Walt Disney Co
For the period ended Dec 28, 2024. Filed Feb 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 28, 2024 · Filed Feb 5, 2025
DIS$116.75-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-29; filed 2024-08-07.
0001744489-24-000232
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-28; filed 2025-02-05.
0001744489-25-000067
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 411 previous paragraphs and 276 current paragraphs.
151 unchanged; 61 reworded; 62 added; 170 removed; 29 previous and 2 current paragraphs rearranged.
Tables are not compared: 71 previous and 42 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (62)
Current report
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current report
On November 14, 2024, the Company and RIL completed the Star India Transaction (see Note 4 to the Condensed Consolidated Financial Statements). After November 14, 2024, the Company began recognizing its 37% share of the India joint venture’s results in “Equity in the income of investees.” Star India results in the current quarter through November 14, 2024 and results in the prior-year quarter are consolidated in the Company’s financial results for those periods and reported in the Entertainment and Sports segments.
Current report
Revenues
Current report
Service revenues for the quarter increased 5%, or $1.1 billion, to $22.0 billion, due to higher subscription and theatrical distribution revenue and, to a lesser extent, growth in theme park admissions and resorts and vacations revenues. Service revenues reflected an approximate 3 percentage point decrease due to Star India and an approximate 1 percentage point decrease due to an unfavorable movement of the U.S. dollar against major currencies including the impact of our hedging program (Foreign Exchange Impact).
Current report
Selling, general, administrative and other costs increased 4% to $3.9 billion driven by a legal settlement and higher marketing costs. Selling, general and administrative and other costs reflected an approximate 1 percentage point decrease due to Star India and an approximate 3 percentage point decrease due to a favorable Foreign Exchange Impact.
Current report
Depreciation and amortization increased 3% to $1.3 billion due to higher depreciation at Experiences, partially offset by lower TFCF and Hulu Acquisition Amortization.
Current report
In the current quarter, the Company recorded a $143 million loss in connection with the Star India Transaction.
Current report
Interest expense, net
Current report
Equity in the Income of Investees
Current report
Income from equity investees decreased $89 million, to $92 million from $181 million, due to lower income from A+E Television Networks (A+E) and losses from the India joint venture in the current quarter.
Current report
The increase in the effective income tax rate in the current quarter compared to the prior-year quarter was due to a non-cash tax charge in connection with the Star India Transaction. This increase was partially offset by the comparison to an unfavorable effect of employee share-based awards in the prior-year quarter, the impact of adjustments related to prior years and a lower foreign effective tax rate. Adjustments related to prior years were favorable in the current quarter and unfavorable in the prior-year quarter.
Current report
•An impairment charge of $143 million and a non-cash tax charge of $213 million, which were both recorded in connection with the Star India Transaction (see Note 4 to the Condensed Consolidated Financial Statements)
Current report
•TFCF and Hulu Acquisition Amortization of $451 million
Current report
Revenues
Current report
Revenues - Affiliate fees
Current report
International programming and production costs decreased primarily due to Star India.
Current report
Selling, general, administrative and other costs decreased $37 million, to $520 million from $557 million, driven by Star India.
Current report
Equity in the Income of Investees
Current report
Operating income from Linear Networks decreased $138 million, to $1,098 million from $1,236 million, due to a decrease at our international business as a result of Star India, and lower income from equity investees.
Current report
Revenues - Subscription fees
Current report
Lower advertising revenue was attributable to decreases of 16% from Star India, which included International Cricket Council (ICC) Cricket World Cup programming on Disney+ Hotstar in the prior-year quarter, and 11% from lower rates at Hulu and Disney+ Core. There were no significant cricket events in the current quarter prior to the Star India Transaction. These decreases were partially offset by an increase of 24% from higher impressions at Disney+ Core and Hulu.
