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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 27, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________.

Commission File Number 001-38842


Delaware						83-0940635
State or Other Jurisdiction of						I.R.S. Employer Identification
Incorporation or Organization

500 South Buena Vista Street

Burbank, California 91521

Address of Principal Executive Offices and Zip Code

(818) 560-1000

Registrant’s Telephone Number, Including Area Code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

DIS

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

There were 1,771,519,851 shares of common stock outstanding as of January 28, 2026.

THE WALT DISNEY COMPANY

Form 10-Q

For the Fiscal Quarter Ended December 27, 2025

TABLE OF CONTENTS


		Page
PART I

ITEM 1.	Financial Statements	3

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	41

ITEM 4.	Controls and Procedures	41

PART II

ITEM 1.	Legal Proceedings	42

ITEM 1A.	Risk Factors	42

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44

ITEM 5.	Other Items	45

ITEM 6.	Exhibits	46

SIGNATURE		47

Cautionary Note on Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or our future financial or operating performance and may include statements concerning, among other things, financial results; business plans (including statements regarding new products and services, future expenditures, cost, investments and transactions for which conditions to close have not been satisfied; future liabilities and other obligations; impairments and amortization; estimates of the financial impact of certain items, accounting treatment, events or circumstances; competition and seasonality on our businesses and results of operations; and capital allocation, including share repurchases and dividends. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “would,” “expects,” “plans,” “could,” “intends,” “target,” “projects,” “forecasts,” “believes,” “estimates,” “anticipates,” “potential,” “continue,” “assumption” or “judgment” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These statements reflect our current views with respect to future events and are based on assumptions as of the date of this report. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements.

Such differences may result from actions taken by the Company, including restructuring or strategic initiatives (including capital investments, asset acquisitions or dispositions, new or expanded business lines or cessation of certain operations), our execution of our business plans (including the content we create and intellectual properties (IP) we invest in, our pricing decisions, our cost structure and our management and other personnel decisions), our ability to quickly execute on cost rationalization while preserving revenue, the discovery of additional information or other business decisions, as well as from developments beyond the Company’s control, including:

•the occurrence of subsequent events;

•deterioration in domestic and global economic conditions or failure of conditions to improve as anticipated;

•deterioration in or pressures from competitive conditions, including competition to create or acquire content, competition for talent and competition for advertising revenue;

•consumer preferences for and acceptance of our content offerings and the distribution channel (including pricing and bundling of our streaming services and impact on churn and subscriber additions) and our leisure travel destinations;

•the market for advertising sales on our streaming services and linear networks;

•health concerns and their impact on our businesses and productions;

•international, including tariffs and other trade policies, political or military developments;

•regulatory and legal developments;

•technological developments;

•labor markets and activities, including work stoppages;

•adverse weather conditions or natural disasters; and

•availability of content.

Such developments may further affect entertainment, travel and leisure businesses generally and may, among other things, affect (or further affect, as applicable):

•our operations, business plans or profitability;

•demand for our products and services;

•the performance of the Company’s content;

•our ability to create or obtain desirable content at or under the value we assign the content;

•the advertising market for programming;

•taxation; and

•performance of some or all Company businesses either directly or through their impact on those who distribute our products.

Additional factors include those described in our 2025 Annual Report on Form 10-K, including under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business,” in our subsequent quarterly reports on Form 10-Q, including under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in our subsequent filings with the Securities and Exchange Commission.

A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances. You should not place undue reliance on the forward-looking statements. Unless required by federal securities laws, we assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made.

PART I. FINANCIAL INFORMATION

Item 1: Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited; in millions, except per share data)


	Quarter Ended
	December 27, 2025		December 28, 2024
Revenues:
Services	$	23,206	$	22,048
Products	2,775		2,642
Total revenues	25,981		24,690
Costs and expenses:
Cost of services (exclusive of depreciation and amortization)	(15,003)		(13,789)
Cost of products (exclusive of depreciation and amortization)	(1,666)		(1,617)
Selling, general, administrative and other	(4,121)		(3,930)
Depreciation and amortization	(1,316)		(1,276)
Total costs and expenses	(22,106)		(20,612)
Restructuring and impairment charges	—		(143)

Interest expense, net	(275)		(367)
Equity in the income of investees	93		92
Income before income taxes	3,693		3,660
Income taxes	(1,209)		(1,016)


Net income	2,484		2,644
Net income attributable to noncontrolling interests	(82)		(90)

Net income attributable to The Walt Disney Company (Disney)	$	2,402	$	2,554

Earnings per share attributable to Disney:



Diluted	$	1.34	$	1.40



Basic	$	1.34	$	1.41

Weighted average number of common and common equivalent shares outstanding:
Diluted	1,793		1,818
Basic	1,786		1,812

See Notes to Condensed Consolidated Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited; in millions)


	Quarter Ended
	December 27, 2025		December 28, 2024
Net income	$	2,484	$	2,644
Other comprehensive income (loss), net of tax:
Market value adjustments for hedges	31		362
Pension and postretirement medical plan adjustments	(3)		25
Foreign currency translation and other	13		552
Other comprehensive income	41		939
Comprehensive income	2,525		3,583
Net income attributable to noncontrolling interests	(82)		(90)
Other comprehensive income (loss) attributable to noncontrolling interests	(27)		72
Comprehensive income attributable to Disney	$	2,416	$	3,565

See Notes to Condensed Consolidated Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited; in millions, except per share data)


	December 27, 2025		September 27, 2025
ASSETS
Current assets
Cash and cash equivalents	$	5,678	$	5,695
Receivables, net	15,054		13,217
Inventories	2,157		2,134
Content advances	1,336		2,063

Other current assets	1,241		1,158


Total current assets	25,466		24,267
Produced and licensed content costs	31,114		31,327
Investments	8,052		8,097
Parks, resorts and other property
Attractions, buildings and equipment	81,830		82,041
Accumulated depreciation	(47,228)		(48,889)
	34,602		33,152
Projects in progress	7,403		6,911
Land	1,193		1,192
	43,198		41,255
Intangible assets, net	9,429		9,272
Goodwill	74,743		73,294


Other assets	10,087		10,002
Total assets	$	202,089	$	197,514

LIABILITIES AND EQUITY
Current liabilities
Accounts payable and other accrued liabilities	$	20,541	$	21,203
Current portion of borrowings	10,819		6,711
Deferred revenue and other	6,686		6,248


Total current liabilities	38,046		34,162
Borrowings	35,821		35,315
Deferred income taxes	4,126		3,524


Other long-term liabilities	10,088		9,901
Commitments and contingencies (Note 12)

Equity
Preferred stock	—		—
Common stock, $0.01 par value, Authorized – 4.6 billion shares, Issued – 1.9 billion shares	60,704		59,814
Retained earnings	60,164		60,410
Accumulated other comprehensive loss	(2,900)		(2,914)

Treasury stock, at cost, 97 million shares at December 27, 2025 and 79 million shares at September 27, 2025	(9,492)		(7,441)
Total Disney Shareholders’ equity	108,476		109,869
Noncontrolling interests	5,532		4,743
Total equity	114,008		114,612
Total liabilities and equity	$	202,089	$	197,514

See Notes to Condensed Consolidated Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited; in millions)


	Quarter Ended
	December 27, 2025		December 28, 2024
OPERATING ACTIVITIES
Net income	$	2,484	$	2,644
Depreciation and amortization	1,316		1,276


Deferred income taxes	525		25
Equity in the income of investees	(93)		(92)
Cash distributions received from equity investees	93		33
Net change in produced and licensed content costs and advances	1,153		1,141

Equity-based compensation	332		317

Other, net	9		206
Changes in operating assets and liabilities:
Receivables	(1,806)		(1,277)
Inventories	(22)		4
Other assets	(220)		(116)
Accounts payable and other liabilities	(1,650)		(1,533)
Income taxes	(1,386)		577
Cash provided by operations	735		3,205

INVESTING ACTIVITIES
Investments in parks, resorts and other property	(3,013)		(2,466)


Other, net	276		(109)
Cash used in investing activities	(2,737)		(2,575)

