10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended	Commission File Number 1-11605
December 31, 2016

Incorporated in Delaware	I.R.S. Employer Identification
	No. 95-4545390

500 South Buena Vista Street, Burbank, California 91521

(818) 560-1000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one).

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer (do not check if smaller reporting company)	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

There were 1,581,248,242 shares of common stock outstanding as of February 1, 2017.

PART I. FINANCIAL INFORMATION

Item 1: Financial Statements

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited; in millions, except per share data)

	Quarter Ended
	December 31, 2016			January 2, 2016
Revenues:
Services	$	12,406		$	12,622
Products	2,378			2,622
Total revenues	14,784			15,244
Costs and expenses:
Cost of services (exclusive of depreciation and amortization)	(7,020		)	(7,056		)
Cost of products (exclusive of depreciation and amortization)	(1,386		)	(1,567		)
Selling, general, administrative and other	(1,985		)	(2,025		)
Depreciation and amortization	(687		)	(607		)
Total costs and expenses	(11,078		)	(11,255		)
Restructuring and impairment charges	—			(81		)
Interest expense, net	(99		)	(24		)
Equity in the income of investees	118			474
Income before income taxes	3,725			4,358
Income taxes	(1,237		)	(1,448		)
Net income	2,488			2,910
Less: Net income attributable to noncontrolling interests	(9		)	(30		)
Net income attributable to The Walt Disney Company (Disney)	$	2,479		$	2,880
Earnings per share attributable to Disney:
Diluted	$	1.55		$	1.73
Basic	$	1.56		$	1.74
Weighted average number of common and common equivalent shares outstanding:
Diluted	1,603			1,668
Basic	1,592			1,654
Dividends declared per share	$	0.78		$	0.71

See Notes to Condensed Consolidated Financial Statements

2

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited; in millions)

	Quarter Ended
	December 31, 2016			January 2, 2016
Net income	$	2,488		$	2,910
Other comprehensive income/(loss), net of tax:
Market value adjustments for investments	(11		)	(3		)
Market value adjustments for hedges	280			(25		)
Pension and postretirement medical plan adjustments	46			42
Foreign currency translation and other	(290		)	(113		)
Other comprehensive income/(loss)	25			(99		)
Comprehensive income	2,513			2,811
Less: Net income attributable to noncontrolling interests	(9		)	(30		)
Less: Other comprehensive loss attributable to noncontrolling interests	99			51
Comprehensive income attributable to Disney	$	2,603		$	2,832

See Notes to Condensed Consolidated Financial Statements

3

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited; in millions, except per share data)

	December 31, 2016			October 1, 2016
ASSETS
Current assets
Cash and cash equivalents	$	3,736		$	4,610
Receivables	9,878			9,065
Inventories	1,299			1,390
Television costs and advances	821			1,208
Other current assets	931			693
Total current assets	16,665			16,966
Film and television costs	6,572			6,339
Investments	4,220			4,280
Parks, resorts and other property
Attractions, buildings and equipment	49,912			50,270
Accumulated depreciation	(26,996		)	(26,849		)
	22,916			23,421
Projects in progress	2,902			2,684
Land	1,236			1,244
	27,054			27,349
Intangible assets, net	6,892			6,949
Goodwill	27,793			27,810
Other assets	2,380			2,340
Total assets	$	91,576		$	92,033
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and other accrued liabilities	$	9,979		$	9,130
Current portion of borrowings	5,698			3,687
Unearned royalties and other advances	3,640			4,025
Total current liabilities	19,317			16,842
Borrowings	14,792			16,483
Deferred income taxes	3,888			3,679
Other long-term liabilities	6,402			7,706
Commitments and contingencies (Note 10)
Equity
Preferred stock, $.01 par value, Authorized – 100 million shares, Issued – none	—			—
Common stock, $.01 par value, Authorized – 4.6 billion shares, Issued – 2.9 billion shares	35,906			35,859
Retained earnings	67,327			66,088
Accumulated other comprehensive loss	(3,855		)	(3,979		)
	99,378			97,968
Treasury stock, at cost, 1.3 billion shares	(56,168		)	(54,703		)
Total Disney Shareholders’ equity	43,210			43,265
Noncontrolling interests	3,967			4,058
Total equity	47,177			47,323
Total liabilities and equity	$	91,576		$	92,033

See Notes to Condensed Consolidated Financial Statements

4

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited; in millions)

	Quarter Ended
	December 31, 2016			January 2, 2016
OPERATING ACTIVITIES
Net income	$	2,488		$	2,910
Depreciation and amortization	687			607
Deferred income taxes	(76		)	551
Equity in the income of investees	(118		)	(474		)
Cash distributions received from equity investees	203			206
Net change in film and television costs and advances	440			705
Equity-based compensation	97			106
Other	187			211
Changes in operating assets and liabilities:
Receivables	(1,160		)	(2,358		)
Inventories	102			134
Other assets	126			91
Accounts payable and other accrued liabilities	(2,763		)	(891		)
Income taxes	1,047			658
Cash provided by operations	1,260			2,456
INVESTING ACTIVITIES
Investments in parks, resorts and other property	(1,040		)	(1,406		)
Acquisitions	—			(400		)
Other	5			8
Cash used in investing activities	(1,035		)	(1,798		)
FINANCING ACTIVITIES
Commercial paper borrowings, net	732			1,907
Borrowings	42			382
Reduction of borrowings	(194		)	(564		)
Repurchases of common stock	(1,465		)	(2,352		)
Proceeds from exercise of stock options	65			52
Other	(167		)	13
Cash used in financing activities	(987		)	(562		)
Impact of exchange rates on cash and cash equivalents	(112		)	(64		)
Change in cash and cash equivalents	(874		)	32
Cash and cash equivalents, beginning of period	4,610			4,269
Cash and cash equivalents, end of period	$	3,736		$	4,301

See Notes to Condensed Consolidated Financial Statements

5

THE WALT DISNEY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited; in millions)

	Quarter Ended
	December 31, 2016									January 2, 2016
	Disney Shareholders			Non- controlling Interests			Total Equity			Disney Shareholders			Non- controlling Interests			Total Equity
Beginning balance	$	43,265		$	4,058		$	47,323		$	44,525		$	4,130		$	48,655
Comprehensive income/(loss)	2,603			(90		)	2,513			2,832			(21		)	2,811
Equity compensation activity	48			—			48			128			—			128
Dividends	(1,237		)	—			(1,237		)	(1,168		)	—			(1,168		)
Common stock repurchases	(1,465		)	—			(1,465		)	(2,352		)	—			(2,352		)
Distributions and other	(4		)	(1		)	(5		)	(7		)	131			124
Ending balance	$	43,210		$	3,967		$	47,177		$	43,958		$	4,240		$	48,198

See Notes to Condensed Consolidated Financial Statements

6

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

1. Principles of Consolidation

These Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. We believe that we have included all normal recurring adjustments necessary for a fair presentation of the results for the interim period. Operating results for the quarter endedDecember 31, 2016 are not necessarily indicative of the results that may be expected for the year ending September 30, 2017. Certain reclassifications have been made in the prior-year financial statements to conform to the current-year presentation.

These financial statements should be read in conjunction with the Company’s 2016 Annual Report on Form 10-K.

The Company enters into relationships or investments with other entities that may be a variable interest entity (VIE). A VIE is consolidated in the financial statements if the Company has the power to direct activities that most significantly impact the economic performance of the VIE and has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE (as defined by ASC 810-10-25-38). Disneyland Paris, Hong Kong Disneyland Resort and Shanghai Disney Resort (collectively the International Theme Parks) are VIEs. Company subsidiaries (the Management Companies) have management agreements with the International Theme Parks, which provide the Management Companies, subject to certain protective rights of joint venture partners, with the ability to direct the day-to-day operating activities and the development of business strategies that we believe most significantly impact the economic performance of the International Theme Parks. In addition, the Management Companies receive management fees under these arrangements that we believe could be significant to the International Theme Parks. Therefore, the Company has consolidated the International Theme Parks in its financial statements.

The terms “Company,” “we,” “us,” and “our” are used in this report to refer collectively to the parent company and the subsidiaries through which our various businesses are actually conducted.

2. Segment Information

The operating segments reported below are the segments of the Company for which separate financial information is available and for which segment results are evaluated regularly by the Chief Executive Officer in deciding how to allocate resources and in assessing performance.

Segment operating results reflect earnings before corporate and unallocated shared expenses, restructuring and impairment charges, interest expense, income taxes and noncontrolling interests. Segment operating income includes equity in the income of investees. Corporate and unallocated shared expenses principally consist of corporate functions, executive management and certain unallocated administrative support functions.

Equity in the income of investees is included in segment operating income as follows:

	Quarter Ended
	December 31, 2016			January 2, 2016
Media Networks	$	119		$	142
Parks and Resorts	(2		)	—
Consumer Products & Interactive Media	1			—
Equity in the income of investees included in segment operating income	118			142
Vice Gain	—			332
Total equity in the income of investees	$	118		$	474

During the quarter ended January 2, 2016, the Company recognized its share of a net gain recorded by A+E Television Networks (A+E), a joint venture owned 50% by the Company, in connection with A+E’s acquisition of an interest in Vice Group Holding, Inc. (Vice) (Vice Gain). The Company’s $332 million share of the Vice Gain is recorded in “Equity in the income of investees” in the Condensed Consolidated Statement of Income but is not included in segment operating income. See Note 3 for further discussion of the transaction.

