Commitments and Contingencies

Commitments

The Company has various contractual commitments for broadcast rights for sports, feature films and other programming, totaling approximately $46.1 billion, including approximately $0.4 billion for available programming as of September 27, 2014, and approximately $44.2 billion related to sports programming rights, primarily college football (including college bowl games) and basketball conferences, NFL, MLB and NBA.

The Company has entered into operating leases for various real estate and equipment needs, including retail outlets and distribution centers for consumer products, broadcast equipment and office space for general and administrative purposes. Rental expense for operating leases during fiscal years 2014, 2013 and 2012, including common-area maintenance and contingent rentals, was $883 million, $875 million and $863 million, respectively.

The Company also has contractual commitments for creative talent and employment agreements and unrecognized tax benefits. Creative talent and employment agreements include obligations to actors, producers, sports, television and radio personalities and executives.

Contractual commitments for broadcast programming rights, future minimum lease payments under non-cancelable operating leases and creative talent and other commitments totaled $54.2 billion at September 27, 2014, payable as follows:



	Broadcast Programming		Operating Leases		Other		Total
2015	$	5,184	$	460	$	1,907	$	7,551
2016	5,139		392		818		6,349
2017	4,641		327		489		5,457
2018	4,428		268		249		4,945
2019	4,596		225		124		4,945
Thereafter	22,097		1,715		1,141		24,953
	$	46,085	$	3,387	$	4,728	$	54,200

Certain contractual commitments, principally broadcast programming rights and operating leases, have payments that are variable based primarily on revenues.

As a result of new broadcast programming rights commitments, primarily for incremental sports rights with payment terms that range up to 11 years, and payments subsequent to year end, the Company’s broadcast programming commitments are approximately $58 billion as of November 15, 2014.

The Company has non-cancelable capital leases, primarily for land and broadcast equipment, which had gross carrying values of $557 million and $572 million at September 27, 2014 and September 28, 2013, respectively. Accumulated amortization related to these capital leases totaled $223 million and $208 million at September 27, 2014 and September 28, 2013, respectively. Future payments under these leases as of September 27, 2014 are as follows:



2015	$	71
2016	40
2017	38
2018	21
2019	14
Thereafter	500
Total minimum obligations	684
Less amount representing interest	(422		)
Present value of net minimum obligations	262
Less current portion	(33		)
Long-term portion	$	229

Contractual Guarantees

The Company has guaranteed bond issuances by the Anaheim Public Authority that were used by the City of Anaheim to finance construction of infrastructure and a public parking facility adjacent to the Disneyland Resort. Revenues from sales, occupancy and property taxes from the Disneyland Resort and non-Disney hotels are used by the City of Anaheim to repay the bonds. In the event of a debt service shortfall, the Company will be responsible to fund the shortfall. As of September 27, 2014, the remaining debt service obligation guaranteed by the Company was $334 million, of which $68 million was principal. To the extent that tax revenues exceed the debt service payments in subsequent periods, the Company would be reimbursed for any previously funded shortfalls. To date, tax revenues have exceeded the debt service payments for Anaheim bonds.

Legal Matters

Beef Products, Inc. v. American Broadcasting Companies, Inc. On September 13, 2012, plaintiffs filed an action in South Dakota state court against certain subsidiaries and employees of the Company and others, asserting claims for defamation arising from alleged false statements and implications, statutory and common law product disparagement, and tortious interference with existing and prospective business relationships. The claims arise out of ABC News reports published in March and April 2012 that discussed the subject of labeling requirements for production processes related to a product one plaintiff produces that is added to ground beef before sale to consumers. Plaintiffs seek actual and consequential damages in excess of $400 million, statutory damages (including treble damages) pursuant to South Dakota’s Agricultural Food Products Disparagement Act, and punitive damages. On July 9, 2013, the Company moved in state court to dismiss all claims and on March 27, 2014, the state court dismissed certain common law disparagement counts as preempted by South Dakota’s produce disparagement statute, but denied the motion on the remaining claims. On April 23, 2014, the Company petitioned the South Dakota Supreme Court to allow a discretionary appeal seeking reversal of the state court’s order permitting the remaining common law disparagement claims to proceed and also seeking reversal of its decision to allow certain claims to proceed as defamation claims. On May 22, 2014, the South Dakota Supreme Court denied the Company’s petition. On May 23, 2014, the Company answered the Complaint. Trial is set for February 2017. At this time, the Company is not able to predict the ultimate outcome of this matter, nor can it estimate the range of possible loss.

The Company, together with, in some instances, certain of its directors and officers, is a defendant or codefendant in various other legal actions involving copyright, breach of contract and various other claims incident to the conduct of its businesses.

Management does not believe that the Company has incurred a probable, material loss by reason of any of the above actions.

Celador International Ltd. v. American Broadcasting Companies, Inc.

In connection with the Company’s litigation with Celador International Ltd., the Company recorded a $321 million charge in Other income/(expense), net, in fiscal 2013. This amount was paid in fiscal 2013.

Long-Term Receivables and the Allowance for Credit Losses

The Company has accounts receivable with original maturities greater than one year related to the sale of television program rights within the Media Networks segment and vacation ownership units within the Parks and Resorts segment. Allowances for credit losses are established against these receivables as necessary.

The Company estimates the allowance for credit losses related to receivables from the sale of television programs based upon a number of factors, including historical experience and the financial condition of individual companies with which we do business. The balance of television program sales receivables recorded in other non-current assets, net of an immaterial allowance for credit losses, was $0.8 billion as of September 27, 2014. The activity in fiscal 2014 related to the allowance for credit losses was not material.

The Company estimates the allowance for credit losses related to receivables from sales of its vacation ownership units based primarily on historical collection experience. Estimates of uncollectible amounts also consider the economic environment and the age of receivables. The balance of mortgage receivables recorded in other non-current assets, net of a related allowance for credit losses of approximately 4%, was $0.7 billion as of September 27, 2014. The activity in fiscal 2014 related to the allowance for credit losses was not material.