DIS 10-K & 10-Q changes, risk factors and insider trading

Declines in U.S., global and regional economic conditions adversely affect theour profitabilityresults of ouroperations businesses.and financial condition.

Declines in U.S., global and resorts.regional economic conditions, such as recessions, other less severe slowdowns in economic activity and/or inflationary conditions typically adversely affect demand for our products and services and/or costs to operate our businesses, reducing our revenue and earnings. While a number of different factors affect the demand for our products and services, actual or perceived declines in economic conditions couldtypically contributehave toimpacts across our businesses, including, among others, lower attendance orand spending at our parks and experiences businesses, pricesfees that MVPDs payreceived for our cable programming,programming and DTC services, including as a result of declines in subscription levels, purchases of and prices for advertising on our DTC productsservices and linear platforms, subscription levels for our cable programming or DTC platformsnetworks or licensing fees, while in the case of inflationary conditions, also continuing to increaseincreasing the prices we pay for goods, services and labor.labor, as well as typically our borrowing costs due to elevated interest rates, making it more difficult to obtain financing for our operations and investments on favorable terms. Even ifwhen inflationary pressures moderate, we expect certain costs, such as for labor, to remain elevated. In addition, an increase in price levels generally, or in price levels in a particular sector, could result in a shift in consumer demand away from the entertainment and experiences we offer, which could also adversely affect our revenuesrevenues, and,while at the same time, increase our costs, including borrowing costs as a result of elevated interest rates, making it more difficult to obtain financing for our operations and investments on favorable terms.costs. A decline in economic conditions or a failure of conditions to improve as anticipated could impact implementation or success of our business plans, such as our investment plans to increase investment infor our Experiences segment, the realignment of our cost structure and plans for our DTC ad-supported services, enhancements, product offerings, pricing structure and price increases.increases and plans for strategic investments. Unfavorable economic conditions also impair the ability of those with whom we do business to satisfy their obligations to us. The adverse impact on our businesses of actual or perceived declines in economic conditions or a failure of conditions to improve as anticipated will depend,depends, in part, on their severity and durationduration, and our ability to mitigate these impacts on our businesses is limited.

Fluctuations in foreign currency exchange rates impact our results of operations, including our revenues and the profitability of our businesses.costs.

Fluctuations in foreign currency exchange rates against the U.S. dollar impact our revenues and the profitabilityresults of our businesses,operations, including by impacting the cost in U.S. dollars of providing our goods and services, our revenues in U.S. dollars generated by our international businesses and the international demand for our domestic products and services. TheAn currentincrease or continuedsustained strength in the value of the U.S. dollar adversely impacts the U.S. dollar value of revenue we receive and expect to receive from other markets and contributes to reduced international demand for our domestic products and services, including international travel to our domestic parks and resorts. A decrease or sustained weakness in the value of the U.S. dollar often increases the cost of labor, goods and services in, or originating from, as applicable, non-U.S. markets. Although we hedge exposure to fluctuations in certain foreign currencies, any such hedging activity may not substantially offset the negative financial impact of exchange rate fluctuations and is not expected to offset all such negative financial impact, particularly in periods of sustained U.S. dollar strength or weakness relative to multiple foreign currencies. Further, economic or political conditions in certain countries outside the U.S. also have reduced, and could continue to reduce,limit, our ability to hedge exposure to currency fluctuations in those countries or our ability to repatriate revenue from those countries.

Changes in technology, in consumer consumption patterns and in how entertainment products and services are created affect demand for our entertainment products,for, the revenue we can generate from these products and the cost of producing or distributing theseour products.entertainment offerings and our results of operations.

The media entertainment and technology businesses in which we participate increasingly depend on our ability to successfully adapt to new technologiestechnologies, including shifting patterns of content consumption and how entertainment products and services are generated. New technologies affect the demand for our products,products and services, the manner in which our productsentertainment offerings are distributed to consumers, the ways we charge for and receive revenue for our entertainment products and services and the stability of those revenue streams, the sources and nature of competing contententertainment offerings, the time and manner in which consumers acquire and view some of our entertainment productsofferings and the options available to advertisers for reaching their desired audiences. These developments have impacted the business model for certain traditional forms of distribution, as evidenced by the industry-wide decline in ratings for broadcast and cable television, the reduction in demand for home entertainment sales of theatrical content, the development of alternative distribution channels for broadcast and cable programming and declines in subscriber levels for traditional cable channels. These developments have decreased advertising and affiliate revenue at some of our linear networks and have led, and may lead in the future, to the impairment of the value of certain of our assets. In addition, theater-going to watch movies has remained below pre-pandemic levels.

RulesRegulations governing new technological developments, such as developments in artificial intelligence (AI), including generative AI and large language model tools, remain unsettled, and these developments may affect aspects of our existing business model,models, including revenue streams for the use of our IP, how we create our entertainment productsofferings and the competition we face. In order to respond to the impact of new technologies on our businesses, we regularly consider, and from time to time implementimplement, new initiatives and changes to our business models, including by developing,developing and investing in and acquiring DTC products,streaming reorganizing our mediaservices and entertainmentcontent businesses to advance our DTC strategiesofferings and developing new media offerings. There can be no assurance that our DTC offerings, new media offerings and other efforts will successfully respond to technological changes. In addition, declines in certain traditional forms of distribution impactsimpact the cost of content allocable to our DTC offerings, negatively impacting the profitability of our DTC offerings. As part of our DTC strategy, we forgo certain revenue from certain traditional sourcessources. as we invest in our DTC offerings. Since launch,Initially, our DTC streaming services experienced significant losses. There can be no assurance that the DTC model and other business models we may develop will each be or remain profitable or be as profitable over the long term as our historic business models.

We face risks relating to misalignment with public and consumer tastes and preferences for entertainment, travel and consumer products, which impactimpacts demand for our entertainment offerings and products and theservices profitabilityand our results of our businesses.operations.