7

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

Segment revenues and segment operating income are as follows:

	Quarter Ended
	December 31, 2016		January 2, 2016
Revenues (1):
Media Networks	$	6,233	$	6,332
Parks and Resorts	4,555		4,281
Studio Entertainment	2,520		2,721
Consumer Products & Interactive Media	1,476		1,910
	$	14,784	$	15,244
Segment operating income(1):
Media Networks	$	1,362	$	1,412
Parks and Resorts	1,110		981
Studio Entertainment	842		1,014
Consumer Products & Interactive Media	642		860
	$	3,956	$	4,267

⁽¹⁾ Studio Entertainment segment revenues and operating income include an allocation of Consumer Products & Interactive Media revenues, which is meant to reflect royalties on sales of merchandise based on certain film properties. The increase to Studio Entertainment revenues and operating income and corresponding decrease to Consumer Products & Interactive Media revenues and operating income totaled $181 million and $262 million for the quarters ended December 31, 2016 and January 2, 2016, respectively.

A reconciliation of segment operating income to income before income taxes is as follows:

	Quarter Ended
	December 31, 2016			January 2, 2016
Segment operating income	$	3,956		$	4,267
Corporate and unallocated shared expenses	(132		)	(136		)
Restructuring and impairment charges	—			(81		)
Interest expense, net	(99		)	(24		)
Vice Gain	—			332
Income before income taxes	$	3,725		$	4,358

3. Acquisitions

Vice/A+E

Vice is a media company targeting a millennial audience through news and pop culture content and creative brand integration. During the first quarter of fiscal 2016, A+E acquired an 8% interest in Vice in exchange for a 49.9% interest in one of A+E’s cable channels, H2, which has been rebranded as Viceland and programmed with Vice content. As a result of this exchange, A+E recognized a net non-cash gain based on the estimated fair value of H2. The Company’s share of the Vice Gain totaled $332 million and was recorded in “Equity in the income of investees” in the Condensed Consolidated Statement of Income in the first quarter of fiscal 2016. At December 31, 2016, A+E had a 20% interest in Vice.

In addition, during the first quarter of fiscal 2016, the Company acquired an 11% interest in Vice for $400 million of cash.

The Company accounts for its interests in A+E and Vice as equity method investments.

BAMTech

In August 2016, the Company acquired a 15% interest in BAMTech, an entity which holds Major League Baseball’s streaming technology and content delivery businesses, for $450 million. In January 2017, the Company acquired an additional 18% interest for $557 million. In addition, the Company has an option to increase its ownership to 66% by acquiring additional shares at fair market value from Major League Baseball between August 2020 and August 2023. The Company accounts for its interest in BAMTech as an equity method investment.

8

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

4. Borrowings

During the quarter ended December 31, 2016, the Company’s borrowing activity was as follows:

	October 1, 2016		Borrowings		Payments			Other Activity			December 31, 2016
Commercial paper with original maturities less than three months(1)	$	777	$	—	$	(117	)	$	1		$	661
Commercial paper with original maturities greater than three months	744		1,594		(745		)	2			1,595
U.S. medium-term notes	16,827		—		—			5			16,832
International Theme Parks borrowings	1,087		13		—			(27		)	1,073
Foreign currency denominated debt and other(2)	735		29		(194		)	(241		)	329
Total	$	20,170	$	1,636	$	(1,056	)	$	(260	)	$	20,490

⁽¹⁾  Borrowings and payments are reported net.

⁽²⁾  The other activity is primarily market value adjustments for debt with qualifying hedges.

The Company has bank facilities with a syndicate of lenders to support commercial paper borrowings as follows:

	Committed Capacity		Capacity Used		Unused Capacity
Facility expiring March 2017	$	1,500	$	—	$	1,500
Facility expiring March 2019	2,250		—		2,250
Facility expiring March 2021	2,250		—		2,250
Total	$	6,000	$	—	$	6,000

All of the above bank facilities allow for borrowings at LIBOR-based rates plus a spread depending on the credit default swap spread applicable to the Company’s debt, subject to a cap and floor that vary with the Company’s debt rating assigned by Moody’s Investors Service and Standard and Poor’s. The spread above LIBOR can range from 0.23% to 1.63%. The Company also has the ability to issue up to $800 million of letters of credit under the facility expiring in March 2019, which if utilized, reduces available borrowings under this facility. As of December 31, 2016, the Company has $172 million of outstanding letters of credit, of which none were issued under this facility. The facilities specifically exclude certain entities, including the International Theme Parks, from any representations, covenants, or events of default and contain only one financial covenant relating to interest coverage, which the Company met on December 31, 2016 by a significant margin.

Interest expense, net

Interest and investment income and interest expense are reported net in the Condensed Consolidated Statements of Income and consist of the following (net of capitalized interest):

	Quarter Ended
	December 31, 2016			January 2, 2016
Interest expense	$	(121	)	$	(66	)
Interest and investment income	22			42
Interest expense, net	$	(99	)	$	(24	)

Interest and investment income includes gains and losses on the sale of publicly and non-publicly traded investments, investment impairments and interest earned on cash and cash equivalents and certain receivables.

9

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

5. International Theme Park Investments

The Company has an 81% effective ownership interest in the operations of Disneyland Paris, a 47% ownership interest in the operations of Hong Kong Disneyland Resort and a 43% ownership interest in the operations of Shanghai Disney Resort. The International Theme Parks are VIEs consolidated in the Company’s financial statements. See Note 1 for the Company’s policy on consolidating VIEs.

The following table summarizes the carrying amounts of the International Theme Parks’ assets and liabilities included in the Company’s Condensed Consolidated Balance Sheets as of December 31, 2016 and October 1, 2016:

	International Theme Parks
	December 31, 2016		October 1, 2016
Cash and cash equivalents	$	717	$	1,008
Other current assets	343		331
Total current assets	1,060		1,339
Parks, resorts and other property	8,960		9,270
Other assets	89		88
Total assets	$	10,109	$	10,697
Current liabilities	$	1,265	$	1,499
Borrowings - long-term	1,073		1,087
Other long-term liabilities	267		256
Total liabilities	$	2,605	$	2,842

The following table summarizes the International Theme Parks’ revenues and costs and expenses included in the Company’s Condensed Consolidated Statement of Income for the quarter ended December 31, 2016:

	December 31, 2016
Revenues	$	737
Costs and expenses	(760		)

International Theme Parks royalty and management fees of $32 million recognized for the quarter ended December 31, 2016 are eliminated in consolidation but are considered in calculating earnings allocated to noncontrolling interests.

For the quarter ended December 31, 2016, International Theme Parks’ cash flows included in the Company’s Condensed Consolidated Statement of Cash Flows are $113 million generated from operating activities, $304 million used in investing activities and $13 million generated from financing activities.

Disneyland Paris

The Company has term loans to Disneyland Paris with outstanding balances totaling €1.0 billion at December 31, 2016 bearing interest at a 4% fixed rate and maturing in 2024. In addition, the Company has provided Disneyland Paris a €0.4 billion line of credit bearing interest at EURIBOR plus 2% and maturing in 2023. At December 31, 2016, €155 million is outstanding under the line of credit. The amounts of the loans and line of credit are eliminated upon consolidation.

The Company has waived royalties and management fees for the fourth quarter of fiscal 2016 through the third quarter of fiscal 2018.

Hong Kong Disneyland Resort

At December 31, 2016, the Government of the Hong Kong Special Administrative Region (HKSAR) and the Company had 53% and 47% equity interests in Hong Kong Disneyland Resort, respectively.

As part of financing the construction of a third hotel, the Company and HKSAR have provided loans with outstanding balances of $136 million and $91 million, respectively, which bear interest at a rate of three month HIBOR plus 2% and mature in September 2025. The amount of the Company’s loan is eliminated upon consolidation.

10

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

Shanghai Disney Resort

Shanghai Disney Resort is owned through two joint venture companies, in which Shanghai Shendi (Group) Co., Ltd (Shendi) owns 57% and the Company owns 43%. A management company, in which the Company has a 70% interest and Shendi a 30% interest, is responsible for operating Shanghai Disney Resort.

The Company has provided Shanghai Disney Resort with long-term loans totaling $762 million, bearing interest at rates up to 8%. In addition, the Company has an outstanding balance of $288 million due from Shanghai Disney Resort related to development and pre-opening costs of the resort and outstanding royalties and management fees. The Company has also provided Shanghai Disney Resort with a $157 million line of credit bearing interest at 8%. There is no outstanding balance under the line of credit at December 31, 2016. The amounts of the loan and line of credit are eliminated upon consolidation.

Shendi has provided Shanghai Disney Resort with term loans totaling 6.5 billion yuan (approximately $0.9 billion), bearing interest at rates up to 8% and maturing in 2036; however, early repayment is permitted. Shendi has also provided Shanghai Disney Resort with a 1.4 billion yuan (approximately $197 million) line of credit bearing interest at 8%. There is no outstanding balance under the line of credit at December 31, 2016.

6. Pension and Other Benefit Programs

The components of net periodic benefit cost are as follows:

	Pension Plans						Postretirement Medical Plans
	Quarter Ended						Quarter Ended
	December 31, 2016			January 2, 2016			December 31, 2016			January 2, 2016
Service costs	$	91		$	80		$	3		$	3
Interest costs	112			115			14			15
Expected return on plan assets	(219		)	(188		)	(12		)	(11		)
Amortization of prior-year service costs	3			3			—			—
Recognized net actuarial loss	101			61			4			2
Net periodic benefit cost	$	88		$	71		$	9		$	9

During the quarter ended December 31, 2016, the Company made $1.3 billion of contributions to its pension and postretirement medical plans. The Company currently does not expect to make any additional material contributions to its pension and postretirement medical plans during the remainder of fiscal 2017. However, final funding amounts for fiscal 2017 will be assessed based on our January 1, 2017 funding actuarial valuation, which we expect to receive during the fourth quarter of fiscal 2017.

