortization) includes acquired film and television library content with a carrying value of $3.1 billion and is generally being amortized straight-line over a weighted-average remaining period of approximately 13 years.
Content Production Incentives
Programming and production costs were reduced by $0.7 billion for fiscal 2025 related to the amortization of production tax incentives. We have production tax credit receivables of $1.8 billion as of September 27, 2025, which, based on the expected timing of collection, are reflected in “Receivables, net” or “Other Assets” in our Consolidated Balance Sheet.
8Borrowings
The Company’s borrowings, including the impact of interest rate and cross-currency swaps, are summarized as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | September 27, 2025 |
| | | Sep. 27, 2025 | | Sep. 28, 2024 | | Stated Interest Rate(1) | Pay Floating Interest rate and Cross- Currency Swaps(2) | Effective Interest Rate(3) | | Swap
Maturities |
Commercial paper | | $ | 2,062 | | | $ | 3,040 | | | — | | $ | — | | | | 4.28% | | |
U.S. dollar denominated notes(4) | | 38,658 | | | 40,496 | | | 4.09% | | 9,625 | | | | 4.43% | | 2026-2031 |
| Foreign currency denominated debt | | 931 | | | 1,886 | | | 3.06% | | 933 | | | | 5.11% | | 2027 |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Other(5) | | (700) | | | (899) | | | | | — | | | | | | |
| | 40,951 | | | 44,523 | | | | | 10,558 | | | | | | |
| Asia Theme Parks borrowings | | 1,075 | | | 1,292 | | | 8.00% | | — | | | | 4.55% | | |
| Total borrowings | | 42,026 | | | 45,815 | | | | | 10,558 | | | | | | |
| Less current portion | | 6,711 | | | 6,845 | | | | | — | | | | | | |
Total long-term borrowings | | $ | 35,315 | | | $ | 38,970 | | | | | $ | 10,558 | | | | | | |
(1)The stated interest rate represents the weighted-average coupon rate for each category of borrowings. For floating-rate borrowings, interest rates are the rates in effect at September 27, 2025; these rates are not necessarily an indication of future interest rates.
(2)Amounts represent notional values of interest rate and cross-currency swaps outstanding as of September 27, 2025.
(3)The effective interest rate includes the impact of purchase accounting adjustments, existing and terminated interest rate and cross-currency swaps, and debt issuance costs and discounts.
(4)Includes purchase accounting adjustments and net debt issuance costs and discounts totaling a net premium of $1.5 billion and $1.6 billion at September 27, 2025 and September 28, 2024, respectively.
(5)Includes market value adjustments for debt with qualifying hedges, which reduces borrowings by $0.7 billion and $0.9 billion at September 27, 2025 and September 28, 2024, respectively.
Bank Facilities and Commercial Paper
At September 27, 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’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 1.1%. 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 September 27, 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 $0.5 billion of letters of credit under the facility expiring in March 2027, which if utilized, reduces available borrowings under this facility. As of September 27, 2025, the Company has $0.4 billion of outstanding letters of credit, of which none were issued under this facility. Outstanding letters of credit at Star India totaling $0.7 billion at September 27, 2025 that were entered into prior to the Star India Transaction are guaranteed by the Company through calendar 2025.
Commercial paper activity is as follows:
| | | | | | | | | | | | | | | | | |
| Commercial paper with original maturities less than three months, net(1) | | Commercial paper with original maturities greater than three months | | Total |
| Balance at Sep. 30, 2023 | $ | 289 | | | $ | 1,187 | | | $ | 1,476 | |
| Additions | 431 | | | 4,305 | | | 4,736 | |
| Payments | — | | | (3,204) | | | (3,204) | |
| Other Activity | 7 | | | 25 | | | 32 | |
| Balance at Sep. 28, 2024 | $ | 727 | | | $ | 2,313 | | | $ | 3,040 | |
| Additions | 1,232 | | | 1,129 | | | 2,361 | |
| Payments | — | | | (3,304) | | | (3,304) | |
| Other Activity | 4 | | | (39) | | | (35) | |
| Balance at Sep. 27, 2025 | $ | 1,963 | | | $ | 99 | | | $ | 2,062 | |
(1)Borrowings and reductions of borrowings are reported net.
U.S. Dollar Denominated Notes
At September 27, 2025, the Company had $38.7 billion of fixed rate U.S. dollar denominated notes with maturities ranging from 1 to 71 years and stated interest rates that range from 1.75% to 8.45%. Of this balance, $1.1 billion borrowed in connection with the November 2024 cruise ship delivery of the Disney Treasure allows for early repayment subject to cancellation fees.
In addition, in connection with the October 2025 cruise ship delivery of the Disney Destiny, the Company borrowed $1.1 billion under an existing credit facility with a fixed rate of 3.74% that will be payable semi-annually over a 12-year term. Early repayment is permitted subject to cancellation fees.
Foreign Currency Denominated Debt
At September 27, 2025, the Company had a fixed rate senior note of Canadian $1.3 billion ($0.9 billion), which had a stated interest rate of 3.06% and matures in March 2027. The Company has entered into pay-floating interest rate and cross-currency swaps that effectively convert the borrowing to a variable-rate U.S. dollar denominated borrowing indexed to SOFR.
Asia Theme Parks Borrowings
Shendi has provided Shanghai Disney Resort with loans totaling 7.7 billion yuan (approximately $1.1 billion) bearing interest at 8% and is 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%. As of September 27, 2025, the line of credit does not have a balance outstanding.
Maturities
The following table provides total borrowings, excluding market value adjustments and debt issuance premiums, discounts and costs, by scheduled maturity date as of September 27, 2025. The table also provides the estimated interest payments on these borrowings as of September 27, 2025 although actual future payments will differ for floating-rate borrowings:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Borrowings | | | | |
| Fiscal Year: | Before Asia Theme Parks Consolidation | | Asia
Theme Parks | | Total Borrowings | | Interest | | Total Borrowings and Interest |
| 2026 | $ | 6,737 | | $ | 14 | | $ | 6,751 | | $ | 1,559 | | $ | 8,310 |
| 2027 | 2,985 | | — | | 2,985 | | 1,394 | | 4,379 |
| 2028 | 1,687 | | 63 | | 1,750 | | 1,300 | | 3,050 |
| 2029 | 2,283 | | 108 | | 2,391 | | 1,362 | | 3,753 |
| 2030 | 1,338 | | 164 | | 1,502 | | 1,265 | | 2,767 |
| Thereafter | 25,146 | | 726 | | 25,872 | | 14,522 | | 40,394 |
| $ | 40,176 | | $ | 1,075 | | $ | 41,251 | | $ | 21,402 | | $ | 62,653 |
Interest
The Company capitalizes interest on assets constructed for its parks and resorts and on certain film and television productions. In fiscal 2025, 2024 and 2023, total interest capitalized was $322 million, $386 million and $365 million, respectively.
