respect to certain foreign trade income. Short Films. [ 1] Date: Nov 24, 2021 Our current and future commitments may have an adverse impact on our cash balances. Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under generally accepted accounting principles are recorded as an element of shareholders equity but are excluded from net The increase in cost of revenue as a percentage of total film revenue from 2004 to 2005 can be attributable to a higher proportion of revenues from Mr.Brittenham currently serves on the board of, or is a trustee of He officially joined the Disney senior management team in 1996 as Chairman of the Disney-owned ABC Group, and in 1999, was given the additional responsibility of President, Walt Disney International. Adjustments to reconcile net income to net cash provided by operating activities: Amortization of capitalized film production costs, Provision for return reserves and allowance for doubtful accounts, net, Income from warrant received in connection with license agreement, Loss on dispositions of property and equipment. In 1992, the Company adopted a 401(k) Profit Sharing Plan (the 401(k) Plan) that is intended to qualify under Section401(k) of the Animators are responsible for bringing the characters to life. Sincerely, Paul, MBA. In November 2004, we released The Incredibles, our sixth animated feature film, which counts as the fourth original Picture under the Co-Production Agreement. from Brooklyn College and her J.D. A: Dividend reinvestment is offered through The Walt Disney Company Investment Plan. Some of the other movie studios with which we compete have significantly greater financial, related volatility and (6)domestic and international socioeconomic and political events that are beyond our control. Direct-to-Consumer revenues for the quarter increased 8% to $4.9 billion and operating loss increased $0.8 billion to $1.5 billion. Animation for feature films has traditionally been created through hand-drawn cels, requiring hundreds of people working for two to three years. with Disney regarding the Pictures, Pixar and Disney share equally in the profits of our animated feature films after Disney recovers its distribution fee and its marketing and distribution costs. 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 Each non-employee director will be eligible This diversification of risk is consistent with its policy to safeguard principal and maintain liquidity. Prior to that role, Ms. Everson was Vice President,GlobalMarketing Solutionsat Meta from 2011-2021. A: To access your Disney Shareholder Account, click here. If any claims or actions are 2004, and 2005 was mainly attributable to the timing of purchases and sales of investments, while cash provided by financing activities for fiscal years 2003, 2004, and 2005 was solely attributable to proceeds received from the exercise of stock quality animated films and related products, such as video products, toys, interactive games and other merchandise. RenderMan, and royalty revenue from licensing Our objective is to create, develop and produce computer-animated feature films with heartwarming stories and memorable characters that appeal to audiences of all ages. officers in the United States District Court for the Northern District of California alleging claims under Section10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. operations and financial condition. Research Lead covering advertising and marketing. The Company maintains reserves primarily against potential uncollectible receivables from theatrical exhibitors. Employment Agreement, Mr.Lasseter received a signing bonus of $5,000,000, of which $60,000 was paid to a third party. The Incredibles is Pixars widest international digital cinema release to date, and the industrys first The future production costs of Cars, Ratatouille and subsequent films, and any future expansion of our studio and headquarters in Emeryville, California, may have an adverse impact on our cash and investment provide the Company with reserve information that may differ substantially from Pixars historical experience with its previous titles. In the modeling phase, digital models of each set and character are created by defining their shapes in three dimensions (height, width and depth) and by adding the rigging, the sets of animation controls that allow the Unless otherwise indicated in the. release or authorize the release of any feature-length animated theatrical motion picture we produce, other than the Pictures and Derivative Works we produce under the Co-Production Agreement and the Distribution Letter Agreement, until twelve For example, Pirates of the Caribbean: The Curse of the Black Pearl, Spy Kids 3D: Game Over, and Freaky Friday, competed directly with Finding Nemo for domestic He has been employed by NIKE since 1979 in a variety of positions with primary responsibilities in product research, design and development, marketing and brand management. reserves for Monsters, Inc. which reduced the Companys difference in reserves from Disney by approximately $5.1 million. us.. fluctuate due to various market factors. 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. continue to use our cash resources for such expenditures, or may choose to finance such capital expenditures through issuance of additional equity or debt securities, by obtaining a credit facility or by some other financing mechanism. the National Academy of Engineering. Disney. Item 14. feature film produced under the Co-Production Agreement to our entertainment law firm in consideration for services rendered. December15. h275W0P07P0QM-ILI,IT062 &TG0vv 7 endstream endobj 1408 0 obj <>stream Ms.Scali is also an accomplished performer, songwriter and recording artist. Although computers have been used to assist in some elements of cel animation in the past, most Financial Statement Schedules. Pursuant to the Co-Production Agreement, in addition to co-financing the production costs of the Pictures, Disney will reimburse U.S. in both VHS and a 2-disc Collectors Edition DVD. The following discussion addresses the December31, 2005. in accounting from Merrimack College and is a certified public We have three core proprietary technologies: (1)Marionette, an animation software system for articulating, Ringmaster is a production management software system for scheduling, You should carefully consider these factors before making an Registered Public Accounting Firm on pages 57 and 58, respectively, which are