7. Earnings Per Share

Diluted earnings per share amounts are based upon the weighted average number of common and common equivalent shares outstanding during the period and are calculated using the treasury stock method for equity-based compensation awards (Awards). A reconciliation of the weighted average number of common and common equivalent shares outstanding and the number of Awards excluded from the diluted earnings per share calculation, as they were anti-dilutive, are as follows:

	Quarter Ended
	December 31, 2016	January 2, 2016
Shares (in millions):
Weighted average number of common and common equivalent shares outstanding (basic)	1,592	1,654
Weighted average dilutive impact of Awards	11	14
Weighted average number of common and common equivalent shares outstanding (diluted)	1,603	1,668
Awards excluded from diluted earnings per share	16	4

11

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

8. Equity

The Company paid the following dividends in fiscal 2017 and 2016:

Per Share	Total Paid	Payment Timing	Related to Fiscal Period
$0.78	$1.2 billion	Second Quarter of Fiscal 2017	Second Half 2016
$0.71	$1.1 billion	Fourth Quarter of Fiscal 2016	First Half 2016
$0.71	$1.2 billion	Second Quarter of Fiscal 2016	Second Half 2015

During the quarter ended December 31, 2016, the Company repurchased15 million shares of its common stock for $1.5 billion. As of December 31, 2016, the Company had remaining authorization in place to repurchase approximately 267 million additional shares. The repurchase program does not have an expiration date.

The following table summarizes the changes in each component of accumulated other comprehensive income (loss) (AOCI) including our proportional share of equity method investee amounts, which is generally net of 37% estimated tax:

							Unrecognized Pension and  Postretirement Medical  Expense			Foreign Currency Translation and Other(1)			AOCI
	Market Value Adjustments
	Investments			Cash Flow Hedges
Balance at October 1, 2016	$	26		$	(25	)	$	(3,651	)	$	(329	)	$	(3,979	)
Quarter Ended December 31, 2016:
Unrealized gains (losses) arising   during the period	(11		)	324			(22		)	(191		)	100
Reclassifications of realized net (gains) losses to net income	—			(44		)	68			—			24
Balance at December 31, 2016	$	15		$	255		$	(3,605	)	$	(520	)	$	(3,855	)
Balance at October 3, 2015	$	13		$	334		$	(2,497	)	$	(271	)	$	(2,421	)
Quarter Ended January 2, 2016:
Unrealized gains (losses) arising   during the period	(3		)	41			—			(62		)	(24		)
Reclassifications of realized net (gains) losses to net income	—			(66		)	42			—			(24		)
Balance at January 2, 2016	$	10		$	309		$	(2,455	)	$	(333	)	$	(2,469	)

⁽¹⁾  Foreign Currency Translation and Other is net of an average 22% estimated tax at December 31, 2016 as the Company has not recognized deferred tax assets for some of our foreign entities.

Details about AOCI components reclassified to net income are as follows:

Gains/(losses) in net income:	Affected line item in the   Condensed Consolidated   Statements of Income:	Quarter Ended
		December 31, 2016			January 2, 2016
Cash flow hedges	Primarily revenue	$	70		$	105
Estimated tax	Income taxes	(26		)	(39		)
		44			66
Pension and postretirement   medical expense	Costs and expenses	(108		)	(67		)
Estimated tax	Income taxes	40			25
		(68		)	(42		)
Total reclassifications for the period		$	(24	)	$	24

12

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

At December 31, 2016 and October 1, 2016, the Company held available-for-sale investments in unrecognized gain positions totaling $29 million and $49 million, respectively, and no investments in significant unrecognized loss positions.

9. Equity-Based Compensation

Compensation expense related to stock options, stock appreciation rights and restricted stock units (RSUs) is as follows:

	Quarter Ended
	December 31, 2016		January 2, 2016
Stock options(1)	$	20	$	23
RSUs	77		83
Total equity-based compensation expense (2)	$	97	$	106
Equity-based compensation expense capitalized during the period	$	21	$	15

⁽¹⁾  Includes stock appreciation rights.

⁽²⁾  Equity-based compensation expense is net of capitalized equity-based compensation and excludes amortization of previously capitalized equity-based compensation costs.

Unrecognized compensation cost related to unvested stock options and RSUs was $221 millionand $770 million, respectively, as of December 31, 2016.

The weighted average grant date fair values of options granted during the quarters ended December 31, 2016 and January 2, 2016 were $25.78 and $31.17, respectively.

During the quarter ended December 31, 2016, the Company made equity compensation grants consisting of 4.5 million stock options and 3.6 million RSUs.

10. Commitments and Contingencies

Legal Matters

Beef Products, Inc. v. American Broadcasting Companies, Inc. OnSeptember 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 about a product, Lean Finely Textured Beef, that was included in ground beef and hamburger meat. Plaintiffs’ complaint sought actual and consequential damages in excess of $400 million (which in March 2016 they asserted could be as much as $1.9 billion), statutory damages (including treble damages) pursuant to South Dakota’s Agricultural Food Products Disparagement Act, and punitive damages. Trial is set for June 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.

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 December 31, 2016, the remaining debt service obligation guaranteed by the Company was $316 million, of which $51 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 these bonds.

13

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

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 and vacation ownership units. 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 December 31, 2016. The activity in the current period 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 approximately $0.7 billion as of December 31, 2016. The activity in the current period related to the allowance for credit losses was not material.

Income Taxes

During the quarter ended December 31, 2016, the Company decreased its gross unrecognized tax benefits by $23 million to $821 million.

In the next twelve months, it is reasonably possible that our unrecognized tax benefits could change due to resolutions of open tax matters. These resolutions would reduce our unrecognized tax benefits by approximately $120 million, of which $23 million would reduce our income tax expense and effective tax rate if recognized. 

11. Fair Value Measurements

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants and is classified in one of the following three categories:

Level 1 - Quoted prices for identical instruments in active markets

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable

The Company’s assets and liabilities measured at fair value are summarized in the following tables by fair value measurement Level:

	Fair Value Measurement at December 31, 2016
	Level 1		Level 2			Level 3		Total
Assets
Investments	$	55	$	—		$	—	$	55
Derivatives
Interest rate	—		16			—		16
Foreign exchange	—		1,025			—		1,025
Other	—		12			—		12
Liabilities
Derivatives
Interest rate	—		(149		)	—		(149		)
Foreign exchange	—		(339		)	—		(339		)
Other	—		(1		)	—		(1		)
Total recorded at fair value	$	55	$	564		$	—	$	619
Fair value of borrowings	$	—	$	19,597		$	1,389	$	20,986

14

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

	Fair Value Measurement at October 1, 2016
	Level 1		Level 2			Level 3		Total
Assets
Investments	$	85	$	—		$	—	$	85
Derivatives
Interest rate	—		132			—		132
Foreign exchange	—		596			—		596
Other	—		6			—		6
Liabilities
Derivatives
Interest rate	—		(13		)	—		(13		)
Foreign exchange	—		(510		)	—		(510		)
Other	—		(4		)	—		(4		)
Total recorded at fair value	$	85	$	207		$	—	$	292
Fair value of borrowings	$	—	$	19,500		$	1,579	$	21,079

 The fair values of Level 2 derivatives are primarily determined by internal discounted cash flow models that use observable inputs such as interest rates, yield curves and foreign currency exchange rates. Counterparty credit risk, which is mitigated by master netting agreements and collateral posting arrangements with certain counterparties, did not have a material impact on derivative fair value estimates.

Level 2 borrowings, which include commercial paper and U.S. medium-term notes, are valued based on quoted prices for similar instruments in active markets.

Level 3 borrowings, which include International Theme Park borrowings and other foreign currency denominated borrowings, are generally valued based on historical market transactions, prevailing market interest rates and the Company’s current borrowing cost and credit risk.

The Company’s financial instruments also include cash, cash equivalents, receivables and accounts payable. The carrying values of these financial instruments approximate the fair values.

12.Derivative Instruments

The Company manages its exposure to various risks relating to its ongoing business operations according to a risk management policy. The primary risks managed with derivative instruments are interest rate risk and foreign exchange risk.

The Company’s derivative positions measured at fair value are summarized in the following tables:

	As of December 31, 2016
	Current Assets			Other Assets			Other Accrued Liabilities			Other Long- Term Liabilities
Derivatives designated as hedges
Foreign exchange	$	429		$	298		$	(106	)	$	(103	)
Interest rate	—			16			(127		)	—
Other	8			4			(1		)	—
Derivatives not designated as hedges
Foreign exchange	259			39			(129		)	(1		)
Interest rate	—			—			—			(22		)
Gross fair value of derivatives	696			357			(363		)	(126		)
Counterparty netting	(306		)	(149		)	338			117
Cash collateral (received)/paid	(243		)	(63		)	1			—
Net derivative positions	$	147		$	145		$	(24	)	$	(9	)

15

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

	As of October 1, 2016
	Current Assets			Other Assets			Other Accrued Liabilities			Other Long- Term Liabilities
Derivatives designated as hedges
Foreign exchange	$	278		$	191		$	(209	)	$	(163	)
Interest rate	—			132			(13		)	—
Other	3			3			(4		)	—
Derivatives not designated as hedges
Foreign exchange	125			2			(133		)	(5		)
Gross fair value of derivatives	406			328			(359		)	(168		)
Counterparty netting	(241		)	(199		)	316			124
Cash collateral (received)/paid	(77		)	(44		)	7			—
Net derivative positions	$	88		$	85		$	(36	)	$	(44	)

Interest Rate Risk Management

The Company is exposed to the impact of interest rate changes primarily through its borrowing activities. The Company’s objective is to mitigate the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. In accordance with its policy, the Company targets its fixed-rate debt as a percentage of its net debt between a minimum and maximum percentage. The Company primarily uses pay-floating and pay-fixed interest rate swaps to facilitate its interest rate risk management activities.

The Company designates pay-floating interest rate swaps as fair value hedges of fixed-rate borrowings effectively converting fixed-rate borrowings to variable rate borrowings indexed to LIBOR. As of December 31, 2016 and October 1, 2016, the total notional amount of the Company’s pay-floating interest rate swaps was $8.3 billion and $8.3 billion, respectively. The following table summarizes adjustments related to fair value hedges included in “Interest expense, net” in the Condensed Consolidated Statements of Income.

