In addition, we cannot provide any assurances that accounting principles. Quantitative and Qualitative Disclosures About Market Risk. Home tax returns are filed and the tax implications are known. We intend to adopt SFAS 123R for our fiscal year beginning January1, 2006. asserted against us, we may seek to obtain a license under a third partys intellectual property rights. Finding Nemo generated revenues of $58.3 million predominantly from worldwide home video, worldwide television and consumer products licensing. The management approach designates the internal reporting used by management for making decisions and assessing h233U0P033S0QM-ILI,IT046&TG0vv `8 endstream endobj 1362 0 obj <>stream Mr. Rice was a member of the Board of Directors of Target Corporation from 2007 to January 2018. h234U0P034S0QM-ILI,IT06J&TG0vv endstream endobj 1337 0 obj <>stream If we were unable to hire, assimilate and No interlocking relationships exist between any member of Pixars Board of Directors or Compensation Committee and any member of the board of directors or compensation committee of any other Under that process, the Corporate Secretary of the Company reviews all such correspondence and regularly forwards to the Board a summary of all such correspondence and copies of all correspondence that, in the opinion of the Corporate Secretary, deals with the functions of the Board or committees thereof or that he otherwise determines requires their attention. will enjoy the same level of success. The term of the Co-Production Agreement, as amended by the Distribution Letter Agreement, continues until the delivery to Disney of Ratatouille unless earlier terminated. Mr. McDonald was President and CEO of Sears Canada from 2011-2013, and spent 17 years at Loblaw Companies Limited, the largest retailer in Canada, where he was born and raised. or older versions: IE11, Edge, Chrome (v60), Firefox (v48), Safari(v11). We believe that the popularity h02T0P02R0QM-ILI,IT01 &TG0vv u2 endstream endobj 1440 0 obj <>stream The total number of initial shares available for issuance under the 2004 Plan was equal to the. Film production budgets may Capitalized The increase in sales and marketing expense in 2005 compared to 2004 primarily resulted from increased marketing and publicity initiatives and higher employee related costs. companies which intend to produce computer-animated feature films or other products. normalization, such as with merchandise or home video expenses, in accordance with the provisions of SOP 00-2. family-oriented films scheduled for release over the next few years, it is possible that the market for these films will become further saturated. Accordingly, Toy Story 2 did not count as one of the five Pictures to be produced. related products, (2)the number of theaters to which Disney distributes our feature films, (3)the specific timing of release of our feature films and related products or (4)the specific amount or quality of marketing and In addition, the costs for marketing, distribution and promotion of the films and related products are incurred well in success will be achieved by our subsequent films, including Cars, Ratatouille and other future projects beyond the Co-Production Agreement. YesNo, Indicate by check mark if disclosure of delinquent filers pursuant to As of February15, In addition, each outstanding option to purchase Pixar Common Stock will be converted at the Effective Time into an option to purchase 2.3 shares of Disney common stock and will be assumed by Disney. Additionally, we received updated information from These reimbursed costs through the end of fiscal 2005 are set forth in Note 4 of Notes to Financial Statements. Disney has the exclusive distribution and exploitation rights with respect to the Pictures, managements beliefs and assumptions. requirements, and has final control over all related decisions. A Derivative Work that is a theatrical motion picture does net income per share as if compensation cost had been recognized based upon the fair value-based method at the date of grant of options awarded. also facilitates the manipulation, editing and re-use of the elements used to create the animated images. If we are unable to assert that our internal control over financial reporting is effective in any future period (or if our auditors are unable to express During Mr. Igers years with ABC, he obtained hands-on experience in every aspect of the television businessincluding news, sports, and entertainmentas well as in program acquisition, rights negotiations, and business affairs. The 2004 Plan also incorporates an evergreen formula pursuant to which on January1 of each year Faster and lower cost graphic cards provide capability for users to produce pictures of higher complexity than previously available. In determining our home video reserves for a particular title, we review information such as Disneys current return reserves, the historical return reserves for our previous titles, actual rates of returns, fixed income securities with major banks. Mr.Brittenham received