FINANCING ACTIVITIES
Commercial paper borrowings (payments), net	4,007		(169)
Borrowings	1,062		1,057
Reduction of borrowings	(887)		(951)

Repurchases of common stock	(2,034)		(794)



Other, net	(164)		(140)
Cash provided by (used in) financing activities	1,984		(997)







Impact of exchange rates on cash, cash equivalents and restricted cash	5		(153)

Change in cash, cash equivalents and restricted cash	(13)		(520)
Cash, cash equivalents and restricted cash, beginning of period	5,799			6,102
Cash, cash equivalents and restricted cash, end of period	$	5,786	$	5,582

See Notes to Condensed Consolidated Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited; in millions)


	Quarter Ended
	Equity Attributable to Disney
	Shares(1)	Common Stock		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Treasury Stock		Total Disney Equity		Non-controlling Interests(2)		Total Equity
Balance at September 27, 2025	1,791	$	59,814	$	60,410		$	(2,914)	$	(7,441)	$	109,869	$	4,743	$	114,612
Comprehensive income	—	—		2,402			14		—		2,416		109		2,525
Equity compensation activity	3	245		—			—		—		245		—		245

Dividends	—	—		(2,651)			—		—		(2,651)		—		(2,651)


Common stock repurchases	(18)	—		—			—		(2,034)		(2,034)		—		(2,034)


Acquisition of Fubo	—	646		—			—		—		646		702		1,348
Distributions and other	—	(1)		3			—		(17)		(15)		(22)		(37)
Balance at December 27, 2025	1,776	$	60,704	$	60,164		$	(2,900)	$	(9,492)	$	108,476	$	5,532	$	114,008

Balance at September 28, 2024	1,812	$	58,592	$	49,722		$	(3,699)	$	(3,919)	$	100,696	$	4,826	$	105,522
Comprehensive income	—	—		2,554			1,011		—		3,565		18		3,583
Equity compensation activity	5	276		—			—		—		276		—		276

Dividends	—	—		(1,807)			—		—		(1,807)		—		(1,807)




Common stock repurchases	(7)	—		—			—		(794)		(794)		—		(794)

Distributions and other	—	—		(1)			—		(2)		(3)		(38)		(41)
Balance at December 28, 2024	1,810	$	58,868	$	50,468		$	(2,688)	$	(4,715)	$	101,933	$	4,806	$	106,739

(1)Shares are net of treasury shares.

(2)Excludes redeemable noncontrolling interests.

See Notes to Condensed Consolidated Financial Statements

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

1.Basis of Presentation

These Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. We believe that we have included all normal recurring adjustments necessary for a fair statement of the results for the interim period. Operating results for the quarter ended December 27, 2025 are not necessarily indicative of the results that may be expected for the year ending October 3, 2026.

The terms “Company,” “Disney,” “we,” “us,” and “our” are used in this report to refer collectively to the parent company, The Walt Disney Company, as well as the subsidiaries through which its various businesses are actually conducted.

These financial statements should be read in conjunction with the Company’s 2025 Annual Report on Form 10-K.

Effective October 29, 2025, the Company included FuboTV Inc. (Fubo), a publicly traded virtual multi-channel video programming distributor (vMVPD), in the Company’s Condensed Consolidated Financial Statements. See Note 4 for additional information.

On November 14, 2024, the Company and Reliance Industries Limited (RIL) formed a joint venture (India joint venture) that combined the Company’s Star-branded and other general entertainment and sports television channels and Disney+ Hotstar streaming service in India (Star India) with certain media and entertainment businesses controlled by RIL (the Star India Transaction). The Company has a 37% interest in the India joint venture and recognizes its share of the joint venture’s results in “Equity in the income of investees.” Star India’s results through November 14, 2024 were consolidated in the Company’s financial results.

Variable Interest Entities

The Company enters into relationships with or makes investments in other entities that may be variable interest entities (VIE). A VIE is consolidated in our 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, see Note 6) 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.

Use of Estimates

The preparation of financial statements in conformity with GAAP 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.

Reclassifications

Certain reclassifications have been made in the fiscal 2025 financial statements and notes to conform to the fiscal 2026 presentation.

2.Segment Information

The Company’s operations are reported in three segments: Entertainment, Sports and Experiences, for which separate financial information, including segment revenue and operating income, is evaluated regularly by the Chief Executive Officer, the Chief Operating Decision Maker, to allocate resources and assess performance.

Segment operating results reflect earnings before corporate and unallocated shared expenses, restructuring and impairment charges, net other income/expense, net interest expense, income taxes and noncontrolling interests. Segment operating income

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

generally includes equity in the income of investees, except for our India joint venture, and excludes amortization of intangible assets and impacts from fair value adjustments recognized in connection with the fiscal 2019 acquisition of TFCF Corporation (TFCF) and Hulu LLC (Hulu) and business acquisitions occurring after fiscal 2025 (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:


	Quarter Ended
	December 27, 2025		December 28, 2024
Revenues:
Entertainment
Third parties	$	11,454	$	10,761
Amounts eliminated in consolidation	155		111
	11,609		10,872
Sports
Third parties	4,521		4,514
Amounts eliminated in consolidation	388		336
	4,909		4,850
Experiences	10,006		9,415
Eliminations	(543)		(447)
Total segment revenues	$	25,981	$	24,690
Segment operating income:
Entertainment	$	1,100	$	1,703
Sports	191		247
Experiences	3,309		3,110
Total segment operating income(1)	$	4,600	$	5,060

(1) Equity in the income of investees is included in segment operating income as follows:


	Quarter Ended
	December 27, 2025		December 28, 2024
Entertainment	$	118	$	118
Sports	3		10

Equity in the income of investees included in segment operating income	121		128

Equity in the loss of India joint venture	(28)		(33)
Acquisition Amortization related to an equity investee	—		(3)
Equity in the income of investees	$	93	$	92

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)


	Quarter Ended
Information about significant segment expenses	December 27, 2025		December 28, 2024
Entertainment
Programming and production costs	$	6,314	$	5,475
Other segment operating expenses(1)	1,469		1,340
Selling, general, administrative and other	2,626		2,294
Depreciation and amortization	218		178
Total Entertainment costs and expenses	10,627		9,287
Sports
Programming and production costs	4,132		4,043
Other segment operating expenses(2)	257		250
Selling, general, administrative and other	308		310
Depreciation and amortization	24		10
Total Sports costs and expenses	4,721		4,613
Experiences
Operating labor	2,285		2,164
Infrastructure costs	846		801
Costs of goods sold and distribution costs	943		929
Other segment operating expenses(3)	902		784
Selling, general, administrative and other	962		948
Depreciation and amortization	759		679
Total Experiences costs and expenses	6,697		6,305
Eliminations(4)	(543)		(447)
Corporate and unallocated shared expenses	304		460
Acquisition Amortization(5)	300		394
Total costs and expenses	$	22,106	$	20,612

(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, processing fees and entertainment offerings.

(4)Reflects fees paid by (a) the Entertainment vMVPD services to ESPN and the Entertainment linear networks for the right to air the networks on Hulu Live TV and Fubo and (b) the Entertainment segment to the Sports segment to program certain sports content on ABC Network and Disney+. The offset is included in Entertainment programming and production costs.

(5)Excludes Acquisition Amortization of intangible assets related to equity investees.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

A reconciliation of segment operating income to income before income taxes is as follows:


	Quarter Ended
	December 27, 2025		December 28, 2024
Segment operating income	$	4,600	$	5,060

Corporate and unallocated shared expenses	(304)		(460)
Equity in the loss of India joint venture	(28)		(33)
Restructuring and impairment charges(1)	—		(143)

Interest expense, net	(275)		(367)
Acquisition Amortization(2)	(300)		(397)


Income before income taxes	$	3,693	$	3,660

(1)In the prior-year quarter, the Company recorded a $143 million loss in connection with the Star India Transaction.