	Quarter Ended
	December 31, 2016			January 2, 2016
Gain (loss) on interest rate swaps	$	(232	)	$	(55	)
Gain (loss) on hedged borrowings	232			55

In addition, the Company realized net benefits of $12 million and $23 million for the quarters ended December 31, 2016 and January 2, 2016, respectively, in “Interest expense, net” related to pay-floating interest rate swaps.

The Company may designate pay-fixed interest rate swaps as cash flow hedges of interest payments on floating-rate borrowings. Pay-fixed swaps effectively convert floating-rate borrowings to fixed-rate borrowings. The unrealized gains or losses from these cash flow hedges are deferred in AOCI and recognized in interest expense as the interest payments occur. The Company did not have pay-fixed interest rate swaps that were designated as cash flow hedges of interest payments at December 31, 2016 or at October 1, 2016 and gains and losses related to pay-fixed swaps recognized in earnings for the quarters ended December 31, 2016 and January 2, 2016 were not material.

To facilitate its interest rate risk management activities, the Company sold an option in November 2016 to enter into a future pay-floating interest rate swap indexed to LIBOR for $0.5 billion in future borrowings. The fair value of this contract as of December 31, 2016 was not material. The option is not designated as a hedge and does not qualify for hedge accounting, accordingly any changes in value will be recorded in earnings.

Foreign Exchange Risk Management

The Company transacts business globally and is subject to risks associated with changing foreign currency exchange rates. The Company’s objective is to reduce earnings and cash flow fluctuations associated with foreign currency exchange rate changes, enabling management to focus on core business issues and challenges.

The Company enters into option and forward contracts that change in value as foreign currency exchange rates change to protect the value of its existing foreign currency assets, liabilities, firm commitments and forecasted but not firmly committed foreign currency transactions. In accordance with policy, the Company hedges its forecasted foreign currency transactions for

16

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

periods generally not to exceed four years within an established minimum and maximum range of annual exposure. The gains and losses on these contracts offset changes in the U.S. dollar equivalent value of the related forecasted transaction, asset, liability or firm commitment. The principal currencies hedged are the euro, Japanese yen, Canadian dollar and British pound. Cross-currency swaps are used to effectively convert foreign currency-denominated borrowings into U.S. dollar denominated borrowings.

The Company designates foreign exchange forward and option contracts as cash flow hedges of firmly committed and forecasted foreign currency transactions. As of December 31, 2016 and October 1, 2016, the notional amounts of the Company’s net foreign exchange cash flow hedges were $5.2 billion and $5.6 billion, respectively. Mark-to-market gains and losses on these contracts are deferred in AOCI and are recognized in earnings when the hedged transactions occur, offsetting changes in the value of the foreign currency transactions. Gains and losses recognized related to ineffectiveness for the quarters ended December 31, 2016 and January 2, 2016 were not material. Net deferred gains recorded in AOCI for contracts that will mature in the next twelve months totaled $332 million.

Foreign exchange risk management contracts with respect to foreign currency denominated assets and liabilities are not designated as hedges and do not qualify for hedge accounting. The notional amounts of these foreign exchange contracts at December 31, 2016 and October 1, 2016 were $3.5 billion and $3.3 billion, respectively. The following table summarizes the net foreign exchange gains or losses recognized on foreign currency denominated assets and liabilities and the net foreign exchange gains or losses on the foreign exchange contracts we entered into to mitigate our exposure with respect to foreign currency denominated assets and liabilities for the quarters ended December 31, 2016 and January 2, 2016 by the corresponding line item in which they are recorded in the Condensed Consolidated Statements of Income.

	Costs and Expenses						Interest expense, net						Income Tax expense
Quarter Ended:	December 31, 2016			January 2, 2016			December 31, 2016			January 2, 2016			December 31, 2016			January 2, 2016
Net gains (losses) on foreign currency denominated assets and liabilities	$	(233	)	$	(89	)	$	7		$	10		$	23		$	23
Net gains (losses) on foreign exchange risk management contracts not designated as hedges	221			79			(7		)	(12		)	(31		)	—
Net gains (losses)	$	(12	)	$	(10	)	$	—		$	(2	)	$	(8	)	$	23

Commodity Price Risk Management

The Company is subject to the volatility of commodities prices and the Company designates certain commodity forward contracts as cash flow hedges of forecasted commodity purchases. Mark-to-market gains and losses on these contracts are deferred in AOCI and are recognized in earnings when the hedged transactions occur, offsetting changes in the value of commodity purchases. The notional amount of these commodities contracts at December 31, 2016 and October 1, 2016 and related gains or losses recognized in earnings for the quarters ended December 31, 2016 and January 2, 2016 were not material.

Risk Management – Other Derivatives Not Designated as Hedges

The Company enters into certain other risk management contracts that are not designated as hedges and do not qualify for hedge accounting. These contracts, which include certain swap contracts, are intended to offset economic exposures of the Company and are carried at market value with any changes in value recorded in earnings. The notional amount and fair value of these contracts at December 31, 2016 and October 1, 2016 were not material. The related gains or losses recognized in earnings were not material for the quarters ended December 31, 2016 and January 2, 2016.

Contingent Features and Cash Collateral

The Company has master netting arrangements by counterparty with respect to certain derivative financial instrument contracts. The Company may be required to post collateral in the event that a net liability position with a counterparty exceeds limits defined by contract and that vary with the Company’s credit rating. In addition, these contracts may require a counterparty to post collateral to the Company in the event that a net receivable position with a counterparty exceeds limits defined by contract and that vary with the counterparty’s credit rating. If the Company’s or the counterparty’s credit ratings were to fall below investment grade, such counterparties or the Company would also have the right to terminate our derivative contracts, which could lead to a net payment to or from the Company for the aggregate net value by counterparty of our derivative contracts. The aggregate fair values of derivative instruments with credit-risk-related contingent features in a net liability position by counterparty were $34 million and $86 million on December 31, 2016 and October 1, 2016, respectively.

17

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

13. Restructuring and Impairment Charges

The Company recorded $81 million of restructuring and impairment charges in the prior-year quarter for an investment impairment and contract termination and severance costs.

14. New Accounting Pronouncements

Restricted Cash

In November 2016, the Financial Accounting Standards Board (FASB) issued guidance that requires restricted cash to be presented with cash and cash equivalents in the statement of cash flows. The guidance is required to be adopted retrospectively, and is effective beginning in the first quarter of the Company’s 2019 fiscal year (with early adoption permitted). At December 31, 2016 and October 1, 2016, the Company held restricted cash of approximately $335 million and $150 million, respectively, primarily associated with collateral received from counterparties to its derivative contracts. The Company’s restricted cash balances are presented in the Condensed Consolidated Balance Sheets as Other current assets and Other assets based on the maturity dates of the related derivatives. Under the new guidance, changes in the Company’s restricted cash will continue to be classified as either operating activities or investing activities in the Condensed Consolidated Statements of Cash Flows, depending on the nature of the activities that gave rise to the restricted cash balance.

Intra-Entity Transfers of Assets Other Than Inventory

In October 2016, the FASB issued guidance that requires the income tax consequences of an intra-entity transfer of an asset other than inventory to be recognized when the transfer occurs instead of when the asset is sold to an outside party. The new guidance is effective beginning with the first quarter of the Company’s 2019 fiscal year (with early adoption permitted as of the beginning of an annual period). The guidance is required to be adopted retrospectively by recording a cumulative-effect adjustment to retained earnings as of the beginning of the adoption period. The Company is assessing the potential impact this guidance will have on its financial statements.

Stock Compensation - Employee Share-based Payments

In March 2016, the FASB issued guidance to amend certain aspects of accounting for employee share-based awards, including accounting for income taxes related to those transactions. This guidance will require recognizing excess tax benefits and deficiencies (that result from an increase or decrease in the value of an award from grant date to the vesting date or exercise date) on share-based compensation arrangements in the tax provision, instead of in equity as under the current guidance. In addition, these amounts will be classified as an operating activity in the statement of cash flows, instead of as a financing activity. The Company reported excess tax benefits of $0.2 billion and $0.3 billion in fiscal 2016 and 2015, respectively. In addition, cash paid for shares withheld to satisfy employee taxes will be classified as a financing activity, instead of as an operating activity. Cash paid for employee taxes was $0.2 billion and $0.3 billion in fiscal 2016 and 2015, respectively. The fiscal 2016 and 2015 amounts of excess tax benefits and cash paid for employee taxes are not necessarily indicative of future amounts that may arise in years following implementation of the new accounting pronouncement.

The Company adopted the new guidance in the first quarter of fiscal 2017 as follows:

• Excess tax benefits of $38 million in the current quarter were recognized as a benefit in “Income taxes” in the Condensed Consolidated Statement of Income and classified as a source in operating activities in the Condensed Consolidated Statement of Cash Flows. The guidance required prospective adoption for the statement of income and allowed for either prospective or retrospective adoption for the statement of cash flows. The Company elected to prospectively adopt the effect to the statement of cash flows and accordingly, did not restate the Condensed Consolidated Statement of Cash Flows for the quarter ended January 2, 2016.

• Cash paid for shares withheld to satisfy employee taxes of $135 million for the quarter ended December 31, 2016 was classified as a use in financing activities in the Condensed Consolidated Statement of Cash Flows. The guidance required retrospective adoption; accordingly, a $94 million use was reclassified from an operating activity to a financing activity in the Condensed Consolidated Statement of Cash Flows for the quarter ended January 2, 2016.

