Dialogue and evaluation by the administration of WALT DISNEY CO of the monetary place and working outcomes (Type 10-Okay)

CONSOLIDATED RESULTS
                      (in thousands and thousands, besides per share knowledge)
                                                                                                              % Change
                                                                                                               Higher
                                                                2021                2020                      (Worse)

Revenues:
Providers                                                    $  61,768           $  59,265                              4 %
Merchandise                                                        5,650               6,123                            (8) %
Whole revenues                                                 67,418              65,388                              3 %
Prices and bills:
Value of companies (unique of depreciation and               (41,129)            (39,406)                           (4) %

amortization)

Value of merchandise (unique of depreciation and                (4,002)             (4,474)                            11 %

amortization)

Promoting, normal, administrative and different                    (13,517)            (12,369)                           (9) %
Depreciation and amortization                                  (5,111)             (5,345)                             4 %
Whole prices and bills                                      (63,759)            (61,594)                           (4) %
Restructuring and impairment costs                             (654)             (5,735)                            89 %
Different earnings, internet                                                 201               1,038                           (81) %
Curiosity expense, internet                                          (1,406)             (1,491)                             6 %
Fairness within the earnings of investees, internet                            761                 651                             17 %

Revenue (loss) from persevering with operations earlier than revenue 2,561

        (1,743)                              nm

taxes

Revenue taxes from persevering with operations                           (25)               (699)                            96 %
Internet earnings (loss) from persevering with operations                    2,536              (2,442)                              nm
Loss from discontinued operations, internet of earnings tax              (29)                (32)                             9 %
advantage of $9 and $10, respectively
Internet earnings (loss)                                               2,507              (2,474)                              nm
Internet earnings from persevering with operations attributable to            (512)               (390)                          (31) %

non-controlling pursuits and redeemable

Internet earnings (loss) attributable to Disney                    $   1,995           $  (2,864)                              nm
Earnings (loss) per share attributable to Disney:
Diluted(1)
Persevering with operations                                       $    1.11           $     (1.57)                            nm
Discontinued operations                                         (0.02)                (0.02)                           - %
                                                            $    1.09           $     (1.58)                            nm

Primary(1)
Persevering with operations                                       $    1.11           $     (1.57)                            nm
Discontinued operations                                         (0.02)                (0.02)                           - %
                                                            $    1.10           $     (1.58)                            nm

Weighted common variety of frequent and customary equal shares
excellent:
Diluted                                                            1,828               1,808
Primary                                                              1,816               1,808

(1) Whole could not equal sum of column because of rounding.

                                       31
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Group of Info
Administration's Dialogue and Evaluation gives a story on the Firm's
monetary efficiency and situation that ought to be learn along side the
accompanying monetary statements. It contains the next sections:
•Important Developments
•Consolidated Outcomes and Non-Section Gadgets
•Enterprise Section Outcomes
•Company and Unallocated Shared Bills
•Restructuring Actions
•Liquidity and Capital Sources
•Supplemental Guarantor Monetary Info
•Important Accounting Insurance policies and Estimates
•Ahead-Wanting Statements
In Merchandise 7, we talk about fiscal 2021 and 2020 outcomes and comparisons of fiscal
2021 outcomes to fiscal 2020 outcomes. Discussions of fiscal 2019 outcomes and
comparisons of fiscal 2020 outcomes to fiscal 2019 outcomes could be present in
"Administration's Dialogue and Evaluation of Monetary Situation and Outcomes of
Operations" within the replace to Half II, Merchandise 7 of the Firm's Annual Report on
Type 10-Okay for the fiscal yr ended October 3, 2020 as reported in

E x hibit 99.1 to present report on firm kind 8-Okay

    filed     April 1, 2021  .
SIGNIFICANT DEVELOPMENTS
COVID-19 Pandemic
Since early 2020, the world has been, and continues to be, impacted by COVID-19
and its variants. COVID-19 and measures to stop its unfold has impacted our
segments in plenty of methods, most importantly on the DPEP section the place our
theme parks and resorts had been closed and cruise ship sailings and guided excursions
had been suspended. These operations resumed, usually at diminished capability, at
numerous factors since Might 2020. Now we have delayed, or in some circumstances, shortened or
cancelled theatrical releases, and stage play performances had been suspended as of
March 2020. Stage play operations resumed, usually at diminished capability, within the
first quarter of fiscal 2021. Theaters have been topic to capability limitations
and shifting authorities mandates or steering relating to COVID-19 restrictions. We
skilled important disruptions within the manufacturing and availability of
content material, together with the delay of key reside sports activities programming throughout fiscal 2020
and financial 2021, in addition to the suspension of most movie and tv
manufacturing in March 2020. Though movie and tv manufacturing usually
resumed starting within the fourth quarter of fiscal 2020, we proceed to see
disruption of manufacturing actions relying on native circumstances. Fewer
theatrical releases and manufacturing delays have restricted the supply of movie
content material to be offered in distribution home windows subsequent to the theatrical launch.
Now we have taken plenty of mitigation efforts in response to the impacts of
COVID-19 on our companies. We considerably elevated money balances by means of the
issuance of senior notes in March and Might 2020. The Firm didn't pay a
dividend with respect to fiscal 2020 operations and has not declared or paid a
dividend with respect to fiscal 2021 operations; suspended sure capital
tasks; diminished sure discretionary expenditures (comparable to spending on
advertising); diminished administration compensation for a number of months in fiscal 2020
and quickly eradicated Board of Director retainers and committee charges in
fiscal 2020. As well as, we furloughed over 120,000 of our staff (who
continued to obtain Firm offered medical advantages), most of which have
returned from furlough as operations have reopened. On the finish of fiscal 2020,
the Firm introduced a workforce discount plan, which was basically
accomplished within the first half of fiscal 2021. We could take further mitigation
actions sooner or later comparable to elevating further financing; not declaring future
dividends; decreasing, or not making, sure funds, comparable to some contributions
to our pension and postretirement medical plans; additional suspending capital
spending, decreasing movie and tv content material investments; or implementing
further furloughs or reductions in pressure; or modifying our working
methods. A few of these measures could have an antagonistic impression on our companies.
Essentially the most important impression on working earnings because the second quarter of
fiscal 2020 from COVID-19 was on the DPEP section because of income misplaced as a
results of closures and/or diminished working capacities. Though outcomes
improved within the second half of fiscal 2021 in comparison with the second half of fiscal
2020 from reopening our DPEP companies, we proceed to be impacted by diminished
working capacities. COVID-19 additionally had a adverse impression in fiscal 2021 at our
DMED section in comparison with fiscal 2020 as increased promoting income from the
return of reside sporting occasions was greater than offset by increased sports activities programming
prices. Our different movie and tv distribution companies had been impacted by
income misplaced from the deferral or cancellation of serious movie releases,
partially offset by prices averted because of a discount in movie price amortization,
advertising and distribution prices. The impression of COVID-19 on fiscal 2021 and 2020
outcomes shouldn't be essentially indicative of the impression on future interval outcomes.
                                       32
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
The impression of those disruptions and the extent of their antagonistic impression on our
monetary and operational outcomes will probably be dictated by the size of time that
such disruptions proceed, which is able to, in flip, rely upon the at present
unknowable length and severity of the impacts of COVID-19 and its variants,
and amongst different issues, the impression and length of governmental actions imposed
in response to COVID-19 and people' and firms' threat tolerance relating to
well being issues going ahead.
Our companies have incurred and can proceed to incur further prices to
deal with authorities laws and the security of our staff, company and
expertise. For instance, after we reopened theme parks and retail shops, we incurred
and can proceed to incur prices for things like further custodial
companies, private safety tools, temperature screenings and testing,
sanitizer and cleansing provides and signage, amongst different gadgets. Comparable prices
have been incurred within the manufacturing of movie and tv content material, together with
reside sporting occasions, and productions could take longer to finish. The timing,
length and extent of those prices will rely upon the timing and scope of the
resumption of our operations. These prices totaled roughly $1 billion in
fiscal 2021. A few of these prices have been capitalized and will probably be amortized
over future intervals. With the unknown length of COVID-19, it isn't attainable
to exactly estimate the impression of COVID-19 on our operations in future
intervals, though we estimate a modestly decrease impression in fiscal 2022. In
addition, we're now not benefiting from sure financial savings associated to the
closure of sure companies, comparable to associated furloughs. The reopening or
closure of our companies depends on relevant authorities necessities,
which fluctuate by location and are topic to ongoing modifications.
Moreover, see Half I., Merchandise 1A. Threat Elements - The antagonistic impression of
COVID-19 on our companies will proceed for an unknown size of time and should
proceed to impression sure of our key sources of income.
Direct-to-Shopper
The Firm has considerably elevated its deal with distribution of branded
movie and episodic content material by way of our personal DTC streaming companies. Because of this, we
are forgoing sure licensing income from the sale of this content material to 3rd
events in TV/SVOD markets. We additionally anticipate to forgo income as we shut down
channels in sure markets on account of funding in our DTC choices. In
addition, we're growing programming and manufacturing investments to create
unique content material for our DTC choices.
CONSOLIDATED RESULTS AND NON-SEGMENT ITEMS
The Firm's fiscal yr finish is on the Saturday closest to September 30 and
consists of fifty-two weeks with the exception that roughly each six
years, we've got a fifty-three week yr. Fiscal 2020 was a fifty-three week yr,
which started on September 29, 2019 and ended on October 3, 2020. We estimate that
the extra week of operations in fiscal 2020 resulted in a profit to
pre-tax earnings within the prior yr of roughly $200 million, primarily on the
DMED section.
Revenues for fiscal 2021 elevated 3%, or $2.0 billion, to $67.4 billion; internet
earnings attributable to Disney elevated $4.9 billion, to earnings of $2.0 billion;
and diluted earnings per share from persevering with operations attributable to Disney
elevated to earnings of $1.11 in comparison with a lack of $1.57 within the prior yr. The
EPS enhance for the yr was as a result of comparability to goodwill and intangible
asset impairments acknowledged within the prior yr at our Worldwide Channels
enterprise, an earnings tax profit within the present yr in comparison with tax expense in
the prior yr and decrease amortization of truthful worth step-up on movie and
tv prices and intangible belongings from the TFCF acquisition and
consolidation of Hulu (collectively TFCF and Hulu acquisition amortization).
These will increase had been partially offset by decrease internet funding positive factors and a
lower in section working earnings at DMED.
Revenues
Service revenues for fiscal 2021 elevated 4%, or $2.5 billion, to $61.8
billion, because of increased DTC subscription income, promoting income development and,
to a lesser extent, elevated merchandise licensing income. These will increase
had been partially offset by a lower in TV/SVOD distribution income, decrease
theatrical revenues, a lower in income at our parks and experiences
companies and, to a lesser extent, decrease digital house leisure gross sales,
all of which mirrored the impression of COVID-19. The lower at parks and
experiences was because of decrease volumes from closure/usually diminished working
capacities, partially offset by a rise in common visitor spending. The
lower in TV/SVOD distribution income additionally mirrored the shift from licensing
our content material to 3rd events to distributing it on our DTC streaming companies.
Product revenues for fiscal 2021 decreased 8%, or $0.5 billion, to $5.7 billion,
because of decrease house leisure volumes and a lower in merchandise, meals and
beverage gross sales at parks and experiences as decrease volumes had been partially offset
by a rise in common visitor spending.
Prices and bills
Value of companies for fiscal 2021 elevated 4%, or $1.7 billion, to $41.1
billion, because of increased programming, manufacturing and know-how prices at Disney+
and Hulu and better sports activities programming prices. The rise in sports activities programming
prices was because of NBA, cricket, school soccer and soccer occasions, lots of which
shifted from fiscal 2020 to fiscal 2021 because of COVID-19. These will increase had been
partially offset by a lower in movie and tv manufacturing price
amortization and distribution prices at
                                       33
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Content material Gross sales/Licensing reflecting decrease revenues and, to a lesser extent, decrease
volumes at our parks and experiences companies.
Value of merchandise for fiscal 2021 decreased 11%, or $0.5 billion, to $4.0
billion, because of decrease merchandise, meals and beverage gross sales at our theme parks
and resorts and a lower in house leisure volumes.
Promoting, normal, administrative and different prices for fiscal 2021 elevated 9%,
or $1.1 billion, to $13.5 billion, because of increased advertising prices at
Direct-to-Shopper and Linear Networks, partially offset by decrease advertising
prices at Content material Gross sales/Licensing.
Depreciation and amortization prices decreased 4%, or $0.2 billion, to $5.1
billion because of decrease amortization of intangible belongings from the acquisition of
TFCF and Hulu and decrease depreciation at our theme parks and resorts.
Restructuring and Impairment Expenses
Restructuring and impairment costs in fiscal 2021 had been $0.7 billion because of
$0.4 billion of asset impairments and severance prices associated to the shut-down
of an animation studio and the closure of a considerable variety of Disney-branded
retail shops in North America and Europe and $0.3 billion of severance and
different prices in reference to the combination of TFCF and workforce reductions
at DPEP.
Restructuring and impairment costs in fiscal 2020 had been $5.7 billion because of
$5.0 billion of impairment costs for goodwill and intangible belongings at our
Worldwide Channels enterprise and $0.8 billion of severance and different prices in
reference to the acquisition and integration of TFCF and at our DPEP section.
Different Revenue (expense), internet
                                                            % Change
(in thousands and thousands)                   2021         2020        Higher (Worse)
fuboTV acquire                   $ 186       $     -                      nm
German FTA acquire                 126             -                      nm
DraftKings acquire (loss)         (111)          973                      nm
Endemol Shine acquire                -            65                     - %
Different earnings, internet             $ 201       $ 1,038                  (81) %