(2)Acquisition Amortization is as follows:


	Quarter Ended
	December 27, 2025		December 28, 2024
Amortization of intangible assets	$	236	$	327
Step-up of film and television costs	64		67
Intangibles related to an equity investee	—		3
	$	300	$	397

3.Revenues

The following table presents revenues by segment and major source:


	Quarter Ended December 27, 2025
	Entertainment		Sports		Experiences		Eliminations		Total
Subscription and affiliate fees	$	7,250	$	2,983	$	—	$	(416)	$	9,817

Advertising	1,775		1,477		—		—		3,252
Theme park admissions	—		—		3,301		—		3,301
Resorts and vacations	—		—		2,410		—		2,410
Retail and wholesale sales of merchandise, food and beverage	—		—		2,741		—		2,741
Merchandise licensing	193		—		944		—		1,137
Content sales	1,936		60		—		—		1,996

Other	455		389		610		(127)		1,327
	$	11,609	$	4,909	$	10,006	$	(543)	$	25,981


	Quarter Ended December 28, 2024
	Entertainment		Sports		Experiences		Eliminations		Total
Subscription and affiliate fees	$	6,720	$	3,057	$	—	$	(321)	$	9,456

Advertising	1,898		1,342		—		—		3,240
Theme park admissions	—		—		3,087		—		3,087
Resorts and vacations	—		—		2,221		—		2,221
Retail and wholesale sales of merchandise, food and beverage	—		—		2,572		—		2,572
Merchandise licensing	165		—		927		—		1,092
Content sales	1,585		78		—		—		1,663

Other	504		373		608		(126)		1,359
	$	10,872	$	4,850	$	9,415	$	(447)	$	24,690

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

The following table presents revenues by segment and primary geographical markets:


	Quarter Ended December 27, 2025
	Entertainment		Sports		Experiences		Eliminations		Total
Americas	$	9,022	$	4,813	$	7,570	$	(543)	$	20,862
Europe	1,776		75		1,228		—		3,079
Asia Pacific	811		21		1,208		—		2,040
Total revenues	$	11,609	$	4,909	$	10,006	$	(543)	$	25,981

	Quarter Ended December 28, 2024
	Entertainment		Sports		Experiences		Eliminations		Total
Americas	$	8,492	$	4,716	$	7,121	$	(447)	$	19,882
Europe	1,651		77		1,127		—		2,855
Asia Pacific	729		57		1,167		—		1,953
Total revenues	$	10,872	$	4,850	$	9,415	$	(447)	$	24,690

Revenues recognized in the current and prior-year periods 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 the quarter ended December 27, 2025, $0.3 billion was recognized related to performance obligations satisfied as of September 27, 2025. For the quarter ended December 28, 2024, $0.3 billion was recognized related to performance obligations satisfied as of September 28, 2024.

As of December 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, wholesalers of SVOD streaming services, television station affiliates and sports sublicensees. Of this amount, we expect to recognize approximately $5 billion in the remainder of fiscal 2026, $4 billion in fiscal 2027, $3 billion in fiscal 2028 and $4 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.

Accounts receivable and deferred revenues from contracts with customers are as follows:


	December 27, 2025		September 27, 2025



Accounts receivable
Current	$	12,450	$	10,544
Non-current	997		985
Allowance for credit losses	(135)		(126)
Deferred revenues
Current	6,123		5,689
Non-current	731		785

For the quarter ended December 27, 2025, the Company recognized revenue of $3.6 billion that was included in the September 27, 2025 deferred revenue balance. For the quarter ended December 28, 2024, the Company recognized revenue of $3.6 billion that was included in the September 28, 2024 deferred revenue balance. Amounts deferred generally relate to theme park admissions and vacation packages, subscriptions to streaming services and advances related to merchandise and TV/VOD licenses.

4.Acquisitions and Dispositions

NFL media assets

In January 2026, ESPN acquired NFL Network and certain other media assets owned and controlled by NFL Enterprises LLC, including the NFL RedZone channel’s pay TV distribution and NFL Fantasy (collectively the Specified Assets), from NFL Enterprises LLC in exchange for a 10% noncontrolling interest of ESPN (the NFL Transaction). This transaction will allow the Company to expand audience reach, increase accessibility and flexibility for consumers, drive innovation, and offer more high-quality content at competitive prices. As a result of the NFL Transaction, the Company has an effective 72% interest in ESPN, with Hearst Corporation (Hearst) and NFL Enterprises LLC holding 18% and 10%, respectively. After July 2034,

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

based on the performance of the Specified Assets, the Company may have the right to reacquire (the Exchange Right) the NFL’s interest in ESPN in exchange for a ten-year note at 70% of the then fair market value of the NFL’s interest in ESPN. Alternatively, on a similar time frame, the NFL may have the right to acquire up to a 4% additional equity interest in ESPN at a purchase price equal to 70% of the then fair market value of ESPN.

The estimated fair value of the NFL Transaction is approximately $3 billion. A significant portion of the transaction value will be deferred until late fiscal 2033 and amortized as an expense thereafter, or, in the case that the Company exercises its Exchange Right, would be charged to equity. The Company is in the process of finalizing the valuation of the assets acquired, liabilities assumed and noncontrolling interests.

FuboTV Inc.

On October 29, 2025, the Company and Fubo combined certain 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 has a 70% economic interest in the combined operations, a 70% voting interest in Fubo on a fully diluted basis 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 was $1.3 billion, which was primarily allocated to goodwill of $1.5 billion and identifiable intangible assets of $0.4 billion, partially offset by debt of $0.4 billion. Goodwill reflects the synergies expected from enhancing and expanding the Company’s vMVPD offerings with more high-quality offerings, choice and increased flexibility.

The Company has included Fubo’s financial results in the Company’s Condensed Consolidated Financial Statements effective from October 29, 2025. The revenue of the acquired Fubo operations included in the Company’s Condensed Consolidated Statement of Income for the quarter ended December 27, 2025 was approximately $0.3 billion. Net income of the acquired Fubo operations included in the Company’s Condensed Consolidated Statement of Income for the quarter ended December 27, 2025, was not significant.

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 Hulu Live TV and sells advertising for Hulu Live TV and Fubo for a fee.

Goodwill

The changes in the carrying amount of goodwill are as follows:


	Entertainment		Sports		Experiences		Total




Balance at September 27, 2025	$	51,258	$	16,486	$	5,550	$	73,294








Fubo Transaction	1,459		—		—		1,459
Currency translation adjustments and other, net	(10)		—		—		(10)
Balance at December 27, 2025	$	52,707	$	16,486	$	5,550	$	74,743

5.Cash, Cash Equivalents, Restricted Cash and Borrowings

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets to the total of the amounts reported in the Condensed Consolidated Statements of Cash Flows.


	December 27, 2025		September 27, 2025
Cash and cash equivalents	$	5,678	$	5,695


Restricted cash included in other assets	108		104

Total cash, cash equivalents and restricted cash in the statement of cash flows	$	5,786	$	5,799

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

Borrowings

During the quarter ended December 27, 2025, the Company’s borrowing activity was as follows:


	September 27, 2025		Borrowings		Payments		Other Activity		December 27, 2025
Commercial paper with original maturities less than three months(1)	$	1,963	$	—	$	(577)	$	(5)	$	1,381
Commercial paper with original maturities greater than three months	99		4,584		—		38		4,721
U.S. dollar denominated borrowings(2)	38,658		1,062		(887)		311		39,144


Asia Theme Parks borrowings	1,075		—		—		(2)		1,073
Foreign currency denominated borrowings and other(3)	231		—		—		90		321
	$	42,026	$	5,646	$	(1,464)	$	432	$	46,640

(1)Borrowings and reductions of borrowings are reported net.

(2)The other activity includes borrowings assumed in the acquisition of Fubo.

(3)The other activity is attributable to market value adjustments for debt with qualifying hedges.

At December 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 1.10%. 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 December 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 $500 million of letters of credit under the facility expiring in March 2027, which if utilized, reduces available borrowings under this facility. As of December 27, 2025, the Company has $0.4 billion of outstanding letters of credit, of which none were issued under this facility.

Cruise Ship Credit Facilities

In October 2025, in connection with the delivery of the Disney Destiny, the Company borrowed $1.1 billion with a fixed interest rate of 3.74%. Payments are due semi-annually over a 12-year term.

