by 
Burbank, Calif. & NDASH; The Walt Disney Company (NYSE: DIS) TODAY Reported Earnings for its first quarter endember 30, 2023.
"Just One Year AGO, We Outlined An Ambitious Plan to Return the Walt Disney Company to a Perioding Growth and Shareholder Value Creation," Said Robert A. IG Er, Chief Executive Office, The Walt Disney Company. "Our Strong Performance this PastQuarter Demonstrates we have turned the corner and entered a new Era for our company, Focused on Fortifying Espn for the Future, Building Streaming Into A Profitable th business, reinvigorating our film studios, and turbochaarging grewth in our parks and experiences.
"AS We Build for the Future, The Steps we are taking today themselves to solidifying disyy & rsquo; s Place as the premiles of global content. at the renewed stream of all of our businesses this Quarter & NDASH; from Sports, to entertainment,To experiences & ndash; we believe the stage is now set for significant geowth and success, including ample oppointunity to increase sharelholder Returns as ou R Earnings and Free Cash Flow Continue to Grow. "
Summarize Financial Results
The Following Table Summarizes First Quarter Results for Fiscal 2024 and 2023:
Summarized segment Financial Results
The Following Table Summarizes First Quarter Segment Revenue and Operating Income (Loss) for Fiscal 2024 and 2023:
Discussion of first quarter segment results
Revenue and Operating Income (Loss) for the Entertainment Segment are as follows:
The increase in Entertainment operating income was due to improved results at Direct-to- Consumer, partially offset by a decline at Content Sales/Licensing and Other.
Linear networks
Linear networks revenues and operating income are as follows:
The decrease in dostic operating inceome in the current quars to the prior-year quarter was determ:
The decrease in interctional operating inceome was due to lower affiliate revenue primarily attributable to feewer subscribers.
Income From Equity Investestees Decreased Primarily Due to Lower Income from A+E Television Networks (A+E) Attributable to Decreases In Advertis Revenue, partially office by a gain on the sale of an inverted.
Direct-to-Consume
Direct-TO-Consumer Revenues and Operating Loss are as follows:
The decrease in Operating Loss in the Current Quarter Compared to the Prior-Year Quarter was due to:
In Addition to revenue, Costs and Operating Income, Management Use the Follow Key Metrics to Analyze Trends and Evaluate the Overallumance of Our + And Hulu Direct-TO-Consumer (DTC) Product Offerings (1), and We Believe the Metrics Are UsefulTo Investors in Analyzing The Business. The following tables and related discussion are on a sequential quars.
Paid Subscripers (1) at:
Average Monthly Revenue Per Paid Subscriber (1) for the Quarter Ended:
DOMESTIC DISNEY+ AVERAGE MONTHLYLYLYLYE PE PER PE PE PE PAD SUBScriper Increased from $ 7.50 to $ 8.15 Due to increases in RETAIL PRICING, PARTIALLY Offset by A Higher X of Subscripers to Promotional Offerings.
International Disney+ (Excluding Disney+ HotStar) Average Monthly Revenue Per Per PAID SUBSCRIBER Decreased from $ 6.10 Due to a Higher Mix OF s to promotional offerings.
Disney+ HotStar Average Monthly Revenue Per Per Per Per Paid Subscriber Increased from $ 0.70 to $ 1.28 Due to Higher Advertising Revenue and Increases in Retail Pricing, PAR Tially Offset by Higher Mix of Subscribers from Lower-Priced Markets.
Hulu Svod only Average Monthly Revenue Per Per Per Paid Subscriber Increased from $ 12.11 to $ 12.29 Due to Increases in Retailing, Partially Office by Lower Scriber Advertising Revenue and a Higher Mix of Subscribers to Promotional Offerings.
Hulu live tv + SVOD AVERAGE MONTHLYLYLYLYLYLAE PER PE PER PAID Subscriber Increased FROM $ 90.08 to $ 93.61 Due to Increases in Retail Pricing.
Content Sales/Licensing and Other
Content Sales/Licensing and Other Revenues and Operating Loss are as follows:
The increase in Operation Loss was due to the performance of the marvels and was in the current quarrent quars to black panther: Wakanda Forever, Avatar: The Way of Water AND Strange world in the prior-year quars.
Sports Revenues and Operating Income (Loss) are as follows:
Higher DOMESTIC ESPN Operating Results in the Current Quarter Compared to the Prior-Year Quarter WEERE DUE TO:
Lower International ESPN Operating Results We drive Driven by Higher Programming and Production Costs Attributable to New Soccer Rights and Production Cost Inflate, PAR Tially Offset by a favorable Foreign Exchange IMPACT. Affiliate Revenue was comparable to the prior-year quarter as an increase in controls was largely.Offset by FeWer Subscribers and An University
The increase in Operation Loss at Star was due to the Airing of the ICC Cricket World Cup in the Current Quarter Compared to the ICC T20 World Cup in the Prior-LEAR, Which Result in:
In Addition to revenue, Costs and Operating Income, Management used the follow key metrics to Analyze and evalic, DTC Product Offering (1), and We Believe the Metrics Are used to Investors in Analyzing the Business. The FollowingTable and related discussion are on a sequential quars.