Current report
(2)The sequential prior quarter and prior-year quarter Paid Subscribers and Average Monthly Revenue per Paid Subscriber have been adjusted to include Disney+ subscribers in Southeast Asia. These subscribers were previously reported with Disney+ Hotstar, which is no longer presented as this business was included in the Star India Transaction.
Current report
(3)Total may not equal the sum of the column due to rounding.
Current report
Average Monthly Revenue Per Paid Subscriber - First Quarter of Fiscal 2025 Comparison to Fourth Quarter of Fiscal 2024
Current report
Domestic Disney+ average monthly revenue per paid subscriber increased from $7.70 to $7.99 due to increases in pricing, partially offset by a higher mix of subscribers to promotional offerings.
Current report
International Disney+ average monthly revenue per paid subscriber increased from $6.78 to $7.19 due to increases in pricing and higher advertising revenue, partially offset by a higher mix of subscribers to promotional offerings.
Current report
Hulu Live TV + SVOD average monthly revenue per paid subscriber increased from $95.82 to $99.22 primarily due to increases in pricing.
Current report
Average Monthly Revenue Per Paid Subscriber - First Quarter of Fiscal 2025 Comparison to First Quarter of Fiscal 2024
Current report
Domestic Disney+ average monthly revenue per paid subscriber decreased from $8.15 to $7.99 driven by a higher mix of subscribers to wholesale offerings, largely offset by increases in pricing.
Current report
International Disney+ average monthly revenue per paid subscriber increased from $5.68 to $7.19 due to increases in pricing, partially offset by a higher mix of subscribers to ad-supported offerings.
Current report
Hulu Live TV + SVOD average monthly revenue per paid subscriber increased from $93.61 to $99.22 due to increases in pricing.
Current report
The decrease in programming and production costs at Disney+ was due to Star India reflecting ICC Cricket World Cup programming in the prior-year quarter.
Current report
Operating results from Direct-to-Consumer improved $431 million, to income of $293 million from a loss of $138 million, due to improved results at Disney+ and, to a lesser extent, Hulu.
Current report
Revenues - TV/VOD and home entertainment distribution
Current report
The increase in theatrical distribution revenue was due to the performance of Moana 2 and Mufasa: The Lion King in the current quarter compared to The Marvels and Wishin the prior-year quarter.
Current report
The decrease in other operating expenses reflected lower cost of goods sold and distribution costs due to the shift of our physical home entertainment distribution business to a licensing model.
Current report
Selling, general, administrative and other costs increased $94 million, to $679 million from $585 million, primarily due to higher theatrical marketing costs.
Current report
Revenues - Affiliate fees
Current report
The decrease in Star India advertising revenue was due to the comparison to ICC Cricket World Cup programming in the prior-year quarter. There were no significant cricket events in the current quarter prior to the Star India Transaction.
Current report
Revenues - Subscription fees
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Removed paragraphs (170)
Previous report
•Current Nine-Month Period Results Compared to Prior-Year Nine-Month Period
Previous report
Service revenues for the quarter increased 4%, or $0.8 billion, to $20.8 billion resulting from higher DTC subscription revenue and, to a lesser extent, higher advertising revenue.
Previous report
Depreciation and amortization decreased 9%, or $0.1 billion, to $1.2 billion due to lower depreciation at our domestic theme parks and resorts and lower TFCF and Hulu Acquisition Amortization.
Previous report
In the prior-year quarter, the Company recorded charges of $2,650 million due to the Content Impairment and severance.
Previous report
Other income (expense), net
Previous report
Other expense in the current quarter reflected a charge of $65 million related to a legal ruling. Other expense, net in the prior-year quarter included a charge of $101 million related to a legal ruling, largely offset by the DraftKings Gain of $90 million.
Previous report
Income from equity investees decreased $45 million, to $146 million from $191 million, due to lower income from A+E Television Networks.
