Mr.Lasseter is an Academy Award-winning director and animator, the Director of Toy Story, A Bugs Life, Toy Story 2 and Cars and Executive Producer for Monsters, Inc., Finding Nemo and The Incredibles. record date for any vote of shareholders of Pixar on the Merger Agreement and the transactions contemplated thereby) in favor of the approval of the principal terms of the Merger Agreement and the Merger. and Monsters, Inc. home video and merchandise, which increased our revenues by $13.8 million for the year. shareholders equity and comprehensive income, and cash flows for each of the years in the three-year period ended December31, 2005. For live entertainment such as stage plays or ice shows, we are entitled to participate on a passive financial basis as specified in the Co-Production Agreement. Term and In fiscal 2020, we expect a significant portion of our programs to be licensed to DTCI. adjustments to the information that it has provided, and these adjustments could have a significant impact on our operating results in later periods. You can also request replacement of any uncashed dividend checks previously issued to you by calling 1-855-553-4763. h273W0P07P0QM-ILI,IT061 &TG0vv b; endstream endobj 1413 0 obj <>stream RenderMan, and royalty revenue from licensing as Pictures. Common Stock on the date of the grant of the option. Registrant and in the capacities and on the dates indicated: Submission of Matters to a Vote of Security Holders, Market for Companys Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities, Managements Discussion and Analysis of Financial Condition and Results of Operations, Quantitative and Qualitative Disclosures About Market Risk, Financial Statements and Supplementary Data, Changes in and Disagreements with Accountants on Accounting and Financial Disclosure, Directors and Executive Officers of the Company, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, Certain Relationships and Related Transactions, Exhibits and Financial Statement Schedules. Under the Co-Production Agreement, the Company agreed to produce, on an exclusive basis, Our fiscal year 2006 earnings are expected to include we believe that period-to-period comparisons of our results of operations may not be necessarily meaningful. Forecasting film revenue and associated gross profits from our feature films is extremely difficult. We are also in production on Ratatouille, which will be distributed January3, 2004,January1, 2005, and December31, 2005, the Company recognized depreciation and amortization expense of $7.8 million, $7.8 million and $10.2 million, respectively, of which, $7.4 million, $7.4 million, and $8.7 Finding Nemo, Pixar assesses collectability of the receivable by determining whether the creditworthiness of the customer has deteriorated and could result in an inability to collect payment. The Company has also The 2004 Plan also incorporates an evergreen formula pursuant to which on January1 of each year Research Lead covering advertising and marketing. 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., . Q: How do I access my Disney Shareholder Account? year after the date of the option grant, provided that the optionee continues to serve as a director on such date. The Company exercised the option which extended the lease to January 2007. significant delays in the release dates of our feature films or other products. served as President since January 2001. proposed merger. Although we have not yet determined whether the adoption of SFAS 123R will result in amounts that are similar to the current pro forma disclosures under SFAS 123, we expect the adoption to increase our Animated Feature Films. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports subject to electrical blackouts as a consequence of a shortage of available electrical power. Accordingly, you should not rely on our annual and quarterly results of operations as any indication of future performance. CGI is now the most prevalent form of animation among feature-length animated films, and the number of CGI-animated films released has been increasing significantly. initiated voluntary embargoes on motion picture exports to certain countries in the past to exert pressure on the. Substantially all of our revenues have been derived, and substantially all not responsible for any losses Disney incurs. Faster and lower cost graphic cards provide capability for h273T0P073R0QM-ILI,IT06 &TG0vv n5 endstream endobj 1410 0 obj <>stream Therefore, the Company operates in a single The following selected financial data is derived from our financial statements. The post-production stage consists of two parallel processes: the picture process and the sound process. Excluding the software business, revenue is concentrated in one large customer, Disney, as outlined in Note8. identified by management. Nonetheless, during its long history, Disney has been a very successful producer and distributor of its own animated feature films. h23T0P037P0QM-ILI,IT041&TG0vv "6 endstream endobj 1364 0 obj <>stream impairment, the unamortized film production costs will be written down to fair value. In addition, John Lasseters availability has been a key contribution to the successful completion of our prior Our operating expenses will These reserves are Ms. Lagomasino had been with Chase Manhattan since 1983 in various positions in private banking. (SFAS) No. Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 10-K has been signed below by the following persons on behalf of the While we have enjoyed box office success with all of our feature animated films to date, there can be no assurance that similar levels of To address these risks, we must, among other things, respond to changes in the competitive environment, continue to attract, retain and motivate qualified persons, and continue to upgrade our Sincerely, Paul, MBA. The Companys objective is to create, develop and produce Disney relating to home video expenses, which decreased previously recorded home video expenses by $3.2 million for all of our film titles on a cumulative basis. h275W0P07P0QM-ILI,IT062 &TG0vv 7 endstream endobj 1408 0 obj <>stream 80% of each released films original production costs as of December31, 2005, with the exception of The Incredibles, which is projected to reach the 80% milestone in 2006. Item10. animation among feature-length animated films, and the number of CGI-animated films released has been increasing significantly. Total operating expenses increased from $30.5 million in 2003 to $34.9 million in 2004 and decreased to $34.3 million in 2005. Toll: 1-781-575-3335, Website: www.disneyshareholder.com Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of the Companys internal audit department and handled in accordance with procedures established by the Audit Committee with respect to such matters. securities with an effective maturity of 24 months or less. Go to Page. department, in November 2005. Cars is directed by Pixars two-time Academy The Co-Production Agreement also contemplates that At January1, 2005 and December31, 2005, net receivables from The For more information, see Business Model and Products Dr.Catmull earned his B.S. groups work closely together in an iterative process. Registrants Common Stock outstanding, and the aggregate market value of such shares held by non-affiliates of the Registrant (based on the closing sale price of such shares on the NASDAQ National Market on July1, 2005) was acquire Pixar (the Merger). h23T0P036P0QM-ILI,IT03J&TG0vv endstream endobj 1344 0 obj <>stream We believe h02V0P02Q0QM-ILI,IT015&TG0vv 1 endstream endobj 1441 0 obj <>stream required to. Nemo in the worldwide home video market. . Such reserves and related changes as reported by Disney are not Our Chief Executive Officer has divided responsibilities. This summary is qualified in all respects by such SFAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June15, 2005. h231W0P03P0QM-ILI,IT040 &TG0vv 0/ endstream endobj 1353 0 obj <>stream Once the film has been green lit, we have final control over the production of the Picture. The increase in cash generated from operating activities during 2004 compared to 2003 resulted primarily from the Disney first (5)the expansion of our facilities to accommodate the growth of the studio. Television. We also have pictures itself or enter into similar agreements with third parties. 2005, (Exact name of registrant as specified in its charter). since March 1991 and as Chief Executive Officer since February 1986. price and performance for professional users. The following discussion addresses the We believe that our audits provide a reasonable basis for our opinion. to Ratatouille and our other future productions, we expect our operating expenses to increase significantly. Through the creation of entertaining, enduring and successful films, the Company seeks to maintain its position as a leading increased spending on production costs and differences in the timing of the collection of our receivables from Disney, partially offset by an overall increase in net income. The Company has not identified any such impairment losses. connection with the Employment Agreement, Mr.Lasseter was granted an option to purchase 2,000,000 shares (split adjusted) of our Common Stock at the Pixar's headquarters is located in Emeryville, California, USA 94608. For example, we make adjustments to our home video revenues for estimates on return reserves that may differ from those reported by Disney. An audit also includes assessing the accounting principles used and significant production management software and for creative development for future films. Our operating results have fluctuated in the past, and we expect frames. We have, to date, developed, produced and released only six animated feature films. value of these highly successful franchises. See Managements Discussion and Analysis of See Item 15(a) above. In the past we have experienced minor delays as a result of such matters. Disney after Disney recovers a distribution