a B.S. In particular, we compete with makers of computer graphics imaging software, principally Mental The members of our creative and technical teams have been nominated for and received a number of awards. SFAS 153 is effective for In addition to Mr.Lasseters role as our Executive Vice PresidentCreative, he is also the (SFAS) No. Next, lighting is added by placing digital lights into the scene. Shareholder Litigation. Accordingly, no revenue has been recognized for such reimbursements; rather, we All options have a term not greater than ten years from the date of grant. information we receive from Disney. Financial Condition and Results of Operations Liquidity and Capital Resources in Item7 of this Form 10-K. To date, we have chosen to use our existing cash resources to fund film production costs and construction costs. acquire Pixar (the Merger). the resulting effect on our home video sales. Creative development is a collaborative process in which the story and its characters are created and developed. He served as United States Trade Representative in the Executive Office of the President from 2013 to 2017, and as Assistant to the President and Deputy National Security Advisor for International Economic Policy from 2009 to 2013. Derivative We believe competition from animated feature films and family-oriented feature films will likely continue to intensify over the next several years. for creative contributions to come from the technical group. Mataraza v. Pixar, et al., Case No. The 401(k) Plan covers substantially all employees. He is a graduate of Ithaca College. be deemed a Picture under and in accordance with the terms of the Co-Production Agreement, subject to certain exceptions as described below. in accounting from Merrimack College and is a certified public Under the share-based compensation transactions using APB 25, and generally would require instead that such transactions be accounted for using a fair-value based method. addition, under the Co-Production Agreement, Disney is responsible for financing 100% of the costs related to the marketing and distribution of the films. Although the adoption of SFAS We also rely on certain technology Our research and development department is responsible for creating and further advancing our distinctive computer animated visual effects, such as the moving fur in Monsters, Inc., 2003, was written and directed by Academy Award-winning Andrew Stanton, who served as co-director and co-screenwriter of A Bugs Life and as co-screenwriter of Toy Story, Toy Story 2, and Monsters, Inc. Academy Award-winning Brad Bird previously directed and wrote the Internal Revenue Code of 1986, as amended. cannot provide any assurances that patents will issue from any of these pending applications or that, if patents do issue, any claims allowed will be sufficiently broad to protect our technology. A: On December 4, 2019 The Walt Disney Company Board of Directors declared a semi-annual cash dividend of $0.88 per share, payable January 16, 2020 to shareholders of record at the close of business on December 16, 2019. Additionally, under the Feature Film Agreement, Disney owns all At January1, 2005 and December31, 2005, net receivables from barriers to entry for studios or special effects companies which intend to produce computer-animated feature films or other products. On January27, 2006, Pixar and Disney entered into a Distribution Letter Agreement regarding the distribution of an additional feature length animated film currently entitled Ratatouille. Mr.Lasseter is a member of the Board of Governors of The Academy of Motion Picture Arts and Sciences. business. Any revisions to our estimated reserves, said attorneys-in-fact or his substitute or substitutes, may do or cause to be done by virtue hereof. all capacities, to sign any and all amendments to this Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each Prior to that time, she served at General Motors as Executive Vice President, Global Product Development, Purchasing and Supply Chain from 2013 to 2014, Senior Vice President, Global Product Development from 2011 to 2013, Vice President, Global Human Resources from 2009 to 2011 and Vice President, Global Manufacturing Engineering from 2008 to 2009. Values were estimated using zero dividend yield for all She has been a member of the Board of Directors of Oracle since 2001, and was a director of HSBC Holdings from 2008 through 2015. Stock. At 24 frames per second, a 115-minute animated feature film such as The Incredibles requires approximately 165,000 individual Three other similar complaints have been filed since October21, 2005. The decrease in research and development costs for 2005 over 2004 was primarily attributable to a decrease in employee related costs as no significant bonuses were paid in 2005 and there Company occupies an office in Seattle, Washington where the majority of the technical support group for the RenderMan product is located. 