Our businesses create entertainment, travel and consumer products, the success of which depends substantially on consumer tastes and preferences that change in often unpredictable ways. The success of our businesses depends on our ability to consistently produce compelling creative content, which may be distributed, among other ways, through DTC platforms,services, broadcast,linear cable,networks and theaters and used in theme park attractions, hotels and other resort facilities and travel experiences and consumer products. Such distribution must meet the changing preferences of the broad consumer market and respond to competition from an expanding array of choices facilitated by technological developments in the delivery of content. The success of our theme parks, resorts, cruise ships and experiences, as well as our theatrical releases, depends on demand for out-of-home entertainment experiences. Demand for certain out-of-home entertainment experiences, such as theater-going to watch movies, has not returned to pre-pandemiclevels levels.that existed prior to the COVID-19 pandemic. In addition, manyas ofa ourglobal businessesentertainment dependcompany onwith acceptancea ofglobal ourconsumer offerings and products by consumers outsidebase, the U.S. The success of our businesses therefore depends on our ability to successfully predict and adapt to continuallyconstantly evolving and often divergent consumer tastes and preferences outsideacross asvarious welldomestic asand insideinternational markets. Evolving tourist preferences regarding travel to destinations in the U.S. and other geographical regions where our parks and experiences businesses operate sometimes affect travel to those businesses. Moreover, we must often make substantial investments in content production and acquisition, acquisition of sports and other programming rights, theme park attractions, cruise ships or hotels and other facilities or customer facing platforms before we know the extent to which these products will earn consumer acceptance, and the market, economic or social conditions are sometimes significantly different from the ones we anticipated at the time of the investment decisions. Further, preferences of some consumers are affected by their perceptions of our position on matters of public interest, including regarding environmental and social issues.issues, and such perceptions sometimes lead to consumer boycotts. Generally, revenuesour from,results of operations and profitabilityfinancial of, each of our businessescondition are adversely impacted when our entertainment offerings and products,products and services, as well as our methods to make our offerings and products and services available to consumers, do not align with constantly evolving and often conflicting consumer preferences and tastes or achieve sufficient consumer acceptance.

A variety of uncontrollable events disrupt our businesses, reduce demand for or consumption of our products and services, impair our ability to provide our products and services or increase the cost or reduce the profitability of providing our products and services.services, adversely impacting our results of operations and financial condition.

The operation and profitability of our businessesof, and demand for and consumption of our products and services, particularly our parks and experiences businesses, are highly dependent on the general environment for travel and tourism, including in the specific regions in which our parks and experiences businesses operate. In addition, we have extensive international operations, including our international theme parks and resorts, which are dependent on domestic and international regulations consistent with trade and investment in those regions. The operation of our businesses andbusinesses, the environment for travel and tourism, as well asthe demand for and consumption of our other entertainmentproducts products,and isservices and ultimately our results of operations and financial condition are subject to significant adverse impactimpacts from a variety of factors beyond our control in the U.S., globally or in specific geographic regions asaround athe resultworld ofwhere awe variety of factors beyond our control,operate, including: health concerns; adverse weather conditions arising from short-term weather patterns or long-term climate change, including longer and more regular excessive heat conditions, catastrophic events or natural disasters (such as excessive heat or rain, hurricanes, wildfires, typhoons, floods, droughts, tsunamis and earthquakes); international, political or military developments, including tradetariffs and other trade and international disputes and social unrest; macroeconomic conditions, including a decline in economic activity, inflationlegal and foreign exchange rates; and terrorist attacks. These events and others, such as fluctuations in travel and energy costs, supply chain disruptions and malware and other cyber-related attacks or intrusions or other widespread computing, telecommunications or payment processing failures, from time to time have disrupted, and may in the future disrupt, our ability to provide our products and services or in certain instances may affect our ability to obtain insurance coverage with respect to some of these events. An incident or other event that affected our property directly, including a security incident, earthquake or hurricane, would have a direct impact on our ability to provide goods and services and could result in closure of impacted operations or have an extended effect of discouraging consumers from attending our facilities. Moreover, the costs of protecting against such incidents reduces the profitability of our operations.

For example, COVID-19 and measures to prevent its spread impacted our businesses in a number of ways, including the closure of our theme parks and resorts, suspension of cruise ship sailings and guided tours, delayed, or in some cases, shortened or canceled, theatrical releases and disruptions in the production and availability of content, significantly reducing revenues across all of our segments. Certain of our business operations have been temporarily disrupted by payment processing outages and widespread computing failures. Hurricanes, such as Hurricanes Helenehave caused park closures and Milton,other which in the case of Hurricane Milton caused Walt Disney World Resort theme parks in Floridaimpacts to close for one full and partial day, have impacted the operations and profitability of Walt Disney World ResortResort, adversely affecting segment results, and may do so in the future. The Company has pausedceased certain operations in certain regions, including in response to sanctions, trade restrictions and related developmentsdevelopments, and the profitability of certain operations has been impacted as a result of eventsresulting in theimpairment corresponding regions.charges.

In addition, we derive affiliate fees and royalties from the distribution of our programming, sales of our licensed products and services by third parties, and the management of businesses operated under brands licensed from the Company and advertising revenues from the purchase of advertising on our various platforms, including DTC services and linear networks, and we are therefore dependent on the successes of those third parties for that portion of our revenue. Our results of operations could be adversely impacted by a significant contraction of distribution channels for our products and services, including through third-party licensees or sellers of our licensed goods and services.services, or a contraction in the number or kind of advertisers purchasing advertising on our platforms, including as a result of legal or regulatory developments. In addition, third-party suppliers provide products and services essential to the operation of a number of our businesses. A wide variety of factors could influence the success of those third parties and if negative factors significantly impacted a sufficient number of those third parties or materially impacted a supplier of a significant product or service, theour profitabilityresults of one or more of our businessesoperations could be adversely affected. In specific geographic markets, we have experienced delayed and/or partial payments from certain third parties due to liquidity issues.

We face risks related to changes in our business strategy,strategies and plans, which have affected and may continue to affect our cost structure, the profitability of our businesses and/or the value of our assets.assets and/or our results of operations.