Interest expense (net of amounts capitalized), interest and investment income, and net periodic pension and postretirement benefit costs (other than service costs) (see Note 10) are reported net in the Consolidated Statements of Income and consist of the following:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Interest expense | $ | (1,812) | | | $ | (2,070) | | | $ | (1,973) | |
| Interest and investment income | 246 | | | 406 | | | 424 | |
| Net periodic pension and postretirement benefit costs (other than service costs) | 261 | | | 404 | | | 340 | |
| Interest expense, net | $ | (1,305) | | | $ | (1,260) | | | $ | (1,209) | |
9Income Taxes
Income Before Income Taxes by Domestic and Foreign Subsidiaries | | | | | | | | | | | | | | | | | |
Income Before Income Taxes | 2025 | | 2024 | | 2023 |
| | | | |
| Domestic subsidiaries (including U.S. exports) | $ | 9,535 | | | $ | 5,754 | | | $ | 3,086 | |
Foreign subsidiaries | 2,468 | | | 1,815 | | | 1,683 | |
| $ | 12,003 | | | $ | 7,569 | | | $ | 4,769 | |
| | | | | |
| | | | | |
Provision for Income Taxes: Current and Deferred
| | | | | | | | | | | | | | | | | |
| Income Tax Expense (Benefit) | | | | | |
| Current | 2025 | | 2024 | | 2023 |
| Federal | $ | (130) | | | $ | 1,393 | | | $ | 1,475 | |
| State | 413 | | | 237 | | | 402 | |
Foreign, including foreign withholding taxes | 906 | | | 973 | | | 867 | |
| 1,189 | | | 2,603 | | | 2,744 | |
| Deferred | | | | | |
| Federal | (2,171) | | | (764) | | | (1,180) | |
| State | (527) | | | 54 | | | 4 | |
| Foreign | 81 | | | (97) | | | (189) | |
| (2,617) | | | (807) | | | (1,365) | |
Income tax expense (benefit) | $ | (1,428) | | | $ | 1,796 | | | $ | 1,379 | |
| | | | | |
| | | | | |
Deferred Tax Assets and Liabilities
| | | | | | | | | | | |
| Components of Deferred Tax (Assets) and Liabilities | September 27, 2025 | | September 28, 2024 |
| | |
| Deferred tax assets | | | |
Net 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 liabilities | | | |
| Depreciable, amortizable and other property | 3,998 | | | 6,584 | |
Investment in U.S. entities | 916 | | | 1,102 | |
| Investment in foreign entities | 879 | | | 465 | |
Right-of-use lease assets | 628 | | | 692 | |
| Other | 89 | | | 78 | |
| Total deferred tax liabilities | 6,510 | | | 8,921 | |
Net deferred tax (asset) liability before valuation allowance(2) | (136) | | | 2,631 | |
| Valuation allowance | 2,931 | | | 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, 2025 |
International 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 Allowance
The following table details the change in valuation allowance for fiscal 2025, 2024 and 2023 (in billions):
| | | | | | | | | | | | | | | | | | | | | | | |
| Balance at Beginning of Period | | Increases (Decreases) to Tax Expense | | Other Changes | | Balance at End of Period |
Year ended September 27, 2025 | $ | 3.0 | | | $ | (0.1) | | | $ | — | | | $ | 2.9 | |
Year ended September 28, 2024 | 3.2 | | | (0.3) | | | 0.1 | | | 3.0 | |
Year ended September 30, 2023 | 2.9 | | | 0.2 | | | 0.1 | | | 3.2 | |
Reconciliation of the effective income tax rate for continuing operations to the federal rate
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Federal income tax rate | 21.0 | % | | 21.0 | % | | 21.0 | % |
State taxes, net of federal benefit(1) | 2.4 | | | 2.2 | | | 5.8 | |
Change in Hulu income tax classification | (27.3) | | | — | | | — | |
Non-tax deductible impairments | 0.9 | | | 8.8 | | | 3.5 | |
| Foreign derived intangible income | (2.2) | | | (3.6) | | | (4.3) | |
Income tax audits and reserves | (8.4) | | | (2.4) | | | 1.3 | |
Tax rate differential on foreign income | 3.4 | | | (1.6) | | | 0.1 | |
U.S. research and development credits | (0.9) | | | (1.1) | | | (1.1) | |
Tax impact of equity awards | (0.3) | | | 0.8 | | | 2.1 | |
| Valuation allowance | (1.3) | | | (0.6) | | | (1.8) | |
| Other | 0.8 | | | 0.2 | | | 2.3 | |
| (11.9 | %) | | 23.7 | % | | 28.9 | % |
(1)Fiscal 2023 includes an adjustment related to certain deferred state taxes
Unrecognized tax benefits
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding the related accrual for interest and penalties, is as follows:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Balance at the beginning of the year | $ | 1,952 | | | $ | 2,517 | | | $ | 2,449 | |
| | | | | |
| Increases for current year tax positions | 105 | | | 82 | | | 98 | |
| Increases for prior year tax positions | 116 | | | 209 | | | 273 | |
| Decreases in prior year tax positions | (164) | | | (423) | | | (144) | |
| Settlements with taxing authorities | (256) | | | (239) | | | (153) | |
Lapse in statute of limitations | (620) | | | (194) | | | (6) | |
| Balance at the end of the year | $ | 1,133 | | | $ | 1,952 | | | $ | 2,517 | |
Balances at September 27, 2025, September 28, 2024 and September 30, 2023 include $0.8 billion, $1.4 billion and $1.8 billion, respectively, that if recognized, would reduce our income tax expense and effective tax rate. These amounts are net of the offsetting benefits from other tax jurisdictions.
At September 27, 2025, September 28, 2024 and September 30, 2023 accrued interest and penalties related to unrecognized tax benefits were $0.3 billion, $0.9 billion and $1.0 billion, respectively. During fiscal 2025, 2024 and 2023, the Company recorded additional interest and penalties of $177 million, $157 million and $210 million, respectively, and recorded reductions in accrued interest and penalties of $816 million, $151 million and $241 million, respectively. The Company’s policy is to report interest and penalties as a component of income tax expense.
The Company is generally no longer subject to U.S. federal examination for years prior to 2018. The Company is no longer subject to examination in any of its major state or foreign tax jurisdictions for years prior to 2009.
In the next twelve months, it is reasonably possible that our unrecognized tax benefits could change due to the resolution of open tax matters, which would reduce our unrecognized tax benefits by $0.4 billion.
Other
In fiscal 2025, the Company recognized income tax benefits of $35 million for the excess of equity-based compensation deductions over amounts recorded based on the grant date fair value. In fiscal 2024 and 2023, the Company recognized income tax expense of $55 million and $93 million, respectively, for the shortfall between equity-based compensation deductions and amounts recorded based on the grant date fair value.
U.S. Legislation
In July 2025, legislation known as “One Big Beautiful Bill Act” was signed into law. The most significant tax impact on the Company will be cash timing benefits from acceleration of tax deductions on U.S. investments in fixed assets and content production, which will result in lower tax payments in the year of investment than would have otherwise occurred under the previous legislation. The cash tax benefit will begin to be realized in fiscal 2026 as U.S. federal and California state income tax
payments otherwise due in fiscal 2025 have been deferred pursuant to relief related to the 2025 wildfires in California. We do not expect a material impact on the Company’s income tax expense.
10Pension and Other Benefit Programs
The Company maintains pension and postretirement medical benefit plans covering certain of its employees not covered by union or industry-wide plans. The Company has defined benefit pension plans that cover employees hired prior to January 1, 2012. For employees hired after this date, the Company has a defined contribution plan. Benefits under these pension plans are generally based on years of service and/or compensation and generally require 3 years of vesting service. Employees generally hired after January 1, 1987 for certain of our media businesses and other employees generally hired after January 1, 1994 are not eligible for postretirement medical benefits.
Defined Benefit Plans
The Company measures the actuarial value of its benefit obligations and plan assets for its defined benefit pension and postretirement medical benefit plans at September 30 and adjusts for any plan contributions or significant events between September 30 and our fiscal year end.
The following chart summarizes the benefit obligations, assets, funded status and balance sheet impacts associated with the defined benefit pension and postretirement medical benefit plans:
| | | | | | | | | | | | | | | | | | | | | | | |
| | Pension Plans | | Postretirement Medical Plans |
| | September 27,
2025 | | September 28,
2024 | | September 27,
2025 | | September 28,
2024 |
| Projected benefit obligations | | | | | | | |
| Beginning obligations | $ | (16,734) | | | $ | (14,690) | | | $ | (968) | | | $ | (961) | |
| | | | | | | |
| Service cost | (264) | | | (248) | | | (1) | | | (1) | |
| Interest cost | (783) | | | (834) | | | (45) | | | (55) | |
Actuarial gain (loss)(1) | 716 | | | (1,667) | | | 30 | | | 6 | |
| Benefits paid | 716 | | | 661 | | | 56 | | | 56 | |
Other | 19 | | | 44 | | | (9) | | | (13) | |
| | | | | | | |
| Ending obligations | $ | (16,330) | | | $ | (16,734) | | | $ | (937) | | | $ | (968) | |
| Fair value of plans’ assets | | | | | | | |
| Beginning fair value | $ | 17,557 | | | $ | 15,442 | | | $ | 892 | | | $ | 781 | |
| | | | | | | |
| Actual return on plan assets | 699 | | | 2,789 | | | 36 | | | 143 | |
| Contributions | 71 | | | 69 | | | 27 | | | 26 | |
| Benefits paid | (716) | | | (661) | | | (56) | | | (56) | |
| Expenses and other | (67) | | | (82) | | | (2) | | | (2) | |
| Ending fair value | $ | 17,544 | | | $ | 17,557 | | | $ | 897 | | | $ | 892 | |
| | | | | | | |
| Overfunded (Underfunded) status of the plans | $ | 1,214 | | | $ | 823 | | | $ | (40) | | | $ | (76) | |
| Amounts recognized in the balance sheet | | | | | | | |
| Non-current assets | $ | 2,565 | | | $ | 2,192 | | | $ | 324 | | | $ | 303 | |
| Current liabilities | (79) | | | (77) | | | (1) | | | (1) | |
| Non-current liabilities | (1,272) | | | (1,292) | | | (363) | | | (378) | |
| $ | 1,214 | | | $ | 823 | | | $ | (40) | | | $ | (76) | |
(1)Primarily reflects updates to the discount rate used to determine the fiscal year-end benefit obligation from the rate that was used in the preceding fiscal year.