In fiscal 2021, the Firm acknowledged a $186 million acquire from the sale of our
funding in fuboTV Inc. (fuboTV acquire), a $126 million acquire on the sale of our
50% curiosity in a German free-to-air (FTA) tv community (German FTA acquire)
and a non-cash lack of $111 million to regulate our funding in DraftKings, Inc.
to truthful worth (DraftKings acquire (loss)).
In fiscal 2020, the Firm acknowledged a $973 million DraftKings acquire and a $65
million acquire on the sale of our 50% curiosity in Endemol Shine Group (Endemol
Shine acquire).
Curiosity Expense, internet
                                                                                     % Change
(in thousands and thousands)                                         2021           2020         Higher (Worse)
Curiosity expense                                   $ (1,546)      $ (1,647)                    6 %
Curiosity earnings, funding earnings and different            140            156                  (10) %
Curiosity expense, internet                              $ (1,406)      $ (1,491)                    6 %


The lower in curiosity expense was primarily because of decrease common curiosity
charges and better capitalized curiosity, partially offset by increased common debt
balances.
The lower in curiosity earnings, funding earnings and different was because of increased
pension and postretirement profit prices, aside from service price, partially
offset by decrease funding impairments.
Fairness within the Revenue of Investees
Fairness within the earnings of investees elevated $110 million to $761 million within the
present yr because of increased earnings from A+E Tv Networks and Tata Sky
Restricted and decrease funding impairments.
                                       34
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Efficient Revenue Tax Charge
                                                                  2021      

2020

Revenue (loss) from persevering with operations earlier than earnings taxes $ 2,561

  $ (1,743)
Revenue tax expense on persevering with operations                         25      

699

Efficient earnings tax price - persevering with operations                    1.0%   

(40.1)%


The efficient earnings tax price within the present yr was decrease than the U.S.
statutory price because of favorable changes associated to prior years and extra
tax advantages on worker share-based awards, partially offset by an unfavorable
impression from overseas losses for which we're unable to acknowledge a tax profit.
The efficient earnings tax price within the prior yr included unfavorable impacts
from the goodwill impairment, which was not tax deductible, increased tax charges
than the U.S. statutory price on overseas earnings and overseas losses for which we
are unable to acknowledge a tax profit.
Noncontrolling Pursuits
                                                                                                                 % Change
(in thousands and thousands)                                                 2021                      2020                  Higher (Worse)
Internet earnings from persevering with operations
attributable to noncontrolling pursuits               $            (512)        $            (390)                        (31)%


The rise in internet earnings from persevering with operations attributable to
noncontrolling pursuits was because of decrease losses at Shanghai Disney Resort, our
DTC sports activities enterprise and Hong Kong Disneyland Resort and better accretion of the
truthful worth of the redeemable noncontrolling curiosity in BAMTech. These will increase
had been partially offset by decrease outcomes at ESPN.
Internet earnings attributable to noncontrolling pursuits is set on earnings
after royalties and administration charges, financing prices and earnings taxes, as
relevant.
Sure Gadgets Impacting Leads to the Yr
Outcomes for fiscal 2021 had been impacted by the next:
•TFCF and Hulu acquisition amortization of $2,418 million
•Restructuring and impairment costs of $654 million
•The fuboTV acquire of $186 million, German FTA acquire of $126 million and DraftKings
lack of $111 million
Outcomes for fiscal 2020 had been impacted by the next:
•Goodwill and intangible asset impairments of $4,953 million and restructuring
costs of $782 million
•TFCF and Hulu acquisition amortization of $2,846 million
•The DraftKings acquire of $973 million and Endemol Shine acquire of $65 million
A abstract of the impression of this stuff on EPS is as follows:
                                            Pre-Tax Revenue          Tax Profit           After-Tax Revenue          EPS Favorable
(in thousands and thousands, besides per share knowledge)            (Loss)              (Expense)(1)               (Loss)               (Opposed)(2)

Yr ended October 2, 2021:
TFCF and Hulu acquisition amortization (3) $ (2,418) $ 562

             $    (1,856)           $       (1.00)
Restructuring and impairment costs               (654)                  152                    (502)                   (0.27)
fuboTV and German FTA positive factors, partially
offset by DraftKings loss                           201                   (46)                    155                     0.08

Whole                                       $    (2,871)         $        668             $    (2,203)           $       (1.18)

Yr ended October 3, 2020: Restructuring and depreciation costs $ (5,735) $ 571

             $    (5,164)           $       (2.86)
TFCF and Hulu acquisition amortization(3)        (2,846)                  662                  (2,184)                   (1.17)
DraftKings and Endemol Shine positive factors                1,038                  (242)                    796                     0.44

Whole                                       $    (7,543)         $        991             $    (6,552)           $       (3.59)


(1)Tax profit/expense changes are decided utilizing the tax price relevant
to the person merchandise affecting comparability.
(2)EPS is internet of noncontrolling curiosity, the place relevant. Whole could not equal
the sum of the column because of rounding.
(3)Contains amortization of intangibles associated to TFCF fairness investees.
                                       35
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
BUSINESS SEGMENT RESULTS
Under is a dialogue of the most important income and expense classes for our
enterprise segments. Prices and bills for every section include working
bills, promoting, normal, administrative and different prices, and depreciation and
amortization. Promoting, normal, administrative and different prices embrace
third-party and inner advertising bills.
Our DMED section primarily generates income throughout three important strains of
enterprise/distribution platforms: Linear Networks, Direct-to-Shopper and Content material
Gross sales/Licensing. Programming and manufacturing prices to assist these
companies/distribution platforms are largely incurred throughout three content material
creation teams: Studios, Normal Leisure and Sports activities. Programming and
manufacturing prices embrace amortization of acquired licensed programming rights
(together with sports activities rights), amortization of capitalized manufacturing prices
(together with participations and residuals) and manufacturing prices associated to reside
programming comparable to information and sports activities.
The Linear Networks enterprise generates income from affiliate charges and
promoting gross sales and from charges from sub-licensing of sports activities programming to
third events. Working bills embrace programming and manufacturing prices,
technical assist prices, working labor and distribution prices.
The Direct-to-Shopper enterprise generates income from subscription charges,
promoting gross sales and pay-per-view and Premier Entry charges. Working bills
embrace programming and manufacturing prices, know-how assist prices, working
labor and distribution prices. Working bills additionally contains charges paid to
Linear Networks for the appropriate to air the linear networks feed and different
companies.
The Content material Gross sales/Licensing enterprise generates income from the sale of movie and
episodic tv content material within the TV/SVOD and residential leisure markets,
distribution of movies within the theatrical market, licensing of our music rights,
gross sales of tickets to stage play performances and licensing of our IP to be used in
stage performs. Working bills embrace programming and manufacturing prices,
distribution bills and prices of gross sales.
Our DPEP section primarily generates income from the sale of admissions to
theme parks, the sale of meals, beverage and merchandise at our theme parks and
resorts, costs for room nights at lodges, gross sales of cruise holidays, gross sales and
leases of trip membership properties, royalties from licensing our IP to be used on
client items and the sale of branded merchandise. Revenues are additionally generated
from sponsorships and co-branding alternatives, actual property lease and gross sales, and
royalties from Tokyo Disney Resort. Important bills embrace working
labor, prices of products offered, infrastructure prices, depreciation and different
working bills. Infrastructure prices embrace data programs expense,
repairs and upkeep, utilities and gasoline, property taxes, retail occupancy
prices, insurance coverage and transportation. Different working bills embrace prices for
such gadgets as provides, commissions and leisure choices.
The Firm evaluates the efficiency of its working segments primarily based on section
working earnings, and administration makes use of complete section working earnings as a
measure of the general efficiency of the working companies. Whole section
working earnings shouldn't be a monetary measure outlined by GAAP, ought to be reviewed
along side the related GAAP monetary measure and will not be
akin to equally titled measures reported by different firms. The Firm
believes that details about complete section working earnings assists traders
by permitting them to guage modifications within the working outcomes of the Firm's
portfolio of companies separate from components aside from enterprise operations
that have an effect on internet earnings.
The next desk reconciles earnings (loss) from persevering with operations earlier than
earnings taxes to complete section working earnings:
                                                                                                       % Change
(in thousands and thousands)                                          2021                2020                     Higher (Worse)

Revenue (loss) from persevering with operations earlier than
earnings taxes                                       $   2,561           $  (1,743)                                   nm
Add (subtract):
Company and unallocated shared bills                928                 817                                (14) %
Restructuring and impairment costs                     654               5,735                                  89 %
Different earnings, internet                                       (201)             (1,038)                               (81) %
Curiosity expense, internet                                  1,406               1,491                                   6 %
TFCF and Hulu acquisition amortization                 2,418               2,846                                  15 %

Whole section working earnings                     $   7,766           $   8,108                                 (4) %


                                       36
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
The next is a abstract of section income and working earnings:
                                                                                        % Change
(in thousands and thousands)                                      2021           2020               Higher (Worse)