2006. toys and interactive games. Mary T. Barra has been Chair of General Motors Company since 2016 and Chief Executive Officer of General Motors since 2014. Mr. Rice will contribute to the mix of experience and qualifications the Board seeks to maintain through his experience in various positions at CVS Health and Eli Lilly and his other public company board experience. may differ from those reported by Disney. There can be no assurance that we will be able to compete successfully against current or future competitors. animated feature films including Cars, which is being directed by John Lasseter, the Director of Toy Story, A Bugs Life, and Toy Story 2 and Executive Producer for Monsters, Inc., Finding Nemo and The Award, which is the highest achievement in the computer graphics field, for his lifetime contributions and was awarded the animation industrys Ub Iwerks Award. following (in thousands): Increases (decreases) in tax resulting from: State income taxes, net of federal tax effect. In 2020, EU Member States accounted for 21 230 of the 41 100 seizures of new psychoactive substances reported in the European Union, Turkey and Norway, amounting to 5.1 of the 6.9 tonnes seized. deemed a Picture under and in accordance with the terms of the Co-Production Agreement, subject to certain exceptions, including but not limited shares of common stock of Disney. The preparation of financial statements in conformity Mr.Roth recently directed the family comedy Christmas with the Kranks, starring Tim Allen and Jamie Lee Curtis which is based on John Grishams best selling novel significant fluctuations in our future quarterly and annual revenues because of a variety of factors, including the following: In particular, since our revenue under the Co-Production Agreement and the Distribution Letter Agreement is directly related to the success of our See Business Technology and Business Competition.. participate actively in various interactive games with Disney where we fund half of the development costs of the games. 2004 over 2003 was primarily attributable to increased creative development and short film projects, as well as a decrease in Disneys reimbursement of allocated costs under the Co-Production Agreement. production costs and shares a specified percentage of Toy Story profits with Pixar after certain agreed upon costs and fees are deducted. thereof, which could have a material adverse effect on our business, financial condition or results of operations. The following table shows, as to our Chief Executive Officer and each of the four most highly compensated executive officers whose salary plus bonus exceeded $100,000 during the last fiscal year (the Named Officers), information There can be no assurance, however, that under such circumstances a license would be available on reasonable terms or at all. Entertainment, Starz!/Encore Group and Fox Entertainment Group. the animation marketplace, there may be increased competition for distribution partners. department, in November 2005. h23P0P03T0Q034P05PM-ILI,IT04.M*,H1` We currently have a number of patents in force in the United States and in foreign countries, as well as a number of patent applications pending in the United States and in foreign countries. Division of Gross Receipts. Employer match contributions vest immediately. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate differ significantly from actual results. With respect to the difficulty of forecasting the timing of revenues, Disney Software revenue includes software license revenue, principally from The following is a summary of the Co-Production Agreement, which was filed as an exhibit to our Annual Report on Form 10-K for the year ended 115, Accounting for Certain Investments in Debt and Equity Securities, and are classified as available for sale. The table below provides information regarding our investment portfolio at our creative group is to create heartwarming stories with memorable characters utilizing the medium of computer animation. Unamortized film production costs are reviewed for indicators of impairment each reporting period on a film-by-film basis. feature film agreement with Disney, which provided for the development, production and distribution of up to three feature-length motion pictures (the Feature Film Agreement). essential to our success and ability to compete. We believe that the primary competitive factors in the market for animated Estimates of anticipated total gross revenues are reviewed periodically nullifies certain requirements of EITF Issue 03-1 and supersedes EITF Topic D-44, Recognition of Other-Than-Temporary Impairment upon the Planned Sale of a Security Whose Cost Exceeds Fair Value. The FSP addresses the For further details, refer to Managements Discussion and Analysis of Although Disney provides the Company with the most current, NOTES TO FINANCIAL STATEMENTS (Continued). Under SFAS No. RenderMan runs on these popular platforms: Linux, Macintosh OSX, and Windows. Management assessed the effectiveness of Pixars internal control over financial reporting as of December31, 2005. Pursuant to the The Co-Production Agreement provides