The increase in ESPN+ Average Monthly Revenue Per Paid Subscriber Was Due to Increases in Retail Pricing and Higher Advertising Revenue.
Experiences revenues and operating inceome are as follows:
The decrease in Operation Income at our dostic Parks and Experiences Reflecting Lower Results atr DORKS and Resorts, Largely OffSet by Higher Results Ney Cruise Line.
Higher International Parks and Experiences & RSQUO; Operating Results Were Due to:
The Increase in Consumer PRODUCTS Operating Results was Due to Licensing Revenue Growth Resulting from Higher Sales Based on Spider-Man and Mickey and F Riends, partially office by a decrease in Sales of Products Based on Star Wars.
Other Financial Information
Revenue and Operating Loss for Our Combined DTC Streaming Business, Which Consist of the Direct-Consumer Line of Business segment and ESPN+ AT. the sports segment, are as follows:
Corporate and Unnallocated Shared Expense Increased $ 28 Million for The Quarter, FROM $ 280 Million to $ 308 Millio, ation.
In the prior-year quarter, The Company Recorded Charges of $ 69 Million Related to Exiting Our Business in Russia.
In the prior-year quarter, The Company Recorded A $ 70 Million Loss to Adjust its Investment in DRAFTKINGS, Inc. To Fair Value, Partially Office by $ 28 Milion In on the sale of a business.
Interest expense, net was as follows:
The increase in interest expense was primarily due to higher average rate, partially office by log,Jaipur Investment
The Increase In Interest Income, Investment Income and Other was Driven by Higher Income On Cash Balances Reflecting An Increen Interest Rates.
Equity in the Income of Investestees was as follows:
The Effective Income Tax Rate was as Follows:
The increase in the effect income tax rate was day. le-Year Quarter.
Net Income Attributable to NonControlling Interests WAS As Follows:
The increase innet Income Attributable to NonControlling Interests PRIMARILY DUE to Improved Results atr Asia Theme Parks, The Acres of Hulu & RSQUO ; S NonControlling Interest to the Amount Paid to NBC Universal in December 2023 and, to a Lesser Exchange, Improved Results at ESPN, Partially Office by the Comparison to the Impact of the Prior-Year Purchase of Major League Baseball;
Net Income Attributable to NonControlling Interests is Determined on Income After Royalties and Management Fees, Financing Costs and Income Taxes, As Applicable.
CASH PROVIDED BY (Use in) Operations and Free Cash Flow Wee as Follows:
CASH PROVIDED by Operations Increased by $ 3.2 Billion to $ 2.2 Billion in the Current Quarter from Cash Use in Operations of $ 1.0 Billion in the Prior-LearBangalore Investment. The increase was due to lower film and television product.Current Quarter, The Timing of Payments for Sports Rights and Lower Collateral Payments DEFERRAL of Fiscal 2023 Federal and California Tax Payments Into the Current Quarter Pursuant to Relief PROVIDD BY the Internae Revenue andCalifornia State Board of Equalization as a Result of 2023 Winter Storms in California.
Investments in Parks, Resorts and Other Property Wee as Follows:
Capital Expenditures Increased from $ 1.2 Billion to $ 1.3 Billion Due to Higher Spend on New Attractions and Cruise Ship Fleet Expansion at the Experiences t.
Depreciation expense was as follows:
In the U.S., Disney+, ESPN+ and Hulu Svod only only are av, as a standalone service or together as part of various multi-products. Hulu live TV + SVOD Includes Disney+ and ESPN+. Disney+ is available in more than 150 Countries and Territories OutsideThe U.S. And Canada. In India and Certain Other Southeast Asian Countries, The Service is Branded Disney+ Hotstar. NEY+ As Well As Star+, a General Entertainment Svice, Which is available on a Standalone Basis or TogetherWith disbo+ (Combo+). Depending on the Market, Our Services Can Be Purchaset on Our Websites or Through Third-PLATY PLATFORMS/Apps or Are Available Via. lesale arrangements.