We adjust our business strategies and plans from time to time in connection with changes in senior management and in our efforts to respond to changes in technology, consumer purchasing and consumption patterns, acceptance of our entertainment offerings, the market for advertising, macroeconomic conditions and other changes in the business environment. For example, in October 2025, we completed a combination of certain Hulu Live TV assets with Fubo to acquire a 70% interest in Fubo; in fiscal 2025, we announced plans for ESPN to acquire the NFL Network and certain other media assets owned and controlled by the NFL in exchange for a 10% noncontrolling interest in ESPN; in fiscal 2024, we announced entering into a definitive agreement to transfertransferred Star India into a joint venture and recorded related impairment charges and announced an investment in a multi-year project with Epic Games; in fiscal 2023, we reorganized our media and entertainment operations, which had been previously reported in one segment, into two segments, Entertainment and Sports; in fiscal 2023 we announced that we would review content, primarily on our DTC services, for alignment with a strategic change in our approach to content curation, resulting in removal of certain content from our platforms and related impairment charges; inand fiscalfrom 2022,time to time, we announced plans to introduce an ad-supported Disney+ service, new pricing model and price increases and cost realignment; and we have announcedannounce exploration of a number of new types of businesses. Changes in strategy, such as was the case with the most recent reorganization of our media and entertainment operations, can lead to workforce disruptions. Our new business strategies and plans are, among other things, subject to execution risk and may not produce the anticipated benefits, such as supporting our growth strategies and enhancing shareholder value.value, and over the long term could be less successful than our prior strategies and plans. For example, notwithstanding our continuing efforts to rationalize costs, the cost of executing on our DTC strategy may continue to grow or be reduced more slowly than anticipated, which may impact our distribution strategy across businesses/distribution platforms, the types of content we distribute through various businesses/distribution platforms, the timing and sequencing of content windows and ultimately, the profitabilityfinancial results of our DTC productsservices and other businesses/distribution platforms. Over the long term, our new organization and strategies could be less successful than our previous organizational structure and strategies.

In addition, changing technology, consumer purchasing patterns and acceptance of content offerings and macroeconomic conditions may impair the value of our assets. We incur costs in connection with changes to our business strategy and plans and have needed and may in the future need to write-down the value of our assets. Among other assets, wein haveconnection impairedwith the value of our content primarily at our DTC services and goodwill and intangible assets at our linear networks and impaired the value of certain of our retail store assets. We may write down other assets as our strategy evolves to account for the business environment.changes

We also make investments in existing or new businesses, including investments in international expansion of our business and in new business lines. For example, in fiscalrecent 2024,years, we announcedhave plans for additional expansion ofexpanded our fleet of cruise ships, with announced plans for further fleet expansion, and in recent years to expandincreased investment in our Experiences segment. In addition, in recent years, we have made significant investments in our businesses, such as expansionparks and renovationresorts; of certain of our theme parks, additional cruise ships,completed the acquisition of TFCF Corporation (TFCF)Hulu and of a 70% interest in Fubo; and made substantial investments related to DTC offerings. The ultimate success of these investments is uncertain, some of these and future investments may ultimately result in returns that are negative or lower than anticipated, and these investments may negatively impact the resources available to, and the profitability of,to our other businesses.businesses and ultimately, our results of operations. In addition, our costs increase in connection with these investments, such as additional expenses incurred with the launch on new cruise ships, and we may have significant charges associated with the write-down of assets if the investments are not as successful as anticipated,anticipated. as occurred in connection withOver the closurelong ofterm, Starour Wars:new Galacticstrategies Starcruiser.could be less successful than previous strategies. Even if our strategies are effective in the long term, our new offerings will generally notnegatively beimpact profitableresults of operations in the short term, results of our new offerings are unlikely to be even quarter over quarter and we may not expand into new markets as or when anticipated. Our ability to forecast for new businesses is impacted by our lack of experience operating in those new businesses, speed with which the competitive landscape changes, volatility beyond our control (such as the events beyond our control noted above) and our ability to obtain or develop the content and rights on which our projections are based. Accordingly, we may not achieve our forecasted outcomes.

Increased competitive pressures impact our revenues, increase our costs and impact theour profitabilityresults of our businesses.operations.

We face substantial competition in each of our businesses from alternative providers of the products and services we offer and from other forms of entertainment, lodging, tourism and recreational activities. This includes, among other types, competition for human resources,personnel, content and other resources we require in operating our business.businesses. For example:

•Our themelinear parksnetworks and resortsDTC andstreaming experiencesservices compete for guestsviewers and subscribers with an increasing number of competitors, including other DTC and linear offerings, all other forms of media and all other forms of entertainment, lodging,as tourismwell and recreation activities and competeas for technology, creative, performing and business talent, including with other theme parktalent and resortfor operators.content.

•Our contentlinear sales/licensing operationsnetworks compete for customerscarriage of their programming with all other formsprogramming of entertainment.providers.

Competition for the acquisition of resources cansometimes further increaseincreases the cost of producing our products and services; changechanges the composition of our offerings, including sports; deprivedeprives us of talent needed for our entertainment and experiences businesses, including thewhich talent is necessary to produce high quality creative material; increaseincreases employee turnover and staffing instability; orand increaseincreases our labor costs. Competition also reduces, or limits growth in, prices for our products and services, including advertising rates and subscription fees at our linear networks and DTC offerings, parks and resorts admissions and room rates and prices for consumer products from which we derive licenselicensing revenues. For example, our advertising revenue is negatively impacted by the increased supply of advertising tools and platforms on which to place advertising, including search, social media, online marketplaces and other ad-supported DTC services, which depresses advertising rates across our DTC streaming services and linear networks and creates demand uncertainty.