for certain dispute resolution procedures in the event of a be without merit and intends to vigorously defend against the action. competition with respect to our RenderMan software %PDF-1.6 % to be other than temporary, an investment loss is recognized in the statement of income. From 2001 to 2005, Ms. Lagomasino was Chairman and Chief Executive Officer of JPMorgan Private Bank, a division of JPMorgan Chase & Co., a global financial services firm. For fiscal years 2003, 2004, and 2005 Disney No. In addition, as PCs become more powerful, software suppliers may also be able to introduce products for PCs that would be competitive with RenderMan in terms of price and performance for professional users. Disney can terminate the agreement under various circumstances. Q: Can I buy or sell stock directly through Disney? and may be revised if necessary. can be no assurance that we will be able to compete successfully against current or future competitors. marketing expenses may increase in future periods, particularly in the areas of public relations, corporate marketing, and consumer products. December31, 2005. those provisions of Statement of Financial Accounting Standards (SFAS) No. She serves on theboardsofThe Coca Cola Company, Villanova Universityandthe Humane Society of the United States. The complaint generally alleged that Pixars directors breached their fiduciary duties in software, and could adversely impact sales of RenderMan. result, the degree of compliance of our internal control over financial reporting with the policies or procedures may deteriorate. If declines in the value of investments accounted for under SFAS No. In addition, as we increase the resources allocated h274W0P07P0QM-ILI,IT021 &TG0vv 0 endstream endobj 1388 0 obj <>stream Tin Toy was the first computer animated film to win an Oscar, when it won the 1988 Academy Award for Best Animated Short Film. In February 2004, Principal Accounting Fees and Services. University and a J.D. Managements assessment of Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. We cannot provide any assurances that the steps we take will prevent misappropriation of our technology or that our confidentiality or license agreements will be Ratatouille to Disney. computer-animated feature film. is reflected. can be no assurance that patents will issue from any of these pending applications or that, if patents do issue, any claims allowed will be sufficiently broad to protect our technology. things, an assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal year. Disneys Also, projections of any She has served as Yahoo!s Chief Financial Officer since June 2000 and as Executive Vice President, Finance and Administration since January 2002. Energy. BURBANK, Calif. - The Walt Disney Company today reported earnings for its fourth quarter and fiscal year ended October 1, 2022. event the Board of Directors of Pixar changes its recommendation that its shareholders approve the principal terms of the Merger Agreement and the Merger, or elects to pursue a superior acquisition proposal from a third party). Disney aggregated $68.0 million and $44.6 million, respectively, which consists of receivables for film revenue, advances net of Disneys actual share of expenditures for all films, and amounts due for miscellaneous reimbursements. During 2003, Disney provided updated information reflecting higher home video return activity than had been originally anticipated which reduced revenues by $4.4 million. The SEC informed the Company in a letter dated The Company operates in a single operating segment. Pixar and Disney agreed to co-finance the production costs of the Pictures, co-own the Pictures (with Disney having exclusive distribution and exploitation rights), co-brand the Pictures, and share equally in the profits of each Picture jointly finance all production costs relating to the Pictures on an equal basis, except Ratatouille which is fully financed by the Company. are established based on a review of the industry, discussions with Disney, and historical experience. h03T0P03R0QM-ILI,IT052&TG0vv 7 endstream endobj 1459 0 obj <>stream h24U0P04S0QM-ILI,IT0(&TG0vv Pursuant to the Distribution Letter Agreement, Ratatouille will be deemed a Picture under and in accordance with the terms of the Co-Production Agreement, subject to certain ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 . each Picture and any related merchandise as well as other ancillary products, after recovery of all marketing and distribution costs (which Disney finances), a distribution fee paid to Disney and any other predefined fees or costs, including any The Company has utilized margin normalization, such as with and will be amortized under the individual-film-forecast-computation method assuming the concept development leads to a successful concept and realization of a film project, when it is expected that the film will be set for production. Period-to-period comparisons of our results of operations may not be the market for these films, whether animated or live action, will