Previous report
The prior-year quarter loss before income taxes included the $2,440 million Content Impairment. In the prior-year quarter, income taxes included a benefit of approximately $568 million related to this charge. Due to the significance of this charge on pre-tax results, the effective tax rate for the prior-year quarter was negative 14.2%. In the current quarter, the Company recognized a $418 million tax benefit related to prior years’ tax matters (Income Tax Reserve Adjustments).
Previous report
•Income Tax Reserve Adjustments of $418 million
Previous report
•Other expense of $65 million related to a legal ruling
Previous report
•Restructuring and impairment charges of $2,650 million
Previous report
•TFCF and Hulu Acquisition Amortization of $432 million
Previous report
•Other expense, net of $11 million reflecting a charge of $101 million related to a legal ruling, partially offset by a DraftKings Gain of $90 million
Previous report
CURRENT NINE-MONTH PERIOD RESULTS COMPARED TO PRIOR-YEAR NINE-MONTH PERIOD
Previous report
Revenues for the current period increased $1.1 billion, to $68.8 billion; net income attributable to Disney increased $2.4 billion, to $4.5 billion; and EPS increased to $2.46 from $1.14 in the prior-year period. The EPS increase was due to higher operating income at Entertainment, a lower effective income tax rate, which included the benefit from the Income Tax Reserve Adjustments, and, to a lesser extent, growth at Experiences.
Previous report
Service revenues for the current period increased 2%, or $1.0 billion to $61.6 billion, resulting from higher DTC subscription revenue and increased revenues at our parks and experiences businesses. These increases were partially offset by lower theatrical distribution revenue and, to a lesser extent, lower TV/VOD distribution revenue.
Previous report
Costs and expenses
Previous report
Cost of services for the current period decreased 3%, or $1.1 billion, to $39.8 billion, primarily due to lower non-sports programming and production costs, and, to a lesser extent, lower technical support costs, partially offset by higher sports programming and production costs and the impact of inflation and increased volumes at our parks and experiences businesses.
Previous report
Depreciation and amortization decreased 6%, or $0.3 billion, to $3.7 billion due to lower TFCF and Hulu Acquisition Amortization and lower depreciation at our domestic theme parks and resorts.
Previous report
Restructuring and impairment charges
Previous report
In the current period, the Company recorded $2,052 million of charges for goodwill impairments related to the Star India Transaction and entertainment linear networks.
Previous report
In the prior-year period, the Company recorded $2,871 million of charges including the Content Impairment, severance and costs related to exiting our businesses in Russia.
Previous report
Other income (expense), net
Previous report
Other expense in the current period reflected a charge of $65 million related to a legal ruling. Other income, net in the prior-year period included a DraftKings Gain of $169 million and a $28 million gain on the sale of a business, partially offset by a charge of $101 million related to a legal ruling.
Previous report
The increase in interest expense was due to higher average rates, partially offset by lower average debt balances.
Previous report
Income from equity investees decreased $87 million, to $468 million from $555 million, due to lower income from A+E Television Networks.
Previous report
Income Taxes
Previous report
The effective income tax rate in the current period was comparable to the U.S. statutory rate as an unfavorable impact from the current period goodwill impairments, which are not tax deductible, was largely offset by a benefit from the Income Tax Reserve Adjustments. The effective income tax rate in the prior-year period was higher than the U.S. statutory rate primarily due to a higher effective tax rate on foreign earnings.
Previous report
Noncontrolling Interests
Previous report
The increase in net income attributable to noncontrolling interests was due to improved results at our Asia Theme Parks and ESPN, partially offset by the comparison to the accretion for Major League Baseball’s interest in BAMTech LLC and NBCU’s interest in Hulu. We had accreted to the redemption value for BAMTech LLC by November 2022 and to the guaranteed redemption value for Hulu by December 2023.