Leases

In February 2016, the FASB issued a new lease accounting standard, which requires the present value of committed operating lease payments to be recorded as right-of-use lease assets and lease liabilities on the balance sheet. As of October 1, 2016, the Company had an estimated $3.1 billion in undiscounted future minimum lease commitments. The Company is currently assessing the impact of the new guidance on its financial statements. The guidance is required to be adopted retrospectively, and is effective beginning in the first quarter of the Company’s 2020 fiscal year (with early adoption permitted).

18

THE WALT DISNEY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited; tabular dollars in millions, except for per share data)

Revenue from Contracts with Customers

In May 2014, the FASB issued guidance that replaces the existing accounting standards for revenue recognition with a single comprehensive five-step model, eliminating industry-specific accounting rules. The core principle is to recognize revenue upon the transfer of goods or services to customers at an amount that reflects the consideration expected to be received. Since its issuance, the FASB has amended several aspects of the new guidance, including provisions that address revenue recognition associated with the licensing of intellectual property. The new guidance, including the amendments, is effective beginning with the first quarter of the Company’s 2019 fiscal year (with early adoption permitted beginning fiscal year 2018). The guidance may be adopted either by restating all years presented in the Company’s financial statements or by recording the impact of adoption as an adjustment to retained earnings at the beginning of the year of adoption. We are continuing to assess the potential impact of this guidance, including the impact on those areas currently subject to industry-specific guidance such as licensing of intellectual property. As part of our assessment, we are reviewing representative samples of customer contracts to determine the impact on revenue recognition under the new guidance. Our method of adoption will in part be based on the degree of change identified in our assessment.

19

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

ORGANIZATION OF INFORMATION

Management’s Discussion and Analysis provides a narrative of the Company’s financial performance and condition that should be read in conjunction with the accompanying financial statements. It includes the following sections:

Consolidated Results and Non-segment Items

Seasonality

Segment Results

Tax Impact of Employee Share-Based Awards

Financial Condition

Commitments and Contingencies

Other Matters

Market Risk

CONSOLIDATED RESULTS AND NON-SEGMENT ITEMS

Our summary consolidated results are presented below:

	Quarter Ended						% Change
(in millions, except per share data)	December 31, 2016			January 2, 2016			Better/ (Worse)
Revenues:
Services	$	12,406		$	12,622		(2)	%
Products	2,378			2,622			(9)	%
Total revenues	14,784			15,244			(3)	%
Costs and expenses:
Cost of services (exclusive of depreciation and amortization)	(7,020		)	(7,056		)	1	%
Cost of products (exclusive of depreciation and amortization)	(1,386		)	(1,567		)	12	%
Selling, general, administrative and other	(1,985		)	(2,025		)	2	%
Depreciation and amortization	(687		)	(607		)	(13)	%
Total costs and expenses	(11,078		)	(11,255		)	2	%
Restructuring and impairment charges	—			(81		)	100	%
Interest expense, net	(99		)	(24		)	>(100)	%
Equity in the income of investees	118			474			(75)	%
Income before income taxes	3,725			4,358			(15)	%
Income taxes	(1,237		)	(1,448		)	15	%
Net income	2,488			2,910			(15)	%
Less: Net income attributable to noncontrolling interests	(9		)	(30		)	70	%
Net income attributable to Disney	$	2,479		$	2,880		(14)	%
Diluted earnings per share attributable to Disney	$	1.55		$	1.73		(10)	%

20

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Quarter Results

Revenues for the quarter decreased3%, or $460 million, to $14.8 billion; net income attributable to Disney decreased14%, or $401 million, to $2.5 billion; and diluted earnings per share attributable to Disney (EPS) decreased10% from $1.73 to $1.55. The EPS decrease for the quarter was due to the Vice Gain recognized in the prior-year quarter (see Note 3 to the Condensed Consolidated Financial Statements), lower operating results and higher net interest expense, partially offset by a decrease in weighted average shares outstanding as a result of our share repurchase program. Operating results reflected declines in the sale of services and products and were adversely impacted by foreign currency translation due to the movement of the U.S. dollar against major currencies including the impact of our hedging program (FX Impact).

Revenues

Service revenues for the quarter decreased2%, or $216 million, to $12.4 billion, due to lower licensing revenue from merchandise and games, sales of television programs, attendance at our domestic parks, advertising revenue and theatrical distribution revenues. These decreases were partially offset by the benefit of the opening of Shanghai Disney Resort in the prior-year third quarter, higher guest spending at our domestic parks and resorts and higher fees from Multi-channel Video Distributors (MVPDs) (Affiliate Fees). Service revenue reflected an approximate 1 percentage point decrease due to an unfavorable FX Impact.

Product revenues for the quarter decreased9%, or $244 million, to $2.4 billion, due to the discontinuation of the Infinity business in the second quarter of the prior year and lower volumes at our home entertainment distribution and retail businesses. These decreases were partially offset by the benefit of the opening of Shanghai Disney Resort and higher guest spending at our domestic parks and resorts. Product revenue reflected an approximate 1 percentage point decrease due to an unfavorable FX Impact.

Costs and expenses

Cost of services for the quarter decreased1%, or $36 million, to $7.0 billion, due to lower programming and production costs and lower film cost amortization, partially offset by the impact of the opening of Shanghai Disney Resort.

Cost of products for the quarter decreased12%, or $181 million, to $1.4 billion, due to the discontinuation of the Infinity business and lower retail and home entertainment volumes, partially offset by the impact of the opening of Shanghai Disney Resort.

Selling, general, administrative and other costs decreased2%, or $40 million, to $2.0 billion, due to the discontinuation of the Infinity business, partially offset by higher theatrical marketing costs. Selling, general, administrative and other costs reflected an approximate 2 percentage point benefit due to a favorable FX Impact.

Depreciation and amortization costs increased13%, or $80 million, to $0.7 billion, due to the opening of Shanghai Disney Resort.

Restructuring and impairment charges

The Company recorded $81 million of restructuring and impairment charges in the prior-year quarter for an investment impairment and contract termination and severance costs.

Interest expense, net

Interest expense, net is as follows: 

	Quarter Ended
(in millions)	December 31, 2016			January 2, 2016			% Change Better/(Worse)
Interest expense	$	(121	)	$	(66	)	(83	)%
Interest and investment income	22			42			(48	)%
Interest expense, net	$	(99	)	$	(24	)	>(100	)%

The increase in interest expense was due to higher average debt balances, higher average interest rates and lower capitalized interest. Capitalized interest was lower due to the completion of the majority of construction at Shanghai Disney Resort in the prior-year third quarter.

The decrease in interest and investment income for the quarter was due to gains on sales of investments in the prior-year quarter.

21

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Equity in the income of investees

Equity in the income of investees decreased$356 million to $118 million for the quarter due to the $332 million Vice

Gain ($0.13 of EPS in the prior-year quarter) (see Note 3 to the Condensed Consolidated Financial Statements).

Effective Income Tax Rate

	Quarter Ended
	December 31, 2016		January 2, 2016		Change Better/(Worse)
Effective income tax rate	33.2	%	33.2	%	—	ppt

The effective income tax rate for the quarter was comparable to the prior-year quarter as a favorable impact of an accounting change ($38 million) was offset by an adverse impact of a tax law change ($34 million). In the current quarter, the Company adopted new accounting guidance, which requires that excess tax benefits or tax deficiencies on employee share-based awards be included in “Income taxes” in the Condensed Consolidated Statement of Income. An excess tax benefit arises when the value of employee share-based award on the exercise or vesting date is higher than the fair value on the grant date. A tax deficiency arises when the value is lower than the fair value. These amounts were previously recorded in “Common stock” in the Condensed Consolidated Balance Sheet (see Note 14 to the Condensed Consolidated Financial Statements).

Noncontrolling Interests

	Quarter Ended
(in millions)	December 31, 2016		January 2, 2016		% Change Better/(Worse)
Net income attributable to noncontrolling interests	$	9	$	30	70	%

The decrease in net income attributable to noncontrolling interests for the quarter was primarily due to lower net income at ESPN.

Net income attributable to noncontrolling interests is determined on income after royalties and management fees, financing costs and income taxes.

SEASONALITY

The Company’s businesses are subject to the effects of seasonality. Consequently, the operating results for the quarter ended December 31, 2016 for each business segment, and for the Company as a whole, are not necessarily indicative of results to be expected for the full year.

Media Networks revenues are subject to seasonal advertising patterns, changes in viewership levels and timing of program sales. In general, advertising revenues are somewhat higher during the fall and somewhat lower during the summer months.

Parks and Resorts revenues fluctuate with changes in theme park attendance and resort occupancy resulting from the seasonal nature of vacation travel and leisure activities. Peak attendance and resort occupancy generally occur during the summer months when school vacations occur and during early-winter and spring-holiday periods.

Studio Entertainment revenues fluctuate due to the timing and performance of releases in the theatrical, home entertainment and television markets. Release dates are determined by several factors, including competition and the timing of vacation and holiday periods.

Consumer Products & Interactive Media revenues are influenced by seasonal consumer purchasing behavior, which generally results in increased revenues during the Company’s first fiscal quarter, and the timing and performance of theatrical and game releases and cable programming broadcasts.

22

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

SEGMENT RESULTS

The Company evaluates the performance of its operating segments based on segment operating income, which is shown below along with segment revenues:

	Quarter Ended				% Change
(in millions)	December 31, 2016		January 2, 2016		Better/ (Worse)
Revenues:
Media Networks	$	6,233	$	6,332	(2)	%
Parks and Resorts	4,555		4,281		6	%
Studio Entertainment	2,520		2,721		(7)	%
Consumer Products & Interactive Media	1,476		1,910		(23)	%
	$	14,784	$	15,244	(3)	%
Segment operating income:
Media Networks	$	1,362	$	1,412	(4)	%
Parks and Resorts	1,110		981		13	%
Studio Entertainment	842		1,014		(17)	%
Consumer Products & Interactive Media	642		860		(25)	%
	$	3,956	$	4,267	(7)	%

The following table reconciles segment operating income to income before income taxes:

	Quarter Ended						% Change
(in millions)	December 31, 2016			January 2, 2016			Better/ (Worse)
Segment operating income	$	3,956		$	4,267		(7)	%
Corporate and unallocated shared expenses	(132		)	(136		)	3	%
Restructuring and impairment charges	—			(81		)	100	%
Interest expense, net	(99		)	(24		)	>(100)	%
Vice Gain(1)	—			332			(100)	%
Income before income taxes	$	3,725		$	4,358		(15)	%

⁽¹⁾ See Note 3 to the Condensed Consolidated Financial Statements for a discussion of the Vice Gain.