become further saturated. The pro forma disclosures previously permitted under SFAS 123 no longer will be an alternative to financial statement recognition. In accordance with SFAS No. specifically provided in the Co-Production Agreement (collectively, Derivative Works). In addition, as PCs become more powerful, software suppliers may also be able to We have Each motion picture is an individual artistic work, and its commercial success is primarily determined by audience reaction, which is unpredictable. For example, Disney is entitled to terminate the Co-Production Agreement in the event that certain types of competitors directly or indirectly acquire or control a 50% or greater ownership interest in Pixar or The executive officers of Pixar and their ages as of February15, 2006 are as follows: Pixars While we degrees in computer science and physics and his Ph.D. in computer science from the University of Utah. On October21, 2005, a putative shareholder class action lawsuit was filed against the Company Under each director is a strong creative team See Business Proprietary Rights.. with Disney for Finding Nemos domestic and international home video revenues, as well as some increases to Monsters, Inc. home video reserves. In addition, through information we obtain from other sources, we may make certain judgments and/or assumptions and adjust the the accompanying Index to Exhibits immediately following the signature page of this Form 10-K. (c)Financial Statement Schedule. Financial Statements and EITF 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent. The Company makes adjustments to home video revenues for estimates on return reserves (as a percentage of sales) that We do our rendering on a large array of powerful computers, which are dedicated to rendering 24 hours a day. Options continue to use our cash resources for such expenditures, or may choose to finance such capital expenditures through issuance of additional equity or debt securities, by obtaining a credit facility or by some other financing mechanism. h271W0P07P0QM-ILI,IT060 &TG0vv 3 endstream endobj 1403 0 obj <>stream Revenue for software licenses are recognized in compliance with SOP 97-2, Software Revenue Recognition. In the fiscal year ended on October 1, 2022, The Walt Disney Company generated a total . Prior to his assurance that such insurance will be sufficient to compensate us for losses that may occur. Pixar and Disney agreed to co-finance the production costs of the Pictures, co-own the Pictures (with Disney having exclusive distribution and exploitation rights), co-brand the Pictures, and share equally in the profits of As Chairman of the ABC Group, Mr. Iger oversaw the broadcast television network and station group, cable television properties, and radio and publishing businesses, and also guided the complex merger between Capital Cities/ABC, Inc. and the Walt Disney Company. feature film, which counts as the second original Picture under the Co-Production Agreement. for determining whether retrospective application of a change in accounting principle is impracticable and for reporting a change when retrospective application is impracticable. We will not share in any theme park revenues generated as a result of the Pictures. need to make estimates about the effect of matters that are inherently uncertain. increase, and film production spending may exceed such budgets. Ms.Decker has served as a director of Pixar since June 2004. In our opinion, managements assessment that Pixar maintained effective films. fair market value on the date of such grant. should contact their respective bank or financial intermediary with any questions regarding these transactions. device, which is then used to project the movie electronically. million, $271.4 million and $156.4 million of cash from operating activities during fiscal years 2003, 2004, and 2005, respectively. CSR REPORT 2021; CSR REPORT 2020; Doing Business With FOX; EEO-1 DATA; Human Rights Statement; Insider Trading and Confidentiality Policy . income is recorded using an effective interest rate with the associated premium or discount amortized to interest income. Written Inquiries: We are committed to operating our businesses with the utmost integrity, adopting governance policies that promote the thoughtful and independent representation of our shareholder interests. Under SOP 97-2, the Company recognizes revenues when all of the following conditions are met: SOP 97-2 generally requires revenue earned on software arrangements involving multiple elements to be allocated to each element based on the relative fair h20V0P00Q0QM-ILI,IT067&TG0vv &< endstream endobj 1421 0 obj <>stream the Co-Production Agreement shall be extended until delivery to Disney of Ratatouille. h05U0P05S0QM-ILI,IT054&TG0vv : endstream endobj 1456 0 obj <>stream In differences between Disneys fiscal reporting period and ours. to financial statements. In. Under the The reporting of a correction of an error by restating previously

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