Previous report
Results for the nine months ended June 29, 2024 were impacted by the following:
Previous report
•Restructuring and impairment charges of $2,052 million
Previous report
•Income Tax Reserve Adjustments of $418 million
Previous report
•TFCF and Hulu Acquisition Amortization of $1,282 million
Previous report
•Other expense of $65 million related to a legal ruling
Previous report
Results for the nine months ended July 1, 2023 were impacted by the following:
Previous report
•Restructuring and impairment charges of $2,871 million
Previous report
•TFCF and Hulu Acquisition Amortization of $1,569 million
Previous report
•Other income, net of $96 million reflecting a DraftKings Gain of $169 million and a gain on the sale of a business of $28 million, partially offset by a charge of $101 million related to a legal ruling
Previous report
The decrease in domestic programming and production costs was attributable to a lower average cost mix of programming and a decrease in program write-downs.
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Reworded paragraphs (61)
Previous wording
Revenues for the quarter increased 4%, or $0.8 billion, to $23.2 billion; net income attributable to Disney increased to income of $2.6 billion in the current quarter compared to a loss of $0.5 billion in the prior-year quarter; and diluted earnings per share (EPS) attributable to Disney increased to income of $1.43 compared to a loss of $0.25 in the prior-year quarter. The EPS increase was due to the comparison to the Content Impairment in the prior-year quarter and higher operating income at Entertainment in the current quarter.
Current wording
Revenues for the quarter increased 5%, or $1.1 billion, to $24.7 billion; net income attributable to Disney increased to $2.6 billion compared to $1.9 billion; and diluted earnings per share (EPS) attributable to Disney increased to $1.40 compared to $1.04 in the prior-year quarter. The EPS increase was due to higher operating income at Entertainment.
Previous wording
Cost of services for the quarter increased 2%, or $0.3 billion, to $13.2 billion due to higher sports programming and production costs as well as increased volumes and the impact of inflation at our parks and experiences businesses, partially offset by lower non-sports programming and production costs.
Current wording
Cost of services for the quarter decreased 1% to $13.8 billion due to lower sports programming and production costs, partially offset by the impact of inflation and increased volumes at our parks and experiences businesses as well as higher non-sports programming and production costs. Cost of services reflected an approximate 6 percentage point decrease due to Star India and an approximate 1 percentage point decrease due to a favorable Foreign Exchange Impact.
Previous wording
The increase in interest expense was due to higher average rates, partially offset by lower average debt balances.
Current wording
The decrease in interest expense was primarily due to lower average rates and debt balances, partially offset by a decrease in capitalized interest.
Previous wording
The decrease in interest income, investment income and other reflected the impact of lower cash and cash equivalent balances, partially offset by a favorable comparison of pension and postretirement benefit costs, other than service cost.
Current wording
The decrease in interest income, investment income and other reflected the impact of lower cash and cash equivalent balances, an unfavorable comparison related to pension and postretirement benefit costs, other than service cost, and investment losses in the current quarter compared to investment gains in the prior-year quarter.
Previous wording
The decrease in net income attributable to noncontrolling interests was primarily due to the comparison to the accretion of NBC Universal’s interest in Hulu in the prior-year quarter as we had accreted to the full guaranteed redemption value by December 2023.
Current wording
The decrease in net income attributable to noncontrolling interests was due to the comparison to accretion of NBC Universal’s interest in Hulu in the prior-year quarter.
Previous wording
The Company’s businesses are subject to the effects of seasonality. Consequently, the operating results for the nine months ended June 29, 2024 for each business segment, and for the Company as a whole, are not necessarily indicative of results to be expected for the full year.
Current wording
The Company’s businesses are subject to the effects of seasonality. Consequently, the operating results for the quarter ended December 28, 2024 for each business segment, and for the Company as a whole, are not necessarily indicative of results to be expected for the full year.
Previous wording
The following table presents income from our operating segments and other components of income (loss) before income taxes:
Current wording
The following table presents income from our operating segments and other components of income before income taxes:
Previous wording
The increase in Entertainment revenues was due to subscription revenue growth.
