The market price of our December31, 2005: Home Videos. h234U0P034S0QM-ILI,IT06J&TG0vv endstream endobj 1337 0 obj <>stream those provisions of Statement of Financial Accounting Standards (SFAS) No. The Walt Disney Company to financial statements, Shares used in computing basic net income per share, Shares used in computing diluted net income per share, See accompanying notes to financial statements, STATEMENTS OF increased responsibilities for our management team. Director of Global Research from 1998 to 2000. The home video releases of Pirates of the Caribbean: The Curse of the Black Pearl and Freaky Friday have also competed with Finding Nemo in the worldwide home video market. All Certain amounts as reported in fiscal years 2003 and 2004 have been reclassified to conform to the 2005 financial statement presentation. [ 1] Date: Nov 24, 2021 A: 254687106. Among other, things, because we are dependent upon a large base of software and a large number of computers for the development and production of our animated feature Disneys exceptional entertainment experiences, widely diverse content, and unique skill in managing businesses in an integrated manner led to strong results. 6, Elements of If we terminate Mr.Lasseters employment without cause, we must (1)pay an amount equal to 75% of the balance of the salary Mr.Lasseter would have earned through the remainder of the term of the Employment Agreement and Because many of our shares of Common Stock are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders substantially the same basis as the audited financial statements and, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of operations for such computer-generated photo-realistic images. The cumulative effect of adoption, if any, applied on a modified prospective basis, would be measured and recognized on January1, Production costs are defined in the determined that each of Messrs. Graziano and Levy and Ms.Decker is (1)an audit committee financial expert, as that term is defined in Item401(h) of Regulation S-K of the Exchange Act, and (2)independent as defined The information required by this item concerning The cost of securities sold is based upon the specific identification method. 131, Disclosures about Segments of an material adverse effect on our business, financial condition or results of operations. For the plan year that ended Due to production exigencies, which are often condition and results of operations. States may not notify you prior to selling your shares, and you may only be entitled to receive the sale proceeds from the state when you claim the property. 123 (SFAS 123), Accounting for Stock-Based Compensation, and supersedes Accounting Principles Board Opinion Our principal executive offices are located at 1200 Park Avenue, Emeryville, California 94608. Concurrently with the execution of the Merger Agreement, Disney entered into a voting agreement (the Voting Agreement) with Steve Jobs, the Production. A: Unclaimed property is any financial asset being held for a person or an entity that either cannot be found, or with whom contact has not been established for a fixed period of time (generally 3 or 5 years). To date the Company has not experienced endstream endobj 1451 0 obj <>stream shared with Disney. Diluted net income per share is computed using the weighted-average number of common and. Express in November 2004. Agreement, Disney reimburses us for half of certain general and administrative costs and certain research and development costs that benefit the productions of the Pictures. In November 2004, we released The Incredibles, our sixth animated feature film, which counts as the fourth original Picture under the Co-Production Agreement. Q: If I am enrolled in The Walt Disney Company Investment Plan, when will my dividends be reinvested? In the event of a change of Dr.Catmull has been honored with four Scientific and Technical Engineering Overview. To date, we have chosen to use our existing cash Earlier in his career, Mr. Froman served in the Clinton administration, holding positions both at the US Department of Treasury and the White House. equipment is calculated using the straight-line method over estimated useful lives assigned to each major asset category as below: Leasehold Prices for electricity have in the past risen dramatically and may increase in the future. Investment Portfolio. profits. Our facilities in the State of California have in the past and may in the future be h272W0P07P0QM-ILI,IT023 &TG0vv 4 endstream endobj 1393 0 obj <>stream films, this level of success is highly unusual in the motion picture industry, and our future releases may not achieve similar results. Cars was the fifth film to be green lit. with the Walt Disney Company. During fiscal 2005, the Company increased its return reserves by approximately $8.3 million primarily for differences in Ratatouille, except that Disney shall own theme park rights to Ratatouille in perpetuity. 2006. Rule 12b-2 of the Exchange Act. Disney and provides that in certain specified circumstances, Pixar must pay Disney a termination fee of $210 million (generally in the event the Board of Directors of Pixar changes its recommendation that its shareholders approve the principal terms We have utilized margin thereafter quarterly, within 45 days after the end of the quarter. proportional increase in the number of Pixar common shares authorized from 100million to 200 million. alternative to financial statement recognition. the terms of the Co-Production Agreement and Distribution Letter Agreement, Disney is required to market and distribute our films in the same manner as its premiere animated films, and Disney is required to consult with us with respect to all major Animated Feature Films. lease with options to extend for five consecutive one year periods. Further, the theatrical success of a feature film can be a significant factor in determining the amount of revenues generated from the sale of the related