Interest expense, net

Interest expense (net of amounts capitalized), interest and investment income, and net periodic pension and postretirement benefit costs (other than service costs) (see Note 8) are reported net in the Condensed Consolidated Statements of Income and consist of the following:


	Quarter Ended
	December 27, 2025		December 28, 2024
Interest expense	$	(443)	$	(487)
Interest and investment income	52		54
Net periodic pension and postretirement benefit costs (other than service costs)	116		66
Interest expense, net	$	(275)	$	(367)

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

Interest and investment income includes gains and losses on certain publicly traded and non-public investments, investment impairments and interest earned on cash and cash equivalents and certain receivables.

6.International 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. 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 Condensed Consolidated Balance Sheets:


	December 27, 2025		September 27, 2025
Cash and cash equivalents	$	486	$	428
Other current assets	219		184
Total current assets	705		612
Parks, resorts and other property	6,183		6,060
Other assets	286		287
Total assets	$	7,174	$	6,959

Current liabilities	$	799	$	734
Long-term borrowings	1,073		1,075
Other long-term liabilities	497		489
Total liabilities	$	2,369	$	2,298

The following table summarizes the International Theme Parks’ revenues and costs and expenses included in the Company’s Condensed Consolidated Statements of Income for the quarter ended December 27, 2025:



Revenues	$	1,635
Costs and expenses	(1,291)

Asia Theme Parks’ royalty and management fees of $86 million for the quarter ended December 27, 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 Condensed Consolidated Statements of Cash Flows for the quarter ended December 27, 2025 were $404 million provided by operating activities, $355 million used in investing activities and $7 million provided by financing activities.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

7.Produced and Acquired/Licensed Content Costs and Advances

Total capitalized produced and licensed content by predominant monetization strategy is as follows:


	As of December 27, 2025						As of September 27, 2025
	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total		Predominantly Monetized Individually		Predominantly Monetized as a Group		Total
Produced content
Released, less amortization	$	5,395	$	14,158	$	19,553	$	4,624	$	14,288	$	18,912
Completed, not released	345		1,150		1,495		313		1,061		1,374
In-process	2,608		3,821		6,429		4,082		3,633		7,715
In development or pre-production	425		117		542		386		182		568
	$	8,773	$	19,246	28,019		$	9,405	$	19,164	28,569






Licensed content - Television programming rights and advances					4,431						4,821
Total produced and licensed content					$	32,450					$	33,390

Current portion					$	1,336					$	2,063
Non-current portion					$	31,114					$	31,327

Amortization of produced and licensed content is as follows:


	Quarter Ended
	December 27, 2025		December 28, 2024
Produced content
Predominantly monetized individually	$	1,354	$	696
Predominantly monetized as a group	1,614		1,813
	2,968		2,509
Licensed programming rights and advances	4,246		4,097
Total produced and licensed content costs(1)	$	7,214	$	6,606

(1)Primarily included in “Costs of services” in the Condensed Consolidated Statements of Income

8.Pension and Other Benefit Programs

The components of net periodic benefit cost (income) are as follows:


	Pension Plans				Postretirement Medical Plans
	Quarter Ended					Quarter Ended
	December 27, 2025		December 28, 2024				December 27, 2025		December 28, 2024
Service costs	$	61	$	65			$	—	$	—
Other costs (benefits):
Interest costs	199		195				11		11
Expected return on plan assets	(306)		(290)				(16)		(15)
Amortization of previously deferred service costs (credits)	1		—				(22)		(22)
Recognized net actuarial loss (gain)	24		62				(7)		(7)
Total other costs (benefits)	(82)		(33)				(34)		(33)
Net periodic benefit cost (income)	$	(21)	$	32			$	(34)	$	(33)

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

9.Earnings Per Share

Diluted earnings per share amounts are based upon the weighted average number of common and common equivalent shares outstanding during the period and are calculated using the treasury stock method for equity-based compensation awards (Awards). 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:


	Quarter Ended
	December 27, 2025	December 28, 2024
Shares (in millions):
Weighted average number of common and common equivalent shares outstanding (basic)	1,786	1,812
Weighted average dilutive impact of Awards	7	6
Weighted average number of common and common equivalent shares outstanding (diluted)	1,793	1,818
Awards excluded from diluted earnings per share	13	16

10.Equity

The Company declared the following dividends in fiscal 2026 and 2025:

Per Share

Amount

Payment Date

$0.75

$1.3 billion(1)

July 22, 2026

$0.75

$1.3 billion

January 15, 2026

$0.50

$0.9 billion

July 23, 2025

$0.50

$0.9 billion

January 16, 2025

(1)Amount represents our estimate of the dividends that will be paid on July 22, 2026. The actual amount will be determined based on shareholders of record at the record date.

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 quarter ended December 27, 2025, the Company repurchased 18 million shares of its common stock for $2.0 billion. During the quarter ended December 28, 2024, the Company repurchased 7 million shares of its common stock for $0.8 billion. As of December 27, 2025, the Company had remaining authorization in place to repurchase approximately 321 million additional shares. The repurchase program does not have an expiration date.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

The following tables summarize 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
First quarter of fiscal 2026
Balance at September 27, 2025	$	(549)	$	(1,901)	$	(1,085)	$	(3,535)
Quarter Ended December 27, 2025:
Unrealized gains (losses) arising during the period	(21)		—		(13)		(34)
Reclassifications of realized net (gains) losses to net income	63		(4)		—		59
Balance at December 27, 2025	$	(507)	$	(1,905)	$	(1,098)	$	(3,510)

First quarter of fiscal 2025
Balance at September 28, 2024	$	(319)	$	(2,243)	$	(1,855)	$	(4,417)
Quarter Ended December 28, 2024:
Unrealized gains (losses) arising during the period	559		—		(246)		313
Reclassifications of realized net (gains) losses to net income	(88)		33		—		(55)
Star India Transaction	—		—		904		904
Balance at December 28, 2024	$	152	$	(2,210)	$	(1,197)	$	(3,255)


	Market Value Adjustments for Hedges		Unrecognized Pension and Postretirement Medical Expense		Foreign Currency Translation and Other		AOCI

Tax on AOCI
First quarter of fiscal 2026
Balance at September 27, 2025	$	120	$	446	$	55	$	621
Quarter Ended December 27, 2025:
Unrealized gains (losses) arising during the period	3		—		(1)		2
Reclassifications of realized net (gains) losses to net income	(14)		1		—		(13)
Balance at December 27, 2025	$	109	$	447	$	54	$	610

First quarter of fiscal 2025
Balance at September 28, 2024	$	71	$	531	$	116	$	718
Quarter Ended December 28, 2024:
Unrealized gains (losses) arising during the period	(130)		—		24		(106)
Reclassifications of realized net (gains) losses to net income	21		(8)		—		13
Star India Transaction	—		—		(58)		(58)
Balance at December 28, 2024	$	(38)	$	523	$	82	$	567

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)


	Market Value Adjustments for Hedges		Unrecognized Pension and Postretirement Medical Expense		Foreign Currency Translation and Other		AOCI

AOCI, after tax
First quarter of fiscal 2026
Balance at September 27, 2025	$	(429)	$	(1,455)	$	(1,030)	$	(2,914)
Quarter Ended December 27, 2025:
Unrealized gains (losses) arising during the period	(18)		—		(14)		(32)
Reclassifications of realized net (gains) losses to net income	49		(3)		—		46
Balance at December 27, 2025	$	(398)	$	(1,458)	$	(1,044)	$	(2,900)

First quarter of fiscal 2025
Balance at September 28, 2024	$	(248)	$	(1,712)	$	(1,739)	$	(3,699)
Quarter Ended December 28, 2024:
Unrealized gains (losses) arising during the period	429		—		(222)		207
Reclassifications of realized net (gains) losses to net income	(67)		25		—		(42)
Star India Transaction	—		—		846		846
Balance at December 28, 2024	$	114	$	(1,687)	$	(1,115)	$	(2,688)

Details about AOCI components reclassified to net income are as follows:


Gain (loss) in net income:	Affected line item in the Condensed Consolidated Statements of Income:	Quarter Ended
		December 27, 2025		December 28, 2024
Market value adjustments, primarily cash flow hedges	Primarily revenue	$	(63)	$	88
Estimated tax	Income taxes	14		(21)
		(49)		67


Pension and postretirement medical expense	Interest expense, net	4		(33)
Estimated tax	Income taxes	(1)		8
		3		(25)





Total reclassifications for the period		$	(46)	$	42

11.Equity-Based Compensation

Equity-based compensation expense related to stock options and restricted stock units (RSU’s) for the quarters ended December 27, 2025 and December 28, 2024 was $332 million and $317 million, respectively. Equity-based compensation capitalized during the quarters ended December 27, 2025 and December 28, 2024 was $49 million and $44 million, respectively. Unrecognized compensation cost related to unvested stock options and RSUs was $0.1 billion and $1.6 billion, respectively, as of December 27, 2025.

