FOR IMMEDIATE RELEASE August 10, 2022 THE WALT DISNEY COMPANY REPORTS

FOR IMMEDIATE RELEASE

August 10, 2022

THE WALT DISNEY COMPANY REPORTS

THIRD QUARTER and NINE MONTHS EARNINGS FOR FISCAL 2022

BURBANK, Calif. ? The Walt Disney Company today reported earnings for its third fiscal quarter ended July 2, 2022.

? Revenues for the quarter and nine months grew 26% and 28%, respectively.

? Diluted earnings per share (EPS) from continuing operations for the quarter increased to $0.77 from $0.50 in the prior-year quarter. Excluding certain items(1), diluted EPS for the quarter

increased to $1.09 from $0.80 in the prior-year quarter.

? Diluted EPS from continuing operations for the nine months ended July 2, 2022 increased to $1.66 from $1.02 in the prior-year period. Excluding certain items(1), diluted EPS for the nine

months increased to $3.22 from $1.91 in the prior-year period.

"We had an excellent quarter, with our world-class creative and business teams powering outstanding performance at our domestic theme parks, big increases in live-sports viewership, and significant subscriber growth at our streaming services. With 14.4 million Disney+ subscribers added in the fiscal third quarter, we now have 221 million total subscriptions across our streaming offerings," said Bob Chapek, Chief Executive Officer, The Walt Disney Company. "We continue to transform entertainment as we near our second century, with compelling new storytelling across our many platforms and unique immersive physical experiences that exceed guest expectations, all of which are reflected in our strong operating results this quarter."

The following table summarizes the third quarter results for fiscal 2022 and 2021:

Quarter Ended

July 2, (in millions, except per share amounts) 2022

July 3, 2021

Revenues

$ 21,504 $ 17,022

Income from continuing operations before income taxes

$

2,119

$

995

Total segment operating income(1) $ 3,567 $ 2,382

Net income from continuing operations(2)

$ 1,409 $ 923

Diluted EPS from continuing operations(2)

$ 0.77 $ 0.50

Diluted EPS excluding certain items(1)

$ 1.09 $ 0.80

Cash provided by continuing operations

Free cash flow(1)

$ 1,922 $ 1,466 $ 187 $ 528

Change 26 %

>100 % 50 % 53 %

54 %

36 %

31 % (65)%

Nine Months Ended

July 2, 2022

July 3, 2021

$ 62,572 $ 48,884

$ 4,909 $ 2,271

$ 10,524 $ 6,179

$ 3,031 $ 1,864

$ 1.66 $ 1.02

$ 3.22 $ 1.91

$ 3,478 $ 2,934 $ (317) $ 466

Change 28 %

>100 % 70 % 63 %

63 %

69 %

19 % nm

(1) Diluted EPS excluding certain items, total segment operating income and free cash flow are non-GAAP financial measures. The most comparable GAAP measures are diluted EPS from continuing operations, income from continuing operations before income taxes, and cash provided by continuing operations, respectively. See the discussion on page 2 and on pages 12 through 15 for how we define and calculate these measures and a reconciliation thereof to the most directly comparable GAAP measures.

(2) Reflects amounts attributable to shareholders of The Walt Disney Company, i.e. after deduction of income attributable to noncontrolling interests.

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SEGMENT RESULTS

The Company evaluates the performance of its operating segments based on segment operating income, and management uses total segment operating income as a measure of the performance of operating businesses separate from non-operating factors. The Company believes that information about total segment operating income assists investors by allowing them to evaluate changes in the operating results of the Company's portfolio of businesses separate from non-operational factors that affect net income, thus providing separate insight into both operations and other factors that affect reported results.

The following are reconciliations of income from continuing operations before income taxes to total segment operating income and revenues to segment revenues (in millions):

Quarter Ended

July 2, 2022

July 3, 2021

Income from continuing operations

before income taxes

$ 2,119 $ 995

Add (subtract):

Content License Early Termination(1)

--

--

Corporate and unallocated shared

expenses

325

212

Restructuring and impairment charges

42

35

Other (income) expense, net

136

91

Interest expense, net

360

445

Amortization of TFCF and Hulu

intangible assets and fair value

step-up on film and television

costs

585

604

Total segment operating income $ 3,567 $ 2,382

Change >100 %

nm (53) % (20) % (49) % 19 %

3 % 50 %

Nine Months Ended

July 2, 2022

July 3, 2021

Change

$ 4,909 $ 2,271 >100 %

1,023

825

237 730 1,026

--

nm

645 (28) %

562 (214) 1,089

58 % nm

6 %

1,774

1,826

$ 10,524 $ 6,179

3 % 70 %

Revenues

Contract License Early Termination(1)