The components of net periodic benefit cost (benefit) are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Pension Plans | | Postretirement Medical Plans |
| | 2025 | | 2024 | | 2023 | | 2025 | | 2024 | | 2023 |
| Service cost | $ | 264 | | | $ | 248 | | | $ | 282 | | | $ | 1 | | | $ | 1 | | | $ | 5 | |
Other costs (benefits): | | | | | | | | | | | |
| Interest cost | 783 | | | 834 | | | 784 | | | 45 | | | 55 | | | 81 | |
| Expected return on plan assets | (1,161) | | | (1,138) | | | (1,149) | | | (59) | | | (58) | | | (61) | |
Amortization of prior-year service costs (credits)(1) | 3 | | | 8 | | | 8 | | | (90) | | | (90) | | | — | |
Recognized net actuarial loss/(gain) | 247 | | | 21 | | | 19 | | | (29) | | | (36) | | | (22) | |
Total other costs (benefit) | (128) | | | (275) | | | (338) | | | (133) | | | (129) | | | (2) | |
Net periodic benefit cost (benefit) | $ | 136 | | | $ | (27) | | | $ | (56) | | | $ | (132) | | | $ | (128) | | | $ | 3 | |
(1)The amortization of prior-year service credits is related to a change in postretirement medical benefit options.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Key assumptions are as follows: | | | | | | | | | | | |
| | Pension Plans | | Postretirement Medical Plans |
| | 2025 | | 2024 | | 2023 | | 2025 | | 2024 | | 2023 |
| Discount rate used to determine the fiscal year‑end benefit obligation | 5.46 | % | | 5.06 | % | | 5.94 | % | | 5.36 | % | | 5.00 | % | | 5.94 | % |
| Discount rate used to determine the interest cost component of net periodic benefit cost | 4.81 | % | | 5.86 | % | | 5.37 | % | | 4.73 | % | | 5.84 | % | | 5.38 | % |
Rate used to determine the expected return on plan assets component of net period benefit cost | 7.25 | % | | 7.00 | % | | 7.00 | % | | 7.25 | % | | 7.00 | % | | 7.00 | % |
| Weighted average rate of compensation increase to determine the fiscal year‑end benefit obligation | 2.70 | % | | 2.70 | % | | 3.10 | % | | n/a | | n/a | | n/a |
| Year 1 increase in cost of benefits | n/a | | n/a | | n/a | | 7.50 | % | | 7.00 | % | | 7.00 | % |
| Rate of increase to which the cost of benefits is assumed to decline (the ultimate trend rate) | n/a | | n/a | | n/a | | 4.00 | % | | 4.00 | % | | 4.00 | % |
| Year that the rate reaches the ultimate trend rate | n/a | | n/a | | n/a | | 2044 | | 2043 | | 2042 |
AOCI, before tax, as of September 27, 2025 consists of the following amounts that have not yet been recognized in net periodic benefit cost:
| | | | | | | | | | | | | | | | | |
| Pension Plans | | Postretirement
Medical Plans | | Total |
Prior service costs (benefits) | $ | 14 | | | $ | (376) | | | $ | (362) | |
Net actuarial loss (gain) | 2,494 | | | (167) | | | 2,327 | |
| Total amounts included in AOCI | $ | 2,508 | | | $ | (543) | | | $ | 1,965 | |
Plan Funded Status
As of September 27, 2025, the projected benefit obligation and accumulated benefit obligation for pension plans with accumulated benefit obligations in excess of plan assets were each $1.3 billion, and the aggregate fair value of plan assets was not material. As of September 28, 2024, the projected benefit obligation and accumulated benefit obligation for pension plans with accumulated benefit obligations in excess of plan assets were $1.4 billion and $1.3 billion, respectively, and the aggregate fair value of plan assets was not material.
As of both September 27, 2025 and September 28, 2024, the projected benefit obligation for pension plans with projected benefit obligations in excess of plan assets was $1.4 billion and the aggregate fair value of plan assets was not material.
The Company’s total accumulated pension benefit obligations at September 27, 2025 and September 28, 2024 were $15.5 billion and $15.7 billion, respectively. Approximately 99% and 98% were vested as of September 27, 2025 and September 28, 2024, respectively.
The accumulated postretirement medical benefit obligations and fair value of plan assets for postretirement medical plans with accumulated postretirement medical benefit obligations in excess of plan assets were each $0.9 billion at September 27, 2025. The accumulated postretirement medical benefit obligations and fair value of plan assets for postretirement medical plans with accumulated postretirement medical benefit obligations in excess of plan assets were $1.0 billion and $0.9 billion, respectively, at September 28, 2024.
Plan Assets
A significant portion of the assets of the Company’s defined benefit plans are managed in a third-party master trust. The investment policy and allocation of the assets in the master trust were approved by the Company’s Investment and Administrative Committee, which has oversight responsibility for the Company’s retirement plans. The investment policy ranges for the major asset classes are as follows:
| | | | | | | | | | | | | | |
| Asset Class | | Minimum | | Maximum |
| | | | |
| Equity investments | | 10% | | 40% |
| Fixed income investments | | 40% | | 60% |
| Alternative investments | | 10% | | 30% |
| Cash & money market funds | | —% | | 10% |
The primary investment objective for the assets within the master trust is the prudent and cost effective management of assets to satisfy benefit obligations to plan participants. Financial risks are managed through diversification of plan assets, selection of investment managers and through the investment guidelines incorporated in investment management agreements. Investments are monitored to assess whether returns are commensurate with risks taken.
The long-term asset allocation policy for the master trust was established taking into consideration a variety of factors that include, but are not limited to, the average age of participants, the number of retirees, the duration of liabilities, the funded status of the plan and the expected payout ratio. Liquidity needs of the master trust are generally managed using cash generated by investments or by liquidating securities.
Assets are generally managed by external investment managers pursuant to investment management agreements that establish permitted securities and risk controls commensurate with the account’s investment strategy. Some agreements permit the use of derivative securities (futures, options, interest rate swaps, credit default swaps) that enable investment managers to enhance returns and manage exposures within their accounts.
Fair Value Measurements of Plan Assets
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 of the fair value hierarchy:
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
Investments that are valued using the net asset value (NAV) (or its equivalent) practical expedient are excluded from the fair value hierarchy disclosure. NAV per share is determined based on the fair value using the underlying assets divided by the number of units outstanding.
The following is a description of the valuation methodologies used for assets reported at fair value. The methodologies used at September 27, 2025 and September 28, 2024 are the same.
Level 1 investments are valued based on reported market prices on the last trading day of the fiscal year. Investments in common and preferred stocks and mutual funds are valued based on the securities’ exchange-listed price or a broker’s quote in an active market. Investments in U.S. Treasury securities are valued based on a broker’s quote in an active market.
Level 2 investments in government and federal agency bonds and notes (excluding U.S. Treasury securities), corporate bonds, mortgage-backed securities (MBS) and asset-backed securities are valued using a broker’s quote in a non-active market or an evaluated price based on a compilation of reported market information, such as benchmark yield curves, credit spreads and estimated default rates. Derivative financial instruments are valued based on models that incorporate observable inputs for the underlying securities, such as interest rates or foreign currency exchange rates.