Each fiscal year, generally in December and January, the Company awards stock options and restricted stock units to a broad-based group of management, technology and creative personnel (Annual Grant). Substantially all of the fiscal 2026 Annual Grant was issued in January 2026 and consisted of 2.6 million stock options and 15.2 million RSUs with weighted average grant date fair values of $37.11 and $113.25, respectively. The fiscal 2025 Annual Grant weighted average grant date fair values for stock options and RSUs were $37.98 and $109.20, respectively.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

12.Commitments and Contingencies

Legal Matters

Securities Actions

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 Appeals, 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.

On December 8, 2025, a private securities lawsuit was filed in the U.S. District Court for the Central District of California against the Company and certain former officers by Union Asset Management Holding AG and GIC Private Limited (the Union Asset Action). The Union Asset Action asserts the same claims and is based on substantially the same factual allegations and time period as the Securities Class Action, and seeks unspecified monetary damages. On January 2, 2026, the parties filed a joint stipulation to stay the Union Asset Action until the Securities Class Action concludes. The Company intends to defend against this lawsuit vigorously. The lawsuit is in the early stages, and at this time we cannot reasonably estimate the amount of any possible loss.

Derivative Actions

Six shareholder derivative complaints have been filed against the Company and certain current and former officers and directors. Each of these actions asserts various claims including breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste, insider selling, and violations of federal securities laws based on substantially similar factual allegations as those asserted in the pending Securities Class Action.

•On August 4, 2023, and December 15, 2023, two shareholder derivative complaints were filed in the U.S. District Court for the Central District of California by Hugues Gervat and Audrey McAdams, respectively. On April 29, 2024, these actions were consolidated (the Consolidated Derivative Action). The Consolidated Derivative Action is currently stayed until August 21, 2026.

•On August 23, 2023, Stourbridge Investments LLC filed a shareholder derivative complaint in the U.S. District Court for the District of Delaware. On October 24, 2023, the action was voluntarily dismissed and, on November 16, 2023, refiled in the Delaware Court of Chancery. The Stourbridge action is currently stayed until the court in the Securities Class Action rules upon any motion for summary judgment.

•On June 27, 2025, Thomas Payne filed a shareholder derivative complaint in the Delaware Court of Chancery. The Payne action is currently stayed until the court in the Securities Class Action rules upon any motion for summary judgment.

•On November 5, 2025, Martin Siegel filed a shareholder derivative complaint in the Delaware Court of Chancery. The Siegel action is currently stayed until the court in the Securities Class Action rules upon any motion for summary judgment.

•On November 14, 2025, Balraj Paul, the Montini Family Trust, and Dorothy Keto filed a shareholder derivative complaint in the U.S. District Court for the Central District of California. On January 14, 2026, the Paul action was consolidated into the Consolidated Derivative Action, which is stayed until August 21, 2026.

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.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

Antitrust and Other Actions

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.

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. A preliminary approval hearing is scheduled for February 19, 2026.

The Company and Unger Counsel did not reach a settlement at the October 3, 2025 mediation. The Company filed a motion to compel arbitration of individual claims and dismiss class claims in the Unger Action on December 19, 2025. A hearing on the motion is set for March 19, 2026. The Company intends to continue to defend against the lawsuit vigorously. At this time, we cannot reasonably estimate the amount of any possible loss in the Unger Action.

On January 2, 2026, in litigation filed by the Company on August 28, 2025 asserting breach of contract claims against DISH Network L.L.C. (DISH) in the U.S. District Court for the Southern District of New York, DISH filed antitrust counterclaims against the Company. DISH asserts a tying claim under Sherman Act § 1 and New York’s Donnelly Act challenging certain provisions in the Company’s carriage agreement with DISH; claims under Sherman Act § 1 challenging an ESPN / Fox One bundle, the creation of Fubo Sports, and the Company’s acquisition of a controlling share of Fubo; a claim under Clayton Act § 7 challenging the Company’s acquisition of a controlling share of Fubo; and a claim under Sherman Act § 2 alleging the Company engaged in a pattern of conduct in an attempt to monopolize an alleged market for skinny sports

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

bundles. DISH also asserts breach-of-contract counterclaims, contending that Company-affiliated entities violated their obligations under certain most-favored-nation provisions in the operative carriage agreement. The Company’s response to these counterclaims is due on February 20, 2026. The Company intends to prosecute its claims and defend against these counterclaims vigorously. The lawsuit is in its early stages, and at this time we cannot reasonably estimate the amount of any potential loss.

The Company, together with, in some instances, certain of its directors and officers, is a defendant in various other legal actions incident to the conduct of its businesses, including streaming services which are subject to patent infringement claims and litigation for which adverse results may include payment of substantial licensing fees and monetary awards, as well as orders preventing us from offering or requiring us to change certain features, functionalities or services, which could harm our businesses and in aggregate negatively impact our results of operations. Management does not believe that the Company has incurred a probable material loss by reason of any of those actions.

Other

The Company entered into license agreements for the sports rights necessary to operate NFL Network and NFL RedZone through 2033.

13.Fair Value Measurements

The Company’s assets and liabilities measured at fair value are summarized in the following tables by fair value measurement level:


	Fair Value Measurement at December 27, 2025
	Level 1		Level 2		Level 3		Total
Assets
Investments	$	—	$	44	$	—	$	44
Derivatives

Foreign exchange	—		828		—		828
Other	—		8		—		8
Liabilities
Derivatives
Interest rate	—		(757)		—		(757)
Foreign exchange	—		(923)		—		(923)
Other	—		(2)		—		(2)

Other	—		(727)		—		(727)
Total recorded at fair value	$	—	$	(1,529)	$	—	$	(1,529)
Fair value of borrowings	$	—	$	40,179	$	3,481	$	43,660

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)


	Fair Value Measurement at September 27, 2025
	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	$	—	$	36,976	$	2,111	$	39,087

The fair values 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 14.

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 costs, 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.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

14.Derivative Instruments

The Company’s derivative positions measured at fair value (see Note 13) are summarized in the following tables:


	As of December 27, 2025
	Current Assets		Investments/ Other Assets		Other Current Liabilities		Other Long- Term Liabilities
Derivatives designated as hedges
Foreign exchange	$	225	$	389	$	(399)	$	(206)
Interest rate	—		—		(757)		—
Other	1		—		(2)		—
Derivatives not designated as hedges
Foreign exchange	56		158		(66)		(252)

Other	7		44		—		—
Gross fair value of derivatives	289		591		(1,224)		(458)
Counterparty netting	(276)		(513)		391		398
Cash collateral (received) paid	—		—		570		—
Net derivative positions	$	13	$	78	$	(263)	$	(60)


	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 (received) paid	—		—		550		10
Net derivative positions	$	15	$	118	$	(291)	$	(61)

Interest Rate Risk Management

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 was $10.6 billion at both December 27, 2025 and September 27, 2025.