We enter into long-term contracts for both the acquisition and the distribution of media programming and products, including contracts for the acquisition of programming rights for sporting events and other programs, and contracts for the distribution of our programming to content distributors. As these contracts expire, we renew or renegotiate the contracts, which from time to time has led to service blackouts when distribution contracts expired before renewal terms were agreed. We may lose programming rights or distribution rights if we are unable to renew these contracts on acceptable terms. AsRenewal negotiations with certain MVPDs for distribution contracts scheduled to expire in fiscal 2026 could lead to temporary or longer-term service blackouts, negatively impacting our results of operations. On October 30, 2025, the Company’s channels were removed from YouTube TV following the expiration of the parties’ distribution contract without agreement on renewal terms, and the Company cannot predict how long this service blackout will last or reasonably estimate the adverse impact on our results of operations. Further, as a result, our portfolio of acquired programming rights, such as sporting events, and the distributors of our programming and the portfolio of programming rights our distributors acquire have changed and will continue to change over time. Even if these contracts are renewed, the cost of obtaining certain programming rights has increased and may continue to increase (or increase at faster rates than our historical experience) and programming distributors, facing pressures resulting from increased subscription fees and alternative distribution channels,distributors demand terms (including with respect to the pricing for, and the nature and amount of, programming distributed) that reduce our revenue from distribution of programs or increase revenue at slower rates than our historical experience. For example, the terms of recentcertain renewals of carriage agreements have included fewer of our linear networks or the opportunity to offer multiple genre-specific bundle options of fewer than all our linear networks while providing for certain of our DTC streaming services to be made available to the distributor’s subscribers. Moreover, our ability to renew these contracts on favorable terms is affected by a number of factors, such as consolidation in the market for program distribution and the entrance of new participants in the market for distribution of content on digital platforms. With respect to the acquisition of programming rights, particularly sports programming rights, the impact of these long-term contracts on our results over the term of the contracts depends on a number of factors, including the strength of advertising markets, subscription levels and programming rights costs increases, effectiveness of marketing efforts and the size of viewer audiences. There can be no assurance that revenues from programming based on these rights will exceed the cost of the rights plus the other costs of producing and distributing the programming.

We face risks related to environmental, social and governance matters and any related reporting obligations.

U.S. and international regulators, investors and other stakeholders are increasingly focused on environmental, social and governance matters. For example, new domesticDomestic and international laws and regulations relating to environmental, social and governance matters, including environmental sustainability, climate change, human rights and human capital management, have been adopted or are under consideration, some of which include specific, target-driven disclosure requirements or obligations. OurResponding responseto these laws and regulations has increased our compliance costs, including from increased investment in technology and appropriate expertise and has required the implementation of new reporting processes, entailing additional compliance risk.

Our reputation and globally recognizable brands are integral to the success of our businesses. Because our brands engage consumers across our businesses, some types of damage to our reputation or brands have an impact on all of our businesses. Because some of our brands are globally recognized, some types of brand damage are not locally contained. Maintenance of the reputation of our Company and brands depends on many factors, including the quality of our offerings, maintenance of trust with our customers and our ability to successfully innovate. In addition, we may pursue brand or product integration combining previously separate brands or products targeting different audiences under one brand or pursue other business initiatives inconsistent with one or more of our brands, and there is no assurance that these initiatives will be accepted by our customers and not adversely impact one or more of our brands. Significant negative claims or publicity regarding the Company or its operations, products, management, employees, practices, business partners, business decisions, social responsibility and culture, which may be amplified by social media, adversely impact our brands or reputation, even if such claims are untrue. DamageFrom time to time, these negative claims and publicity have led, and may lead in the future, to calls for consumer or other action, including boycotts, litigation, investigations or regulatory actions. These negative perceptions and other damage to our reputation or brands could impactpersist, negatively impacting our sales, business opportunities, profitability,results recruitingof operations, financial condition and valuationprice of our securities.common stock.

Therevenues, successincluding ofby increasing subscriber and viewership levels and managing churn; our DTCpricing, strategybundling, product features and profitabilitycontent ofdistribution ourdeterminations, DTCincluding streamingacross services will be impacted by the success of the reorganization of our mediawindows; and entertainment business and the strategic change in our approach to content curation initiated in fiscal 2023; our ability to drivecontain subscriber additions and retention based on the attractiveness of our content, manage churn, achieve the desired financial impact of our DTC pricing, bundling and distribution determinations, the Disney+ ad supported service, monetization and cost containment strategy and the launch of the ESPN flagship DTC service; and the effects of our determinations with regard to distribution for our creative content across windows.costs. The initial costs of marketing campaigns are generally recognized in the business of initial exploitation, and amortization of capitalized production costs and licensed programming rights are generally allocated across businesses based on the estimated relative value of the distribution windows. Accordingly, our distribution determinations impact the costs of each business, including the applicable DTC service. There are a number of competing DTC businesses. Consumers may not be willing to pay for an expanding set of DTC services at increasing prices, potentially exacerbated by challenging economic conditions, such as during periods of high inflation or declines in economic activity. In addition, such economic conditions negatively impact the purchase of and price for advertising on our DTC streaming services. We face competition for creative talent and sports and other programming rights and are sometimes not successful in recruiting and retaining talent and obtaining desired programming rights and face increased costs to do so. We have experienced flat subscriber growth or net losses of subscribers in periods. Our content does not always successfully attract and retain subscribers in the quantities that we expect. Our content is subject to cost pressures and may cost more than we expect. We may not successfully manage our costs to meet our profitability goals. Government regulation,regulations, including revised foreign content and ownership regulations as well as government-imposed content restrictions, impactsimpact the implementation of our DTC business plans.plans and increase our costs. The highly competitive environment in which we operate puts pricing pressure on our DTC offerings and may require us to lower our prices or not takeincrease priceour increasesprices to attract or retain customers or lead to higher churn rates. These and other risks may impact the profitability and success of our DTC streaming services.services and our results of operations.

Potential credit ratings actions, increases in interest rates, or volatility in the U.S. and global financial markets or periods of elevated indebtedness could impede access to, or increase the cost of, financing our operations and investments.investments and have the effect of decreasing of business flexibility.

Our borrowing costs have been and can be affected by short- and long-term debt ratings assigned by nationally recognized ratings agencies that are based, in part, on the Company’s performance as measured by credit metrics such as leverage and interest coverage ratios. For example, our elevated indebtedness and leverage ratios in response to the financial impact of COVID-19 on our businesses resulted in S&Pcertain Globalrating Ratings and Fitch Ratingsagencies downgrading our debt ratings. As of September 28,27, 2024,2025, Moody’s Ratings’ long- and short-term debt ratings for the Company were A2 and P-1 (Stable), respectively; and S&P Global Ratings’ long- and short-term debt ratings for the Company were A-A and A-2 (Positive), respectively; and Fitch Ratings’ long- and short-term debt ratings for the Company were A- and F2A-1 (Stable), respectively. Any future downgrades could increase our cost of borrowing and/or make it more difficult for us to obtain financing on acceptable terms.