Paid Subscripers Reflect Subscribers for Which We Recognized Subscripting Revenue. Subscribers CEASE to Be A Paid Subscriber as of their Effective Ion date or as a result of a failed payment method. Subscribers to multi-propuct offerings in the u.s. Are Counted as a Paid SubScriber fororEach Service Included in the Multi-Propuct Offering and Subscribers to Hulu Live TV + SVOD ASNE PAID Subscriber for EACH of the Hulu Live TV + S VOD, Disney+ and ESPN+ Services. In Latin America, if a Subscriber has either the stateone disney+OR Star+ Service Or Subscribes to Combo+, The Subscriber is Counting As One Disney+ Paid Subscriber. OUGH WHOLESALE Arangements Including Those for Which the Service is Distributed to Each Subscriber of An Existing Content Distribution Tier.Total Number of Paid Subscribers Across Our DTC Streaming Services, We Refer to them as Paid Subscriptions.
INTERNATIONAL DISNEY+ (Excluding Disney+ HotStar) Includes The Disney+ Service Outside the U.S. Andada And the Star+ Service in Latin America.
Hulu and ESPN+ AVERAGE MONTHLYLY LEVENUE PE PER PAID Subscriber Is Calculated Based on the Average of the Monthly Average Pach Month In the Udabur Wealth Management. The Monthly Averad Paid Subscribers is Calculated as the Sum of the Beginning of the Month and END of the Month PaidSubscriber Count, Divided by Two. Disney+ Average Monthly Revenue Per Per PaBScriber is Calculated using a daily aveled subcribers for the PERIOD. Revenue Includes Subscripting Fees, Advertising (Excluding Revenue Earnet from Sell Selling Advertising Spots to Other Company Businesses) And Premium and FeatureAdd-On Revenue But EXCLUDES PAY-VIEW Revenue. Advertising Revenue Generated by Content of One Streaming Service that is access through. E (for Example, Hulu Content Access ACCESSED Through Disney+) is allCated Between Both Services.Subscriber is net of discounts on offerings that carry more than one service. Revenue is allocated to eACH Service Based on the Relale Prics Each Service on A Standalone BasisBangalore Wealth Management. Hulu Live TV + SVOD Revenue is AloLocated to the Svices Based onThe Wholesale Price of the Hulu Svod only, Disney+ and ESPN+ Multi-PRODUCT Offering. In General, Wholesale Arrangements Have Average Monthly Revenue Per Paid Subscriber than Subscribers that we acquire directly or third-delivery platforms.
This earnings release presents diluted Eps Excluding Certain Items, Total Segment Operation Income, Free Cash Flow, and DTC Streaming Business ), all of which are important finances for the company, but are not finasures defined by gaap.
The Measures Should Be Reviewed in Conjunction with The Most Comparable Gaap Financial Measures and Are Not Presence Measures of Diluted Eps, Incom E before inceome taxes, Cash Provided by Operations, or Entertainment and Sports Segment Operation Income (Loss) As Determined in Accordance withGAAP. Diluted EXCluding Certain Items, Total Segment Operation Income, Free Cash Flow, and DTC Streaming Businesses d the may not be comparable to similaly titled means reported by other companies.
Our Definitions and Calcurations of Historial Measures of Diluted Eps Excluding Certain itms, Total Segment Operation Income, Free Cash Flow, and DTC Streaming Bus Inesses Operation Income (LOSS), As Well As Quantitative Reconciliations of Each of the Historical Measures to the Most Directly Comparable GaapFinancial Measure Are Provided Below. Disney is not providing forward-loging measures for diluted Eps or Cash Prived by Operations, whise are the problem. Parable GAAP Measures to Diluted EPS Excluding Certain Its and Free Cash Flow, Respectively, OR A Quantitative Reconcilities of Forward-Looking Diluted EPS Excluding Certain Items or Free Cash Flow to Those Most Directly Comparable Gaap Measures. Disney is unable to predict or BLE CERTAINTY The Ultimate Outcome of Certain Significant Items Required for Each of the Measures with Unreasonable Effort. Information About OtherAdjusting items that is currently not available to dispool of a portally unpredictable and significant improvement.
The Company uses dischated EPS Excluding (1) Certain items affecting comparability of results from period and (2) Amortization of TFCF and Hulu intangible A sseTs, Including Purchase Accounting Step-Up Adjustments for Released Content, to facilities the evolution of the performance ofThe company & rsquo; s openrations exclusive of these ites, and the adjustments reflect How Senior Management IS Evaluating Segment Performance.
The Company Beliefs that Providing Diluted Eps Exclusive of Certain Items Items ITEMS IMPACTILITY Is usedful to Investors, PARTICULELE The Impaact of the E XCluded Items is Significant in Relation to Reported Earnings and BeCAUSE The Measure Alows for Comparableity Between Performance of the Comp Any & rsquo;s business and allows invesstors to eveant the impact of thees items space.