Revenues:

Distribution of Disney media and leisure $ 50,866 $ 48,350

                       5 %
Disney Parks, Experiences and Merchandise            16,552         17,038                         (3) %
                                                $ 67,418       $ 65,388                           3 %
Section working earnings:
Disney Media and Leisure Distribution     $  7,295       $  7,653                         (5) %
Disney Parks, Experiences and Merchandise               471            455                           4 %
                                                $  7,766       $  8,108                         (4) %


Disney Media and Leisure Distribution
Income and working outcomes for the DMED section are as follows:
                                                                            % Change
(in thousands and thousands)                                2021           2020         Higher (Worse)
Revenues:
Linear Networks                           $ 28,093       $ 27,583                     2 %
Direct-to-Shopper                          16,319         10,552                    55 %
Content material Gross sales/Licensing and Different            7,346         10,977                  (33) %
Elimination of Intrasegment Income(1)        (892)          (762)          

(17)%

                                          $ 50,866       $ 48,350                     5 %
Section working earnings (loss):
Linear Networks                           $  8,407       $  9,413                  (11) %
Direct-to-Shopper                          (1,679)        (2,913)                   42 %
Content material Gross sales/Licensing and Different              567          1,153                  (51) %
                                          $  7,295       $  7,653                   (5) %


(1) Displays charges obtained by the Linear Networks from different DMED companies for
the appropriate to air our Linear Networks and associated companies.
Linear Networks
Working outcomes for Linear Networks are as follows:
                                                                               % Change
(in thousands and thousands)                                   2021           2020         Higher (Worse)
Revenues
Affiliate charges                               $ 18,652       $ 18,691                     - %
Promoting                                     8,853          8,252                     7 %
Different                                             588            640                   (8) %
Whole revenues                                 28,093         27,583                     2 %
Working bills                            (16,808)       (15,309)                 (10) %
Promoting, normal, administrative and different     (3,491)        (3,330)                  (5) %
Depreciation and amortization                    (168)          (262)                   36 %
Fairness within the earnings of investees                 781            731                     7 %
Working Revenue                             $  8,407       $  9,413                  (11) %


                                       37
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Revenues
Affiliate income is as follows:
                                                            % Change
(in thousands and thousands)                2021           2020         Higher (Worse)

Home Channels         $ 15,244       $ 15,018                     2 %
Worldwide Channels       3,408          3,673                   (7) %
                          $   18,652     $ 18,691                     - %


The rise in affiliate income on the Home Channels was because of an
enhance of seven% from increased contractual charges, partially offset by decreases of
4% from fewer subscribers and a pair of% from the comparability to the extra week of
operations within the prior yr.
The lower in affiliate income on the Worldwide Channels was because of
decreases of 4% from fewer subscribers pushed by channel closures, primarily in
Europe and Asia, 2% from the comparability to the extra week of operations in
the prior yr and 1% from an unfavorable overseas alternate impression.
Promoting income is as follows:
                                                          % Change
(in thousands and thousands)                2021          2020        Higher (Worse)

Cable                     $ 3,681       $ 3,648                     1 %
Broadcasting                3,239         3,278                   (1) %
Home Channels             6,920         6,926                   - %
Worldwide Channels      1,933         1,326                    46 %
                          $   8,853     $   8,252                   7 %


The rise in Cable promoting income was because of a rise of 10% from
increased charges, partially offset by decreases of 6% from fewer impressions and 4%
from the comparability to the extra week of operations within the prior yr. The
lower in impressions mirrored decrease common viewership, partially offset by
increased items delivered.
The lower in Broadcasting promoting income was primarily because of decreases
of seven% from fewer impressions at ABC and a pair of% from the comparability to the extra
week of operations within the prior yr, partially offset by will increase of 4% from
increased charges at ABC and 4% from the owned tv stations. The lower in
impressions mirrored decrease common viewership, partially offset by increased items
delivered. The rise on the owned tv stations was primarily because of
increased charges reflecting political promoting.
The rise in Worldwide Channels promoting income was because of will increase
of 43% from increased impressions, reflecting a rise in common viewership, 6%
from increased charges and a pair of% from a good overseas alternate impression, partially
offset by a lower of 5% from the comparability to the extra week of
operations within the prior yr. The rise in impressions was as a result of airing
of reside sporting occasions within the present yr that weren't aired within the prior
yr, primarily Indian Premier League (IPL) cricket matches.
Different income decreased $52 million, to $588 million from $640 million, because of
an unfavorable overseas alternate impression.
Prices and Bills
Working bills are as follows:
                                                                        % Change
(in thousands and thousands)                           2021            2020         Higher (Worse)

Programming and manufacturing prices
Cable                               $  (9,353)      $  (8,538)                 (10) %
Broadcasting                           (2,767)         (2,605)                  (6) %
Home Channels                     (12,120)        (11,143)                  (9) %
Worldwide Channels                 (3,139)         (2,693)                 (17) %
                                      (15,259)        (13,836)                 (10) %
Different working bills               (1,549)         (1,473)                  (5) %
                                    $ (16,808)      $ (15,309)                 (10) %


                                       38
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
The rise in programming and manufacturing prices at Cable was as a result of timing
of reside sporting occasions, partially offset by the comparability to the extra
week of operations within the prior yr. On account of COVID-19, occasions have been
delayed since March 2020. Essentially the most important impacts had been as a result of shift of
NBA and school soccer video games from fiscal 2020 into the present fiscal yr.
The rise in programming and manufacturing prices at Broadcasting was because of an
enhance within the common price of programming reflecting incremental prices of
well being and security measures.
The rise in programming and manufacturing prices on the Worldwide Channels
was because of a rise in sports activities programming prices, partially offset by the
comparability to the extra week of operations within the prior yr and the impression
of channel closures. Greater sports activities programming prices had been as a result of timing of
reside sporting occasions pushed by the shift of IPL cricket matches into the present
yr from fiscal 2020.
Promoting, normal administrative and different prices elevated $161 million, to
$3,491 million from $3,330 million, because of increased advertising prices at FX Channels
and ABC reflecting extra titles premiering within the present yr, partially offset
by decrease dangerous debt expense.
Depreciation and amortization decreased $94 million, to $168 million from $262
million, primarily as a result of switch of know-how belongings and associated
depreciation primarily between Linear Networks and Content material Gross sales/Licensing and
Different and better asset write-offs within the prior yr.
Fairness within the Revenue of Investees
Revenue from fairness investees elevated $50 million, to $781 million from $731
million, primarily because of increased earnings from A+E Tv Networks pushed by
a rise in program gross sales and decrease programming prices, partially offset by
decrease promoting income and better advertising prices.
Working Revenue from Linear Networks
Working earnings decreased 11%, to $8,407 million from $9,413 million because of
decreases at Cable and, to a lesser extent, Broadcasting, partially offset by an
enhance on the Worldwide Channels and better earnings from fairness investees.
The next desk gives supplemental income and working earnings element
for Linear Networks:
                                                                         % Change
(in thousands and thousands)                             2021           2020         Higher (Worse)
Supplemental income element
Home Channels                      $ 22,463       $ 22,244                     1 %
Worldwide Channels                    5,630          5,339                     5 %
                                       $ 28,093       $ 27,583                     2 %
Supplemental working earnings element
Home Channels                      $  6,594       $  7,708                  (14) %
Worldwide Channels                    1,032            974                     6 %
Fairness within the earnings of investees           781            731                     7 %
                                       $  8,407       $  9,413                  (11) %


Direct-to-Shopper

The working outcomes for Direct-to-Shopper are as follows:

                                                                                % Change
(in thousands and thousands)                                    2021           2020         Higher (Worse)
Revenues
Subscription charges                             $ 12,020       $  7,645                    57 %
Promoting                                      3,366          2,357                    43 %
TV/SVOD distribution and different                     933            550                    70 %
Whole revenues                                  16,319         10,552                    55 %
Working bills                             (13,234)       (10,078)                 (31) %

Gross sales, normal, administrative and different (4,435) (3,126)

            (42) %
Depreciation and amortization                     (329)          (260)                 (27) %
Fairness within the lack of investees                      -             (1)                  100 %
Working Loss                                $ (1,679)      $ (2,913)                   42 %


                                       39
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Revenues
The rise in subscription charges was because of increased subscribers pushed by development
at Disney+, Hulu and, to a lesser extent, ESPN+, and better charges because of
will increase in retail pricing at Hulu, Disney+ and, to a lesser extent, ESPN+.
Greater promoting income mirrored will increase of 39% from increased impressions
and three% from increased charges because of a rise at Hulu. Greater impressions had been due
to will increase at Hulu, Disney+ and, to a lesser extent, ESPN+.
The rise in TV/SVOD distribution and different income was because of increased Disney+
Premier Entry revenues and a rise in Final Preventing Championship (UFC)
pay-per-view charges. Greater Disney+ Premier Entry revenues had been because of 4
releases within the present yr, Black Widow, Raya, Jungle Cruise and Cruella,
in comparison with one launch within the prior yr, Mulan. The rise in UFC
pay-per-view charges mirrored the good thing about 13 occasions within the present yr
in comparison with eleven within the prior yr and better pricing.
The next desk presents the variety of paid subscribers(1) (in thousands and thousands) for
Disney+, ESPN+ and Hulu as of:
                                                               % Change
                  October 2, 2021      October 3, 2020      Higher (Worse)
Disney+(2)            118.1                 73.7                        60 %
ESPN+                  17.1                 10.3                        66 %
Hulu
SVOD Solely              39.7                 32.5                        22 %
Dwell TV + SVOD          4.0                  4.1                       (2) %
Whole Hulu(3)          43.8                 36.6                        20 %


The next desk presents the typical month-to-month income per paid subscriber(4)
for the fiscal yr ended:
                                                    % Change
                     2021           2020         Higher (Worse)
Disney+           $      4.08    $      4.80               (15) %
ESPN+             $      4.57    $      4.35                  5 %
Hulu
SVOD Solely         $     12.86    $     12.24                  5 %
Dwell TV + SVOD    $     81.35    $     67.24                 21 %


