Disney(US:DIS)2024-05-07 13:01Financial Performance - Net income for the quarter ended March 30, 2024, was $1,488 million, a decrease from $2,849 million for the same period last year, representing a decline of approximately 48%[7] - Comprehensive income attributable to Disney for the quarter was a loss of $27 million, compared to a profit of $1,360 million in the prior year[7] - The company reported an income before income taxes of $657 million for the quarter, a decrease from $2,123 million in the same quarter last year[33] - Total revenues for the quarter ended March 30, 2024, were $22,083 million, a decrease from $21,815 million in the same quarter of the previous year[41] - Revenues for the current six-month period increased by $0.3 billion to $45.6 billion, while net income attributable to Disney decreased by $0.7 billion to $1.9 billion, and EPS decreased from $1.39 to $1.03[133] Cash Flow and Assets - Cash provided by operations for the six months ended March 30, 2024, was $5,851 million, significantly higher than $2,262 million for the same period last year[11] - Total assets decreased from $205,579 million as of September 30, 2023, to $195,110 million as of March 30, 2024, reflecting a reduction of approximately 5%[9] - Cash, cash equivalents, and restricted cash at the end of the period were $6,726 million, down from $10,453 million at the end of the previous period, a decline of about 36%[11] - As of March 30, 2024, total cash, cash equivalents, and restricted cash decreased to $6.726 billion as of March 30, 2024, down from $14.235 billion as of September 30, 2023[51] Investments and Capital Expenditures - The company invested $2,558 million in parks, resorts, and other property during the six months ended March 30, 2024, compared to $2,430 million in the same period last year[11] - The company completed the purchase of NBC Universal's 33% interest in Hulu LLC for $8.6 billion in December 2023[22] - The company has provided loans totaling $982 million to Shanghai Disney Resort, with interest rates up to 8% and a maturity date in 2036[61] Shareholder Returns - The company repurchased $1,001 million of common stock during the financing activities, indicating a commitment to returning value to shareholders[11] - The company paid dividends totaling $1,371 million during the six months ended March 30, 2024[17] - The Board of Directors declared a cash dividend of $0.30 per share ($0.5 billion) for the second half of fiscal 2023 and a cash dividend of $0.45 per share (estimated at $0.8 billion) for the first half of fiscal 2024[76] Segment Performance - Total segment revenues for the quarter ended March 30, 2024, were $22,083 million, a 1.2% increase from $21,815 million in the same quarter last year[29] - Total segment operating income for the quarter was $3,845 million, up 17% from $3,285 million in the prior year[29] - The Entertainment segment reported an operating income of $781 million, significantly higher than $455 million in the same quarter last year, representing a 71.5% increase[29] - Experiences segment revenues rose to $8,393 million, up from $7,646 million, reflecting a 9.8% increase year-over-year[29] Liabilities and Impairments - The company reported a goodwill impairment of $2,038 million for the six months ended March 30, 2024, indicating potential challenges in asset valuation[11] - The company recognized a non-cash goodwill impairment charge of $1.3 billion related to Star India, reflecting its carrying amount exceeding fair value[44] - The company’s total liabilities related to Star India were reported at $898 million as of March 30, 2024[47] Tax and Deferred Assets - The effective income tax rate increased to 67.1% due to non-deductible goodwill impairments recognized in the current quarter[128] - The company’s net deferred tax liability as of March 30, 2024, was $6,254 million, down from $6,587 million at September 30, 2023[68] - The valuation allowance for deferred tax assets decreased by $0.2 billion from $3.2 billion at September 30, 2023, to $3.0 billion at March 30, 2024[70] Legal Matters - The Company is involved in multiple legal actions, including a private antitrust lawsuit filed by Fubo, which asserts claims under the Sherman Act and seeks unspecified money damages[93] - The Company intends to vigorously defend against various shareholder derivative complaints alleging breaches of fiduciary duty and other claims against its executives and board members[92] Equity and Compensation - The total equity-based compensation expense for the quarter ended March 30, 2024, was $367 million, an increase from $300 million for the quarter ended April 1, 2023[89] - The unrecognized compensation cost related to unvested stock options and RSUs as of March 30, 2024, was $115 million and $2.4 billion, respectively[89] Foreign Exchange and Interest Rate Management - The Company recognized a net loss of $103 million on foreign currency denominated assets and liabilities for the quarter ended March 30, 2024[110] - The Company reported a net gain of $87 million on foreign exchange risk management contracts not designated as hedges for the quarter ended March 30, 2024[110] - The total fair value of borrowings hedged as of March 30, 2024, was $12.6 billion, with adjustments totaling $(1.4) billion[106]