Depreciation expense is as follows:

	Quarter Ended				% Change
(in millions)	December 31, 2016		January 2, 2016		Better/ (Worse)
Media Networks
Cable Networks	$	36	$	37	3	%
Broadcasting	21		21		—	%
Total Media Networks	57		58		2	%
Parks and Resorts
Domestic	328		318		(3)	%
International	156		84		(86)	%
Total Parks and Resorts	484		402		(20)	%
Studio Entertainment	12		13		8	%
Consumer Products & Interactive Media	15		14		(7)	%
Corporate	68		63		(8)	%
Total depreciation expense	$	636	$	550	(16)	%

23

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Amortization of intangible assets is as follows:

	Quarter Ended				% Change
(in millions)	December 31, 2016		January 2, 2016		Better/ (Worse)
Media Networks	$	2	$	5	60	%
Parks and Resorts	1		1		—	%
Studio Entertainment	16		20		20	%
Consumer Products & Interactive Media	32		31		(3)	%
Total amortization of intangible assets	$	51	$	57	11	%

Media Networks

Operating results for the Media Networks segment are as follows:

	Quarter Ended						% Change
(in millions)	December 31, 2016			January 2, 2016			Better/ (Worse)
Revenues
Affiliate fees	$	3,075		$	2,960		4	%
Advertising	2,529			2,619			(3)	%
TV/SVOD distribution and other	629			753			(16)	%
Total revenues	6,233			6,332			(2)	%
Operating expenses	(4,298		)	(4,355		)	1	%
Selling, general, administrative and other	(633		)	(644		)	2	%
Depreciation and amortization	(59		)	(63		)	6	%
Equity in the income of investees	119			142			(16)	%
Operating Income	$	1,362		$	1,412		(4)	%

Revenues

The increase in affiliate fees was due to growth of 7% from higher contractual rates, partially offset by decreases of 2% from fewer subscribers and 1% from an unfavorable FX Impact.

The decrease in advertising revenues was due to a decrease of $81 million at Cable Networks, from $1,488 million to $1,407 million and a decrease of $9 million at Broadcasting, from $1,131 million to $1,122 million. The decrease at Cable Networks was due to a 5% decrease from lower impressions, partially offset by a 1% increase from higher rates, both of which were negatively impacted by the shift in timing of College Football Playoff (CFP) bowl games relative to our fiscal quarter end. Six CFP games were aired in the first quarter of the prior year, whereas three CFP games were aired in the current quarter. Lower impressions reflected a decrease in average viewership, partially offset by an increase in units delivered. Broadcasting advertising revenues reflected an 11% decrease from lower impressions and a 2% decrease from other advertising, partially offset by a 12% increase from higher rates at the ABC Television Network and the owned television stations. The decrease in impressions was due to lower average viewership and, to a lesser extent, fewer network units delivered, which reflected the impact of higher political coverage. The increase in rates at the owned television stations was due to higher political advertising.

TV/SVOD distribution and other revenue decreased$124 million, from $753 million to $629 million due to the sale of Jessica Jones in the prior-year quarter, lower sales of cable programs in the current quarter and an unfavorable FX Impact, partially offset by higher sales of ABC programs in the current quarter.

Costs and Expenses

Operating expenses include programming and production costs, which decreased$48 million, from $4,059 million to $4,011 million. At Broadcasting, programming and production costs decreased$82 million due to the impact of lower program sales and a decrease in cost write-downs for network programming. At Cable Networks, programming and production costs increased$34 million due to contractual rate increases for NBA, NFL and CFP programming, partially offset by the timing of CFP games and the impact of lower program sales.

Selling, general, administrative and other costs decreased$11 million, from $644 million to $633 million due to a favorable FX Impact.

24

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Equity in the Income of Investees

Income from equity investees decreased$23 million, from $142 million to $119 million. Approximately half of the decrease was due to lower equity income from A+E Television Networks (A+E) and approximately half of the decrease was due to equity losses from BAMTech, which was acquired in August 2016. The decrease at A+E was due to lower advertising revenue and higher programming costs, partially offset by higher affiliate fees and lower intangible amortization. The decrease also reflected a negative impact from the conversion of the H2 channel to Viceland in November 2015. Results at Hulu were comparable to the prior-year quarter.

Segment Operating Income

Segment operating income decreased$50 million, to $1,362 million due to a decrease at ESPN and lower income from equity investees, partially offset by increases at the ABC Television Network and the owned television stations.

The following table provides supplemental revenue and segment operating income detail for the Media Networks segment:

	Quarter Ended				% Change
(in millions)	December 31, 2016		January 2, 2016		Better/ (Worse)
Revenues
Cable Networks	$	4,428	$	4,521	(2)	%
Broadcasting	1,805		1,811		—	%
	$	6,233	$	6,332	(2)	%
Segment operating income
Cable Networks	$	864	$	975	(11)	%
Broadcasting	379		295		28	%
Equity in the income of investees	119		142		(16)	%
	$	1,362	$	1,412	(4)	%

Restructuring and impairment charges

The Company recorded restructuring and impairment charges of $81 million related to Media Networks in the first quarter of fiscal 2016 for an investment impairment and contract termination and severance costs.

Parks and Resorts

Operating results for the Parks and Resorts segment are as follows:

	Quarter Ended						% Change
(in millions)	December 31, 2016			January 2, 2016			Better/ (Worse)
Revenues
Domestic	$	3,740		$	3,674		2	%
International	815			607			34	%
Total revenues	4,555			4,281			6	%
Operating expenses	(2,547		)	(2,475		)	(3)	%
Selling, general, administrative and other	(411		)	(422		)	3	%
Depreciation and amortization	(485		)	(403		)	(20)	%
Equity in the loss of investees	(2		)	—			nm
Operating Income	$	1,110		$	981		13	%

Revenues

Parks and Resorts revenues increased6%, or $274 million, to $4.6 billion due to increases of $208 million at our international operations and $66 million at our domestic operations. Revenues were unfavorably impacted by Hurricane Matthew at our domestic operations and a shift in the timing of the New Year’s holiday relative to our fiscal periods.

25

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Revenue growth at our international operations reflected an increase of 33% from the opening of Shanghai Disney Resort in the prior-year third quarter and the benefit of a full period of operations at Disneyland Paris as the park was closed for four days in the prior-year quarter.

Revenue growth at our domestic operations reflected a 4% increase from higher average guest spending, partially offset by a 3% decrease from lower volumes. Guest spending growth was due to higher average ticket prices for admissions to our theme parks and sailings at our cruise line, increased food and beverage spending and higher average daily rates at our hotels. Lower volumes were due to decreases in attendance and occupied room nights. The decrease in attendance reflected the prior-year benefit of the 60th Anniversary celebration at Disneyland Resort, the impact in the current quarter from Hurricane Matthew at Walt Disney World Resort and the impact of the New Year’s holiday shift.

The following table presents supplemental park and hotel statistics:

	Domestic						International (2)						Total
	Quarter Ended						Quarter Ended						Quarter Ended
	Dec. 31, 2016			Jan. 2, 2016			Dec. 31, 2016			Jan. 2, 2016			Dec. 31, 2016			Jan. 2, 2016
Parks
Increase/(decrease)
Attendance	(5)		%	10		%	50		%	(7)		%	6		%	6		%
Per Capita Guest Spending	7		%	7		%	(3)		%	5		%	2		%	7		%
Hotels(1)
Occupancy	91		%	92		%	79		%	77		%	88		%	89		%
Available Room Nights (in thousands)	2,569			2,608			731			620			3,300			3,228
Per Room Guest Spending		$324			$314			$289			$281			$317			$309

⁽¹⁾ Per room guest spending consists of the average daily hotel room rate, as well as guest spending on food, beverage and merchandise at the hotels. Hotel statistics include rentals of Disney Vacation Club units.

⁽²⁾ Per capita guest spending growth rate is stated on a constant currency basis. Per room guest spending is stated at the fiscal 2016 first quarter average foreign exchange rate. The euro to U.S. dollar weighted average foreign currency exchange rate was $1.08 and $1.10 for the quarters ended December 31, 2016 and January 2, 2016, respectively.

Costs and Expenses

Operating expenses include operating labor, which increased$40 million, from $1,162 million to $1,202 million, infrastructure costs, which decreased$1 million, from $463 million to $462 million and cost of sales, which increased$8 million, from $411 million to $419 million. The increase in operating labor was primarily due to the opening of Shanghai Disney Resort and inflation, partially offset by efficiency initiatives. The increase in cost of sales was due to the opening of Shanghai Disney Resort. Infrastructure costs were flat as decreases due to efficiency initiatives and lower dry-dock expenses were offset by increased costs due to the opening of Shanghai Disney Resort and inflation. A portion of the dry-dock costs for the Disney Wonder were incurred in the current quarter whereas all of the dry-dock costs for the Disney Dream were incurred in the prior-year first quarter. Other operating expenses, which include costs for items such as supplies, commissions and entertainment offerings, increased due to the opening of Shanghai Disney Resort.

The increase in depreciation and amortization was due to the opening of Shanghai Disney Resort.

Segment Operating Income

Segment operating income increased13%, or $129 million, to $1.1 billion due to growth at our domestic and international operations.