The following table summarizes fair value hedge adjustments to hedged borrowings:


	Carrying Amount of Hedged Borrowings				Fair Value Adjustments Included in Hedged Borrowings
	December 27, 2025		September 27, 2025		December 27, 2025		September 27, 2025
Borrowings:
Current	$	2,980	$	2,954	$	(19)	$	(44)
Long-term	7,413		7,347		(634)		(680)
	$	10,393	$	10,301	$	(653)	$	(724)

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

The following amounts are included in “Interest expense, net” in the Condensed Consolidated Statements of Income:


	Quarter Ended
	December 27, 2025		December 28, 2024
Gain (loss) on:
Pay-floating swaps	$	67	$	(195)
Borrowings hedged with pay-floating swaps	(67)		195
Expense associated with interest accruals on pay-floating swaps	(85)		(111)

Foreign Exchange Risk Management

The Company designates foreign exchange forward and option contracts as cash flow hedges of firmly committed and forecasted foreign currency transactions. As of December 27, 2025 and September 27, 2025, the notional amount of the Company’s net foreign exchange cash flow hedges was $10.1 billion and $9.3 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 $228 million. The following table summarizes the effect of foreign exchange cash flow hedges on AOCI:


	Quarter Ended
	December 27, 2025		December 28, 2024
Gain (loss) recognized in Other Comprehensive Income	$	(25)	$	562
Gain (loss) reclassified from AOCI into the Statements of Operations(1)	(62)		89

(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 December 27, 2025 and September 27, 2025, the total notional amount of the Company’s designated cross currency swaps was Canadian $1.3 billion ($1.0 billion) and Canadian $1.3 billion ($0.9 billion), respectively. The related gains or losses recognized in earnings for the quarters ended December 27, 2025 and December 28, 2024 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 at December 27, 2025 and September 27, 2025 was $3.2 billion and $3.0 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 quarters ended December 27, 2025 and December 28, 2024 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 net notional amount of these contracts at December 27, 2025 and September 27, 2025 was $0.7 billion and $0.6 billion, respectively. The related gains or losses recognized in earnings for the quarters ended December 27, 2025 and December 28, 2024 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 value of derivative instruments with credit-risk-related contingent features in a net liability position by counterparty was $0.9 billion at December 27, 2025 and September 27, 2025.

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

15.New Accounting Pronouncements

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 and 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 Expense

In November 2024, the FASB issued guidance that requires the disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement line item. 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.

Accounting for Government Grants

In December 2025, the FASB issued guidance that establishes the recognition, measurement and presentation requirements for government grants. The guidance is effective at the beginning of the Company’s 2030 fiscal year (with early adoption permitted). The Company is currently assessing the impact this guidance will have on its financial statements and financial statement disclosures.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

ORGANIZATION OF INFORMATION

Management’s Discussion and Analysis provides a narrative of the Company’s financial performance and condition that should be read in conjunction with the accompanying financial statements. It includes the following sections:

•Consolidated Results

•Current Quarter Results Compared to Prior-Year Quarter

•Seasonality

•Business Segment Results

•Corporate and Unallocated Shared Expenses

•Financial Condition

•Market Risk

•Commitments and Contingencies

•Other Matters

•Supplemental Guarantor Financial Information

CONSOLIDATED RESULTS


	Quarter Ended				% Change Better (Worse)
(in millions, except per share data)	December 27, 2025		December 28, 2024
Revenues:
Services	$	23,206	$	22,048	5 %
Products	2,775		2,642		5 %
Total revenues	25,981		24,690		5 %
Costs and expenses:
Cost of services (exclusive of depreciation and amortization)	(15,003)		(13,789)		(9) %
Cost of products (exclusive of depreciation and amortization)	(1,666)		(1,617)		(3) %
Selling, general, administrative and other	(4,121)		(3,930)		(5) %
Depreciation and amortization	(1,316)		(1,276)		(3) %
Total costs and expenses	(22,106)		(20,612)		(7) %
Restructuring and impairment charges	—		(143)		100 %

Interest expense, net	(275)		(367)		25 %
Equity in the income of investees	93		92		1 %
Income before income taxes	3,693		3,660		1 %
Income taxes	(1,209)		(1,016)		(19) %


Net income	2,484		2,644		(6) %
Net income attributable to noncontrolling interests	(82)		(90)		9 %

Net income attributable to Disney	$	2,402	$	2,554	(6) %
Diluted earnings per share attributable to Disney	$	1.34	$	1.40	(4) %

CURRENT QUARTER RESULTS COMPARED TO PRIOR-YEAR QUARTER

Revenues for the quarter increased 5%, or $1.3 billion, to $26.0 billion; net income attributable to Disney decreased to $2.4 billion compared to $2.6 billion in the prior-year quarter; and diluted earnings per share (EPS) attributable to Disney decreased to $1.34 compared to $1.40 in the prior-year quarter. The net income and EPS decreases were due to lower operating income at Entertainment and a higher effective income tax rate. These decreases were partially offset by higher operating income at Experiences, the comparison to charges taken in connection with the Star India Transaction and a legal settlement in the prior-year quarter and lower intangible amortization and interest expense.

Revenues

Service revenues for the quarter increased 5%, or $1.2 billion, to $23.2 billion, which included an approximate 1 percentage point increase from the Fubo Transaction and an approximate 1 percentage point decrease from the Star India

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Transaction. Aside from these impacts, service revenues increased due to an increase in content sales, growth at our parks and experiences businesses and, to a lesser extent, higher subscription and affiliate fees.

Product revenues for the quarter increased 5%, or $0.1 billion, to $2.8 billion due to growth at our parks and experiences businesses.

Costs and expenses

Cost of services for the quarter increased 9%, or $1.2 billion, to $15.0 billion, which included an approximate 2 percentage point increase from the Fubo Transaction and an approximate 1 percentage point decrease due to the Star India Transaction. Aside from these impacts, cost of services increased due to higher programming and production costs and, to a lesser extent, the impact of inflation and increased volumes at our parks and experiences businesses.

Selling, general, administrative and other costs increased 5%, or $0.2 billion, to $4.1 billion, due to higher marketing costs.

Depreciation and amortization increased 3% to $1.3 billion driven by higher depreciation at our parks and experiences and Entertainment businesses, partially offset by lower amortization of intangible assets.

Restructuring and impairment charges

In the prior-year quarter, the Company recorded a $143 million loss in connection with the Star India Transaction.

Interest expense, net

Interest expense, net is as follows:


	Quarter Ended
(in millions)	December 27, 2025		December 28, 2024		% Change Better (Worse)
Interest expense	$	(443)	$	(487)	9 %
Interest income, investment income and other	168		120		40 %

Interest expense, net	$	(275)	$	(367)	25 %

The decrease in interest expense was due to lower average debt balances and an increase in capitalized interest.

The increase in interest income, investment income and other was due to a favorable comparison related to pension and postretirement benefit costs, other than service cost.

Income Taxes


	Quarter Ended
	December 27, 2025			December 28, 2024
Income before income taxes	$	3,693		$	3,660
Income tax (benefit) expense	1,209			1,016
Effective income tax rate	32.7		%	27.8		%

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 the current quarter resulting from the Fubo Transaction and an unfavorable impact in the current quarter for adjustments related to prior years, partially offset by a non-cash tax-charge in the prior-year quarter in connection with the Star India Transaction.

Noncontrolling Interests


	Quarter Ended
(in millions)	December 27, 2025		December 28, 2024		% Change Better (Worse)
Net income attributable to noncontrolling interests	$	(82)	$	(90)	9 %

Net income attributable to noncontrolling interests is determined on income after royalties and management fees, financing costs and income taxes, as applicable.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Certain Items Impacting Results in the Quarter

Results for the quarter ended December 27, 2025 were impacted by the following:

•Non-cash tax charge of $307 million resulting from the Fubo Transaction

•Acquisition Amortization of $300 million

Results for the quarter ended December 28, 2024 were impacted by the following:

•An impairment charge of $143 million recorded in connection with the Star India Transaction. Tax expense includes a $31 million tax benefit on the impairment charge and a non-cash tax charge of $244 million related to the Star India Transaction

•Acquisition Amortization of $397 million

A summary of the impact of these items on EPS is as follows:


(in millions, except per share data)	Pre-Tax Income (Loss)		Tax Benefit (Expense)(1)		After-Tax Income (Loss)		EPS Favorable (Adverse)(2)
Quarter Ended December 27, 2025:

Non-cash tax charge resulting from the Fubo Transaction	$	—	$	(307)	$	(307)	$	(0.17)

Acquisition Amortization	(300)		70		(230)		(0.12)




Total	$	(300)	$	(237)	$	(537)	$	(0.29)

Quarter Ended December 28, 2024:
Star India Transaction	$	(143)	$	(213)	$	(356)	$	(0.20)
Acquisition Amortization	(397)		93		(304)		(0.16)

Total	$	(540)	$	(120)	$	(660)	$	(0.36)

(1)Tax benefit (expense) amounts are determined using the tax rate applicable to the individual item.