The Company’s defined benefit plan assets are summarized by level in the following tables:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | As of September 27, 2025 |
| Description | | Level 1 | | Level 2 | | Total | | Investment Mix |
| | | | | | | | |
| Cash | | $ | 34 | | | $ | — | | | $ | 34 | | | — % |
Common and preferred stocks(1) | | 2,737 | | | — | | | 2,737 | | | 15 % |
| Mutual funds | | 979 | | | — | | | 979 | | | 5 % |
Government and federal agency bonds, notes and MBS | | 3,767 | | | 2,576 | | | 6,343 | | | 33 % |
Corporate bonds | | — | | | 2,705 | | | 2,705 | | | 14 % |
| Other mortgage- and asset-backed securities | | — | | | 139 | | | 139 | | | 1 % |
Derivatives and other, net | | 15 | | | 2 | | | 17 | | | — % |
| Total investments in the fair value hierarchy | | $ | 7,532 | | | $ | 5,422 | | | 12,954 | | | |
| | | | | | | | |
Assets valued at NAV as a practical expedient: | | | | | | | | |
Common collective funds | | | | | | 1,202 | | | 6 % |
| Alternative investments | | | | | | 4,431 | | | 23 % |
Money market funds | | | | | | 545 | | | 3 % |
Investments at fair value | | | | | | 19,132 | | | 100 % |
Other(2) | | | | | | (691) | | | |
Total plan assets at fair value | | | | | | $ | 18,441 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | As of September 28, 2024 |
| Description | | Level 1 | | Level 2 | | Total | | Investment Mix |
| | | | | | | | |
| Cash | | $ | 19 | | | $ | — | | | $ | 19 | | | — % |
Common and preferred stocks(1) | | 3,377 | | | — | | | 3,377 | | | 18 % |
| Mutual funds | | 701 | | | — | | | 701 | | | 4 % |
Government and federal agency bonds, notes and MBS | | 2,744 | | | 1,845 | | | 4,589 | | | 24 % |
Corporate bonds | | — | | | 2,111 | | | 2,111 | | | 11 % |
| Other mortgage- and asset-backed securities | | — | | | 166 | | | 166 | | | 1 % |
Derivatives and other, net | | 10 | | | 1 | | | 11 | | | — % |
| Total investments in the fair value hierarchy | | $ | 6,851 | | | $ | 4,123 | | | 10,974 | | | |
| | | | | | | | |
Assets valued at NAV as a practical expedient: | | | | | | | | |
Common collective funds | | | | | | 2,380 | | | 13 % |
| Alternative investments | | | | | | 4,350 | | | 23 % |
Money market funds | | | | | | 1,037 | | | 6 % |
Investments at fair value | | | | | | 18,741 | | | 100 % |
Other(2) | | | | | | (292) | | | |
Total plan assets at fair value | | | | | | $ | 18,449 | | | |
| | | | | | | | |
(1)Includes 2.9 million shares of Company common stock valued at $327 million and 2.9 million shares valued at $278 million at September 27, 2025 and September 28, 2024, respectively.
(2)Represents net unsettled transactions, relating primarily to purchases and sales of plan assets.
Uncalled Capital Commitments
Alternative investments held by the master trust include interests in funds that have rights to make capital calls to the investors. In such cases, the master trust would be contractually obligated to make a cash contribution at the time of the capital call. At September 27, 2025, the total committed capital still uncalled and unpaid was $1.3 billion.
Plan Contributions
During fiscal 2025, the Company made $98 million of contributions to its pension and postretirement medical plans. The Company currently does not expect to make material pension and postretirement medical plan contributions in fiscal 2026. Final minimum funding requirements for fiscal 2026 will be determined based on a January 1, 2026 funding actuarial valuation, which is expected to be received during the fourth quarter of fiscal 2026.
Estimated Future Benefit Payments
The following table presents estimated future benefit payments for the next ten fiscal years:
| | | | | | | | | | | |
| Pension
Plans | | Postretirement Medical Plans(1) |
| 2026 | $ | 829 | | $ | 54 |
| 2027 | 838 | | 57 |
| 2028 | 884 | | 59 |
| 2029 | 929 | | 62 |
| 2030 | 975 | | 64 |
| 2031 – 2035 | 5,445 | | 343 |
(1)Estimated future benefit payments are net of expected Medicare subsidy receipts of $34 million.
Assumptions
Assumptions, such as discount rates, long-term rate of return on plan assets and the healthcare cost trend rate, have a significant effect on the amounts reported for net periodic benefit cost as well as the related benefit obligations.
Discount Rate — The assumed discount rate for pension and postretirement medical plans reflects the market rates for high-quality corporate bonds currently available. The Company’s discount rate was determined by considering yield curves constructed of a large population of high-quality corporate bonds and reflects the matching of the plans’ liability cash flows to the yield curves. The Company measures service and interest costs by applying the specific spot rates along that yield curve to the plans’ liability cash flows.
Long-term rate of return on plan assets — The long-term rate of return on plan assets represents an estimate of long-term returns on an investment portfolio consisting of a mixture of equities, fixed income and alternative investments. When determining the long-term rate of return on plan assets, the Company considers long-term rates of return on the asset classes (both historical and forecasted) in which the Company expects the pension funds to be invested. The following long-term rates of return by asset class were considered in setting the long-term rate of return on plan assets assumption:
| | | | | | | | | | | |
| Equity Securities | 6 | % | to | 10 | % |
| Debt Securities | 3 | % | to | 7 | % |
| Alternative Investments | 6 | % | to | 11 | % |
Healthcare cost trend rate — The Company reviews external data and its own historical trends for healthcare costs to determine the healthcare cost trend rates for the postretirement medical benefit plans. The 2025 actuarial valuation assumed a 7.50% annual rate of increase in the per capita cost of covered healthcare claims with the rate decreasing in even increments over nineteen years until reaching 4.00%.
Sensitivity — A one percentage point change in the discount rate and expected long-term rate of return on plan assets would have the following effects as of September 27, 2025 and for fiscal 2026:
| | | | | | | | | | | | | | | | | |
| | Discount Rate | | Expected Long-Term
Rate of Return On Assets |
| Increase (decrease) | Benefit
Expense | | Projected Benefit Obligations | | Benefit
Expense |
| 1 percentage point decrease | $ | 115 | | | $ | 2,140 | | | $ | 177 | |
| 1 percentage point increase | (48) | | | (1,898) | | | (177) | |
Multiemployer Benefit Plans
The Company participates in a number of multiemployer pension plans under union and industry-wide collective bargaining agreements that cover our union-represented employees and expenses its contributions to these plans as incurred. These plans generally provide for retirement, death and/or termination benefits for eligible employees within the applicable
collective bargaining units, based on specific eligibility/participation requirements, vesting periods and benefit formulas. The risks of participating in these multiemployer plans are different from single-employer plans. For example:
•Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.
•If a participating employer stops contributing to the multiemployer plan, the unfunded obligations of the plan may become the obligation of the remaining participating employers.
•If a participating employer chooses to stop participating in these multiemployer plans, the employer may be required to pay those plans an amount based on the underfunded status of the plan.
The Company also participates in several multiemployer health and welfare plans that cover both active and retired employees. Health care benefits are provided to participants who meet certain eligibility requirements under the applicable collective bargaining unit.
The following table sets forth our contributions to multiemployer pension and health and welfare benefit plans:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Pension plans | $ | 314 | | $ | 291 | | $ | 316 |
| Health & welfare plans | 276 | | 300 | | 299 |
| Total contributions | $ | 590 | | $ | 591 | | $ | 615 |
Defined Contribution Plans
The Company has defined contribution retirement plans for domestic employees who began service after December 31, 2011 and are not eligible to participate in the defined benefit pension plans. In general, the Company contributes from 3% to 9% of an employee’s compensation depending on the employee’s age and years of service with the Company up to plan limits. The Company also has savings and investment plans for which the Company generally matches 50% of employee contributions up to plan limits. In fiscal 2025, 2024 and 2023, the costs of our domestic and international defined contribution plans were $448 million, $408 million and $378 million, respectively.
11Equity
The Company declared the following dividends in fiscal 2026, 2025 and 2024:
| | | | | | | | | | | | | | |
| Per Share | | Amount | | Payment Date |
| $0.75 | | $1.3 billion(1) | | July 22, 2026 |
| $0.75 | | $1.3 billion(1) | | January 15, 2026 |
| $0.50 | | $0.9 billion | | July 23, 2025 |
| $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 dividends that will be paid on January 15, 2026 and July 22, 2026. The actual amount will be determined based on shareholders of record at the record date.