ElevatedFurther, periods of elevated indebtedness could have the effect of, among other things, reducing our financial flexibility and our ability to respond to changing business and economic conditions and other uncontrollable events.events, Debtincluding repaymentby obligations could also reducereducing funds available for investments, capital expenditures, share repurchases and dividends,dividends and other activitiesactivities, and mayputting createus at a competitive disadvantages for usdisadvantage relative to other companies with lower debt levels. Our leverage ratios increased as the result of COVID-19’s impact on financial performance, which caused certain of the credit ratings agencies to downgrade their assessment of our credit ratings. Downgrades to our credit ratings may negatively impact our cost of borrowings and/or make it more difficult for us to obtain financing on acceptable terms.

A significant number of employees in various parts of our businesses, including employees of our theme parks, and writers, directors, actors and production personnel for our productions are covered by collective bargaining agreements. In addition, some of our employees outside the U.S. are represented by works councils, trade unions or other employee associations. Further, some employees of licensees who manufacture and retailers who sell our licensed consumer products, and employees of providers of programming content (such as sports leagues) are covered by labor agreements with their employers. From time to time, collective bargaining agreements and other labor agreements expire, requiring renegotiation of their terms. In general, labor disputes and work stoppages involving our employees; persons employed on our productions; athletes or others employed by, or otherwise connected with, sports leagues or organizers; or the employees of our licensees or retailers who sell our licensed consumer products or providers of programming content may disrupt or lead to closure of certain operations and reduce our revenues and the profitability of our businesses. For example, in fiscal 2023, members of the Writers Guild of America (WGA) commenced a work stoppage, which lasted for almost five months, and members of SAG-AFTRA, the union representing television and movie actors, also commenced a work stoppage, which lasted for almost four months. These work stoppages affected our productions and the pipeline for programming and theatrical releases, which resulted in reduced revenue for the impacted businesses. The newresulting collective bargaining agreements with these and anotherother entertainment guildguilds, some of which are scheduled to expire in fiscal 2026, and recently with certain labor unions at our domestic parks and resorts will increase our costs to create our content and to operate our domestic parks and resorts, respectively. In July 2024, members of SAG-AFTRA commenced a work stoppage against video game employers, which is ongoing. As a general matter, resolution of labor disputes and negotiation of new collective bargaining agreements, including as a result of rate increases and other changes to employee benefits, has in the past increased our costs and may increase our costs in the future.

•Revenues from television networks and stations are subject to seasonal and other cyclical advertising patterns and changes in viewership levels, including related to certain sporting events. In general, domestic general entertainment linear networks advertising revenues are typically somewhat higher during the fall and somewhat lower during the summer months, domestic advertising revenues are typically higher during election cycles and sports advertising revenues are impacted by the timing of sports seasons and events, which varies throughout the year and/or take place periodically.

•DTC revenues fluctuate based on: changes in the number of subscribers, mix of subscribers to different offerings and subscriber fees; viewership levels; and the demand for sports and film and television content. Each of these is sensitive to the availability of content, which varies from time to time throughout the year based on, among other things, sports seasons, content production schedules and sports league work stoppages.

Our operations are impacted by our ability to attract and retain employees and costs of employee wages and health, welfare and retirement benefits, including postretirement medical benefits for some employees and retirees, may reducenegatively impact our profitability.results of operations and financial condition.

With approximately 233,000231,000 employees, the success of our businesses is substantially affected by our ability to attract and retain a workforce with the necessary skills for our varied businesses, including executing successfully on succession planning for the talent at all levels necessary to advance the Company’s key objectives and strategies. Further, our profitabilityresults isof operations are substantially affected by labor costs, including wages and our health, welfare and retirement benefits, including the costs of medical benefits for current employees and the costs of postretirement medical benefits for some current employees and retirees. We may experience significant increases in these costs as a result of macroeconomic, regulatory, competitive and other factors. For example, labor costs in our parks and resorts have increased, and we expect will continue to increase, as a result of collective bargaining agreements and wage laws and regulations where we operate. Further, certain conditions in the healthcare industry, such as prolonged workforce shortages or rising prescription drug prices, may lead to an increase in the cost of providing medical insurance and expenses.other medical benefits for our employees have increased, and we expect will continue to increase. In addition, for benefits provided to certain employees, changes in asset values, investment returns and discount rates used to calculate pension and postretirement medical expense and related assets and liabilities can be volatile and may have an unfavorable impact on our costs in some years. These factors may also increase future funding requirements for these benefit plans. There can be no assurance that we will succeed in attracting and retaining the human resources necessary for the success of our businesses or in limiting cost increases from wages and other employee benefits, whichnegatively couldimpacting reduceour the profitabilityresults of ouroperations businesses.and financial condition.

RISKS RELATED TO INTELLECTUAL PROPERTY, LITIGATION, CYBERSECURITY AND REGULATORY REQUIREMENTS

The value to us of our IP is dependent on the scope and duration of our rights as defined by applicable laws in the U.S. and abroad and the manner in which those laws are construed. Where those laws are drafted or interpreted in ways that limit the extent or duration of our rights, or if existing laws are changed, our ability to generate revenue from our IP may decrease, or the cost of obtaining and maintaining rights may increase. The terms of some copyrights for IP related to some of our products and services have expired, including the copyright term for the short film Steamboat Willie (1928) and early versions of characters depicted in this film, and other copyrights will expire in the future. For example, inIn the United States and countries that look to the United States copyright term when shorter than their own, the copyright term for early works and the specific early versions of characters depicted in those works expires at the end of the 95th calendar year after the date the copyright was originally

The unauthorized use of our IP maytypically increaseincreases theour costcosts, ofincluding protectingin connection with our efforts to protect rights in our IPIP, orand may reduce our revenues. The convergence of computing, communications and entertainment devices, increased broadband internet speed and penetration, increased availability and speed of mobile data transmission and increasingly sophisticated attempts to obtain unauthorized access to data systems have made the unauthorized digital copying and distribution of our films, television productions and other creative works easier and faster and protection and the enforcement of IP rights more challenging. The unauthorized distribution and access to entertainment content generally continues to be a significant challenge for IP rights holders. Further, the availability of certain AI tools has facilitated the creation of infringing works based on the unauthorized use of our IP. Inadequate laws or weak enforcement mechanisms to protect entertainment industry IP in one country can adversely affect the results of the Company’s operations worldwide, despite the Company’s efforts to protect its IP rights. Distribution innovations have increased opportunities to access content in unauthorized ways. Additionally, negative economic conditions coupled withor a shift in government priorities or policies could lead to less enforcement. These developments require us to devote substantial resources to protecting our IP against unlicensed use and present the risk of increased losses of revenue as a result of unlicensed distribution of our content and other commercial misuses of our IP. The legal landscape for some new technologies, including some AI tools, remains uncertain, and development of the law or other regulatory frameworks in this area could impact our ability to protect against infringingunauthorized uses.