Current wording
The increase in Entertainment revenues was due to subscription revenue growth and higher theatrical distribution revenues.
Previous wording
The increase in Entertainment operating income in the current quarter compared to the prior-year quarter was due to improved results at Direct-to-Consumer and Content Sales/Licensing and Other.
Current wording
The increase in Entertainment operating income in the current quarter compared to the prior-year quarter was due to improved results at Content Sales/Licensing and Other and Direct-to-Consumer, partially offset by a decrease at Linear Networks.
Previous wording
The decrease in domestic ESPN affiliate revenue was primarily attributable to a decline of 8% from fewer subscribers, partially offset by an increase of 6% from higher effective rates.
Current wording
The decrease in domestic affiliate revenue was due to a decline of 8% from fewer subscribers, partially offset by an increase of 7% from higher effective rates.
Previous wording
Lower international affiliate revenue was attributable to decreases of 9% from fewer subscribers driven by channel closures, 2% from an unfavorable foreign exchange impact and 2% from lower effective rates.
Current wording
Lower international affiliate revenue was due to declines of 14% from Star India, 8% from lower effective rates, 5% from fewer subscribers and 2% from an unfavorable Foreign Exchange Impact.
Previous wording
The decline in domestic advertising revenue was due to a decrease of 15% from lower impressions attributable to a decline in average viewership, partially offset by an increase of 1% from higher rates.
Current wording
The increase in domestic advertising revenue included an increase of 12% from higher rates, due to more political advertising at the owned television stations, partially offset by an 11% decrease from fewer impressions attributable to lower average viewership at our networks.
Previous wording
Lower international advertising revenue was primarily due to a decrease of 7% from an unfavorable foreign exchange impact, partially offset by an increase of 5% from higher rates.
Current wording
Lower international advertising revenue was due to decreases of 29% from Star India and 3% from an unfavorable Foreign Exchange Impact.
Previous wording
The decrease in domestic programming and production costs was primarily due to a lower average cost mix of programming and, to a lesser extent, a decrease in program write-downs.
Current wording
The increase in domestic programming and production costs was primarily due to a higher average cost mix of programming at the ABC Network reflecting the impact of the 2023 guild strikes on the prior-year quarter.
Previous wording
The decrease in other operating expenses was primarily attributable to lower technology and distribution costs.
Current wording
The decrease in other operating expenses was primarily attributable to lower technology costs.
Previous wording
Income from equity investees decreased $88 million, to $440 million from $528 million, due to lower income from A+E Television Networks attributable to decreases in advertising and affiliate revenues.
Current wording
Income from equity investees decreased $50 million, to $123 million from $173 million, due to lower income from A+E attributable to decreases in advertising and affiliate revenue and the comparison to a gain on the sale of an investment in the prior-year quarter.
Previous wording
Growth in subscription fees reflected increases of 10% from higher rates attributable to increases in retail pricing at Disney+ Core and Hulu, and 7% from more subscribers due to growth at Disney+ Core and, to a lesser extent, Hulu, partially offset by a decrease of 3% from an unfavorable foreign exchange impact.
Current wording
Growth in subscription fees reflected increases of 9% from higher rates attributable to increases in pricing and 6% from more subscribers, partially offset by a decrease of 2% from an unfavorable Foreign Exchange Impact.
Previous wording
(1)See discussion on pages 72-73 — DTC Product Descriptions, Key Definitions and Supplemental Information.
Current wording
(1)See discussion on pages 50 — DTC Product Descriptions, Key Definitions and Supplemental Information.
Previous wording
Hulu SVOD Only average monthly revenue per paid subscriber increased from $12.39 to $12.73 due to increases in retail pricing, partially offset by a higher mix of subscribers to multi-product offerings.
Current wording
Hulu SVOD Only average monthly revenue per paid subscriber was comparable to the prior sequential quarter as lower advertising revenue was offset by increases in pricing and a higher mix of subscribers to higher priced multi-product offerings.