26

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Studio Entertainment

Operating results for the Studio Entertainment segment are as follows:

	Quarter Ended						% Change
(in millions)	December 31, 2016			January 2, 2016			Better/ (Worse)
Revenues
Theatrical distribution	$	961		$	1,017		(6)	%
Home entertainment	547			722			(24)	%
TV/SVOD distribution and other	1,012			982			3	%
Total revenues	2,520			2,721			(7)	%
Operating expenses	(1,007		)	(1,064		)	5	%
Selling, general, administrative and other	(643		)	(610		)	(5)	%
Depreciation and amortization	(28		)	(33		)	15	%
Operating Income	$	842		$	1,014		(17)	%

Revenues

The decrease in theatrical distribution revenue reflected the comparison of Rogue One: A Star Wars Story in the current quarter to the exceptional performance of Star Wars: The Force Awakens in the prior-year quarter. This decrease was partially offset by the success of Doctor Strange and Moana in the current quarter compared to The Good Dinosaur, Bridge of Spies and the continued international performance of Ant-Man in the prior-year quarter.

The decrease in home entertainment revenue was due to a decrease of 24% from lower unit sales. The decrease in unit sales was due to lower sales of Star Wars Classic titles and Frozen, as well as the timing of Disney Classic releases. Aladdin Diamond Edition was released in the prior-year quarter, whereas the Beauty and the Beast Signature Collection Edition was released in the fourth quarter of fiscal 2016.

The increase in TV/SVOD distribution and other revenue was due to increases of 9% from TV/SVOD distribution and 3% from Lucasfilm’s special effects business, partially offset by a decrease of 8% from lower revenue share with the Consumer Products & Interactive Media segment due to the stronger performance of merchandise based on Star Wars and Frozen in the prior-year quarter. The increase in TV/SVOD distribution was due to growth in our pay and free television businesses, including the timing of title availabilities. Domestic pay television sales also reflected an increase from higher rates. Higher revenue from Lucasfilm’s special effects business was driven by more projects in the current quarter.

Costs and Expenses

Operating expenses include a decrease of $52 million in film cost amortization, from $718 million to $666 million primarily due to the impact of lower revenues. Operating expenses also include cost of goods sold and distribution costs, which decreased$5 million, from $346 million to $341 million due to lower home entertainment unit sales, partially offset by an increase in costs from Lucasfilm’s special effects business.

Selling, general, administrative and other costs increased $33 million from $610 million to $643 million due to higher theatrical marketing costs driven by spending on three significant titles released globally in the current quarter compared to two significant titles released globally in the prior-year quarter. The current quarter included Rogue One: A Star Wars Story, Moana and Doctor Strange, while the prior-year quarter included Star Wars: The Force Awakens and The Good Dinosaur. The prior-year quarter also included the domestic release of Bridge of Spies.

Segment Operating Income

Segment operating income decreased17%, or $172 million, to $842 million due to decreases in home entertainment and theatrical distribution and lower revenue share with the Consumer Products & Interactive Media segment, partially offset by growth in TV/SVOD distribution.

27

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Consumer Products & Interactive Media

Operating results for the Consumer Products & Interactive Media segment are as follows:

	Quarter Ended						% Change
(in millions)	December 31, 2016			January 2, 2016			Better/ (Worse)
Revenues
Licensing, publishing and games	$	936		$	1,300		(28)	%
Retail and other	540			610			(11)	%
Total revenues	1,476			1,910			(23)	%
Operating expenses	(554		)	(729		)	24	%
Selling, general, administrative and other	(234		)	(276		)	15	%
Depreciation and amortization	(47		)	(45		)	(4)	%
Equity in the income of investees	1			—			nm
Operating Income	$	642		$	860		(25)	%

Revenues

The decrease in licensing, publishing and games revenue was due to decreases of 15% from our games business and 11% from our merchandise licensing business. Lower games revenue was due to the discontinuation of the Infinity business in the second quarter of the prior year and decreased licensing revenue from Star Wars: Battlefront, which was released in the prior-year quarter, partially offset by higher minimum guarantee shortfall recognition. Lower merchandise licensing revenue was due to higher revenue in the prior-year quarter from merchandise based on Star Wars and Frozen and an unfavorable FX Impact, partially offset by higher minimum guarantee shortfall recognition.

The decrease in retail and other revenue was driven by a decrease of 11% from our retail business due to lower comparable store and online sales, reflecting higher sales of Frozen and Star Wars merchandise in the prior-year quarter. This decrease was partially offset by sales of Moana merchandise in the current quarter.

Costs and Expenses

Operating expenses include a $147 milliondecrease in cost of goods sold and distribution costs, from $489 million to $342 million, a $7 milliondecrease in labor and occupancy costs, from $141 million to $134 million and an $18 milliondecrease in product development expense, from $79 million to $61 million. The decrease in cost of goods sold and distribution costs was due to the discontinuation of Infinity and lower retail sales. The decrease in product development expense was due to the discontinuation of Infinity.

Selling, general, administrative and other costs decreased $42 million from $276 million to $234 million primarily due to the discontinuation of Infinity.

Segment Operating Income

Segment operating income decreased 25%, or $218 million, to $642 million, due to lower results at our merchandise licensing, games and retail businesses.

TAX IMPACT OF EMPLOYEE SHARE-BASED AWARDS

As disclosed in Note 14 to the Condensed Consolidated Financial Statements, the Company adopted new accounting guidance in the current quarter with respect to the tax impacts (i.e. excess tax benefits or tax deficiencies) associated with employee share-based awards. For the current quarter, the Company recognized $38 million of excess tax benefits in “Income Taxes” in the Condensed Consolidated Statement of Income. Based on expected vesting/forfeiture/exercise of employee awards over the remainder of the year, we estimate that for fiscal 2017 we will recognize approximately $150 million of excess tax benefits in “Income Taxes”. We expect that the majority of this impact will occur in the first half of the fiscal year. The market price of Company common stock and actual exercise decisions of employee option holders will determine the actual excess tax benefits and, accordingly, the excess tax benefit that we recognize may be different than this estimate.

28

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

FINANCIAL CONDITION

The change in cash and cash equivalents is as follows:

	Quarter Ended						% Change Better/ (Worse)
(in millions)	December 31, 2016			January 2, 2016
Cash provided by operations	$	1,260		$	2,456		(49)	%
Cash used in investing activities	(1,035		)	(1,798		)	42	%
Cash used in financing activities	(987		)	(562		)	(76)	%
Impact of exchange rates on cash and cash equivalents	(112		)	(64		)	(75)	%
Change in cash and cash equivalents	$	(874	)	$	32		nm

Operating Activities

Cash provided by operating activities decreased49% to $1.3 billion for the current quarter compared to $2.5 billion in the prior-year quarter due to an increase in contributions to the Company’s pension plans.

Film and Television Costs

The Company’s Studio Entertainment and Media Networks segments incur costs to acquire and produce feature film and television programming. Film and television production costs include all internally produced content such as live-action and animated feature films, animated direct-to-video programming, television series, television specials, theatrical stage plays or other similar product. Programming costs include film or television product licensed for a specific period from third parties for airing on the Company’s broadcast and cable networks and television stations. Programming assets are generally recorded when the programming becomes available to us with a corresponding increase in programming liabilities. Accordingly, we analyze our programming assets net of the related liability.

The Company’s film and television production and programming activity for the quarters ended December 31, 2016 and January 2, 2016 are as follows:

	Quarter Ended
(in millions)	December 31, 2016			January 2, 2016
Beginning balances:
Production and programming assets	$	7,547		$	7,353
Programming liabilities	(1,063		)	(989		)
	6,484			6,364
Spending:
Television program licenses and rights	2,031			1,767
Film and television production	1,275			1,231
	3,306			2,998
Amortization:
Television program licenses and rights	(2,728		)	(2,558		)
Film and television production	(1,018		)	(1,145		)
	(3,746		)	(3,703		)
Change in film and television production and programming costs	(440		)	(705		)
Other non-cash activity	(36		)	13
Ending balances:
Production and programming assets	7,393			7,141
Programming liabilities	(1,385		)	(1,469		)
	$	6,008		$	5,672

29

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Investing Activities

Investing activities consist principally of investments in parks, resorts and other property and acquisition and divestiture activity. The Company’s investments in parks, resorts and other property for the quarters ended December 31, 2016 and January 2, 2016 are as follows:

	Quarter Ended
(in millions)	December 31, 2016		January 2, 2016
Media Networks
Cable Networks	$	46	$	27
Broadcasting	22		30
Total Media Networks	68		57
Parks and Resorts
Domestic	609		627
International	291		607
Total Parks and Resorts	900		1,234
Studio Entertainment	27		27
Consumer Products & Interactive Media	6		13
Corporate	39		75
	$	1,040	$	1,406

Capital expenditures for the Parks and Resorts segment are principally for theme park and resort expansion, new attractions, cruise ships, capital improvements and systems infrastructure. The decrease at our international parks and resorts was due to lower spending for Shanghai Disney Resort.

Capital expenditures at Media Networks primarily reflect investments in facilities and equipment for expanding and upgrading broadcast centers, production facilities and television station facilities.

Capital expenditures at Corporate primarily reflect investments in corporate facilities, information technology infrastructure and equipment.

The Company currently expects its fiscal 2017 capital expenditures will be approximately $0.4 billion higher than fiscal 2016 capital expenditures of $4.8 billion primarily due to increased investments at our domestic parks and resorts partially offset by decreased investments at our international parks and resorts.

Other Investing Activities

During the prior-year quarter, acquisitions reflected $400 million for an 11% interest in Vice.

Financing Activities

Cash used in financing activities was $1.0 billion in the current quarter, which reflected repurchases of common stock of $1.5 billion partially offset by net cash inflows from borrowings of $0.6 billion.