•Entertainment DTC Product Descriptions,Descriptions and Key Definitions and Supplemental Information

Revenues for fiscal 20242025 increased 3%, or $2.5$3.1 billion, to $91.4$94.4 billion; net income attributable to Disney increased $2.6$7.4 billion to income of $5.0$12.4 billion compared to $2.4$5.0 billion in the prior year; and diluted earnings per share (EPS) from continuing operations attributable to Disney increased to $2.72$6.85 compared to $1.29$2.72 in the prior year. The net income and EPS increaseincreases waswere due to a lower effective tax rate in the current year compared to the prior year and the comparison to impairments related to the Star India Transaction and goodwill in the prior year. In addition, the increases in net income and EPS were due to higher operating income at Entertainment.Entertainment and Experiences. The lower effective tax rate was due to a non-cash tax benefit recognized in the current year upon a change in Hulu’s U.S. income tax classification (see Note 9 to the Consolidated Financial Statements).

Service revenues for fiscal 20242025 increased 3%, or $2.3$2.7 billion, to $81.8$84.6 billion, which included an approximate 3 percentage point decrease from the Star India Transaction. Aside from this impact, service revenues increased due to higher subscription revenue, growth at our parks and experiences businesses,businesses and,and toan aincrease lesserin extent,content higher advertising revenue. These increases were partially offsetsales.

Depreciation and amortization decreasedfor fiscal 2025 increased 7%, or $0.4$0.3 billion, to $5.0$5.3 billion primarily due to lowerhigher depreciation at our domestic parks and resortsexperiences and lower TFCF and Hulu acquisition amortization.businesses.

(2)In the current and prior years, content impairments relatedRelated to strategic changes in our approach to content curation.

Other Income (expense), net

The increasedecrease in interest expense was due to higherlower average rates,rates and debt balances, partially offset by lowera averagedecrease debtin balances.capitalized interest.

The increasedecrease in interest income, investment income and other was driven by a largerlower benefit from pension and postretirement benefit costs, other than service cost, and investments gains in the current year compared to losses in the prior year, partially offset by the impact of lower average cash and cash equivalent balances.balances and lower average rates.

Equity in the income of investees decreased $207$280 million to $575$295 million in the current year from $575 million in the prior year due to losses from the India joint venture in the current year and lower income from A+E.

•IncomeFavorable Taxadjustments Reserverelated Adjustmentsto prior year tax matters of $418 million

The Entertainment segment generates revenue from film, episodic and other content that is produced and distributed across three significant lines of business:

•Content Sales/Licensing, which primarily generates revenue from the distribution of films in the theatrical market, sale of film and episodic content in the TV/VOD and home entertainment markets, distribution of films in the theatrical market, licensing of our music rights, sales of tickets to stage play performances and licensing of our IP for use in stage plays. Revenues also include an intersegment allocation of revenues from the Experiences segment, which is meant to reflect royalties on consumer products merchandise licensing revenues generated on IP created by the Entertainment segment.

•Amortization of capitalized production costs and the costs of licensed programming rights

•Subscriber-based fees for programming the Hulu Live TV service, including fees paid by Hulu to the Sports segmentESPN and otherthe Entertainment segmentlinear businessesnetworks business for the right to air their linear networks on Hulu Live TV

•Fees paid to the Sports segmentESPN to program ESPN on ABC and certain sports content on ABC Network and Disney+

Amortization of capitalized production costs and costs of licensed programming rights is generally allocated across Entertainment’s businesses based on the estimated relative value of the distribution windows. The initial costs of marketing campaigns are generally recognized in the business of initial exploitation. Certain other costs, such as technology, shared services and certain labor related costs, are allocated based on metrics designed to correlate with consumption.

The Sports segment primarily generates revenue from affiliate fees, advertising,and subscription fees, advertising, pay-per-view fees and sub-licensing of sports rights. Operating expenses consist primarily of programming and production costs,costs technologyand support costs,other operating labor and distribution costs.expenses. Programming and production costs include amortization of licensed sports rights and production costs related to live sports and other sports-related programming. Other operating expenses include technology support costs and distribution costs.

The Experiences segment primarily generates revenue from the sale of tickets for admissions to theme parks, the sale of food, beverage and merchandise at our theme parks and resorts, charges for room nights at hotels, sales of cruise vacations, sales and rentals of vacation club properties, royalties from licensing our IP for use on consumer goods and the sale of branded merchandise. Revenues are also generated from sponsorships and co-branding opportunities, real estate rent and sales, and royalties fromearned on Tokyo Disney Resort.Resort Significantrevenues. expensesExpenses includeconsist of operating labor, infrastructure costs, costs of goods sold and distribution costs, depreciation and other operating expenses. Infrastructure costs include technology support costs, repairs and maintenance, utilities and fuel, property taxes, retail occupancy costs, insurance and transportation. Other operating expenses include costs for such items as supplies, commissions and entertainment offerings.