Previous wording
Hulu Live TV + SVOD average monthly revenue per paid subscriber increased from $90.66 to $94.89 due to increases in retail pricing, partially offset by lower advertising revenue and a higher mix of subscribers to multi-product offerings.
Current wording
Hulu SVOD Only average monthly revenue per paid subscriber increased from $12.29 to $12.52 due to increases in pricing, partially offset by lower per-subscriber advertising revenue and a higher mix of subscribers to multi-product offerings.
Previous wording
Higher programming and production costs at Hulu were due to an increase in subscriber-based fees for programming the Hulu Live TV service driven by rate increases, partially offset by lower costs for SVOD content.
Current wording
Higher programming and production costs at Hulu were driven by higher subscriber-based fees for programming the Hulu Live TV service due to rate increases.
Previous wording
The increase in other operating expense was primarily attributable to higher technology and distribution costs.
Current wording
The increase in other operating expense was due to higher technology and distribution costs.
Previous wording
The increase in TV/VOD distribution revenue was due to higher sales of episodic content.
Current wording
The increase in TV/VOD and home entertainment distribution revenue was due to higher TV/VOD sales of episodic content and an increase in home entertainment distribution revenue. The increase in home entertainment distribution revenue was due to higher electronic distribution revenue, partially offset by a decrease at our physical distribution business due to the business shifting to a third party licensing model.
Previous wording
The decrease in programming and production costs was due to lower production cost amortization attributable to the decreases in theatrical and, to a lesser extent, TV/VOD distribution revenues.
Current wording
The decrease in programming and production costs was due to lower film cost impairments, partially offset by higher production cost amortization attributable to the increase in TV/VOD distribution revenue.
Previous wording
Operating results from Content Sales/Licensing and Other increased $366 million, to income of $254 million from a loss of $112 million due to higher theatrical and TV/VOD distribution results.
Current wording
Operating results from Content Sales/Licensing and Other increased $536 million, to income of $312 million from a loss of $224 million due to higher theatrical distribution results.
Previous wording
(2)In the current quarter, amortization of intangible assets was $251 million and amortization of step-up on film and television costs was $68 million. In the prior-year quarter, amortization of intangible assets was $262 million and amortization of step-up on film and television costs was $68 million.
Current wording
(1)In the current quarter, amortization of intangible assets was $251 million and amortization of step-up on film and television costs was $67 million. In the prior-year quarter, amortization of intangible assets was $282 million and amortization of step-up on film and television costs was $68 million.
Previous wording
The decrease in domestic affiliate revenue was due to a decline of 13% from fewer subscribers, including the impact of the non-renewal of carriage of certain networks by an affiliate, partially offset by an increase of 7% from higher effective rates.
Current wording
Domestic ESPN affiliate revenue was comparable to the prior-year quarter, as an increase of 7% from higher effective rates was offset by a decrease of 7% from fewer subscribers.
Previous wording
The increase in international ESPN affiliate revenue was attributable to higher effective rates.
Current wording
The decrease in international ESPN affiliate revenue was attributable to an unfavorable Foreign Exchange Impact and, to a lesser extent, fewer subscribers, largely offset by higher effective rates.
Previous wording
The decrease in Star India affiliate revenue was due to lower effective rates.
Current wording
The decrease in Star India affiliate revenue was due to the Star India Transaction.
Previous wording
The increase in domestic ESPN advertising revenue was due to increases of 9% from higher rates and 5% from sponsorship revenue growth.
Current wording
The increase in domestic ESPN advertising revenue was primarily due to an increase of 12% from higher rates.
Previous wording
Subscription fees increased $34 million, to $414 million from $380 million, due to higher rates.
Current wording
Subscription fees increased $12 million, to $427 million from $415 million, due to higher rates.