The Company did not declare or pay a dividend in fiscal 2023.
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 year ended September 27, 2025, the Company repurchased 32 million shares of its common stock for $3.5 billion. During the year ended September 28, 2024, the Company repurchased 28 million shares of its common stock for $3.0 billion. The amount of repurchases in both fiscal 2025 and fiscal 2024 exclude the one percent excise tax on stock repurchases imposed by the Inflation Reduction Act of 2022. As of September 27, 2025, the Company had remaining authorization in place to repurchase approximately 339 million additional shares. The repurchase program does not have an expiration date.
The following table summarizes 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 | | | | | | | |
| Balance at October 1, 2022 | $ | 804 | | | $ | (3,770) | | | $ | (2,014) | | | $ | (4,980) | |
Unrealized gains (losses) arising during the period | (101) | | | 1,594 | | | (2) | | | 1,491 | |
| Reclassifications of net (gains) losses to net income | (444) | | | 4 | | | 42 | | | (398) | |
| | | | | | | |
| Balance at September 30, 2023 | $ | 259 | | | $ | (2,172) | | | $ | (1,974) | | | $ | (3,887) | |
| Unrealized gains (losses) arising during the period | (112) | | | 25 | | | 119 | | | 32 | |
| Reclassifications of net (gains) losses to net income | (466) | | | (96) | | | — | | | (562) | |
| Balance at September 28, 2024 | $ | (319) | | | $ | (2,243) | | | $ | (1,855) | | | $ | (4,417) | |
Unrealized gains (losses) arising during the period | 20 | | | 210 | | | (134) | | | 96 | |
Reclassifications of net (gains) losses to net income | (250) | | | 132 | | | — | | | (118) | |
Star India Transaction | — | | | — | | | 904 | | | 904 | |
| Balance at September 27, 2025 | $ | (549) | | | $ | (1,901) | | | $ | (1,085) | | | $ | (3,535) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Market Value
Adjustments
for Hedges | | Unrecognized
Pension and
Postretirement
Medical
Expense | | Foreign
Currency
Translation
and Other | | AOCI |
| |
| |
| Tax on AOCI | | | | | | | |
| Balance at October 1, 2022 | $ | (179) | | | $ | 901 | | | $ | 139 | | | $ | 861 | |
Unrealized gains (losses) arising during the period | 12 | | | (384) | | | 17 | | | (355) | |
| Reclassifications of net (gains) losses to net income | 103 | | | — | | | (14) | | | 89 | |
| | | | | | | |
| Balance at September 30, 2023 | $ | (64) | | | $ | 517 | | | $ | 142 | | | $ | 595 | |
Unrealized gains (losses) arising during the period | 27 | | | (10) | | | (26) | | | (9) | |
Reclassifications of net (gains) losses to net income | 108 | | | 24 | | | — | | | 132 | |
| Balance at September 28, 2024 | $ | 71 | | | $ | 531 | | | $ | 116 | | | $ | 718 | |
Unrealized gains (losses) arising during the period | (9) | | | (53) | | | (3) | | | (65) | |
Reclassifications of net (gains) losses to net income | 58 | | | (32) | | | — | | | 26 | |
Star India Transaction | — | | | — | | | (58) | | | (58) | |
| Balance at September 27, 2025 | $ | 120 | | | $ | 446 | | | $ | 55 | | | $ | 621 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Market Value
Adjustments
for Hedges | | Unrecognized
Pension and
Postretirement
Medical
Expense | | Foreign
Currency
Translation
and Other | | AOCI |
| |
| |
| AOCI, after tax | | | | | | | |
| Balance at October 1, 2022 | $ | 625 | | | $ | (2,869) | | | $ | (1,875) | | | $ | (4,119) | |
Unrealized gains (losses) arising during the period | (89) | | | 1,210 | | | 15 | | | 1,136 | |
| Reclassifications of net (gains) losses to net income | (341) | | | 4 | | | 28 | | | (309) | |
| | | | | | | |
| Balance at September 30, 2023 | $ | 195 | | | $ | (1,655) | | | $ | (1,832) | | | $ | (3,292) | |
Unrealized gains (losses) arising during the period | (85) | | | 15 | | | 93 | | | 23 | |
Reclassifications of net (gains) losses to net income | (358) | | | (72) | | | — | | | (430) | |
| Balance at September 28, 2024 | $ | (248) | | | $ | (1,712) | | | $ | (1,739) | | | $ | (3,699) | |
Unrealized gains (losses) arising during the period | 11 | | | 157 | | | (137) | | | 31 | |
Reclassifications of net (gains) losses to net income | (192) | | | 100 | | | — | | | (92) | |
Star India Transaction | — | | | — | | | 846 | | | 846 | |
| Balance at September 27, 2025 | $ | (429) | | | $ | (1,455) | | | $ | (1,030) | | | $ | (2,914) | |
Details about AOCI components reclassified to net income are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Gains (losses) in net income: | | Affected line item in the Consolidated Statements of Operations: | | 2025 | | 2024 | | 2023 |
Market value adjustments, primarily cash flow hedges | | Primarily revenue | | $ | 250 | | | $ | 466 | | | $ | 444 | |
| Estimated tax | | Income taxes | | (58) | | | (108) | | | (103) | |
| | | | 192 | | | 358 | | | 341 | |
| | | | | | | | |
| | | | | | | | |
Pension and postretirement medical expense | | Interest expense, net | | (132) | | | 96 | | | (4) | |
| Estimated tax | | Income taxes | | 32 | | | (24) | | | — | |
| | | | (100) | | | 72 | | | (4) | |
| | | | | | | | |
Foreign currency translation and other | | Other income (expense), net | | — | | | — | | | (42) | |
Estimated tax | | Income taxes | | — | | | — | | | 14 | |
| | | | — | | | — | | | (28) | |
| | | | | | | | |
Total reclassifications for the period | | | | $ | 92 | | | $ | 430 | | | $ | 309 | |
12Equity-Based Compensation
Under various plans, the Company may grant stock options and other equity-based awards to executive, management, technology and creative personnel. The Company’s approach to long-term incentive compensation contemplates awards of stock options and restricted stock units (RSUs). Certain RSUs awarded to senior executives vest based upon the achievement of market or performance conditions (Performance RSUs).
Stock options are generally granted with a 10 year term at exercise prices equal to or exceeding the market price at the date of grant and become exercisable ratably over a three-year period from the grant date. At the discretion of the Compensation Committee of the Company’s Board of Directors, options can occasionally extend up to 15 years after date of grant. RSUs generally vest ratably over three years and Performance RSUs generally fully vest after three years, subject to achieving market or performance conditions. Equity-based award grants generally provide continued vesting, in the event of termination, for employees that reach age 60 or greater, have at least ten years of service and have held the award for at least one year.
Each share granted subject to a stock option award reduces the number of shares available under the Company’s stock incentive plans by one share while each share granted subject to a RSU award reduces the number of shares available by two shares. As of September 27, 2025, the maximum number of shares available for issuance under the Company’s stock incentive plans (assuming all the awards are in the form of stock options) was approximately 117 million shares and the number available
for issuance assuming all awards are in the form of RSUs was approximately 59 million shares. The Company satisfies stock option exercises and vesting of RSUs with newly issued shares. Stock options and RSUs are generally forfeited by employees who terminate prior to vesting.
Each year, generally during the first half of the year, the Company awards stock options and restricted stock units to a broad-based group of management, technology and creative personnel. The fair value of options is estimated based on the binomial valuation model. The binomial valuation model takes into account variables such as volatility, dividend yield and the risk-free interest rate. The binomial valuation model also considers the expected exercise multiple (the multiple of exercise price to grant price at which exercises are expected to occur on average) and the termination rate (the probability of a vested option being canceled due to the termination of the option holder) in computing the value of the option.