•Fees paid by Hulu to ESPN and the Entertainment linear networks business for the right to air their networks on Hulu Live TV

•Fees paid by ABC Network and Disney+ to ESPN to program ESPN on ABC and certain sports content on ABC Network and Disney+, respectively

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

We enter into long-term contracts for both the acquisition and the distribution of media programming and products, including contracts for the acquisition of programming rights for sporting events and other programs, and contracts for the distribution of our programming to content distributors. As these contracts expire, we renew or renegotiate the contracts, which from time to time has led to service blackouts when distribution contracts expired before renewal terms were agreed. We may lose programming rights or distribution rights if we are unable to renew these contracts on acceptable terms. Renewal negotiations with certain MVPDs and other distributors for distribution contracts scheduled to expire in fiscal 2026 could lead to temporary or longer-term service blackouts, negatively impacting our results of operations. For example, in the third quarter of fiscal 2026, the NFL Network and NFL RedZone were removed from Comcast Xfinity and service has not been reinstated, and in the first quarter of fiscal 2026, the Company’s channels were temporarily removed from YouTube TVTV, in each case, following the expiration of the parties’ distribution contract without agreement on renewal terms. Further, our portfolio of acquired programming rights, such as sporting events, and the distributors of our programming and the portfolio of programming rights we license to our distributors acquire have changed and will continue to change over time. Even if these contracts are renewed, the cost of obtaining certain programming rights has increased and may continue to increase (or increase at faster rates than our historical experience) and programming distributors demand terms (including with respect to the pricing for, and the nature and amount of, programming distributed) that have and may in the future reduce our revenue from distribution of programs or increase revenue at slower rates than our historical experience. For example, the terms of certain renewals of carriage agreements have included fewer of our linear networks or the opportunity to offer multiple genre-specific bundle options of fewer than all our linear networks while providing for certain of our direct-to-consumer (DTC) streaming services to be made available to the distributor’s subscribers. Moreover, our ability to renew these contracts on favorable terms is affected by a number of factors, such as consolidation in the market for program distribution and the entrance of new participants in the market for distribution of content on digital platforms. With respect to the acquisition of programming rights, particularly sports programming rights, the impact of these long-term contracts on our results over the term of the contracts depends on a number of factors, including the strength of advertising markets, subscription levels and programming rights costs increases, effectiveness of marketing efforts and the size of viewer audiences. There can be no assurance that revenues from programming based on these rights will exceed the cost of the rights plus the other costs of producing and distributing the programming.

risk factors, regarding patent infringement litigation and other claims. In addition, from time to time, we pursuebring litigation against third partiesactions seeking to vindicate our rights.

Actual and threatened proceedings and investigations increase our costs, divert management resources and disrupt business operations and may negatively impact our reputation and brands. The outcomes of such matters are inherently unpredictable, and determining legal reserves or potential losses from such matters involves judgment. If the lossesultimate tocost resolveof the resolution of such matters exceedexceeds the total amounts recordedpreviously in any given reporting period,recorded, our results of operations for that interim or annual reporting period could be materially adversely affected.affected for the applicable reporting period. Further, from time to time, adverse resolutions or settlements of such matters result in substantial monetary damages or substantial future payment obligations and injunctive relief or other orders or actions that limit or prevent our implementation of our business plans, including our ability to complete strategic transactions and offer certain products and services, impact the enforcement or validity of our property and other (including intellectual property) rights, franchises and licenses or cause us to alter our business practices, which individually or taken together, negatively impact our business prospects, our results of operations, our financial condition and price of our common stock. While we maintain insurance for certain types of claims, our insurance may not be adequate to cover all losses and does not cover all types of claims that may arise.

Laws and regulations in any of these and other areas and changes in judicial and agency interpretation or regulatory priorities, actions or initiatives (or, if applicable, private litigation to enforce such laws and regulations), as well as an increasingly unpredictable regulatory landscape, require us to incur additional costs and may limit our ability to implement our business strategies as planned or offer products and services in ways that are profitable, or at all. In addition, ongoing and future developments in international political, trade and security policy may lead to new regulations that increase the cost of providing our products and services, negatively impact demand for our products and services and limit international trade and investment, disrupting our operations in and outside the U.S., including our international theme parks and resorts operations in France, mainland China and Hong Kong. Accordingly, laws and regulations applicable to our business and operations and judicial and agency decisions and other actions in connection therewith, individually or taken together, may negatively impact our business prospects, our results of operations, our financial condition and the price of our common stock.

For example, in 2022 the U.S. and other countries implemented a series of sanctions against Russia in response to events in Russia and Ukraine; U.S. agencies have enhanced trade restrictions, including new prohibitions on the importation of goods from certain regions and other jurisdictions are considering similar measures; and U.S. state governments have become more active in passing legislation targeted at specific sectors and companies and applying existing laws in novel ways to new technologies, including streaming and online commerce. Tariffs announced with respect to and by certain U.S. trading partners, could, depending on how these or future tariffs or other regulations with respect to trade are implemented, have a significant impact on our results of operations, including by impacting the macroeconomic environment, increasing costs or adversely affecting demand for our products and services. In April 2026, the FCC ordered the Company to file early license renewal applications for all of our owned television stationsstations, bywhich the Company filed on May 28, 2026.2026, and a response from the FCC is pending and could adversely impact the Company, including as described above and elsewhere in these risk factors and in our 2025 Annual Report on Form 10-K.

•Current Six-MonthNine-Month Period Results Compared to Prior-Year Six-MonthNine-Month Period

Revenues for the quarter increased 7%, or $1.5$1.6 billion, to $25.2 billion; net income attributable to Disney decreased to $2.2$2.6 billion compared to $3.3$5.3 billion in the prior-year quarter; and diluted earnings per share (EPS) attributable to Disney decreased to $1.27$1.51 compared to $1.81$2.92 in the prior-year quarter. The net income and EPS decreases werereflected duethe comparison to thea recognition of anon-cash tax benefit recognized upon a change in Hulu’s U.S. income tax classification in the prior-year quarter relatedand, to thea resolutionlesser extent, an impairment of aour taxinvestment matter.in A+E in the current quarter. These decreases were partially offset by higher operating

Service revenues for the quarter increased 7%, or $1.4$1.5 billion, to $22.7 billion, which included an approximate 2 percentage point increasefavorable impact from the Fubo Transaction and, to a lesser extent,and NFL Transaction.Transactions. Aside from this impact, service revenues increased due to growth in resorts and vacations and theme park admissions revenue and higher subscription and affiliate fees, growth at our parks and experiences businesses and, to a lesser extent, an increase in content sales.fees.

Product revenues for the quarter increased 5%,6%, or $0.1 billion, to $2.5$2.6 billion due to growth at ourin parks and& experiences businesses.merchandise, food and beverage revenue.

