Item 2.06 Material Impairments.
As previously announced, The Walt Disney Company (together with the subsidiaries
through which its various businesses are actually conducted, the "Company") is
in the process of reviewing content, primarily on its direct-to-consumer ("DTC")
services, for alignment with a strategic change in approach to content curation
and as a result is removing certain content from its platforms. On May 26, 2023,
the Company removed certain produced content from its DTC services. As a result,
the Company will record a $1.5 billion impairment charge in its fiscal third
quarter financial statements to adjust the carrying value of these content
assets to fair value. The Company is continuing its review and currently
anticipates additional produced content will be removed from its DTC and other
platforms, largely during the remainder of its third fiscal quarter. As a
result, the Company currently estimates it may incur further impairment charges
of up to approximately $0.4 billion related to produced content. The Company
does not expect any material cash expenditures in connection with the impairment
charges related to produced content. In addition, the Company may terminate
certain license agreements for the right to use content on its platforms, which
would result in the removal of licensed content from its platforms and lead to
impairment and/or contract termination charges as well as cash payments. The
Company currently expects that any such charges and payments related to licensed
content would be meaningfully less than the impairment charges related to
produced content.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit
Number Description
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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