Total segment revenues

Quarter Ended

July 2, 2022

July 3, 2021

$ 21,504 $ 17,022

Change 26 %

Nine Months Ended

July 2, 2022

July 3, 2021

$ 62,572 $ 48,884

Change 28 %

--

--

$ 21,504 $ 17,022

nm

1,023

--

26 % $ 63,595 $ 48,884

nm 30 %

(1) During the nine months ended July 2, 2022, the Company recognized a $1,023 million reduction in revenue for the amount due to a customer to early terminate license agreements for film and television content delivered in previous years in order for the Company to use the content primarily on our direct-to-consumer services (Content License Early Termination). The Content License Early Termination adjustment is included in Company revenues, but excluded from total segment revenues.

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The following table summarizes the third quarter and nine-month segment revenue and segment operating income (loss) for fiscal 2022 and 2021 (in millions):

Quarter Ended

Nine Months Ended

Segment Revenues:

July 2, 2022

July 3, 2021

Change

July 2, 2022

July 3, 2021

Change

Disney Media and Entertainment Distribution

Disney Parks, Experiences and Products

Total Segment Revenues

$ 14,110

7,394 $ 21,504

$ 12,681

4,341 $ 17,022

11 % $ 42,315 $ 37,782

70 %

21,280 11,102

26 % $ 63,595 $ 48,884

12 %

92 % 30 %

Segment operating income (loss):

Disney Media and

Entertainment Distribution $ 1,381

Disney Parks, Experiences and

Products

2,186

Total Segment Operating Income $ 3,567

$ 2,026

356 $ 2,382

(32) %

>100 % 50 %

$ 4,133 $ 6,348

6,391

(169)

$ 10,524 $ 6,179

(35) %

nm 70 %

Disney Media and Entertainment Distribution

Revenue and operating results for the Disney Media and Entertainment Distribution segment are as follows (in millions):

Revenues: Linear Networks Direct-to-Consumer Content Sales/Licensing and Other Elimination of Intrasegment Revenue(1)

Operating income (loss): Linear Networks Direct-to-Consumer Content Sales/Licensing and Other

Quarter Ended

July 2, 2022

July 3, 2021

$ 7,189 $ 6,956

5,058

4,256

2,111

1,681

(248)

(212)

$ 14,110 $ 12,681

$ 2,469 $ 2,187

(1,061)

(293)

(27)

132

$ 1,381 $ 2,026

Change

3 % 19 %

26 %

(17) % 11 %

13 % >(100) %

nm (32) %

Nine Months Ended

July 2, 2022

July 3, 2021

$ 22,011 $ 21,395

14,651

11,759

6,410

5,299

(757)

(671)

$ 42,315 $ 37,782

$ 6,783 $ 6,765

(2,541)

(1,049)

(109)

632

$ 4,133 $ 6,348

Change

3 % 25 %

21 %

(13) % 12 %

-- % >(100) %

nm (35) %

(1) Reflects fees received by the Linear Networks from other DMED businesses for the right to air our Linear Networks and related services.

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Linear Networks

Linear Networks revenues for the quarter increased 3% to $7.2 billion, and operating income increased 13% to $2.5 billion. The following table provides further detail of Linear Networks results (in millions):

Supplemental revenue detail

Quarter Ended

July 2, 2022

July 3, 2021

Change

Domestic Channels International Channels

Supplemental operating income detail Domestic Channels International Channels

$

5,700 $

5,561

1,489

1,395

$

7,189 $

6,956

$

2,075 $

1,803

166

169

2 % 7 % 3 %

15 % (2) %

Equity in the income of investees

228

215

$

2,469 $

2,187

6 % 13 %

Domestic Channels

Domestic Channels revenues for the quarter increased 2% to $5.7 billion, and operating income increased 15% to $2.1 billion, reflecting higher results at both Cable and Broadcasting.