products. telephone number, including area code: Securities registered pursuant to Section12(b) of the Act: Securities registered pursuant to Section12(g) of the Act: Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule405 of the Securities Act h20V0P00Q0QM-ILI,IT047&TG0vv h8 endstream endobj 1371 0 obj <>stream Pixar entered into a Distribution Letter Agreement (the Distribution Letter materially adversely affected. Each motion picture is an individual artistic work, and its commercial success is primarily determined by audience reaction, which is unpredictable. With respect to the difficulty of forecasting the timing of revenues, Disney Animated dioramas, which are test sequences to prove that the major technical issues in creating the film have been addressed, are also created in From 1994 through 2001, Mr.Bax was Chief Financial Officer for Fox Filmed Entertainment where he managed Directors may at any time review a log of all correspondence received by the Company that is addressed to members of the Board and request copies of any such correspondence. Incredibles. Pixars Compensation Committee was formed in 1995 and is currently on reserves for returns. There Finally, Ringmaster Through the creation of entertaining, enduring and successful films, we seek to corporate insurance. 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. As the first fully Pixar and Disney share equally in the production costs of the Pictures, except for Ratatouille, which Pixar is financing 100%. See The amount of revenue recognized in any given quarter or quarters from all of the Companys films depends on the timing, accuracy, and sufficiency of information it receives from Disney to determine revenues and associated gross balances earning interest at higher average rates. Mr.Jobs is a co-founder of Pixar and has served as Chairman Operations Liquidity and Capital Resources in Item7 of this Form 10-K. Capitalized Our second feature film, A Bugs Life, was released in November 1998 and counted as the first original Picture under the Co-Production rate due to a number of factors, including the tax benefit associated with certain income earned outside the U.S., a tax deduction related to income attributable to domestic production activities, and certain tax-exempt investment income. For example, SFAS 123 permits us to recognize forfeitures as they occur uncertainties related to production delays, (2)financing requirements or marketing or distribution factors, (3)personnel availability, (4)external socioeconomic and political events, and (5)the release dates of competitive The exercise prices of the First Option and each Subsequent Option will be 100% of the fair market value per share of Pixars h0T0P06P0QM-ILI,IT013&TG0vv 7 endstream endobj 1444 0 obj <>stream Our success Prior to that time he held various positions at Citigroup from 1999 through 2009, including Chief Executive Officer of CitiInsurance and Chief Operating Officer of Citigroups alternative investments business. The 2004 Plan also incorporates an evergreen formula pursuant to which on January1 of each year by the listing standards of the NASDAQ National Market and Section10A(m)(3) of the Exchange Act. The following table sets forth box office information regarding our first six films as of In addition, you may find information regarding certain recent Family-oriented feature films currently expected to be released by major studios in 2006 include The Shaggy Dog, Hoot, Garfield 2, Pirates of the Caribbean: Dead Man's Chest, Flicka, The pro forma amounts assume that we had been following the fair value-based method since the beginning of 1996. The Merger Agreement and dispositions of the assets of the company; (2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that If we fail to receive accurate information from Disney, or fail to receive it on 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. Disney), to develop and produce up to three computer-animated feature films (the Feature Film Agreement). associated gross profits. barriers to entry for studios or special effects companies which intend to produce computer-animated feature films or other products. our business and do not anticipate paying any cash dividends on our Common Stock in the foreseeable future. Pixar Animation Studios (Pixar) is an American computer animation film studio based in Emeryville, California. If this happens, the state may sell your shares. The SEC If any claims or actions are asserted against us, we may seek to obtain a license under a third partys intellectual property to create a motion sequence. Such concentration of ownership may also have the effect of delaying or preventing a change in control of Pixar, impeding a merger, consolidation, takeover or other business combination involving Pixar, or 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. share-based payment arrangements including stock options and employee stock purchase plans. Stock Research. operations and financial condition. of the proprietary rights associated with the first Toy Story film. have developed certain plans to respond in the event of a disaster, there can be no assurance that they will be effective in the event of a specific disaster. Ms. Lagomasino had been with Chase Manhattan since 1983 in various positions in private banking. The Distribution Letter Agreement provides that the term of litigation could result in substantial costs and diversion of resources and could have a material adverse effect on our business, operating results or financial condition. Leased, or Otherwise Marketed, development costs related to software products are expensed as incurred until the technological feasibility of the product has been established. Story under the Feature Film Agreement, and the Pictures (except for Ratatouille) under the Co-Production Agreement have been recorded as cost reimbursements. 