(1)Displays subscribers for which we acknowledged subscription income.
Subscribers stop to be a paid subscriber as of their efficient cancellation
date or on account of a failed fee methodology. Subscribers to the bundled
providing within the U.S. are counted as a paid subscriber for every service included
within the bundle (Disney+, Hulu and ESPN+). Star+ in Latin America is obtainable as a
standalone service or together with Disney+. If a subscriber has both the
standalone Disney+ or Star+ service or each the Disney+ and Star+ companies, they
are counted as one Disney+ paid subscriber. Once we mixture the full quantity
of paid subscribers throughout our DTC streaming companies, whether or not acquired
individually, by means of a wholesale association or by way of the bundle, we discuss with
them as paid subscriptions.
(2)Contains Disney+ Hotstar and Star+. Disney+ Hotstar launched on April 3, 2020
in India (as a conversion of the preexisting Hotstar service), on September 5,
2020 in Indonesia, on June 1, 2021 in Malaysia, and on June 30, 2021 in
Thailand. Disney+ Hotstar common month-to-month income per paid subscriber is
considerably decrease than the typical month-to-month income per paid subscriber for
Disney+ in different markets. Star+ launched in Latin America on August 31, 2021.
(3)Whole could not equal the sum of the column because of rounding.
(4)Income per paid subscriber is calculated primarily based on the typical of the month-to-month
common paid subscribers for every month within the interval. The month-to-month common paid
subscribers is calculated because the sum of the start of the month and finish of
the month paid subscriber depend, divided by two. Disney+ common month-to-month income
per paid subscriber is calculated utilizing a each day common of paid subscribers for
the interval. Income contains subscription charges, promoting (excluding income
earned from promoting promoting spots to different Firm companies) and premium
and have add-on income however excludes Premier Entry and Pay-Per-View income.
The common income per subscriber is internet of reductions on bundled companies. The
bundled low cost is allotted to every service primarily based on the relative retail value
of every service on a standalone foundation. On the whole, wholesale preparations have a
decrease common month-to-month income per paid subscriber than subscribers that we
purchase instantly or by means of third occasion platforms like Apple.
                                       40
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
The common month-to-month income per paid subscriber for Disney+ decreased from $4.80
to $4.08 because of the next mixture of Disney+ Hotstar subscribers within the present yr,
partially offset by a decrease mixture of wholesale subscribers within the present yr and
will increase in retail pricing.
The common month-to-month income per paid subscriber for ESPN+ elevated from $4.35
to $4.57 primarily because of will increase in retail pricing in August 2021 and August
2020, partially offset by the next mixture of subscribers to the bundled providing.
The common month-to-month income per paid subscriber for the Hulu SVOD Solely service
elevated from $12.24 to $12.86 primarily because of increased per-subscriber
promoting income, a decrease mixture of wholesale subscribers and a rise in
per-subscriber premium add-on income, partially offset by the next mixture of
subscribers to the bundled providing. The common month-to-month income per paid
subscriber for the Hulu Dwell TV + SVOD service elevated from $67.24 to $81.35
because of a rise in retail pricing in December 2020, increased per-subscriber
promoting income and, to a lesser extent, per-subscriber premium and have
add-on income, partially offset by the next mixture of subscribers to the bundled
providing.
Prices and Bills
Working bills are as follows:
                                                                               % Change
(in thousands and thousands)                             2021               2020           Higher (Worse)
Programming and manufacturing prices    $      (10,716)     $      (8,124)                (32) %
Different working expense                     (2,518)            (1,954)                (29) %
                                    $      (13,234)     $     (10,078)                (31) %


The rise in programming and manufacturing prices was because of increased prices at
Disney+, Hulu and, to a lesser extent, ESPN+. The rise at Disney+ was because of
the continued growth together with launches in further markets. Greater prices at
Hulu had been because of a rise in subscriber-based charges for programming the Dwell
service pushed by increased common month-to-month subscribers and price will increase. Greater
ESPN+ prices had been primarily because of new soccer programming rights, increased prices
for UFC programming rights pushed by two further occasions within the present yr,
and new school sports activities rights. Different working bills, which embrace technical
assist and distribution prices, elevated because of increased distribution prices at
Disney+ as a result of ongoing growth.
Promoting, normal, administrative and different prices elevated $1,309 million, to
$4,435 million from $3,126 million, because of increased advertising and normal and
administrative prices at Disney+ pushed by the continued growth.
Depreciation and amortization elevated $69 million, to $329 million from $260
million, pushed by the continued growth of Disney+.
Working Loss from Direct-to-Shopper
Working loss from Direct-to-Shopper decreased $1,234 million, to $1,679
million from $2,913 million because of improved outcomes at Hulu and, to a lesser
extent, ESPN+, partially offset by the next loss at Disney+.
Content material Gross sales/Licensing and Different
Working outcomes for Content material Gross sales/Licensing and Different are as follows:
                                                                              % Change
(in thousands and thousands)                                    2021          2020        Higher (Worse)
Revenues
TV/SVOD distribution                          $ 4,206       $ 5,673                  (26) %
Theatrical distribution                           920         2,134                  (57) %
House leisure                              1,014         1,802                  (44) %
Different                                           1,206         1,368                  (12) %
Whole revenues                                  7,346        10,977                  (33) %
Working bills                             (4,536)       (6,871)                   34 %

Gross sales, normal, administrative and different (1,963) (2,628)

            25 %
Depreciation and amortization                    (294)         (291)                  (1) %
Fairness within the earnings (loss) of investees           14           (34)                     nm
Working Revenue                              $   567       $ 1,153                  (51) %


                                       41
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
COVID-19
Our Content material Gross sales/Licensing companies have been impacted by COVID-19 in a
variety of methods. Now we have delayed, or in some circumstances, shortened or cancelled,
theatrical releases, and stage play performances had been suspended as of March
2020. Stage play operations resumed, usually at diminished capability, within the first
quarter of fiscal 2021. Theaters have been topic to capability limitations and
shifting authorities mandates or steering relating to COVID-19. We skilled
important disruptions within the manufacturing and availability of content material, together with
the suspension of most movie and tv manufacturing in March 2020. Though
movie and tv manufacturing usually resumed starting within the fourth quarter
of 2020, we proceed to see disruption of manufacturing actions relying on
native circumstances. Fewer theatrical releases and manufacturing delays have
restricted the supply of movie content material to be offered in distribution home windows
subsequent to the theatrical launch.
Revenues
The lower in TV/SVOD distribution income mirrored each decrease episodic and
movie content material gross sales. The lower in episodic content material gross sales was primarily because of
decrease gross sales of Homeland, Methods to Get Away with Homicide, Fashionable Household, Gray's
Anatomy and That is Us within the present yr and the comparability to prior-year
gross sales of Ratched, The Politician, Tales from the Loop and The Wilds. Decrease movie
content material gross sales mirrored much less content material out there as a result of impression of COVID-19 and
the shift from licensing our content material to 3rd events to distributing it on our
DTC streaming companies.
The lower in theatrical distribution income was as a result of prior-year
efficiency of Frozen II and Star Wars: The Rise of Skywalker, which had been each
launched previous to COVID-19's impression on our enterprise. Different important titles
launched within the prior yr included Maleficent: Mistress of Evil and Ford v
Ferrari, whereas the present yr included Shang-Chi and the Legend of the Ten
Rings, Black Widow and Free Man.
The lower in house leisure income was because of decreases of 36% from
decrease unit gross sales and 5% from decrease common internet efficient pricing. New launch
titles within the present yr included Mulan, Raya and the Final Dragon and Black
Widow, whereas the prior yr included Frozen II, Star Wars: The Rise of
Skywalker, The Lion King, Toy Story 4, Maleficent: Mistress of Evil, Onward,
Ford v Ferrari, Aladdin and Avengers: Endgame. The lower in common internet
efficient pricing was because of a decrease combine of latest launch titles, which have a
increased gross sales value than catalog titles.
The lower in different income was because of decrease income from stage performs
reflecting the impression of COVID-19, partially offset by a rise in income
from Lucasfilm's particular results enterprise pushed by extra tasks.
Prices and Bills
Working bills are as follows:
                                                                                                            % Change
(in thousands and thousands)                                            2021                      2020                  Higher (Worse)
Programming and manufacturing prices                  $          (3,611)        $          (5,729)                         37 %
Distribution prices and price of products offered                      (925)                   (1,142)                         19 %
                                                  $          (4,536)        $          (6,871)                         34 %


The lower in programming and manufacturing prices was because of decrease manufacturing
price amortization pushed by a decline in revenues and decrease movie and tv
price impairments.
The lower in distribution prices and price of products offered was primarily because of
decrease house leisure volumes, a lower in prices for stage performs as a
results of a restricted variety of performances within the present yr and decrease
theatrical distribution prices because of fewer theatrical releases, partially offset
by extra tasks at Lucasfilm's particular results enterprise.
Promoting, normal, administrative and different prices decreased $665 million, to
$1,963 million from $2,628 million, primarily because of decrease theatrical and residential
leisure advertising prices and, to a lesser extent, a lower in dangerous debt
expense.
Fairness within the Revenue (Loss) of Investees
Revenue from fairness investments elevated $48 million, to earnings of $14 million
from a lack of $34 million, primarily because of increased earnings from Tata Sky Restricted
and the absence of an funding impairment acknowledged within the prior yr.
Working Revenue from Content material Gross sales/Licensing and Different
Working earnings from Content material Gross sales/Licensing and Different decreased $586 million,
to $567 million from $1,153 million, primarily because of decrease theatrical
distribution and residential leisure outcomes, partially offset by decrease movie and
tv price impairments.
                                       42
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Gadgets Excluded from Section Working Revenue Associated to Disney Media and
Leisure Distribution
The next desk presents supplemental data for gadgets associated to the
DMED section which can be excluded from section working earnings:
(in thousands and thousands)                                           2021                  2020               % Change Higher (Worse)
TFCF and Hulu acquisition amortization(1)           $   (2,410)         $        (2,838)                              15 %
Restructuring and impairment costs(2)                   (315)              (5,394)                                  94 %
German FTA acquire                                            126                    -                                     nm


(1)Within the present yr, amortization of step-up on movie and tv prices was
$646 million and amortization of intangible belongings was $1,749 million. Within the
prior yr, amortization of step-up on movie and tv prices was $899
million and amortization of intangible belongings was $1,913 million.
(2)The present yr contains impairments and severance prices associated to the
closure of an animation studio and severance prices and contract termination
costs in reference to the combination of TFCF. The prior yr contains
goodwill and intangible asset impairments and severance and contract termination
costs in reference to the acquisition and integration of TFCF.
Disney Parks, Experiences and Merchandise
Working outcomes for the DPEP section are as follows:
                                                                                                    % Change
(in thousands and thousands)                                          2021                  2020                Higher (Worse)
Revenues
Theme park admissions                             $     3,848           $     4,038                           (5) %
Parks & Experiences merchandise, meals and
beverage                                                3,299                 3,441                           (4) %
Resorts and holidays                                   2,701                 3,402                          (21) %
Merchandise licensing and retail                        5,241                 4,721                            11 %
Parks licensing and different                               1,463                 1,436                             2 %
Whole revenues                                         16,552                17,038                           (3) %
Working bills                                    (10,799)              (11,485)                            6 %
Promoting, normal, administrative and different             (2,886)               (2,642)                          (9) %
Depreciation and amortization                          (2,377)               (2,437)                            2 %
Fairness within the lack of investees                           (19)                  (19)                            - %
Working Revenue                                  $       471           $       455                             4 %


COVID-19

DPEP section revenues have been negatively impacted by COVID-19 as a result of usually diminished shutdown / working capability at our theme parks and resorts. The next desk summarizes the approximate variety of weeks of operation in the course of the present yr and the earlier yr:

                                         Weeks of Operation
                                           2021             2020
Walt Disney World Resort                          52        36
Disneyland Resort                                 22        24
Disneyland Paris                                  19        35
Hong Kong Disneyland Resort (1)                   40        22
Shanghai Disney Resort                            52        38