(2)EPS is net of noncontrolling interest share, where applicable. Total may not equal the sum of the column due to rounding.

SEASONALITY

The Company’s businesses are subject to the effects of seasonality. Consequently, the operating results for the quarter ended December 27, 2025 for each business segment, and for the Company as a whole, are not necessarily indicative of results to be expected for the full year.

Entertainment revenues are subject to seasonal and other cyclical advertising patterns, changes in viewership and subscriber levels, timing and performance of theatrical releases, and the timing of and demand for film and television programs. In general, domestic advertising revenues are typically somewhat higher during the fall and somewhat lower during the summer months and domestic advertising revenue is typically higher during election cycles. Affiliate and subscriptions fees vary with the subscriber trends of multi-channel video programming distributors (i.e. cable, satellite telecommunications and digital over-the-top service providers) and our streaming services. Theatrical release dates are determined by several factors, including competition and the timing of vacation and holiday periods.

Sports revenues are subject to seasonal advertising patterns, changes in viewership and subscriber levels, and the availability of and demand for sports programming. Advertising revenues generated from sports programming are also impacted by the timing of sports seasons and events, which timing may vary throughout the year or may take place periodically (e.g. biannually, quadrennially).

Experiences revenues fluctuate with changes in theme park attendance and resort occupancy resulting from the seasonal nature of vacation travel and leisure activities, the opening of new guest offerings and pricing and promotional offers. Peak attendance and resort occupancy generally occur during the summer months when school vacations occur and during early winter and spring holiday periods. In addition, theme park and resort revenues may be higher during significant celebrations such as theme park or character anniversaries and lower in the periods preceding or following such celebrations. Consumer products revenue fluctuates with consumer purchasing behavior, which generally results in higher revenues during the Company’s first and fourth fiscal quarters. In addition, licensing revenues fluctuate with the timing and performance of theatrical and game releases and direct-to-consumer content.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

BUSINESS SEGMENT RESULTS

The Company evaluates the performance of its operating businesses based on segment revenue and segment operating income.

The following table presents revenues from our operating segments:


	Quarter Ended				% Change Better (Worse)
(in millions)	December 27, 2025		December 28, 2024
Entertainment	$	11,609	$	10,872	7 %
Sports	4,909		4,850		1 %
Experiences	10,006		9,415		6 %
Eliminations (1)	(543)		(447)		(21) %
Revenues	$	25,981	$	24,690	5 %

(1)Reflects fees paid by (a) the Entertainment vMVPD services to ESPN and the Entertainment linear networks for the right to air the networks on Hulu Live and Fubo and (b) the Entertainment segment to the Sports segment to program certain sports content on ABC Network and Disney+.

The following table presents income from our operating segments and other components of income before income taxes:


	Quarter Ended				% Change Better (Worse)
(in millions)	December 27, 2025		December 28, 2024
Entertainment operating income	$	1,100	$	1,703	(35) %
Sports operating income	191		247		(23) %
Experiences operating income	3,309		3,110		6 %
Corporate and unallocated shared expenses	(304)		(460)		34 %
Equity in the loss of India joint venture	(28)		(33)		15 %
Restructuring and impairment charges	—		(143)		100 %

Interest expense, net	(275)		(367)		25 %
Acquisition Amortization	(300)		(397)		24 %


Income before income taxes	$	3,693	$	3,660	1 %

Depreciation expense is as follows:


	Quarter Ended				% Change Better (Worse)
(in millions)	December 27, 2025		December 28, 2024




Entertainment	$	205	$	165	(24) %
Sports	24		10		>(100) %
Experiences

Domestic	524		461		(14) %
International	208		191		(9) %

Total Experiences	732		652		(12) %



Corporate	79		82		4 %
Total depreciation expense	$	1,040	$	909	(14) %

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Amortization of intangible assets is as follows:


	Quarter Ended				% Change Better (Worse)
(in millions)	December 27, 2025		December 28, 2024




Entertainment	$	13	$	13	— %

Experiences	27		27		— %
Acquisition amortization - intangible assets	236		327		28 %


Total amortization of intangible assets	$	276	$	367	25 %

BUSINESS SEGMENT RESULTS - Current Quarter Results Compared to Prior-Year Quarter

Entertainment

Operating results for Entertainment are as follows:


	Quarter Ended				% Change Better (Worse)
(in millions)	December 27, 2025		December 28, 2024
Revenues
Subscription and affiliate fees	$	7,250	$	6,720	8 %
Advertising	1,775		1,898		(6) %
Content sales	1,936		1,585		22 %
Other	648		669		(3) %
Total revenues	11,609		10,872		7 %
Operating expenses	(7,783)		(6,815)		(14) %
Selling, general, administrative and other	(2,626)		(2,294)		(14) %
Depreciation and amortization	(218)		(178)		(22) %
Equity in the income of investees	118		118		— %

Operating Income	$	1,100	$	1,703	(35) %

Revenues - Subscription and affiliate fees

Growth in subscription and affiliate fees was due to increases of 4% from higher effective rates, 4% from the Fubo Transaction and 1% from more subscribers, partially offset by decreases of 1% from the Star India Transaction and 1% from the temporary suspension of carriage with an affiliate in the current quarter.

Revenues - Advertising

The decline in advertising revenue was due to decreases of 5% from the Star India Transaction and 5% from lower rates, partially offset by increases of 3% from higher impressions and 1% from the Fubo Transaction. Rates and impressions included an impact from less political advertising.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Revenues - Content sales

Content sales revenue increased due to an increase of 25% from theatrical distribution, partially offset by a decrease of 6% from home entertainment distribution. Higher theatrical distribution revenue was attributable to more significant titles released in the current quarter compared to the prior-year quarter. The current quarter included Zootopia 2, Avatar: Fire and Ash, Predator: Badlands and Tron: Ares. The prior-year quarter included Moana 2 and Mufasa: The Lion King.

Operating expenses


	Quarter Ended				% Change Better (Worse)
(in millions)	December 27, 2025		December 28, 2024
Programming and production costs	$	(6,314)	$	(5,475)	(15) %
Other operating expenses	(1,469)		(1,340)		(10) %
	$	(7,783)	$	(6,815)	(14) %

The increase in programming and production costs was due to increases of 11% from theatrical distribution, 4% from the Fubo Transaction and 3% from our streaming services. Higher programming and production costs at our streaming services were primarily due to an increase in subscriber-based license fees.

The increase in other operating expenses was primarily due to higher technology and distribution costs.

Selling, general, administrative and other

Selling, general, administrative and other costs increased $332 million to $2,626 million from $2,294 million due to higher marketing costs at theatrical distribution and our streaming services. Higher theatrical marketing costs were due to more significant releases in the current quarter.

Depreciation and amortization

Depreciation and amortization increased $40 million to $218 million from $178 million due to new technology and facilities assets placed in service.

Operating Income from Entertainment

Segment operating income decreased $603 million to $1,100 million from $1,703 million due to lower theatrical distribution results.