Previous wording
(1)See discussion on pages 72-73 —DTC Product Descriptions, Key Definitions and Supplemental Information.
Current wording
(1)See discussion on page 50—DTC Product Descriptions, Key Definitions and Supplemental Information
Previous wording
The increase in Star India programming and production costs was attributable to the timing of the ICC T20 World Cup.
Current wording
Star India programming and production costs decreased due to the comparison to ICC Cricket World Cup programming in the prior-year quarter.
Previous wording
Theme park admissions revenue growth was due to increases of 1% from higher average per capita ticket revenue and 1% from attendance growth.
Current wording
Theme park admissions revenue growth was due to an increase of 4% from higher average per capita ticket revenue, partially offset by a decrease of 1% from lower attendance. The decrease in attendance reflected a decline at our domestic parks, including the impact of hurricanes at Walt Disney World Resort, partially offset by attendance growth at our international parks.
Previous wording
Higher resorts and vacations revenue was attributable to increases of 4% from higher average ticket prices for cruise line sailings, 1% from higher average daily hotel room rates and 1% from increased occupied hotel room nights.
Current wording
Higher resorts and vacations revenue was due to increases of 2% from higher average daily hotel room rates, 1% from increased Disney Vacation Club sales and 1% from higher occupied room nights.
Previous wording
Parks & Experiences merchandise, food and beverage revenue growth was due to increases of 3% from higher volumes and 2% from an increase in average guest spending.
Current wording
Parks & Experiences merchandise, food and beverage revenue growth resulted from an increase of 4% from higher average guest spending.
Previous wording
Lower merchandise licensing and retail revenue was due to decreases of 4% from merchandise licensing and 1% from retail. The decrease in merchandise licensing revenue was due to lower minimum guarantee shortfall recognition, partially offset by higher royalties from merchandise sales.
Current wording
Lower merchandise licensing and retail revenue was due to decreases of 1% from merchandise licensing and 1% from an unfavorable Foreign Exchange Impact, partially offset by a 1% increase from retail.
Previous wording
The increase in parks licensing and other revenue was due to a favorable foreign exchange impact and higher real estate sales.
Current wording
The increase in parks licensing and other revenue was due to higher real estate sales.
Previous wording
Higher operating labor was primarily due to inflation and, to a lesser extent, increased volumes, partially offset by cost saving initiatives. The increase in infrastructure costs was primarily attributable to higher technology spending. Cost of goods sold and distribution costs decreased primarily due to lower third-party royalty expense. The increase in other operating expense was due to higher costs for new guest offerings, increased operations support costs and inflation.
Current wording
Higher operating labor was due to inflation and, to a lesser extent, new guest offerings. Cost of goods sold and distribution costs increased due to higher volumes.
Previous wording
Cash provided by operations increased $3.4 billion from $5.1 billion in the prior-year period to $8.5 billion for the current period. The increase was primarily due to lower film and television production spending and the timing of payments for sports rights. The increase also reflected collateral receipts related to our hedging program in the current period compared to collateral payments in the prior-year period and the comparison to a payment in the prior-year period related to the termination of content licenses in fiscal 2022. These increases were partially offset by payment in the current period of fiscal 2023 federal and California income taxes, which were deferred pursuant to relief provided by the Internal Revenue Service and California State Board of Equalization as a result of 2023 winter storms in California.
Current wording
Cash provided by operations increased $1.0 billion from $2.2 billion in the prior-year period to $3.2 billion for the current period. The increase was primarily due to lower tax payments in the current quarter compared to the prior-year quarter, partially offset by lower operating cash flows at Entertainment. Tax payments in the prior-year quarter reflected payment of fiscal 2023 U.S. federal and California state income taxes that had been deferred pursuant to relief provided by the Internal Revenue Service and California Board of Equalization as a result of the 2023 winter storms in California. The decrease in operating cash flows at Entertainment was primarily due to higher film and television production spending and an increase in operating cash disbursements resulting from higher operating expenses, partially offset by an increase in cash receipts attributable to higher revenue.