(1) Hong Kong Disneyland Resort usually operated 5 days per week in fiscal
2021 and seven days per week in fiscal 2020
Revenues
The lower in theme park admissions income was because of a lower of 14% from
decrease attendance, partially offset by a rise of 8% from increased common
ticket costs.
                                       43
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Parks & Experiences merchandise, meals and beverage income was decrease in comparison with
the prior yr because of a lower of 9% from decrease volumes, partially offset by
a rise of three% from increased common visitor spending.
The lower in resorts and holidays income was because of decreases of 17% from
fewer passenger cruise days and three% from decrease occupied room nights.
Merchandise licensing and retail income development was because of a rise of 9%
from merchandise licensing pushed by increased revenues from merchandise primarily based on
Mickey and Minnie, Spider-Man, Star Wars, together with The Mandalorian, and Disney
Princesses, partially offset by a lower in revenues from merchandise primarily based on
Frozen.
The rise in parks licensing and different income was primarily because of an
enhance in sponsorship income, partially offset by a lower in royalties
from Tokyo Disney Resort on account of the resort working at diminished
capacities.
The next desk presents supplemental park and lodge statistics:
                                            Home                              Worldwide(1)                               Whole
                                    2021                2020                2021                   2020                2021                2020
Parks
Enhance (lower)
Attendance(2)                          (17) %              (47) %               (4) %                 (53) %              (14) %              (49) %
Per Capita Visitor Spending(3)             17 %                 8 %               (3) %                  (3) %                11 %                 7 %

Inns

Occupancy(4)                             42 %                43 %                21 %                   35 %                37 %                41 %
Out there Room Nights (in
hundreds)(5)                          10,451              11,114               3,179                  3,207              13,630              14,321
Per Room Visitor Spending(6)               $374                $367                $377                   $308                $374                $355


(1)Per capita visitor spending development price is acknowledged on a continuing foreign money foundation.
Per room visitor spending is acknowledged on the common overseas alternate price for the
identical interval within the prior yr.
(2)Attendance is used to investigate quantity tendencies at our theme parks and relies
on the variety of distinctive each day entries, i.e. an individual visiting a number of theme
parks in a single day is counted solely as soon as. Our attendance depend contains
complimentary entries however excludes entries by youngsters below the age of three.
(3)Per capita visitor spending is used to investigate visitor spending tendencies and is
outlined as complete income from ticket gross sales and gross sales of meals, beverage and
merchandise in our theme parks, divided by complete theme park attendance.
(4)Occupancy is used to investigate the utilization of accessible capability at lodges and is
outlined because the variety of room nights occupied by company as a proportion of
out there lodge room nights.
(5)Out there lodge room nights are outlined as the full variety of room nights
which can be out there at our lodges and at DVC properties positioned at our theme
parks and resorts that aren't utilized by DVC members. Out there lodge room
nights embrace rooms quickly taken out of service.
(6)Per room visitor spending is used to investigate visitor spending at our lodges and
is outlined as complete income from room leases and gross sales of meals, beverage and
merchandise at our lodges, divided by complete occupied lodge room nights.
Prices and Bills
Working bills are as follows:
                                                                                 % Change
(in thousands and thousands)                                    2021            2020         Higher (Worse)
Working labor                              $  (4,711)      $  (4,870)                    3 %
Infrastructure prices                            (2,308)         (2,422)                    5 %

Value of products offered and distribution prices (2,086) (2,202)

               5 %
Different working expense                         (1,694)         (1,991)                   15 %
                                             $ (10,799)      $ (11,485)                    6 %


The lower in working labor was because of decrease volumes and decreased furlough
prices (internet of presidency credit), partially offset by inflation and a rise
in incentive compensation prices. The lower in infrastructure prices was
primarily as a result of prior yr write-down of belongings at our retail shops and
diminished volumes. Decrease price of products offered had been because of decrease
                                       44
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
volumes. The lower in different working bills was because of decrease volumes and
the comparability to prior-year costs for capital undertaking abandonments.
Promoting, normal, administrative and different prices elevated $244 million from
$2,642 million to $2,886 million because of increased incentive compensation prices and
elevated advertising spend.
Depreciation and amortization decreased $60 million from $2,437 million to
$2,377 million, primarily because of decrease depreciation at our theme parks and
resorts.
Section Working Revenue
Section working earnings elevated $16 million, to $471 million because of an
enhance at our client merchandise enterprise, largely offset by a lower at our
home parks and experiences.
The next desk presents supplemental income and working earnings element
for the Parks, Experiences and Merchandise section:
                                                                         % Change
(in thousands and thousands)                             2021           2020         Higher (Worse)
Supplemental income element
Parks & Experiences
Home                               $  9,353       $ 10,226                   (9) %
Worldwide                             1,859          2,020                   (8) %
Shopper Merchandise                         5,340          4,792                    11 %
                                       $ 16,552       $ 17,038                   (3) %
Supplemental working earnings element
Parks & Experiences
Home                               $ (1,139)      $   (623)                 (83) %
Worldwide                            (1,074)        (1,073)                    - %
Shopper Merchandise                         2,684          2,151                    25 %
                                       $    471       $    455                     4 %


Gadgets Excluded from Section Working Revenue Associated to Parks, Experiences and
Merchandise
The next desk presents supplemental data for gadgets associated to the
DPEP section which can be excluded from section working earnings:
                                                                        % 

Swap

(in thousands and thousands)                               2021         2020        Higher 

(Worse)

Restructuring and impairment costs(1)   $ (327)      $ (265)                 (23) %
Amortization of TFCF intangible belongings        (8)          (8)              

-%


(1)The present yr contains asset impairments and severance prices associated to
the closure of a considerable variety of our Disney-branded retail shops in North
America and Europe and severance prices associated to different workforce reductions.
The prior yr contains severance prices associated to workforce reductions.
CORPORATE AND UNALLOCATED SHARED EXPENSES
Company and unallocated shared bills are as follows:
                                                                                          % Change
(in thousands and thousands)                                       2021            2020               Higher (Worse)

Unallocated company and shared bills $ (928) $ (817)

                     (14) %


The rise in company and unallocated shared bills was because of increased
compensation prices.
RESTRUCTURING ACTIVITIES
See Observe 19 to the Consolidated Monetary Statements for data relating to
the Firm's restructuring actions in reference to the acquisition and
integration of TFCF and on the DPEP section.
                                       45
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
LIQUIDITY AND CAPITAL RESOURCES
The change in money, money equivalents and restricted money is as follows:
(in thousands and thousands)                                                           2021                 2020
Money offered by operations - persevering with operations                 $    5,566           $    7,616
Money utilized in investing actions - persevering with operations               (3,171)              (3,850)

Money offered by (utilized in) financing actions – persevering with operations

                                                              (4,385)               8,480
Money offered by operations - discontinued operations                        1                    2

Money circulation from investing actions – discontinued operations

                                                                   8                  213

Impression of alternate charges on money, money equivalents and restricted money

                                                             30                   38
Change in money, money equivalents and restricted money                $   (1,951)          $   12,499


Working Actions
Persevering with operations
Money offered by working actions of $5.6 billion for fiscal 2021 decreased
27% or $2.0 billion in comparison with $7.6 billion in fiscal 2020 because of decrease
working money circulation at DMED and better earnings tax and curiosity funds,
partially offset by increased working money circulation at DPEP and decrease funds for
severance. The lower at DMED was because of increased spending on movie and
tv productions. The rise at DPEP was because of decrease working money
disbursements as a result of pay-down of liabilities within the prior yr consequently
of closures/diminished capacities and decrease volumes within the present yr.
Depreciation expense is as follows:
(in thousands and thousands)                                         2021           2020
Disney Media and Leisure Distribution        $       613    $       638
Disney Parks, Experiences and Merchandise
Home                                                 1,551          

1,634

Worldwide                                              718            

694

Whole Disney Parks, Experiences and Merchandise             2,269          2,328
Company                                                  186            174
Whole depreciation expense                         $     3,068    $     3,140


Amortization of intangible belongings is as follows:
(in thousands and thousands)                                         2021           2020

Distribution of Disney media and leisure $ 178 $ 175
Disney Parks, Experiences and Merchandise

                     108            

109

TFCF and Hulu                                            1,757          

1,921

Whole amortization of intangible belongings            $     2,043    $     

2,205


Produced and licensed content material prices
The DMED section incurs prices to supply and license movie, episodic tv
and different content material. Manufacturing prices embrace spend on content material internally produced
at our studios comparable to live-action and animated movies, episodic sequence,
specials, shorts and theatrical stage performs. Manufacturing prices additionally embrace
authentic content material commissioned from third occasion studios. Programming prices
embrace content material rights licensed from third events to be used on the Firm's
Linear Networks and DTC streaming companies. Programming belongings are usually
recorded when the programming turns into out there to us with a corresponding
enhance in programming liabilities.
                                       46
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
The Firm's manufacturing and programming exercise for fiscal 2021 and 2020 are
as follows:
(in thousands and thousands)                                       2021           2020
Starting balances:
Manufacturing and programming belongings                $ 27,193       $ 27,407
Programming liabilities                            (4,099)        (4,061)
                                                   23,094         23,346

Bills:

Licensed programming and rights                    12,412         12,077
Produced content material                                   12,848          8,104
                                                   25,260         20,181

Amortization:

Licensed programming and rights                   (12,784)       (11,241)
Produced content material                                   (8,175)        (9,337)
                                                  (20,959)       (20,578)
Change in manufacturing and programming prices          4,301           (397)
Different non-cash exercise                               224            145
Ending balances:
Manufacturing and programming belongings                  31,732         27,193
Programming liabilities                            (4,113)        (4,099)
                                                 $ 27,619       $ 23,094


The Firm at present expects its fiscal 2022 spend on produced and licensed
content material, together with sports activities rights, to be as a lot as roughly $33 billion, or
roughly $8 billion greater than fiscal 2021 spend of $25 billion. The
enhance is pushed by increased spend to assist our DTC growth and customarily
assumes no important disruptions to manufacturing because of COVID-19. See Observe 15 to
the Consolidated Monetary Statements for data relating to the Firm's
contractual commitments to amass sports activities and broadcast programming.
Commitments and ensures
The Firm has numerous commitments and ensures, comparable to long-term leases,
buy commitments and different executory contracts, which can be disclosed within the
footnotes to the monetary statements. See Notes 15 and 16 to the Consolidated
Monetary Statements for additional data relating to these commitments.
Authorized and Tax Issues
As disclosed in Notes 10 and 15 to the Consolidated Monetary Statements, the
Firm has publicity for sure tax and authorized issues.
Investing Actions
Persevering with operations
Investing actions consist principally of investments in parks, resorts and
different property and acquisition and divestiture exercise. The Firm's
investments in parks, resorts and different property for fiscal 2021 and 2020 are as
follows:
(in thousands and thousands)                                         2021          2020

Distribution of Disney media and leisure $ 862 $ 783
Disney Parks, Experiences and Home Merchandise

                                             1,597         2,145
Worldwide                                          675           759

Whole Disney Parks, Experiences and Merchandise 2,272 2,904 Firms

                                              444           335
                                                   $ 3,578       $ 4,022


The capital expenditures of the DMED section primarily mirror investments in know-how and in services and tools to develop and modernize broadcast facilities, manufacturing services and tv station services.