The weighted average assumptions used in the option-valuation model were as follows:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Risk-free interest rate | 4.6% | | 4.0% | | 3.6% |
| Expected volatility | 28% | | 27% | | 31% |
| Dividend yield | 0.97% | | 0.66% | | —% |
| Termination rate | 6.1% | | 6.1% | | 5.9% |
| Exercise multiple | 2.12 | | 2.12 | | 1.98 |
Although the initial fair value of stock options is not adjusted after the grant date, changes in the Company’s assumptions may change the value of, and therefore the expense related to, future stock option grants. The assumptions that cause the greatest variation in fair value in the binomial valuation model are the expected volatility and expected exercise multiple. Increases or decreases in either the expected volatility or expected exercise multiple will cause the binomial option value to increase or decrease, respectively. The volatility assumption considers both historical and implied volatility and may be impacted by the Company’s performance as well as changes in economic and market conditions.
Compensation expense for RSUs and stock options is recognized ratably over the service period of the award. Compensation expense for RSUs is based on the market price of the shares underlying the awards on the grant date. Compensation expense for Performance RSUs reflects the estimated probability that the market or performance conditions will be met.
Compensation expense related to stock options and RSUs is as follows:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
Stock options | $ | 70 | | | $ | 71 | | | $ | 76 | |
| RSUs | 1,293 | | | 1,295 | | | 1,067 | |
Total equity-based compensation expense(1) | 1,363 | | | 1,366 | | | 1,143 | |
| Tax impact | (275) | | | (285) | | | (260) | |
| Reduction in net income | $ | 1,088 | | | $ | 1,081 | | | $ | 883 | |
| Equity-based compensation expense capitalized during the period | $ | 194 | | | $ | 201 | | | $ | 145 | |
| | | | | |
(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.
The following table summarizes information about stock option transactions in fiscal 2025 (shares in millions):
| | | | | | | | | | | |
| |
| | Shares | | Weighted
Average
Exercise Price |
| Outstanding at beginning of year | 19 | | | $ | 118.37 |
| | | |
| Awards granted | 2 | | | 108.30 |
| Awards exercised | (2) | | | 98.74 |
| Awards expired/canceled | (1) | | | 135.21 |
| Outstanding at end of year | 18 | | | $ | 119.08 |
| Exercisable at end of year | 14 | | | $ | 124.16 |
The following tables summarize information about stock options vested and expected to vest at September 27, 2025 (shares in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Vested |
| | Range of Exercise Prices | | | Number of
Options | | Weighted Average
Exercise Price | | Weighted Average
Remaining Years of
Contractual Life |
| | $ | 80 | | — | $ | 110 | | | | 4 | | $ | 97.41 | | 5.7 |
| | $ | 111 | | — | $ | 140 | | | | 5 | | 112.05 | | 2.4 |
| | $ | 141 | | — | $ | 170 | | | | 4 | | 148.70 | | 4.9 |
| | | | | | | | | | | |
| | $ | 171 | | — | $ | 200 | | | | 1 | | 177.43 | | 5.4 |
| | | | | | | 14 | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Expected to Vest |
| | Range of Exercise Prices | | | Number of Options(1) | | Weighted Average
Exercise Price | | Weighted Average
Remaining Years of
Contractual Life |
| | $ | 50 | | — | $ | 100 | | | | 2 | | $ | 91.92 | | 8.1 |
| | $ | 101 | | — | $ | 150 | | | | 2 | | 109.50 | | 9.3 |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | 4 | | | | |
(1)Number of options expected to vest is total unvested options less estimated forfeitures.
The following table summarizes information about RSU transactions in fiscal 2025 (shares in millions):
| | | | | | | | | | | |
| |
| | Units | | Weighted Average
Grant-Date Fair Value |
| Unvested at beginning of year | 26 | | $ | 109.25 |
Granted(1) | 16 | | 108.55 |
| Vested | (15) | | 100.58 |
| Forfeited | (2) | | 96.77 |
| | | |
Unvested at end of year(2) | 25 | | $ | 100.94 |
(1)Includes 0.4 million Performance RSUs.
(2)Includes 1.0 million Performance RSUs.
The weighted average grant-date fair values of options granted during fiscal 2025, 2024 and 2023 were $37.66, $32.09 and $33.18, respectively, and for RSUs were $108.52, $94.23 and $89.66, respectively. The total intrinsic value (market value on date of exercise less exercise price) of options exercised and RSUs vested during fiscal 2025, 2024 and 2023 totaled $1,700 million, $1,322 million and $829 million, respectively. The aggregate intrinsic values of stock options vested and expected to vest at September 27, 2025 were $74 million and $44 million, respectively.
As of September 27, 2025, unrecognized compensation cost related to unvested stock options and RSUs was $79 million and $1,845 million, respectively. That cost is expected to be recognized over a weighted-average period of 1.1 years for stock options and 1.1 years for RSUs.
Cash received from option exercises for fiscal 2025, 2024 and 2023 was $233 million, $88 million and $52 million, respectively. Tax benefits realized from tax deductions associated with option exercises and RSU vestings for fiscal 2025, 2024 and 2023 were approximately $344 million, $275 million and $190 million, respectively.
13Detail of Certain Balance Sheet Accounts
| | | | | | | | | | | | | | |
| Current receivables | | September 27,
2025 | | September 28,
2024 |
| | | |
| Accounts receivable | | $ | 10,434 | | | $ | 10,341 | |
Production tax credit receivables | | 1,313 | | | 1,358 | |
| Other | | 1,560 | | | 1,113 | |
| Allowance for credit losses | | (90) | | | (83) | |
| | $ | 13,217 | | | $ | 12,729 | |
| | | | | | | | | | | | | | |
| Parks, resorts and other property | | September 27,
2025 | | September 28,
2024 |
| Attractions, buildings and improvements | | $ | 41,457 | | | $ | 39,246 | |
| Furniture, fixtures and equipment | | 30,854 | | | 28,279 | |
| Land improvements | | 8,627 | | | 8,067 | |
| Leasehold improvements | | 1,103 | | | 1,082 | |
| | 82,041 | | | 76,674 | |
| Accumulated depreciation | | (48,889) | | | (45,506) | |
| Projects in progress | | 6,911 | | | 4,728 | |
| Land | | 1,192 | | | 1,145 | |
| | $ | 41,255 | | | $ | 37,041 | |
| | | | | | | | | | | | | | | | | |
| September 27, 2025 |
Intangible assets | Gross | | Accumulated Amortization | | Net |
| Character/franchise intangibles, copyrights and trademarks | $ | 9,507 | | | $ | (4,034) | | | $ | 5,473 | |
| MVPD agreements | 7,213 | | | (5,543) | | | 1,670 | |
| Other amortizable intangible assets | 3,493 | | | (3,156) | | | 337 | |
Total intangible assets subject to amortization | 20,213 | | | (12,733) | | | 7,480 | |
Indefinite lived intangible assets(1) | 1,792 | | | — | | | 1,792 | |
Total intangible assets | $ | 22,005 | | | $ | (12,733) | | | $ | 9,272 | |
| | | | | | | | | | | | | | | | | |
| September 28, 2024 |
| Gross | | Accumulated Amortization | | Net |
| Character/franchise intangibles, copyrights and trademarks | $ | 9,507 | | | $ | (3,604) | | | $ | 5,903 | |
| MVPD agreements | 7,213 | | | (4,733) | | | 2,480 | |
| Other amortizable intangible assets | 3,493 | | | (2,929) | | | 564 | |
Total intangible assets subject to amortization | 20,213 | | | (11,266) | | | 8,947 | |
Indefinite lived intangible assets(1) | 1,792 | | | — | | | 1,792 | |
Total intangible assets | $ | 22,005 | | | $ | (11,266) | | | $ | 10,739 | |
(1)Indefinite lived intangible assets consist of ESPN, Pixar and Marvel trademarks and television FCC licenses.
| | | | | | | | | | | | | | |
| Accounts payable and other accrued liabilities | | September 27,
2025 | | September 28,
2024 |
| Accounts and accrued payables | | $ | 15,055 | | | $ | 14,796 | |
| Payroll and employee benefits | | 3,587 | | | 3,672 | |
Income taxes payable | | 2,301 | | | 2,473 | |
| Other | | 260 | | | 129 | |
| | $ | 21,203 | | | $ | 21,070 | |
14Commitments and Contingencies
Commitments
The 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) | | Other
Programming | | Other | | Total |
| 2026 | $ | 9,894 | | | $ | 2,951 | | | $ | 4,162 | | | $ | 17,007 | |
| 2027 | 9,797 | | | 1,645 | | | 2,240 | | | 13,682 | |
| 2028 | 9,540 | | | 1,243 | | | 2,011 | | | 12,794 | |
| 2029 | 9,101 | | | 792 | | | 1,766 | | | 11,659 | |
| 2030 | 9,134 | | | 244 | | | 1,023 | | | 10,401 | |
| Thereafter | 36,610 | | | 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 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. The Company 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 Company filed a motion for judgment on the pleadings, which was denied on May 21, 2025. The Company filed a petition for a writ of mandamus to the Ninth Circuit Court of Appeal, which was denied on July 18, 2025. The district court has set trial for August 17, 2027, and discovery is currently in progress. At this time, we cannot reasonably estimate the amount of any possible loss.