incorporated herein by reference. CGI is now the most prevalent form of If estimated remaining gross revenues are not sufficient to recover the unamortized film In addition, the Company has amortized more than To the extent that personnel, our business model upon which an evaluation of our prospects can be based. While the fair value method under SFAS 123R is very similar to the fair value method under SFAS 123 with regards to measurement and recognition of material effect on its results of operations, financial position or cash flows. The number and percentage of shares beneficially owned is determined under rules of the the underwater murk in Finding Nemo and the human skin in The Incredibles. Such expenses incurred for Pixar business approximated $91,000, $0, and $26,000 during 2003, 2004, and 2005, respectively. Several movie studios have developed their own Distribution Letter Agreement. Our responsibility is to express an opinion on At December31, 2005, based on historical taxable income and projections of future taxable income, the Company believes it is more likely than not that the The price for the Common Stock as of the close of business on February15, 2006 was $61.30 per share. Toll: 1-781-575-3335, Website: www.disneyshareholder.com h20T0P00R0QM-ILI,IT04 &TG0vv $9 endstream endobj 1370 0 obj <>stream For instance, towards the end of the life cycle for a revenue stream, Disney may inform us, and has in the past informed us, of additional distribution costs to those previously agreement under certain circumstances. 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 The loss of the services of any of Messrs. Jobs, Lasseter, Bax, Dr.Catmull, Ms.Scali or of other key employees, especially our h273W0P07P0QM-ILI,IT061 &TG0vv b; endstream endobj 1413 0 obj <>stream This agreement generally provides that Ratatouille will with Statement of Position 00-2 Accounting by Producers or Distributors of Films (SOP 00-2). 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, Our management evaluated, with the participation of our Chief Executive character animation which was used for several central characters in live action films such as Star Wars Episode III: Revenge of the Sith. The executive officers of Pixar and their ages as of February15, 2006 are as follows: Pixars 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. in the future. Our creative and technical personnel have collaborated since our founding to produce three-dimensional computer-animated films. of 1933. In addition, Mr.Jobs is currently Chief Executive Officer and a We intend to release all of our films on television, which includes Pay-Per-View, pay television and network television. In the sound process, the sound effects and musical score are added and the final sound is mixed. fiscal year ended December31, 2005 have not reflected, and future reported operating expenses will not reflect, our true level of spending on the production of animated feature films, related products and Overhead. Pixar was incorporated in the state of California on competition with respect to our RenderMan software to Finding Nemos lower amortization rate. thousands of sketches that represent the story to be animated. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports The following table sets forth the beneficial ownership of Common Stock of Pixar as of February15, 2006 for the The complaint sought class certification and certain forms of equitable relief, including enjoining the consummation of the Pete Docter, the director of Our films are distributed to television markets throughout the world. While film is the primary means of distributing motion pictures to theaters, digital projectors have achieved the brightness and high resolution necessary to project movies on theater screens without the use of Mr.Lasseter joined Lucasfilms Computer Division in 1984, and was a founding member of Pixar when it was formed in February 1986. Home video sales continue to be among the largest contributors to lifetime revenues of our films. We, like other animation studios, edit the film because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate. within 45 days after the end of each calendar month for the first three years after the films release then quarterly thereafter, subject to certain exceptions, and we have the right to audit Disneys books and records relating to the The cases have Accordingly, no revenue has been recognized To ensure prompt handling of unexpected matters, the Audit Committee delegates to the Chairman of the Audit 2. Incredibles, which were released in November 1998,November 2001,May 2003 and November 2004, respectively. nullifies certain requirements of EITF Issue 03-1 and supersedes EITF Topic D-44, Recognition of Other-Than-Temporary Impairment upon the Planned Sale of a Security Whose Cost Exceeds Fair Value. The FSP addresses the The estimate for return reserves, whether based on historical information or more current information from Disney, is inherently Peak Revenue $770.0M (2022) of interest income on investments. Nonetheless, during its long history, Disney has been a very successful producer and distributor of its own animated feature films. In 2003, our income tax rate approximated U.S. Federal and California State statutory In addition, Pixar shall finance all production costs and receive all gross receipts of Ratatouille after deduction of (1)a distribution fee If any claims or actions are asserted against us, we may seek to obtain a license under a third partys intellectual property Sciences and the British Academy of Film and Television Arts. Included in net revenues was $4.1 million relating to Toy Story, resulting from a reduction in television expenses based on updated information obtained from Disney. Certain Relationships and Related Transactions, We have engaged the law firm of Ziffren, Brittenham, Branca, Fischer, Gilbert-Lurie, Stiffelman,& Cook LLP (Ziffren) to handle future periods. 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 h02W0P0P0QM-ILI,IT013 &TG0vv i8 endstream endobj 1443 0 obj <>stream 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. use internally and license to third parties. We entered the pay television market in March 2003 by licensing the pay television rights for Monsters, Inc. to Starz!/Encore. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in the early stages of a business enterprise, significantly greater financial, technical, marketing and other resources than we do.