                                       47
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Capital expenditures on the DPEP section are principally for theme park and
resort growth, new points of interest, cruise ships, capital enhancements and
programs infrastructure. The lower in capital expenditures at our home
parks and resorts in fiscal 2021 in comparison with fiscal 2020 was pushed by the
short-term suspension of sure capital tasks because the onset of COVID-19
though spending elevated within the latter a part of fiscal 2021 in comparison with fiscal
2020.
Capital expenditures at Company primarily mirror investments in services,
data know-how infrastructure and tools. The rise in fiscal 2021
in comparison with fiscal 2020 was because of increased spending on services.
The Firm at present expects its fiscal 2022 capital expenditures will probably be
roughly $6.1 billion in comparison with fiscal 2021 capital expenditures of $3.6
billion. The rise in capital expenditures is because of increased spending on
cruise ship fleet growth, Company services and manufacturing services and
know-how on the DMED section.
Different Investing Actions
Money offered by different investing actions of $407 million in fiscal 2021 and
$172 million in fiscal 2020 displays proceeds from the gross sales of investments.
Financing Actions
Persevering with operations
Money utilized in financing actions was $4.4 billion in fiscal 2021 in comparison with
money offered by financing actions of $8.5 billion in fiscal 2020. Money used
in financing actions in fiscal 2021 was because of a discount in borrowings and
the acquisition of a redeemable non-controlling curiosity, partially offset by
proceeds from the issuance of inventory choices. The lower in money offered by
financing actions in fiscal 2021 in comparison with fiscal 2020 mirrored a
discount in internet borrowings of $3.7 billion in fiscal 2021 in comparison with proceeds
from internet borrowings of $11.2 billion in fiscal 2020. Moreover, we paid a
money dividend of $1.6 billion in fiscal 2020 in comparison with no dividend in fiscal
2021.
Borrowings actions and different
In the course of the yr ended October 2, 2021, the Firm's borrowing exercise was as
follows:
                                                                                                                 Different
(in thousands and thousands)                              October 3, 2020         Borrowings          Funds                 Exercise          October 2, 2021
Business paper with authentic
maturities lower than three
months(1)                                 $            -          $        -          $      -                $       -          $            -
Business paper with authentic
maturities higher than three
months                                             2,023               2,221            (2,247)                      (5)                  1,992
U.S. greenback denominated notes(2)                  52,736                   -            (3,510)                    (136)                 49,090
Asia Theme Parks borrowings                        1,303                  35              (129)                     122                   1,331
International foreign money denominated debt
and different(3)                                       2,566                  29               (98)                    (504)                  1,993

                                          $       58,628          $    2,285          $ (5,984)               $    (523)         $       54,406


(1)Borrowings and reductions of borrowings are reported internet.
(2)The opposite exercise is primarily as a result of amortization of buy value
changes on debt assumed within the TFCF acquisition and debt issuance charges.
(3)The opposite exercise is because of market worth changes for debt with
qualifying hedges.
See Observe 9 to the Consolidated Monetary Statements for data relating to
the Firm's financial institution services and debt maturities. The Firm could use working
money flows, industrial paper borrowings as much as the quantity of its unused $12.25
billion financial institution services maturing in March 2022, March 2023 and March 2025, and
incremental time period debt issuances, to retire or refinance different borrowings earlier than
or as they arrive due.
See Observe 4 to the Consolidated Monetary Statements for a abstract of the
Firm's put/name settlement with NBCU.
See Observe 7 to the Consolidated Monetary Statements for data relating to
commitments to fund Hong Kong Disneyland Resort and Shanghai Disney Resort.
See Observe 12 to the Consolidated Monetary Statements for a abstract of the
Firm's dividends in fiscal 2020 and 2019. The Firm didn't declare or pay
a dividend in fiscal 2021. The Firm didn't repurchase any of its shares in
fiscal 2021, 2020 or 2019.
The Firm's working money circulation and entry to the capital markets could be
impacted by components exterior of its management, together with COVID-19, which has had an
antagonistic impression on the Firm's working money flows. Now we have taken plenty of
measures to mitigate the impression on the Firm's monetary place. See
Important Developments for the impression COVID-19 has had on our operations and
mitigating measures we've got taken.
                                       48
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
We consider that the Firm's monetary situation stays sturdy and that its
money balances, different liquid belongings, working money flows, entry to debt and
fairness capital markets and borrowing capability below present financial institution services,
taken collectively, present satisfactory assets to fund ongoing working
necessities and upcoming debt maturities in addition to future capital expenditures
associated to the growth of current companies and growth of latest tasks,
though sure of those actions have been scaled again or suspended in mild
of COVID-19. Relying on the unknowable length and severity of the longer term
impacts of COVID-19 and its variants, the Firm could take further mitigating
actions sooner or later comparable to persevering with to not declare dividends (the Firm
didn't pay a dividend with respect to fiscal 2020 operations and has not
declared or paid a dividend with respect to fiscal 2021 operations); decreasing,
or not ensuring funds, comparable to some contributions to our pension and
postretirement medical plans; elevating further financing; additional suspending
capital spending; decreasing movie and tv content material investments; or
implementing further furloughs or reductions in pressure. The impacts on our
working money flows are topic to uncertainty and should require us to rely extra
closely on exterior funding sources, comparable to debt and different sorts of financing.
The Firm's borrowing prices can be impacted by short- and long-term debt
scores assigned by nationally acknowledged score companies, that are primarily based, in
important half, on the Firm's efficiency as measured by sure credit score
metrics comparable to leverage and curiosity protection ratios. As of October 2, 2021,
Moody's Traders Service's long- and short-term debt scores for the Firm
had been A2 and P-1 (Secure), respectively, Customary and Poor's long- and short-term
debt scores for the Firm had been BBB+ and A-2 (Secure), respectively, and
Fitch's long- and short-term debt scores for the Firm had been A- and F2
(Secure), respectively. The Firm's financial institution services include just one monetary
covenant, regarding curiosity protection, which the Firm met on October 2,
2021, by a major margin. The Firm's financial institution services additionally particularly
exclude sure entities, together with the Asia Theme Parks, from any
representations, covenants or occasions of default.
SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION
On March 20, 2019, as a part of the acquisition of TFCF, The Walt Disney Firm
("TWDC") grew to become the last word dad or mum of TWDC Enterprises 18 Corp. (previously recognized
as The Walt Disney Firm) ("Legacy Disney"). Legacy Disney and TWDC are
collectively known as "Obligor Group", and individually, as a "Guarantor".
Concurrent with the shut of the TFCF acquisition, $16.8 billion of TFCF's
assumed public debt (which then constituted 96% of such debt) was exchanged for
senior notes of TWDC (the "alternate notes") issued pursuant to an exemption from
registration below the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to an Indenture, dated as of March 20, 2019, between TWDC,
Legacy Disney, as guarantor, and Citibank, N.A., as trustee (the "TWDC
Indenture") and assured by Legacy Disney. On November 26, 2019, $14.0 billion
of the excellent alternate notes had been exchanged for brand spanking new senior notes of TWDC
registered below the Securities Act, issued pursuant to the TWDC Indenture and
assured by Legacy Disney. As well as, contemporaneously with the closing of
the March 20, 2019 alternate provide, TWDC entered right into a assure of the
registered debt securities issued by Legacy Disney below the Indenture dated as
of September 24, 2001 between Legacy Disney and Wells Fargo Financial institution, Nationwide
Affiliation, as trustee (the "2001 Trustee") (as amended by the primary
supplemental indenture amongst Legacy Disney, as issuer, TWDC, as guarantor, and
the 2001 Trustee, as trustee).
Different subsidiaries of the Firm don't assure the registered debt
securities of both TWDC or Legacy Disney (such subsidiaries are known as
the "non-Guarantors"). The par worth and carrying worth of complete excellent and
assured registered debt securities of the Obligor Group at October 2, 2021
was as follows:
                                                          TWDC                                  Legacy Disney
(in thousands and thousands)                               Par Worth          Carrying Worth         Par Worth          Carrying Worth
Registered debt with unconditional
assure                                  $  37,338          $      39,162 

$ 10,587 $ 10,671


The ensures by TWDC and Legacy Disney are full and unconditional and canopy
all fee obligations arising below the assured registered debt securities.
The ensures could also be launched and discharged upon (i) as a normal matter, the
indebtedness for borrowed cash of the consolidated subsidiaries of TWDC in
mixture constituting not more than 10% of all consolidated indebtedness for
borrowed cash of TWDC and its subsidiaries (topic to sure exclusions),
(ii) upon the sale, switch or disposition of all or considerably the entire
fairness pursuits or all or considerably all, or considerably as an entirety,
the belongings of Legacy Disney to a 3rd occasion, and (iii) different customary occasions
constituting a discharge of a guarantor's obligations. As well as, within the case
of Legacy Disney's assure of registered debt securities issued by TWDC,
Legacy Disney could also be launched and discharged from its assure at any time
Legacy Disney shouldn't be a borrower, issuer or guarantor below sure materials financial institution
services or any debt securities.
Operations are performed nearly totally by means of the Firm's subsidiaries.
Accordingly, the Obligor Group's money circulation and talent to service its debt,
together with the general public debt, are dependent upon the earnings of the Firm's
subsidiaries and the distribution of these earnings to the Obligor Group,
whether or not by dividends, loans or in any other case. Holders of the assured registered
debt securities have a direct declare solely in opposition to the Obligor Group.
                                       49
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Set forth under are summarized monetary data for the Obligor Group on a
mixed foundation after elimination of (i) intercompany transactions and balances
between TWDC and Legacy Disney and (ii) fairness within the earnings from and
investments in any subsidiary that could be a non-Guarantor. This summarized monetary
data has been ready and offered pursuant to the Securities and
Trade Fee Regulation S-X Rule 13-01, "Monetary Disclosures about
Guarantors and Issuers of Assured Securities" and isn't meant to current
the monetary place or outcomes of operations of the Obligor Group in
accordance with U.S. GAAP.
Outcomes of operations (in thousands and thousands)                      2021
Revenues                                              $      -
Prices and bills                                           -
Internet earnings (loss) from persevering with operations            (1,847)
Internet earnings (loss)                                       (1,847)

Internet earnings attributable to TWDC shareholders (1,847)


Steadiness Sheet (in thousands and thousands)                                         October 2, 2021               October 3, 2020
Present belongings                                                   $               9,506        $               12,899
Noncurrent belongings                                                                1,689                         2,076
Present liabilities                                                              6,878                         6,155
Noncurrent liabilities (excluding intercompany to
non-Guarantors)                                                                 51,439                        57,809
Intercompany payables to non-Guarantors                                        147,629                       146,748