Items Excluded from Segment Operating Income Related to Entertainment

The following table presents supplemental information for items related to the Entertainment segment that are excluded from segment operating income:


	Quarter Ended				% Change Better (Worse)
(in millions)	December 27, 2025		December 28, 2024
Acquisition Amortization(1)	$	(298)	$	(321)	7 %

(1)In the current quarter, amortization of intangible assets was $234 million and amortization of step-up on film and television costs was $64 million. In the prior-year quarter, amortization of intangible assets was $251 million and amortization of step-up on film and television costs was $67 million.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Sports

Operating results for Sports are as follows:


	Quarter Ended				% Change Better (Worse)
(in millions)	December 27, 2025		December 28, 2024
Revenues
Subscription and affiliate fees	$	2,983	$	3,057	(2) %
Advertising	1,477		1,342		10 %
Other	449		451		— %
Total revenues	4,909		4,850		1 %
Operating expenses	(4,389)		(4,293)		(2) %
Selling, general, administrative and other	(308)		(310)		1 %
Depreciation and amortization	(24)		(10)		>(100) %
Equity in the income of investees	3		10		(70) %
Operating Income	$	191	$	247	(23) %

Revenues - Subscription and affiliate fees

Lower subscription and affiliate fees reflected decreases of 4% from fewer subscribers, 3% from the temporary suspension of carriage with an affiliate in the current quarter and 1% from the Star India Transaction, partially offset by an increase of 6% from higher effective rates.

Revenues - Advertising

Advertising revenue growth was primarily due to an increase of 8% from higher rates.

Operating expenses


	Quarter Ended				% Change Better (Worse)
(in millions)	December 27, 2025		December 28, 2024
Programming and production costs	$	(4,132)	$	(4,043)	(2) %
Other operating expenses	(257)		(250)		(3) %
	$	(4,389)	$	(4,293)	(2) %

Programming and production costs increased in the current quarter compared to the prior-year quarter driven by contractual rate increases and costs for new sports rights, partially offset by the timing of NBA and college sports rights costs under new agreements, including the impact of fewer regular season NBA games.

Depreciation and amortization

Depreciation and amortization increased $14 million, to $24 million from $10 million, due to new technology assets placed in service.

Operating Income from Sports

Segment operating income decreased $56 million, to $191 million from $247 million, driven by an increase in programming and production costs and a decrease in subscription and affiliate fees, partially offset by higher advertising revenue.

Items Excluded from Segment Operating Income Related to Sports

The following table presents supplemental information for items related to the Sports segment that are excluded from segment operating income:


	Quarter Ended				% Change Better (Worse)
(in millions)	December 27, 2025		December 28, 2024
Acquisition Amortization(1)	$	—	$	(74)	100 %

(1)Represents amortization of intangible assets.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Experiences

Operating results for the Experiences segment are as follows:


	Quarter Ended				% Change Better (Worse)
(in millions)	December 27, 2025		December 28, 2024
Revenues
Theme park admissions	$	3,301	$	3,087	7 %
Resorts and vacations	2,410		2,221		9 %
Parks & Experiences merchandise, food and beverage	2,348		2,181		8 %
Merchandise licensing and retail	1,337		1,318		1 %
Parks licensing and other	610		608		— %
Total revenues	10,006		9,415		6 %
Operating expenses	(4,976)			(4,678)	(6) %
Selling, general, administrative and other	(962)		(948)		(1) %
Depreciation and amortization	(759)		(679)		(12) %

Operating Income	$	3,309	$	3,110	6 %

Revenues - Theme park admissions

Theme park admissions revenue growth was due to increases of 4% from higher average per capita ticket revenue and 2% from increased attendance at our international and domestic parks. Attendance growth at our domestic parks benefited from the comparison to the adverse impact of Hurricane Milton in the prior-year quarter.

Revenues - Resorts and vacations

Higher resorts and vacations revenue was primarily attributable to an increase of 6% from additional passenger cruise days, reflecting the launches of the Disney Treasure in December 2024 and the Disney Destiny in November 2025.

Revenues - Park & Experiences merchandise, food and beverage

Parks & Experiences merchandise, food and beverage revenue growth was primarily due to increases of 3% from higher average guest spending and 2% from volume growth.

Key Metrics

In addition to revenue, costs and operating income, management uses the following key metrics to analyze trends and evaluate the overall performance of our theme parks and resorts, and we believe these metrics are useful to investors in analyzing the business:


	Domestic		International(1)
	Quarter Ended		Quarter Ended
	December 27, 2025	December 28, 2024	December 27, 2025	December 28, 2024
Parks
Increase (decrease)
Attendance(2)	1 %	(2) %	6 %	4 %
Per Capita Guest Spending(3)	4 %	4 %	2 %	3 %
Hotels
Occupancy(4)	87 %	85 %	87 %	86 %
Available Hotel Room Nights (in thousands)(5)	2,550	2,540	797	798
Change in Per Room Guest Spending(6)	4 %	5 %	1 %	17 %

(1)Per capita guest spending growth rate and per room guest spending growth rate exclude the impact of changes in foreign exchange rates.

(2)Attendance is used to analyze volume trends at our theme parks and is based on the number of unique daily entries, i.e. a person visiting multiple theme parks in a single day is counted only once. Our attendance count includes complimentary entries but excludes entries by children under the age of three.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

(3)Per capita guest spending is used to analyze guest spending trends and is defined as total revenue from ticket sales and sales of food, beverage and merchandise in our theme parks, divided by total theme park attendance.

(4)Occupancy is used to analyze the usage of available capacity at hotels and is defined as the number of room nights occupied by guests as a percentage of available hotel room nights.

(5)Available hotel room nights is defined as the total number of room nights that are available at our hotels and at Disney Vacation Club (DVC) properties located at our theme parks and resorts that are not utilized by DVC members. Available hotel room nights include rooms temporarily taken out of service.

(6)Per room guest spending is used to analyze guest spending at our hotels and is defined as total revenue from room rentals and sales of food, beverage and merchandise at our hotels, divided by total occupied hotel room nights.

Operating expenses


	Quarter Ended				% Change Better (Worse)
(in millions)	December 27, 2025		December 28, 2024
Operating labor	$	(2,285)	$	(2,164)	(6) %
Infrastructure costs	(846)		(801)		(6) %
Cost of goods sold and distribution costs	(943)		(929)		(2) %
Other operating expense	(902)		(784)		(15) %
	$	(4,976)	$	(4,678)	(6) %

Higher operating labor was due to inflation, an unfavorable foreign exchange impact, new guest offerings and increased operations support. The increase in infrastructure costs was primarily due to new guest offerings. Higher cost of goods sold and distribution costs were primarily attributable to volume growth, partially offset by lower third-party royalty expense. The increase in other operating expense was primarily due to new guest offerings, volume growth and increased operations support costs.

Depreciation and amortization

Depreciation and amortization increased $80 million, to $759 million from $679 million, due to higher depreciation at our domestic parks and experiences driven by an increase at Disney Cruise Line.

Operating Income from Experiences

Segment operating income increased $199 million, to $3,309 million from $3,110 million, due to growth at domestic parks and experiences.

Supplemental revenue and operating income

The following table presents supplemental revenue and operating income detail for the Experiences segment:


	Quarter Ended				% Change Better (Worse)
(in millions)	December 27, 2025		December 28, 2024
Supplemental revenue detail
Parks & Experiences
Domestic	$	6,910	$	6,432	7 %
International	1,753		1,646		7 %
Consumer Products	1,343		1,337		— %
	$	10,006	$	9,415	6 %
Supplemental operating income detail
Parks & Experiences
Domestic	$	2,149	$	1,982	8 %
International	428		420		2 %
Consumer Products	732		708		3 %
	$	3,309	$	3,110	6 %

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

CORPORATE AND UNALLOCATED SHARED EXPENSES


	Quarter Ended				% Change Better (Worse)
(in millions)	December 27, 2025		December 28, 2024
Corporate and unallocated shared expenses	$	(304)	$	(460)	34 %

Corporate and unallocated shared expenses decreased $156 million for the quarter, from $460 million to $304 million, primarily due to the comparison to a legal settlement in the prior-year quarter.

FINANCIAL CONDITION

The change in cash and cash equivalents is as follows:


	Quarter Ended				% Change Better (Worse)
(in millions)	December 27, 2025		December 28, 2024
Cash provided by operations	$	735	$	3,205	(77) %
Cash used in investing activities	(2,737)		(2,575)

Walt Disney Co 10-Q