fee and pre-agreed distribution costs. Although none of our employees are represented by a labor Each motion picture is an individual artistic work, and its commercial success is primarily determined by audience reaction, which is unpredictable. On January24, 2006, we entered into an Agreement and Plan of Merger with Disney by which Disney has agreed to acquire Pixar. These pro forma amounts may not be representative of future disclosures since the estimated fair The summary financial information reviewed by the CEO is identical to the information presented in the accompanying statements of income and the Company has no foreign operations. Our library titles contributed $60.6 million for fiscal 2003, resulting from merchandise sales, worldwide home video sales and worldwide In November 2002, we purchased approximately 2.24 acres of land adjacent to our primary facility for $9.4 million, for future expansion. values of the elements. affiliates from releasing animated films or live action family films within certain release windows from our films, including Ratatouille pursuant to the Distribution Letter Agreement, it is likely that other family-oriented motion pictures Mr. Iger is the author of the New York Times best-selling book The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of The Walt Disney Company, published in 2019. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial Non-employee directors are eligible to receive option grants pursuant to our 2004 Equity Incentive Plan (Equity Plan) which was approved by the shareholders and took effect in August 2004. Work stoppages could adversely impact our operations. See Managements Discussion and Analysis of Financial Condition and Results of Also reported are values for in-the-money options that represent the positive spread between the respective exercise prices of h20U0P00S0QM-ILI,IT067&TG0vv D endstream endobj 1422 0 obj <>stream The Walt Disney Company Investment Plan Prospectus. This data should be read in conjunction with the Financial Statements and financial performance. This technology The final rendering of a single frame takes an average of one to four hours, but a small percentage of more complex frames can take much longer, between 20 and 40 hours made adjustments to its home video revenues for estimates on return reserves that may differ from those reported by Disney. We capitalize our share of direct costs of film production in accordance We continue to expect Q: How do I receive financial information regarding Euro Disney? Pixar and Disney jointly finance all production costs relating to the Pictures (except for developments at Pixar, including information. information based on our estimates and judgments. He was previously a member of the Apple board of directors (2011-2019). Pursuant to the Co-Production Agreement, we receive statements and payments of our share of gross receipts monthly Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the Effective Time), each issued and outstanding share of Common Stock of Pixar will be converted into the right to receive 2.3 (in thousands): Merger Agreement Co-Production Agreement to mean all costs and expenses we incur directly related to or fairly allocable to the creation, development, pre-production, production, post-production and delivery to Disney of the Pictures. Quarter Quarterly Release Half-Year & Annual Report; Q1: DOWNLOAD q1 2019 release: Q2: our business model upon which an evaluation of our prospects can be based. The assembled shot is then given to the animator together with the prerecorded voice. h273U0P073S0QM-ILI,IT066&TG0vv < endstream endobj 1412 0 obj <>stream thousands of sketches that represent the story to be animated. The pre-production stage begins when the screenplay is turned into story boards, which are panels filled with of Motion Picture Arts and Sciences and the National Academy of Engineering. h2T0P070P0QM-ILI,IT020&TG0vv (0 endstream endobj 1379 0 obj <>stream competition with respect to our RenderMan software anticipated total gross revenues are reviewed periodically and may be revised if necessary. h02W0P0P0QM-ILI,IT013 &TG0vv i8 endstream endobj 1443 0 obj <>stream windows. we wrote off $1.9 million in costs previously capitalized for future film projects. After property has been transferred to the state as abandoned property, shareholders must directly contact the state in order to reclaim their property. The Company has an Equity Incentive Plan (the 2004 Plan) that was approved by the Companys Shareholders in 2004. At 24 frames per second, a 115-minute animated feature film such as The Incredibles requires approximately 165,000 individual All payments to Pixar from Disney for development and production of Toy Story under the Feature Disney Financial Statements and Financial Ratios Analysis The term of the Co-Production Agreement continues until we deliver share-based payment arrangements including stock options and employee stock.
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