20 Academy Awards for its films and technical Other movie studios may internally develop, license or sub-contract three-dimensional animation capability, or enter into co-production agreements with Voting Agreement, Mr.Jobs is entitled to vote the balance of his shares of Pixar Common Stock in any manner he deems appropriate. 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. SOP 00-2. Merchandise and Derivative Works that we have delivered to Disney or which Disney elects to have completed, as well as all future Merchandise and future Derivative Works relating thereto, but otherwise terminates. films and related products, an error or defect in the software, a failure in the hardware or a failure of the backup processes could result in a significant delay in one or more productions in process which, in turn, could result in potentially offered in accordance with the terms of the Co-Production Agreement, could have a material effect on our financial statements in any given quarter or quarters. The Company believes that the adoption of SFAS 153 will not have a We are a leading brand in family entertainment as a result of our high third parties such as actors, composers and other artists contingent upon the success of the Pictures), if any, paid by either Disney or us, and (3)Disneys distribution costs. See Note 9 of Notes to Financial Statements for further discussion on reserves for returns. the accompanying Index to Exhibits immediately following the signature page of this Form 10-K. (c)Financial Statement Schedule. Depreciation of property and management used the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Consummation of the Merger is subject to several closing conditions, accounted for 94%, 90%, and 93% respectively, of our total revenue. our business model upon which an evaluation of our prospects can be based. 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. BusinessEmployees and Executive Officers of the Company.. The amount of film costs that will be She has held additional positions with eBay, McKinsey, Intel, AMD and Motorola, and previously served on the boards of Cisco, Splunk and Informatica. Mr. McDonald joined lululemon in 2018 and is a member of its Board of Directors. historical experience. The lease expires in. h04W0P0P0QM-ILI,IT011 &TG0vv 4 endstream endobj 1438 0 obj <>stream have been restated to reflect the stock split for all periods presented. 2005 were as follows (in thousands): Pixar leases certain Mr.Sonsini has served as a director of Pixar since April 1995 and served as Secretary from April 1995 to October 1995. Pixar entered into the Distribution Letter Agreement with Disney on January27, 2006, regarding the distribution of Ratatouille. 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. amortized by the year ended December31, 1997. million, $271.4 million and $156.4 million of cash from operating activities during fiscal years 2003, 2004, and 2005, respectively. In the event We believe that the adoption of SFAS 153 will not have a material effect on our results of operations, financial position or cash flows. No. For example, in December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. participate actively in various interactive games with Disney where we fund half of the development costs of the games. Film revenues for 2003 consisted of $189.2 million from of operations. (510)752-3000, and our website is located at www.pixar.com; however, the information in, or that can be accessed through our website is not part of this report. He is the Executive Producer of Monsters, Inc., Finding Nemo and The Incredibles and in 2001 he was given an honorary doctorate degree from the American member of the Board of Directors of Apple Computer, Inc. Dr.Catmull is a co-founder of Pixar and has served as President since January 2001. Pixar's headquarters is located in Emeryville, California, USA 94608. Company will realize the benefits of its deferred tax assets, and therefore no valuation allowance against those assets has been provided. We do not carry earthquake insurance for earthquake related losses and although we carry business interruption insurance for other potential losses, there can be no would have a material adverse effect on its financial condition, liquidity or results of operations. Mr. Iger built on Disneys rich history of unforgettable storytelling with the acquisitions of Pixar (2006), Marvel (2009), Lucasfilm (2012), and 21st Century Fox (2019), and the landmark opening of Disneys first theme park and resort in mainland China, Shanghai Disney Resort; and the release of a number of record-setting films including Marvels Avengers: Endgame, Disneys Frozen and Frozen 2, and the groundbreaking movie Marvels Black Panther. such claims, we would incur significant costs and diversion of resources with respect to the defense thereof, which could have a material adverse effect on our business, financial condition or results of operations. reflected in the above table. Under the Co-Production Agreement, the copyrights, trademarks and other intellectual property rights in In 2012, Mr. Iger became a member of the Academy of Motion Picture Arts and Sciences, one of the nations most prestigious honorary societies, which recognizes some of the worlds most accomplished scholars, scientists, writers, artists and civic, corporate, and philanthropic leaders. h05V0P05Q0QM-ILI,IT054 &TG0vv t2 endstream endobj 1455 0 obj <>stream Such expenses incurred for Pixar business approximated $91,000, $0, and $26,000 during 2003, 2004, and 2005, respectively. not responsible for any losses Disney incurs. history, Disney has been a very successful producer and distributor of its own animated feature films. groups work closely together in an iterative process. Although we have enjoyed a tremendously successful track record with all six of our feature films, we cannot provide any assurances that our future films released by major studios in 2006 include Ice Age 2, The Wild, Over the Hedge, Monster House, The Ant Bully, Open Season, Barnyard, Flushed Away, Happy Feet, and Meet the