Cost of services for the quarter increased 8%,5%, or $1.0$0.6 billion, to $14.4$13.7 billion, which included an approximate 32 percentage point increaseunfavorable impact from the Fubo Transaction and, to a lesser extent, NFL Transaction. Aside from this impact, cost of services increased due to higher programming and production costs and, to a lesser extent, the impact of new guest offerings, inflation and increased volumes at our parks and experiences businesses.

Selling, general, administrative and other costs increaseddecreased 2%,4%, or $0.1$0.2 billion, to $4.1$4.0 billion due to higherlower marketing costs.

Depreciation and amortization increased 6%, or $0.1 billion, to $1.4 billion drivenprimarily bydue to higher depreciation at Experiences and Entertainment,Experiences, partially offset by lower amortization of intangible assets.

Charges in the current quarter were $147$812 million for an impairment of our investment in A+E Global Media (A+E) and $92$88 million for severance. Charges in the prior-year quarter were $109$185 million primarily for contentan impairments.impairment of our investment in Tata Play Limited.

The increase in interest income, investment income and other was due to a net gain on investments in the current quarter compared to a net loss on investments in the prior-year quarter, and a favorable comparison related to pension and postretirement benefit costs, other than service cost.

The effective income tax rate was positive 26.8%22.0% in the current quarter compared to a negative effective income tax rate of 10.2%85.1% in the prior-year quarter. SignificantThe itemsprior-year impactingquarter theincluded a $3.3 billion non-cash tax benefit recognized upon a change in theHulu’s effectiveU.S. income tax rate included the following:classification.

The increasedecrease in net income attributable to noncontrolling interests was primarily due to the NFLHulu TransactionCharge and,in tothe aprior-year lesser extent, higher results at Shanghai Disney Resort.quarter.

Results for the quarter ended MarchJune 28,27, 2026 were impacted by the following:

CURRENT SIX-MONTHNINE-MONTH PERIOD RESULTS COMPARED TO PRIOR-YEAR SIX-MONTHNINE-MONTH PERIOD

Revenues for the current period increased $2.8$4.4 billion, to $51.1$76.4 billion; net income attributable to Disney decreased $1.2$3.8 billion, to $4.6$7.3 billion; and EPS decreased to $2.61$4.12 from $3.21$6.12 in the prior-year period. The net income and EPS decreases were due to the recognitioncomparison ofto a tax benefit in the prior-year periodrecognized related to thea change in Hulu’s U.S. income tax classification, a favorable resolution of a tax matter and,in tothe aprior-year lesserperiod, extent,and loweran operatingimpairment incomeof atour Entertainment.investment in A+E in the current period. These decreases were partially offset by higher operating income at Experiences.Experiences in the current period and the comparison to the Hulu Charge in the prior-year period.

Service revenues for the current period increased 6%, or $2.6$4.0 billion to $45.9$68.6 billion, which included an approximate 1 percentage point net favorable impact from the Fubo, NFL and Star India Transactions. Aside from this impact, service revenues increased due to growth in resorts and vacations and theme park admissions revenue, higher subscription and affiliate fees and, to a lesser extent, an increase in content sales.

Product revenues for the current period increased 5%, or $0.3$0.4 billion, to $5.3$7.8 billion, due to growth at ourin parks and& experiences businesses.merchandise, food and beverage revenue.

Cost of services for the current period increased 8%,7%, or $2.3$2.9 billion, to $29.4$43.1 billion, which included an approximate 21 percentage point net favorableunfavorable impact from the Fubo, NFL and Star India Transactions. Aside from this impact, cost of services increased due to higher programming and production costs and, to a lesser extent, the impact of new guest offerings, inflation and increased volumes at our parks and experiences businesses.

Selling, general, administrative and other costs increased 4%,1%, or $0.3$0.1 billion, to $8.2$12.2 billion due to higher marketing costs, partially offset by the comparison to a legal settlementsettlements in the prior-year period.

Charges in the current period were $147$959 million for an impairmentimpairments of our investment in A+E and $92$180 million for severance. Charges in the prior-year period were $185 million primarily for an impairment of our investment in Tata Play Limited, $143 million for impairment of goodwill inrelated connection with theto Star India Transaction and $109 million for content impairments.

The decrease in interest expense was primarily due to lower average rates.rates, partially offset by higher average debt balances.

Income from equity investees increased $22$30 million, to $150$233 million from $128$203 million, duedriven toby a lower loss from the India joint venture, partially offset by a decrease in income from A+E.

The effective income tax rate was 29.9%27.2% in the current period compared to 10.4%negative 20.4% in the prior-year period. Significant items impacting the change in the effective income tax rate included the following:

•The prior-yearcurrent period included aan favorableunfavorable impact of approximately 16 percentage points from adjustments related to prior years and a non-cash tax charge of approximately 4 percentage points from non-cash tax charges in connection with the StarFubo Indiaand TransactionNFL Transactions.

The increasedecrease in net income attributable to noncontrolling interests was primarily due to the Hulu Charge in the prior-year period, partially offset by the impact of the NFL Transaction andin higherthe resultscurrent at Shanghai Disney Resort.period.

Certain Items Impacting Results in the SixNine Month Period

Results for the sixnine months ended MarchJune 28,27, 2026 were impacted by the following:

The Company’s businesses are subject to the effects of seasonality. Consequently, the operating results for the sixnine months ended MarchJune 28,27, 2026 for each business segment, and for the Company as a whole, are not necessarily indicative of results to be expected for the full year.

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

(1)Reflects fees paid by (a) the entertainment vMVPD services to the sports and entertainment linear networks for the right to air the networks on the Hulu Live TV and Fubo services and (b) the Entertainment segment to the Sports segment to program certain sports content on ABC Network and Disney+. The increase in eliminations for the quarter and nine-month period was due to the Fubo and NFL Transactions.

Growth in subscription and affiliate fees was due to increases of 5%4% from the Fubo Transaction, 5%3% from higher effective rates, 2%3% from more subscribers and 1% from a favorable foreign exchange impact and 2% from more subscribers.impact.

The increasedecrease in advertising revenue was primarily attributable to ana increasedecrease of 8%4% from higherlower impressions,rates, partially offset by a decreaseincreases of 6%1% from lowermore rates.impressions and 1% from the Fubo Transaction.