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Operating Income (Loss) from Direct-to-Consumer
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Association, as trustee (the “2001 Trustee”) (as amended by the first supplemental indenture among Legacy Disney, as issuer, TWDC, as guarantor, and the 2001 Trustee, as trustee).
Rearranged previous paragraphs (29)
Previous report — wording carried elsewhere
Interest expense, net is as follows:
Previous report — wording carried elsewhere
The increase in interest income, investment income and other was driven by a favorable comparison of pension and postretirement benefit costs, other than service cost, and larger investment gains in the current period compared to the prior-year period.
Previous report — wording carried elsewhere
Certain Items Impacting Results in the Nine Month Period
Previous report — wording carried elsewhere
A summary of the impact of these items on EPS is as follows:
Previous report — wording carried elsewhere
(1)Tax benefit (expense) amounts are determined using the tax rate applicable to the individual item.
Previous report — wording carried elsewhere
(2)EPS is net of noncontrolling interest share, where applicable. Total may not equal the sum of the column due to rounding.
Previous report — wording carried elsewhere
Lower international affiliate revenue was attributable to decreases of 8% from fewer subscribers and 4% from an unfavorable foreign exchange impact.
Previous report — wording carried elsewhere
Higher programming and production costs at Hulu in the current quarter compared to the prior-year quarter were due to higher subscriber-based fees for programming the Hulu Live TV service primarily attributable to rate increases.
Previous report — wording carried elsewhere
Revenue and operating results for the Entertainment segment are as follows:
Previous report — wording carried elsewhere
The increase in Entertainment operating income was due to improved results at Direct-to-Consumer, partially offset by a decline at Linear Networks.
Previous report — wording carried elsewhere
Operating results for Linear Networks are as follows:
Previous report — wording carried elsewhere
The following table provides supplemental revenue and operating income detail for Linear Networks:
Previous report — wording carried elsewhere
Operating results for Direct-to-Consumer are as follows:
Previous report — wording carried elsewhere
Operating results for Content Sales/Licensing and Other are as follows:
Previous report — wording carried elsewhere
The decrease in TV/VOD distribution revenue was primarily due to lower sales of episodic content.
Previous report — wording carried elsewhere
The decrease in home entertainment distribution revenue was due to lower unit sales.
Previous report — wording carried elsewhere
Operating Income (Loss) from Content Sales/Licensing and Other
Previous report — wording carried elsewhere
Operating results from Content Sales/Licensing and Other increased $42 million, to income of $12 million from a loss of $30 million.
Previous report — wording carried elsewhere
Items Excluded from Segment Operating Income Related to Entertainment
Previous report — wording carried elsewhere
The following table presents supplemental information for items related to the Entertainment segment that are excluded from segment operating income:
Previous report — wording carried elsewhere
(2)In the current period, amortization of intangible assets was $804 million and amortization of step-up on film and television costs was $205 million. In the prior-year period, amortization of intangible assets was $889 million and amortization of step-up on film and television costs was $374 million.
Previous report — wording carried elsewhere
Operating results for Sports are as follows:
Previous report — wording carried elsewhere
The following table provides supplemental revenue and operating income (loss) detail for the Sports segment:
Previous report — wording carried elsewhere
Items Excluded from Segment Operating Income Related to Sports
Previous report — wording carried elsewhere
The following table presents supplemental information for items related to the Sports segment that are excluded from segment operating income:
Previous report — wording carried elsewhere
Operating results for the Experiences segment are as follows:
Previous report — wording carried elsewhere
Revenues - Park & Experiences merchandise, food and beverage
Previous report — wording carried elsewhere
The following table presents supplemental revenue and operating income detail for the Experiences segment:
Previous report — wording carried elsewhere
Average Monthly Revenue Per Paid Subscriber