The Company FURTHER BELIEEVES that Providing Diluted Eps Exclusive of Amortization of TFCF and Hulu Intangible AsSociated with The Acquisition In 2019 is USS USS USS USS USS USS USS USS USS US EFUL to Investors Because the TFCF and Hulu Acquisition was consciousrably larger than the company & rsquo; ISITION Accounting ImpaactThen, then
The Following Table Reconciles Reported Diluted Eps to Diluted EPS Excluding Certain Items for the First Quarter:
The Company Evaluates the Performance of ITS Operation Segments Based on Segment Operation Income, and Management UseS Total Segment Operation Income As a Measure of the PERE PER Formance of Operating Business Separat from Non-PROTERATING FACTORS.by Allowing the Evaluate Changes in the Operation Results of the Company & RSQUO; NCOME, Thus Providing SepaTe Insight Into Both Operations and Other Factors that Affect Reported Results.Surat Wealth Management
The Following Table Reconciles Income Before Income Taxes to Total Segment Operation Income:
The Company UseS FREE CASH Flow (Cash Provided by Operations Less Investments in Parks, Resorts and Other Property), AMONGOHER MeASUSURS, to Evals the Ability O F its Operations to Generate Cash that is available for Purposes Other than Capital Expenditures. Management Believes that informationAbout Free Cash Flow Provides Investors with An Important Perspective On the Cash Available to Service Debligations, Make StrateGic Acquisitions and Inves MENTS and Pay Dividends or Repurchase Shares.
The footowing table presents a summary of the company & rsquo; s consolidated cash flows:
The Follow Table Reconciles The Company & RSquo; S Consolidated Cash PROVIDED BY (Use in) Operations to Free Cash Flow:
The Company Use Combined DTC Streaming Business OPERATING INCOME (Loss) Because It Believes that This Measure Allows Investors to Evaluate The Performance of ITS POR TFOLIO of Streaming Business and Track Progress Against The Company & RSquo; S GOAL of Reaching Profitability in the FourTh Quarter of Fiscal 2024 AtIts combined streaming business.
The Follow Tables Reconcile Entertainment and Sports Segment Operation Income (Loss) to the DTC Streaming Business OPERATING LOSS:
Certain statements and information in this earnings release may constitute "Forward-LOOOKING Statements" withIn The Meaning of the Private Security Reform AC T OF 1995, Including Statements Regarding Financial Performance, Earnings Expectations, Expected Drivers and Guidance, Including Future Adjusted Eps, Free CashFlow and Funding Sources, Capital Allocation, Including DivicEnds and Share Repurchases, Subscriber And Reveenue Growth, Plans for Direct-Consumer Ability and timing and count reductions; value of, and opportunities for greWth Based on, Our Intellectual Property, Content OfficeBusinesses and Assets, Including Thetrical and Sports Content, Franchises and Brands; Business Plans; Future Performance and Growth; Plans, Expectations, ST. RateGic Priorities and Drivers of Growth and Profitability and Other Statements that are not history in nature. Any information that is not historyIn Nature Included in this Earnings Release is Subject to Change. These statements are made on the basis of management & rsquo; Uture events and Business Performance as of the Time The Statements are Made.Statements.
Actual Results MAY DIFFER MITERLY FROM Those Expressed OR Implied. SUCH DIFFERENCES MAY Result from Actions taken by the Company, Including RESTRUCTURING OR Rategic Initiatives (Including Capital Investments, Asset Acquisitions or Dispositions, New OR EXPANDED Business Lines or CERTAIN Operations), OURExecution of our Business Plans (Including The Content We Create and IP We Invest in, Our Pricing Decisions, Our Cost Structure and Our Management and Other Personnel isions), Our Ability to Quickly Execute on Cost Rationalization WHILE Preserving Revenue, The Discovery of Additive InformationOr Other Business Decisions, As Well as From Developments Beyond The Company & RSquo; S Control, Including:
Such Developments May Further Affect Entertainment, Travel and Leisure Business Generally and May, Among Other Things, AFFECT (or FURTHER AFFECT, AS Application, As Applicable ),:
Additional Factors Are Set Forth in The Company & RSQUO; S Annual Report on Form 10-K for the year ended sectionmber 30, 2023, Including Under the Captions "RISK FACT "" "Management & RSQUO; S Discussion and Analysis of Financial Condition and Results of Operations,"And" Business, "Quarterly Reports on Form 10-Q, Including Under The Captions" Risk Factors "and" Management & RSquo; Dition and Results of Operations, "And Subsequent Filings with the Securities and Exchange Commission.
The Terms "Company," "We," and "Our" are used in this report to referctively to the painr and the subsidaleies through our valious are actually confatd.
Conference call information
In connection with this release, The Walt Disney All Host A Conference Call Today, February 7, 2024, PM EST/1: 30 PS PST VIA A Live WebCast. TO ACCESS the webcast go to. The corresponding earnings presetningAnd webcast review, also be available on the site.
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