CRITICAL ACCOUNTING POLICIES AND ESTIMATES
We consider that the appliance of the next accounting insurance policies, that are
vital to our monetary place and outcomes of operations, require
important judgments and estimates on the a part of administration. For a abstract of
our important accounting insurance policies, together with the accounting insurance policies mentioned
under, see Observe 2 to the Consolidated Monetary Statements.
Produced and Acquired/Licensed Content material Prices
We amortize and check for impairment capitalized movie and tv manufacturing
prices primarily based on whether or not the content material is predominantly monetized individually or as
a bunch. See Observe 2 to the Consolidated Monetary Statements for additional
dialogue.
Manufacturing prices which can be categorized as particular person are amortized primarily based upon the
ratio of the present interval's revenues to the estimated remaining complete revenues
(Final Revenues).
With respect to produced movies meant for theatrical launch, probably the most
delicate issue affecting our estimate of Final Revenues is theatrical
efficiency. Revenues derived from different markets subsequent to the theatrical
launch are usually extremely correlated with theatrical efficiency. Theatrical
efficiency varies based totally upon the general public curiosity and demand for a
specific movie, the recognition of competing movies on the time of launch and
the extent of promoting effort. Upon a movie's launch and dedication of the
theatrical efficiency, the Firm's estimates of revenues from succeeding
home windows and markets, which can embrace imputed license charges for content material that's
used on our DTC streaming companies, are revised primarily based on historic
relationships and an evaluation of present market tendencies.
With respect to capitalized tv manufacturing prices which can be categorized as
particular person, probably the most delicate components affecting estimates of Final Revenues
are program scores of the content material on our licensees' platforms. Program scores,
that are a sign of market acceptance, instantly have an effect on this system's
potential to generate promoting and subscriber revenues and are correlated with
the license charges we are able to cost for the content material in subsequent home windows and for
subsequent seasons.
Final Revenues are reassessed every reporting interval and the impression of any
modifications on amortization of manufacturing price is accounted for as if the change
occurred originally of the present fiscal yr. If our estimate of
Final Revenues decreases, amortization of prices could also be accelerated or end result
in an impairment. Conversely, if our estimate of Final Revenues will increase,
price amortization could also be slowed.
Produced content material prices which can be a part of a bunch and bought/licensed content material
prices are amortized primarily based on projected utilization sometimes leading to an
accelerated or straight-line amortization sample. The dedication of
projected utilization requires judgement and is reviewed periodically for modifications. If
projected utilization modifications we could have to speed up or gradual the popularity of
amortization expense.
The amortization of multi-year sports activities rights relies on our projections of
revenues over the contract interval, which embrace promoting income and an
allocation of affiliate income (relative worth). If the annual contractual
funds associated to every season approximate every season's estimated relative
worth, we expense the associated contractual funds in the course of the relevant season.
If estimated relative values by yr had been to alter considerably, amortization
of our sports activities rights prices could also be accelerated or slowed.
                                       50
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Income Recognition
The Firm has income recognition insurance policies for its numerous working segments
which can be applicable to the circumstances of every enterprise. Confer with Observe 2 to
the Consolidated Monetary Statements for our income recognition insurance policies.
Pension and Postretirement Medical Plan Actuarial Assumptions
The Firm's pension and postretirement medical profit obligations and associated
prices are calculated utilizing plenty of actuarial assumptions. Two important
assumptions, the low cost price and the anticipated return on plan belongings, are
vital components of expense and/or legal responsibility measurement, which we consider
yearly. Different assumptions embrace the healthcare price pattern price and worker
demographic components comparable to retirement patterns, mortality, turnover and price of
compensation enhance.
The low cost price allows us to state anticipated future money funds for advantages
as a gift worth on the measurement date. A decrease low cost price will increase the
current worth of profit obligations and will increase pension and postretirement
medical expense. The rule for setting this price is a high-quality long-term
company bond price. We elevated our low cost price to 2.88% on the finish of
fiscal 2021 from 2.82% on the finish of fiscal 2020 to mirror market rate of interest
situations at our fiscal 2021 year-end measurement date. The Firm's low cost
price was decided by contemplating yield curves constructed of a big
inhabitants of high-quality company bonds and displays the matching of the
plans' legal responsibility money flows to the yield curves. A one proportion level lower
within the assumed low cost price would enhance complete profit expense for fiscal
2022 by roughly $341 million and would enhance the projected profit
obligation at October 2, 2021 by roughly $4.0 billion. A one proportion
level enhance within the assumed low cost price would lower complete profit expense
and the projected profit obligation by roughly $292 million and $3.4
billion, respectively.
To find out the anticipated long-term price of return on the plan belongings, we
take into account the present and anticipated asset allocation, in addition to historic and
anticipated returns on every plan asset class. Our anticipated return on plan belongings is
7.00%. A decrease anticipated price of return on plan belongings will enhance pension and
postretirement medical expense. A one proportion level change within the long-term
asset return assumption would impression fiscal 2022 annual expense by roughly
$175 million.
Goodwill, Different Intangible Property, Lengthy-Lived Property and Investments
The Firm is required to check goodwill and different indefinite-lived intangible
belongings for impairment on an annual foundation and if present occasions or circumstances
require, on an interim foundation. The Firm performs its annual check of goodwill
and indefinite-lived intangible belongings for impairment in its fiscal fourth
quarter.
Goodwill is allotted to numerous reporting items, that are an working section
or one stage under the working section. To check goodwill for impairment, the
Firm first performs a qualitative evaluation to find out whether it is extra
seemingly than not that the carrying quantity of a reporting unit exceeds its truthful
worth. Whether it is, a quantitative evaluation is required. Alternatively, the
Firm could bypass the qualitative evaluation and carry out a quantitative
impairment check.
The qualitative evaluation requires the consideration of things comparable to latest
market transactions, macroeconomic situations, and modifications in projected future
money flows of the reporting unit.
The quantitative evaluation compares the truthful worth of every goodwill reporting
unit to its carrying quantity, and to the extent the carrying quantity exceeds the
truthful worth, an impairment of goodwill is acknowledged for the surplus as much as the
quantity of goodwill allotted to the reporting unit.
In fiscal 2021, the Firm bypassed the qualitative check and carried out a
quantitative evaluation of goodwill for impairment.
The impairment check for goodwill requires judgment associated to the identification
of reporting items, the project of belongings and liabilities to reporting items
together with goodwill, and the dedication of truthful worth of the reporting items.
To find out the truthful worth of our reporting items, we apply what we consider to
be probably the most applicable valuation methodology for every of our reporting items.
We usually use a gift worth approach (discounted money flows) corroborated
by market multiples when out there and as applicable. The discounted money circulation
analyses are delicate to our estimates of future income development and margins for
these companies in addition to the low cost charges used to calculate the current
worth of future money flows. In occasions of antagonistic financial situations within the
international financial system, the Firm's long-term money circulation projections are topic to a
higher diploma of uncertainty than regular. We consider our estimates are
in step with how a market participant would worth our reporting items.
If we had established totally different reporting items or utilized totally different valuation
methodologies or assumptions, the impairment check outcomes might differ, and we
may very well be required to report impairment costs.
To check its different indefinite-lived intangible belongings for impairment, the Firm
first performs a qualitative evaluation to find out whether it is extra seemingly than
not that the carrying quantity of every of its indefinite-lived intangible belongings
exceeds its truthful worth. Whether it is, a quantitative evaluation is required.
Alternatively, the Firm could bypass the qualitative evaluation and carry out a
quantitative impairment check.
                                       51
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
The qualitative evaluation requires the consideration of things comparable to latest
market transactions, macroeconomic situations, and modifications in projected future
money flows.
The quantitative evaluation compares the truthful worth of an indefinite-lived
intangible asset to its carrying quantity. If the carrying quantity of an
indefinite-lived intangible asset exceeds its truthful worth, an impairment loss is
acknowledged for the surplus. Honest values of indefinite-lived intangible belongings are
decided primarily based on discounted money flows or appraised values, as applicable.
The Firm exams long-lived belongings, together with amortizable intangible belongings,
for impairment at any time when occasions or modifications in circumstances (triggering occasions)
point out that the carrying quantity will not be recoverable. As soon as a triggering
occasion has occurred, the impairment check employed relies on whether or not the
Firm's intent is to carry the asset for continued use or to carry the asset for
sale. The impairment check for belongings held to be used requires a comparability of the
estimated undiscounted future money flows anticipated to be generated over the
helpful lifetime of the numerous belongings of an asset group to the carrying quantity
of the asset group. An asset group is mostly established by figuring out the
lowest stage of money flows generated by a bunch of belongings which can be largely
unbiased of the money flows of different belongings and will embrace belongings used
throughout a number of companies. If the carrying quantity of an asset group exceeds the
estimated undiscounted future money flows, an impairment could be measured because the
distinction between the truthful worth of the asset group and the carrying quantity of
the asset group. For belongings held on the market, to the extent the carrying quantity is
higher than the asset's truthful worth much less prices to promote, an impairment loss is
acknowledged for the distinction. Figuring out whether or not a long-lived asset is
impaired requires numerous estimates and assumptions, together with whether or not a
triggering occasion has occurred, the identification of asset teams, estimates of
future money flows and the low cost price used to find out truthful values.
The Firm has investments in fairness securities. For fairness securities that do
not have a readily determinable truthful worth, we take into account forecasted monetary
efficiency of the investee firms, in addition to volatility inherent within the
exterior markets for these investments. If these forecasts will not be met,
impairment costs could also be recorded.
The Firm recorded non-cash impairment costs of $0.3 billion and $5.2
billion in fiscal 2021 and 2020, respectively.
The fiscal 2021 costs primarily associated to the closure of an animation studio
and a considerable variety of our Disney-branded retail shops in North America
and Europe.
The fiscal 2020 impairment costs primarily associated to impairments of MVPD
settlement intangible belongings ($1.9 billion) and goodwill ($3.1 billion) on the
Worldwide Channels' enterprise. See Observe 19 to the Consolidated Monetary
Statements for added dialogue of those impairment costs.
Allowance for Credit score Losses
We consider our allowance for credit score losses and estimate collectability of
accounts receivable primarily based on historic dangerous debt expertise, our evaluation of
the monetary situation of particular person firms with which we do enterprise,
present market situations, and cheap and supportable forecasts of future
financial situations. In occasions of financial turmoil, together with COVID-19, our
estimates and judgments with respect to the collectability of our receivables
are topic to higher uncertainty than in additional secure intervals. If our estimate
of uncollectible accounts is just too low, prices and bills could enhance in future
intervals, and whether it is too excessive, prices and bills could lower in future
intervals. See Observe 3 to the Consolidated Monetary Statements for added
dialogue.
Contingencies and Litigation
We're at present concerned in sure authorized proceedings and, as required, have
accrued estimates of the possible and estimable losses for the decision of
these proceedings. These estimates are primarily based upon an evaluation of potential
outcomes, assuming a mixture of litigation and settlement methods and have
been developed in session with exterior counsel as applicable. From time to
time, we're additionally concerned in different contingent issues for which we accrue
estimates for a possible and estimable loss. It's attainable, nevertheless, that
future outcomes of operations for any specific quarterly or annual interval might
be materially affected by modifications in our assumptions or the effectiveness of our
methods associated to authorized proceedings or our assumptions relating to different
contingent issues. See Observe 15 to the Consolidated Monetary Statements for
extra detailed data on litigation publicity.
Revenue Tax
As a matter in fact, the Firm is usually audited by federal, state and
overseas tax authorities. Every so often, these audits lead to proposed
assessments. Our determinations relating to the popularity of earnings tax advantages
are made in session with exterior tax and authorized counsel, the place applicable,
and are primarily based upon the technical deserves of our tax positions in consideration of
relevant tax statutes and associated interpretations and precedents and upon the
anticipated final result of proceedings (or negotiations) with taxing and authorized
authorities. The tax advantages in the end realized by the Firm could differ from
these acknowledged in our future monetary statements primarily based on plenty of
components, together with the Firm's choice to
                                       52
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
settle somewhat than litigate a matter, related authorized precedent associated to
related issues and the Firm's success in supporting its submitting positions
with taxing authorities.
Impacts of COVID-19 on Accounting Insurance policies and Estimates
In mild of the at present unknown final length and severity of COVID-19, we
face a higher diploma of uncertainty than regular in making the judgments and
estimates wanted to use our important accounting insurance policies and make modifications
to those estimates and judgements over time. This might lead to significant
impacts to our monetary statements in future intervals. A extra detailed
dialogue of the impression of COVID-19 on the Accounting Insurance policies and Estimates
follows.
Produced and Acquired/Licensed Content material Prices
Sure of our accomplished or in progress movie and tv productions have had
their preliminary launch dates delayed. The length of the delay, market
situations after we launch the content material, or a change in our launch technique
(e.g. bypassing sure distribution home windows) might have an effect on Final
Revenues, which can speed up amortization or lead to an impairment of
capitalized movie and tv manufacturing prices.
Given the continued uncertainty round reside sporting occasions persevering with
uninterrupted, the quantity and timing of revenues derived from the printed of
these occasions could differ from the projections of revenues that assist our
amortization sample of the rights prices we pay for these occasions. Such modifications
in revenues might lead to an acceleration or slowing of the amortization of
our sports activities rights prices.
Income Recognition
Sure of our affiliate contracts include commitments with respect to the
content material to be aired on our tv networks (e.g. reside sports activities or authentic
content material). If there are delays or cancellations of reside sporting occasions or
disruptions to movie and tv content material manufacturing actions, we could have to
assess the impression on our contractual obligations and regulate the income that we
acknowledge associated to those contracts.
Goodwill, Different Intangible Property, Lengthy-Lived Property and Investments
Given the continued impacts of COVID-19 throughout our companies, the projected money
flows that we use to evaluate the truthful worth of our companies and belongings for
functions of impairment testing are topic to higher uncertainty than regular.
If sooner or later we cut back our estimate of money circulation projections, we could have to
impair a few of these belongings.
Previous to the Firm's reorganization in October 2020, the previous
Direct-to-Shopper & Worldwide section included an Worldwide Channels
reporting unit, which was comprised of the Firm's worldwide tv
networks. Our worldwide tv networks primarily derive revenues from
affiliate charges charged to MVPDs for the appropriate to ship our programming below
multi-year licensing agreements and the gross sales of promoting time/area on the
networks.
Within the third quarter of fiscal 2020, we assessed the Worldwide Channels'
long-lived belongings and goodwill for impairment and recorded impairments of
$1.9 billion primarily associated to MVPD settlement intangible belongings and
$3.1 billion associated to goodwill.
As of October 2, 2021, the remaining steadiness of our worldwide MVPD settlement
intangible belongings was $2.2 billion, primarily associated to our channel companies
in Latin America and India.
See Observe 19 to the Consolidated Monetary Statements for dialogue of the
impairment exams carried out within the third quarter of fiscal 2020.
Threat Administration Contracts
The Firm employs quite a lot of monetary devices (derivatives) together with
rate of interest and cross-currency swap agreements and ahead and possibility
contracts to handle its publicity to fluctuations in rates of interest, overseas
foreign money alternate charges and commodity costs.
On account of the impression of COVID-19 on our companies, our projected money
flows or projected utilization of commodities are topic to a higher diploma of
uncertainty, which can trigger us to acknowledge positive factors or losses on our hedging
devices in several intervals than the hedged transaction.
New Accounting Pronouncements
See Observe 20 to the Consolidated Monetary Statements for data relating to
new accounting pronouncements.
FORWARD-LOOKING STATEMENTS
The Personal Securities Litigation Reform Act of 1995 gives a secure harbor for
"forward-looking statements" made by or on behalf of the Firm. We could from
time to time make written or oral statements which can be "forward-looking,"
together with statements contained on this report and different filings with the
Securities and Trade Fee and in reviews to our
                                       53
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
shareholders. Such statements could, for instance, categorical expectations,
projections, estimates, plans or future impacts; actions that we could take (or
not take); developments past our management, together with modifications in home or
international financial situations; or different statements that aren't historic in
nature. All forward-looking statements are made on the idea of administration's
views and assumptions relating to future occasions and enterprise efficiency as of the
time the statements are made and the Firm doesn't undertake any obligation
to replace its disclosure regarding forward-looking issues. Precise outcomes could
differ materially from these expressed or implied because of quite a lot of vital
components, lots of that are past our management. Along with the components
affecting particular enterprise operations recognized in reference to the
description of those operations and the monetary outcomes of those operations
elsewhere in our filings with the SEC, probably the most important components affecting
these expectations, which can be revised or supplemented in subsequent reviews
we file with the SEC, are set forth below Merchandise 1A - Threat Elements of this Report
on Type 10-Okay in addition to on this Merchandise 7 - Administration's Dialogue and Evaluation
and Merchandise 1 - Enterprise.
ITEM 7A. Quantitative and Qualitative Disclosures About Market Threat
The Firm is uncovered to the impression of rate of interest modifications, overseas foreign money
fluctuations, commodity fluctuations and modifications available in the market values of its
investments.
Insurance policies and Procedures
Within the regular course of enterprise, we make use of established insurance policies and procedures
to handle the Firm's publicity to modifications in rates of interest, overseas
currencies and commodities utilizing quite a lot of monetary devices.
Our targets in managing publicity to rate of interest modifications are to restrict the
impression of rate of interest volatility on earnings and money flows and to decrease
general borrowing prices. To realize these targets, we primarily use curiosity
price swaps to handle internet publicity to rate of interest modifications associated to the
Firm's portfolio of borrowings. By coverage, the Firm targets fixed-rate
debt as a proportion of its internet debt between minimal and most percentages.
Our goal in managing publicity to overseas foreign money fluctuations is to scale back
volatility of earnings and money circulation in an effort to enable administration to deal with
core enterprise points and challenges. Accordingly, the Firm enters into
numerous contracts that change in worth as overseas alternate charges change to
shield the U.S. greenback equal worth of its current overseas foreign money
belongings, liabilities, commitments and forecasted overseas foreign money revenues and
bills. The Firm makes use of possibility methods and ahead contracts that
present for the acquisition or sale of foreign exchange to hedge possible, however
not firmly dedicated, transactions. The Firm additionally makes use of ahead and possibility
contracts to hedge overseas foreign money belongings and liabilities. The principal
foreign exchange hedged are the euro, Japanese yen, British pound, Chinese language
yuan and Canadian greenback. Cross-currency swaps are used to successfully convert
overseas foreign money denominated borrowings to U.S. greenback denominated borrowings.
By coverage, the Firm maintains hedge protection between minimal and most
percentages of its forecasted overseas alternate exposures usually for intervals
to not exceed 4 years. The positive factors and losses on these contracts offset modifications
within the U.S. greenback equal worth of the associated exposures. The financial or
political situations in a rustic might cut back our potential to hedge publicity to
foreign money fluctuations within the nation or our potential to repatriate income from
the nation.
Our targets in managing publicity to commodity fluctuations are to make use of
commodity derivatives to scale back volatility of earnings and money flows arising
from commodity value modifications. The quantities hedged utilizing commodity swap contracts
are primarily based on forecasted ranges of consumption of sure commodities, comparable to
gasoline oil and gasoline.
It's the Firm's coverage to enter into overseas foreign money and rate of interest
by-product transactions and different monetary devices solely to the extent
thought of needed to satisfy its targets as acknowledged above. The Firm does
not enter into these transactions or every other hedging transactions for
speculative functions.
Worth at Threat (VAR)
The Firm makes use of a VAR mannequin to estimate the utmost potential one-day loss
within the truthful worth of its rate of interest, overseas alternate, commodities and market
delicate fairness monetary devices. The VAR mannequin estimates had been made
assuming regular market situations and a 95% confidence stage. Varied modeling
methods can be utilized in a VAR computation. The Firm's computations are
primarily based on the interrelationships between actions in numerous rates of interest,
currencies, commodities and fairness costs (a variance/co-variance approach).
These interrelationships had been decided by observing rate of interest, overseas
foreign money, commodity and fairness market modifications over the previous quarter for the
calculation of VAR quantities at every fiscal quarter finish. The mannequin contains all of
the Firm's debt in addition to all rate of interest and overseas alternate by-product
contracts, commodities and market delicate fairness investments. Forecasted
transactions, agency commitments, and accounts receivable and payable denominated
in foreign exchange, which sure of those devices are meant to hedge,
had been excluded from the mannequin.
The VAR mannequin is a threat evaluation software and doesn't purport to characterize precise
losses in truthful worth that will probably be incurred by the Firm, nor does it take into account
the potential impact of favorable modifications in market components.
                                       54
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
VAR on a mixed foundation elevated to $364 million at October 2, 2021 from $323
million at October 3, 2020.
The estimated most potential one-day loss in truthful worth, calculated utilizing the
VAR mannequin, is as follows (unaudited, in thousands and thousands):
                                           Curiosity Charge                   Foreign money                     Fairness
                                             Delicate                     Delicate                   Delicate
                                             Monetary                     Monetary                   Monetary              Commodity Delicate              Mixed
Fiscal 2021                                 Devices                   Devices                 Devices            Monetary Devices            Portfolio
Yr finish fiscal 2021 VAR              $                    357       $                  44       $                  37       $                   1       $                364
Common VAR                                                342                          34                          48                           1                        345
Highest VAR                                                380                          44                          65                           1                        372
Lowest VAR                                                 290                          23                          37                           1                        296
Yr finish fiscal 2020 VAR                                   304                          29                          81                           1                        323