Five shareholder derivative complaints have been filed and a sixth derivative complaint has been received by the Company. 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. The fourth, in which Thomas Payne is the plaintiff, was filed on June 27, 2025, in the Court of Chancery in the District of Delaware. The fifth, in which Martin Siegel is
the plaintiff, was filed on November 5, 2025, in the Delaware Court of Chancery. The sixth, in which Balraj Paul, the Montini Family Trust, and Dorothy Keto are plaintiffs, was received by the Company on November 7, 2025, and is expected to be filed 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, waste, and insider selling. 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 Gervat/McAdams, Stourbridge, and Payne actions have been stayed pending development of the Securities Class Action. 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 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 and consumer protection 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 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.
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 (Biddle/Fendelander Action). The plaintiffs in the Unger Action also alleged that Disney impermissibly bundles ESPN with other Disney networks and unjustly enriched itself. The Unger Action has since been transferred to the Northern District of California with the court finding it related to the Biddle/Fendelander Action. 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.
On May 30, 2025, the plaintiffs in the Biddle/Fendelander Action filed a proposed Second Consolidated Amended Complaint, adding a class of fuboTV subscribers, a Clayton Act § 7 claim challenging the Company’s acquisition of fuboTV on behalf of fuboTV subscribers, and a claim under Sherman Act § 2. On June 5, 2025, the Company and plaintiffs in the Biddle/Fendelander Action reached a settlement in principle to settle all claims on behalf of all YouTube TV, DirecTV Stream and fuboTV subscribers for an amount that is not material for the Company. The settlement was contingent on Plaintiffs’ Counsel in the Biddle/Fendelander Action (Biddle/Fendelander Counsel) obtaining or having authority to settle claims on behalf of all three subscriber classes, Court approval, and other contingencies. On June 10, 2025, the Court issued an order consolidating the Unger Action with the Biddle/Fendelander Action.
On July 21, 2025, the Court issued an order appointing Biddle/Fendelander Counsel to serve as interim lead counsel for the putative classes of YouTube TV and DirecTV Stream subscribers, and Unger Counsel to serve as interim lead counsel for the putative class of fuboTV subscribers, thereby resulting in Biddle/Fendelander Counsel not having authority to settle on behalf of the three putative classes of subscribers as required by the settlement in principle.
At a joint mediation held on October 3, 2025, the Company and plaintiffs in the Biddle/Fendelander Action reached a settlement in principle to settle all claims on behalf of all YouTube TV and DirecTV Stream subscribers for an amount that is not material for the Company. The settlement is contingent on Biddle/Fendelander Counsel obtaining Court approval and other contingencies, and the settling parties intend to present a long-form settlement agreement to the Court for approval in early December 2025. The Company and Unger Counsel did not reach a settlement at the October 3, 2025 mediation, but agreed to continue exploring a resolution of the claims in the Unger Action.
At a status conference on the Biddle/Fendelander and Unger Actions on October 8, 2025, the Court set a preliminary-approval hearing on the proposed settlement of the Biddle/Fendelander Action for December 10, 2025 and set a follow-up status conference in the Unger Action for December 4, 2025. If the Company and Unger Counsel are unable to reach a satisfactory settlement, the Company intends to defend against the lawsuit vigorously. At this time, we cannot reasonably estimate the amount of any possible loss in the Unger Action.
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.
15Leases
The 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, 2025 | | September 28, 2024 | | |
Right-of-use assets(1) | | | | | | |
| Operating leases | | $ | 3,170 | | | $ | 3,376 | | | |
| Finance leases | | 221 | | | 246 | | | |
| Total right-of-use assets | | $ | 3,391 | | | $ | 3,622 | | | |
| | | | | | |
Short-term lease liabilities(2) | | | | | | |
| Operating leases | | $ | 525 | | | $ | 744 | | | |
| Finance leases | | 21 | | | 30 | | | |
| | 546 | | | 774 | | | |
Long-term lease liabilities(3) | | | | | | |
| Operating leases | | 2,710 | | | 2,768 | | | |
| Finance leases | | 141 | | | 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:
| | | | | | | | | | | | | | | | | | | | |
| | 2025 | | 2024 | | 2023 |
| Finance lease cost | | | | | | |
| Amortization of right-of-use assets | | $ | 23 | | | $ | 36 | | | $ | 39 | |
| Interest on lease liabilities | | 25 | | | 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.
Cash paid during the year for amounts included in the measurement of lease liabilities is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | 2025 | | 2024 | | 2023 |
| Operating cash flows for operating leases | | $ | 903 | | | $ | 876 | | | $ | 714 | |
| Operating cash flows for finance leases | | 25 | | | 13 | | | 15 | |
| Financing cash flows for finance leases | | 46 | | | 44 | | | 41 | |
| Total | | $ | 974 | | | $ | 933 | | | $ | 770 | |
| | | | | | |
| | | | | | |
Non-cash additions to right-of-use assets for fiscal 2025, 2024 and 2023 were $0.4 billion, $0.3 billion and $1.0 billion, respectively.
Future minimum lease payments, as of September 27, 2025, are as follows:
| | | | | | | | | | | | | | |
| | Operating | | Financing |
| Fiscal Year: | | | | |
| 2026 | | $ | 661 | | | $ | 30 | |
| 2027 | | 555 | | | 25 | |
| 2028 | | 478 | | | 22 | |
| 2029 | | 428 | | | 12 | |
| 2030 | | 377 | | | 15 | |
| Thereafter | | 1,759 | | | 321 | |
| Total undiscounted future lease payments | | 4,258 | | | 425 | |
| Less: Imputed interest | | (1,023) | | | (263) | |
| Total reported lease liability | | $ | 3,235 | | | $ | 162 | |
Lessor Arrangements
The Company leases certain of its land and buildings to third parties, primarily at its parks and experiences businesses. Lessee payments include fixed amounts for the rental of the property although the vast majority of the payments are variable based on a percentage of lessee sales. Revenues recognized on these leases for fiscal 2025, 2024 and 2023 were $0.6 billion, $0.6 billion and $0.5 billion, respectively.
16Fair Value Measurements
The Company’s assets and liabilities measured at fair value are summarized in the following tables by fair value measurement Level. See Note 10 for definitions of fair value measures and the Levels within the fair value hierarchy. | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Fair Value Measurement at September 27, 2025 |
| Description | | Level 1 | | Level 2 | | Level 3 | | Total |
| Assets | | | | | | | | |
| Investments | | $ | — | | | $ | 89 | | | $ | — | | | $ | 89 | |
| Derivatives | | | | | | | | |
| | | | | | | | |
| Foreign exchange | | — | | | 816 | | | — | | | 816 | |
| Other | | — | | | 5 | | | — | | | 5 | |
| Liabilities | | | | | | | | |
| Derivatives | | | | | | | | |
| Interest rate | | — | | | (762) | | | — | | | (762) | |
| Foreign exchange | | — | | | (926) | | | — | | | (926) | |
| Other | | — | | | (1) | | | — | | | (1) | |
| Other | | — | | | (668) | | | — | | | (668) | |
| Total recorded at fair value | | $ | — | | | $ | (1,447) | | | $ | — | | | $ | (1,447) | |
Fair value of borrowings (see carrying value in Note 8) | | $ | — | | | $ | 36,976 | | | $ | 2,111 | | | $ | 39,087 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Fair Value Measurement at September 28, 2024 |
| Description | | 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 (see carrying value in Note 8) | | $ | — | | | $ | 42,392 | | | $ | 1,317 | | | $ | 43,709 | |
The fair value 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 17.