The increase at Cable was due to growth in advertising revenue and to a lesser extent, a decrease in marketing costs and an increase in affiliate revenue. Advertising revenue growth was due to an increase in rates and higher impressions reflecting higher average viewership. Rates and impressions benefited from the timing of the NBA Finals, which aired in the current quarter compared to the fourth quarter of the prior year as a result of a delayed start of the 2021 NBA season due to COVID-19. Higher affiliate revenue was driven by an increase in contractual rates, partially offset by fewer subscribers. Programming and production costs were comparable to the prior-year quarter as higher costs for NBA programming and an increase in sports production costs were largely offset by lower MLB and soccer rights costs. Higher NBA rights costs reflected the timing of the Finals, which are programmed by ESPN and aired on ABC, and contractual rate increases, partially offset by fewer regular season games in the current quarter. Lower costs for MLB programming were due to airing 13 games in the current quarter compared to 44 games in the prior-year quarter. The decrease in soccer programming costs reflected the comparison to the airing of UEFA Euro 2020 in the prior-year quarter. UEFA Euro typically occurs every four years. UEFA Euro 2020 was originally scheduled to occur in fiscal 2020, but was held in fiscal 2021 due to COVID-19.

The increase at Broadcasting was due to higher results at ABC and, to a lesser extent, at the owned television stations. The increase at ABC reflected lower programming and production costs, growth in affiliate revenue, which reflected higher contractual rates, and a decrease in marketing costs, partially offset by lower advertising revenue. Lower programming and production costs were due to a lower cost mix of programming and, to a lesser extent, the timing of the NBA Finals, which are programmed by ESPN. The lower cost mix of programming reflected the timing of The Academy Awards and fewer hours of scripted and acquired reality programming, partially offset by the cost of airing new NHL programming. The Academy Awards aired in the second quarter of the current fiscal year compared to the third quarter of the prior fiscal year. We acquired rights to NHL programming starting with the 2021/2022 season. Lower advertising revenue was due to the timing of The Academy Awards, a decrease in viewership and to a lesser extent, fewer units delivered, partially offset by higher rates. Fewer units delivered resulted from the impact of more hours programmed by ESPN due to the timing of the NBA Finals. The increase at the owned television stations reflected higher affiliate and advertising revenue. The

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increase in affiliate revenue was due to higher contractual rates. Higher advertising revenue resulted from increased rates reflecting political advertising, partially offset by the impact of the timing of The Academy Awards. International Channels

International Channels revenues for the quarter increased 7% to $1.5 billion and operating income was comparable to the prior-year quarter at $0.2 billion reflecting lower operating income from channels that operated for the entire current and prior-year quarters (ongoing channels), offset by a benefit from channel closures.

Lower results from ongoing channels were primarily due to an increase in sports programming costs, partially offset by advertising revenue growth reflecting higher average viewership. The increases in sports programming costs and advertising revenue were due to the airing of 64 Indian Premier League (IPL) cricket matches in the current quarter compared to 29 matches in the prior-year quarter. IPL cricket matches typically occur in our second and third fiscal quarters. The increase in the number of matches in the current quarter was due to a shift in the timing of matches in the prior year from the third quarter to the fourth quarter as a result of COVID-19 and the IPL adding matches to the current season. Direct-to-Consumer

Direct-to-Consumer revenues for the quarter increased 19% to $5.1 billion and operating loss increased $0.8 billion to $1.1 billion. The increase in operating loss was due to a higher loss at Disney+, lower operating income at Hulu and, to a lesser extent, a higher loss at ESPN+.

Lower results at Disney+ reflected higher programming and production, technology and marketing costs, partially offset by increases in subscription revenue and, to a lesser extent, advertising revenue. The increase in programming and production costs was primarily due to more content provided on the service, including the impact of airing 64 IPL cricket matches in the current quarter compared to 29 matches in the prior-year quarter. Higher subscription revenue was due to subscriber growth and increases in retail pricing, partially offset by an unfavorable foreign exchange impact. The increase in subscribers as well as in technology and marketing costs reflected growth in existing markets and, to a lesser extent, expansion to new markets. Advertising revenue growth was due to the additional IPL matches in the current quarter.

The decrease at Hulu was due to higher programming and production and marketing costs, partially offset by subscription revenue growth. The increase in programming and production costs was primarily due to higher subscriber-based fees for programming the Live TV service reflecting an increase in the number of subscribers, rate increases and the carriage of more networks. Subscription revenue growth was due to increases in subscribers and in retail pricing.

Lower results at ESPN+ were due to higher sports programming costs, partially offset by an increase in subscription revenue due to subscriber growth.

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