The VAR for Hong Kong Disneyland Resort and Shanghai Disney Resort is immaterial
as of October 2, 2021 and accordingly has been excluded from the above desk.
ITEM 8. Monetary Statements and Supplementary Information
See Index to Monetary Statements and Supplemental Information on web page   63  .
ITEM 9. Modifications in and Disagreements with Accountants on Accounting and
Monetary Disclosure
None.
ITEM 9A. Controls and Procedures
Analysis of Disclosure Controls and Procedures
Now we have established disclosure controls and procedures to make sure that the
data required to be disclosed by the Firm within the reviews that it recordsdata
or submits below the Securities Trade Act of 1934 is recorded, processed,
summarized and reported throughout the time intervals laid out in SEC guidelines and types
and that such data is accrued and made recognized to the officers who
certify the Firm's monetary reviews and to different members of senior
administration and the Board of Administrators as applicable to permit well timed selections
relating to required disclosure.
Based mostly on their analysis as of October 2, 2021, the principal govt officer
and principal monetary officer of the Firm have concluded that the Firm's
disclosure controls and procedures (as outlined in Guidelines 13a-15(e) and 15d-15(e)
below the Securities Trade Act of 1934) are efficient.
Administration's Report on Inside Management Over Monetary Reporting
Administration's report set forth on web page   64   is integrated herein by
reference.
Modifications in Inside Controls
There have been no modifications in our inner management over monetary reporting
in the course of the fourth quarter of the fiscal yr ended October 2, 2021 which have
materially affected, or are fairly prone to materially have an effect on, our inner
management over monetary reporting.
ITEM 9B. Different Info
None.
ITEM 9C. Disclosure Concerning International Jurisdictions that Stop Inspections
Not relevant.
                                       55

————————————————– ——————————

TABLE OF CONTENTS

© Edgar on-line, supply Previews

About Edith J.

Check Also

STEWART INFORMATION SERVICES CORP: Creation of a Direct Monetary Obligation or Obligation Below a Registrant’s Off-Stability Sheet Association, Different Occasions, Monetary Statements and Proof (Type 8-Okay)

Article 2.03. Creation of a direct monetary obligation or obligation below a Off-Stability Sheet Association …