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 cost, 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.
Non-recurring Fair Value Measure
The Company also has assets that may be required to be recorded at fair value on a non-recurring basis. These assets are evaluated when certain triggering events occur (including a decrease in estimated future cash flows) that indicate their carrying amounts may not be recoverable. In fiscal 2025, fiscal 2024 and fiscal 2023, the Company recorded impairment charges as disclosed in Notes 4 and 18. Fair value was determined using estimated discounted future cash flows, which is a Level 3 valuation technique (see Note 2 for a discussion of the more significant inputs used in our discounted cash flow analysis).
Credit Concentrations
The Company monitors its positions with, and the credit quality of, the financial institutions that are counterparties to its financial instruments on an ongoing basis and does not currently anticipate nonperformance by the counterparties.
The Company does not expect that it would realize a material loss, based on the fair value of its derivative financial instruments as of September 27, 2025, in the event of nonperformance by any single derivative counterparty. The Company generally enters into derivative transactions only with counterparties that have a credit rating of A- or better and requires collateral in the event credit ratings fall below A- or aggregate exposures exceed limits as defined by contract. In addition, the Company limits the amount of investment credit exposure with any one institution.
The Company does not have material cash and cash equivalent balances with financial institutions that have below investment grade credit ratings and maintains short-term liquidity balances in high quality money market funds. At September 27, 2025, the Company’s balances (excluding money market funds) with individual financial institutions that exceeded 10% of the Company’s total cash and cash equivalents were 21% of total cash and cash equivalents. At September 28, 2024, the Company’s balances (excluding money market funds) with individual financial institutions that exceeded 10% of the Company’s total cash and cash equivalents were 24% of total cash and cash equivalents.
The Company’s trade receivables and financial investments do not represent a significant concentration of credit risk at September 27, 2025 due to the wide variety of customers and markets in which the Company’s products are sold, the dispersion of our customers across geographic areas and the diversification of the Company’s portfolio among financial institutions.
17Derivative 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 16) are summarized in the following tables:
| | | | | | | | | | | | | | | | | | | | | | | |
| | As of September 27, 2025 |
| | Current
Assets | | Investments/Other Assets | | Other
Current
Liabilities | | Other Long-
Term
Liabilities |
| Derivatives designated as hedges | | | | | | | |
| Foreign exchange | $ | 233 | | | $ | 376 | | | $ | (407) | | | $ | (208) | |
| Interest rate | — | | | — | | | (762) | | | — | |
| Other | 3 | | | 2 | | | — | | | — | |
Derivatives not designated as hedges | | | | | | | |
| Foreign exchange | 39 | | | 168 | | | (49) | | | (262) | |
| | | | | | | |
| Other | — | | | 89 | | | (1) | | | — | |
| Gross fair value of derivatives | 275 | | | 635 | | | (1,219) | | | (470) | |
| Counterparty netting | (260) | | | (517) | | | 378 | | | 399 | |
Cash collateral paid | — | | | — | | | 550 | | | 10 | |
| Net derivative positions | $ | 15 | | | $ | 118 | | | $ | (291) | | | $ | (61) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | 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 September 27, 2025 and September 28, 2024, was $10.6 billion and $12.0 billion, respectively.
The following table summarizes fair value hedge adjustments to hedged borrowings:
| | | | | | | | | | | | | | | | | | | | | | | |
| Carrying Amount of Hedged Borrowings | | Fair Value Adjustments Included in Hedged Borrowings |
| September 27, 2025 | | September 28, 2024 | | September 27, 2025 | | September 28, 2024 |
| Borrowings: | | | | | | | |
| Current | $ | 2,954 | | | $ | 1,414 | | | $ | (44) | | | $ | (10) | |
| Long-term | 7,347 | | | 10,128 | | | (680) | | | (913) | |
| $ | 10,301 | | | $ | 11,542 | | | $ | (724) | | | $ | (923) | |
The following amounts are included in “Interest expense, net” in the Consolidated Statements of Income:
| | | | | | | | | | | | | | | | | |
| | 2025 | | 2024 | | 2023 |
| Gain (loss) on: | | | | | |
| Pay-floating swaps | $ | 182 | | | $ | 799 | | | $ | (14) | |
| Borrowings hedged with pay-floating swaps | (182) | | | (799) | | | 14 | |
Expense associated with interest accruals on pay-floating swaps | (396) | | | (611) | | | (510) | |
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 September 27, 2025 or at September 28, 2024, and gains and losses related to pay-fixed interest rate swaps recognized in earnings for fiscal 2025, 2024 and 2023 were not material.
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, Mexican peso 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 September 27, 2025 and September 28, 2024, the notional amounts of the Company’s net foreign exchange cash flow hedges were $9.3 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 losses recorded in AOCI for contracts that will mature in the next twelve months total $254 million. The following table summarizes the effect of foreign exchange cash flow hedges on AOCI:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
Gain (loss) recognized in Other Comprehensive Income | $ | 17 | | | $ | (97) | | | $ | (136) | |
Gain reclassified from AOCI into the Statement of Operations(1) | 261 | | | 472 | | | 446 | |
(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 both September 27, 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). The related gains or losses recognized in earnings for the fiscal years ended 2025, 2024 and 2023 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 (including our non-designated cross-currency swaps) at September 27, 2025 and September 28, 2024 were $3.0 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 years ended September 27, 2025 and September 28, 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 September 27, 2025 and September 28, 2024 and related gains or losses recognized in earnings for fiscal 2025, 2024 and 2023 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 amount of these contracts at September 27, 2025 and September 28, 2024 were $0.6 billion and $0.5 billion, respectively. The related gains or losses recognized in earnings for fiscal 2025, 2024 and 2023 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 was $0.9 billion and $1.1 billion at September 27, 2025 and September 28, 2024, respectively.
18Restructuring and Impairment Charges
A summary of restructuring and impairment charges is as follows:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
Equity investments | $ | 635 | | $ | 158 | | $ | 141 |
| Content | 109 | | 187 | | 2,577 |
Star India - see Note 4 | 75 | | 1,545 | | — |
Goodwill | — | | 1,287 | | 721 |
Other | — | | 418 | | 453 |
| Restructuring and impairment charges | $ | 819 | | $ | 3,595 | | $ | 3,892 |
Investments
In fiscal 2025, the Company recorded charges of $0.6 billion for impairments of A+E and Tata Play Limited.
Content
We recorded charges of $0.1 billion, $0.2 billion and $2.6 billion, in fiscal 2025, 2024 and 2023, respectively, as a result of strategic changes in our approach to content curation primarily for streaming.
Goodwill
In fiscal 2024 and 2023, we recorded goodwill impairment charges of $1.3 billion and $0.7 billion, respectively, related to the entertainment linear networks reporting unit.
Other
In fiscal 2024, the Company recorded charges of $0.3 billion for asset impairments at our retail business and $0.1 billion of severance. In fiscal 2023, the Company recorded charges of $0.4 billion for severance and $0.1 billion for exiting our businesses in Russia.
19New Accounting Pronouncements and Other Disclosure Rules
Accounting Pronouncements Adopted in Fiscal 2025
Improvements to Reportable Segments Disclosures
In November 2023, the FASB issued guidance to enhance segment reporting 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 Company adopted the new guidance retrospectively in the fourth quarter of fiscal 2025. The adoption did not have an effect on our financial statements, but resulted in incremental disclosures about significant segment expenses in the segment information footnote. See Note 1 for additional information.
Accounting Pronouncements Not Yet Adopted
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 to annual periods beginning with the Company’s 2026 fiscal year.
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued guidance that requires the disclosure of additional information related to certain amounts included in each consolidated income statement expense line item, such as inventory purchases, employee compensation, and depreciation and amortization. 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.
Targeted Improvements to the Accounting for Internal-Use Software
In September 2025, the FASB issued guidance to modernize the accounting for internal-use software by removing references to various stages of software development projects so that the guidance is neutral to different software development methods and by clarifying that software cost capitalization begins when management has authorized and committed to funding, and it is probable the software will be completed and perform its intended use. The guidance is effective for the Company beginning with the first quarter of fiscal 2029. The new guidance is not expected to have a material impact on our financial statements.