Cash used in financing activities of $1.0 billion was $0.4 billion more than the $0.6 billion used in the prior-year quarter. The increase from the prior-year quarter reflected lower borrowings of $1.1 billion ($0.6 billion in the current quarter compared to $1.7 billion in the prior-year quarter). These impacts were partially offset by the benefit of lower common stock repurchases of $0.9 billion ($1.5 billion in the current quarter compared to $2.4 billion in the prior-year quarter).

See Note 4 to the Condensed Consolidated Financial Statements for a summary of the Company’s borrowing activities during the quarter ended December 31, 2016 and information regarding the Company’s bank facilities. The Company may use commercial paper borrowings up to the amount of its unused bank facilities, in conjunction with term debt issuance and operating cash flow, to retire or refinance other borrowings before or as they come due.

See Note 8 to the Condensed Consolidated Financial Statements for a summary of the Company’s dividends in fiscal 2017 and 2016 and share repurchases during the quarter ended December 31, 2016.

We believe that the Company’s financial condition is strong and that its cash balances, other liquid assets, operating cash flows, access to debt and equity capital markets and borrowing capacity, taken together, provide adequate resources to fund

30

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

ongoing operating requirements and future capital expenditures related to the expansion of existing businesses and development of new projects. However, the Company’s operating cash flow and access to the capital markets can be impacted by macroeconomic factors outside of its control. In addition to macroeconomic factors, the Company’s borrowing costs can be impacted by short- and long-term debt ratings assigned by nationally recognized rating agencies, which are based, in significant part, on the Company’s performance as measured by certain credit metrics such as interest coverage and leverage ratios. As of December 31, 2016, Moody’s Investors Service’s long- and short-term debt ratings for the Company were A2 and P-1, respectively, with stable outlook; Standard & Poor’s long- and short-term debt ratings for the Company were A and A-1, respectively, with stable outlook; and Fitch’s long- and short-term debt ratings for the Company were A and F1, respectively, with stable outlook. The Company’s bank facilities contain only one financial covenant, relating to interest coverage, which the Company met on December 31, 2016 by a significant margin. The Company’s bank facilities also specifically exclude certain entities, including the International Theme Parks, from any representations, covenants or events of default.

COMMITMENTS AND CONTINGENCIES

Legal Matters

As disclosed in Note 10 to the Condensed Consolidated Financial Statements, the Company has exposure for certain legal matters.

Guarantees

See Note 10 to the Condensed Consolidated Financial Statements for information regarding the Company’s guarantees.

Tax Matters

As disclosed in Note 9 to the Consolidated Financial Statements in the 2016 Annual Report on Form 10-K, the Company has exposure for certain tax matters.

Contractual Commitments

See Note 14 to the Consolidated Financial Statements in the 2016 Annual Report on Form 10-K for information regarding the Company’s contractual commitments.

OTHER MATTERS

Accounting Policies and Estimates

We believe that the application of the following accounting policies, which are important to our financial position and results of operations require significant judgments and estimates on the part of management. For a summary of our significant accounting policies, including the accounting policies discussed below, see Note 2 to the Consolidated Financial Statements in the 2016 Annual Report on Form 10-K.

Film and Television Revenues and Costs

We expense film and television production, participation and residual costs over the applicable product life cycle based upon the ratio of the current period’s revenues to the estimated remaining total revenues (Ultimate Revenues) for each production. If our estimate of Ultimate Revenues decreases, amortization of film and television costs may be accelerated. Conversely, if our estimate of Ultimate Revenues increases, film and television cost amortization may be slowed. For film productions, Ultimate Revenues include revenues from all sources that will be earned within ten years from the date of the initial theatrical release. For television series, Ultimate Revenues include revenues that will be earned within ten years from delivery of the first episode, or if still in production, five years from delivery of the most recent episode, if later.

With respect to films intended for theatrical release, the most sensitive factor affecting our estimate of Ultimate Revenues (and therefore affecting future film cost amortization and/or impairment) is theatrical performance. Revenues derived from other markets subsequent to the theatrical release (e.g., the home entertainment or television markets) have historically been highly correlated with the theatrical performance. Theatrical performance varies primarily based upon the public interest and demand for a particular film, the popularity of competing films at the time of release and the level of marketing effort. Upon a film’s release and determination of the theatrical performance, the Company’s estimates of revenues from succeeding windows and markets are revised based on historical relationships and an analysis of current market trends. The most sensitive factor affecting our estimate of Ultimate Revenues for released films is the level of expected home entertainment sales. Home

31

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

entertainment sales vary based on the number and quality of competing home entertainment products, as well as the manner in which retailers market and price our products.

With respect to television series or other television productions intended for broadcast, the most sensitive factors affecting estimates of Ultimate Revenues are program ratings and the strength of the advertising market. Program ratings, which are an indication of market acceptance, directly affect the Company’s ability to generate advertising revenues during the airing of the program. In addition, television series with greater market acceptance are more likely to generate incremental revenues through the licensing of program rights worldwide to television distributors, SVOD services and in home entertainment formats. Alternatively, poor ratings may result in cancellation of the program, which would require an immediate write-down of any unamortized production costs. A significant decline in the advertising market would also negatively impact our estimates.

We expense the cost of television broadcast rights for acquired series, movies and other programs based on the number of times the program is expected to be aired or on a straight-line basis over the useful life, as appropriate. Amortization of those television programming assets being amortized on a number of airings basis may be accelerated if we reduce the estimated future airings and slowed if we increase the estimated future airings. The number of future airings of a particular program is impacted primarily by the program’s ratings in previous airings, expected advertising rates and availability and quality of alternative programming. Accordingly, planned usage is reviewed periodically and revised if necessary. We amortize rights costs for multi-year sports programming arrangements during the applicable seasons based on the estimated relative value of each year in the arrangement. The estimated value of each year is based on our projections of revenues over the contract period, which include advertising revenue and an allocation of affiliate revenue. If the annual contractual payments related to each season approximate each season’s estimated relative value, we expense the related contractual payments during the applicable season. If planned usage patterns or estimated relative values by year were to change significantly, amortization of our sports rights costs may be accelerated or slowed.

Costs of film and television productions are subject to regular recoverability assessments, which compare the estimated fair values with the unamortized costs. The net realizable values of television broadcast program licenses and rights are reviewed using a daypart methodology. A daypart is defined as an aggregation of programs broadcast during a particular time of day or programs of a similar type. The Company’s dayparts are: primetime, daytime, late night, news and sports (includes broadcast and cable networks). The net realizable values of other cable programming assets are reviewed on an aggregated basis for each cable network. Individual programs are written off when there are no plans to air or sublicense the program. Estimated values are based upon assumptions about future demand and market conditions. If actual demand or market conditions are less favorable than our projections, film, television and programming cost write-downs may be required.

Revenue Recognition

The Company has revenue recognition policies for its various operating segments that are appropriate to the circumstances of each business. See Note 2 to the Consolidated Financial Statements in the 2016 Annual Report on Form 10-K for a summary of these revenue recognition policies.

We reduce home entertainment revenues for estimated future returns of merchandise and for customer programs and sales incentives. These estimates are based upon historical return experience, current economic trends and projections of customer demand for and acceptance of our products. If we underestimate the level of returns or sales incentives in a particular period, we may record less revenue in later periods when returns or sales incentives exceed the estimated amount. Conversely, if we overestimate the level of returns or sales incentives for a period, we may have additional revenue in later periods when returns or sales incentives are less than estimated.

We recognize revenues from advance theme park ticket sales when the tickets are used. We recognize revenues from expiring multi-use tickets ratably over the estimated usage period. The estimated usage periods are derived from historical usage patterns. If actual usage is different than our estimated usage, revenues may not be recognized in the periods the related services are rendered. In addition, a change in usage patterns would impact the timing of revenue recognition.

Pension and Postretirement Medical Plan Actuarial Assumptions

The Company’s pension and postretirement medical benefit obligations and related costs are calculated using a number of actuarial assumptions. Two critical assumptions, the discount rate and the expected return on plan assets, are important elements of expense and/or liability measurement, which we evaluate annually. Refer to the 2016 Annual Report on Form 10-K for estimated impacts of changes in these assumptions. Other assumptions include the healthcare cost trend rate and employee demographic factors such as retirement patterns, mortality, turnover and rate of compensation increase.

32

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

The discount rate enables us to state expected future cash payments for benefits as a present value on the measurement date. A lower discount rate increases the present value of benefit obligations and increases pension expense. The guideline for setting this rate is a high-quality long-term corporate bond rate. The Company’s discount rate was determined by considering yield curves constructed of a large population of high-quality corporate bonds and reflects the matching of the plans’ liability cash flows to the yield curves.

To determine the expected long-term rate of return on the plan assets, we consider the current and expected asset allocation, as well as historical and expected returns on each plan asset class. A lower expected rate of return on pension plan assets will increase pension expense.

Goodwill, Other Intangible Assets, Long-Lived Assets and Investments

The Company is required to test goodwill and other indefinite-lived intangible assets for impairment on an annual basis and if current events or circumstances require, on an interim basis. Goodwill is allocated to various reporting units, which are generally an operating segment or one level below the operating segment. The Company compares the fair value of each reporting unit to its carrying amount to determine if there is a potential goodwill impairment. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the fair value of the goodwill within the reporting unit is less than the carrying value of the goodwill.

To determine the fair value of our reporting units, we generally use a present value technique (discounted cash flows) corroborated by market multiples when available and as appropriate. We apply what we believe to be the most appropriate valuation methodology for each of our reporting units. The discounted cash flow analyses are sensitive to our estimates of future revenue growth and margins for these businesses. We include in the projected cash flows an estimate of the revenue we believe the reporting unit would receive if the intellectual property developed by the reporting unit that is being used by other reporting units was licensed to an unrelated third party at its fair market value. These amounts are not necessarily the same as those included in segment operating results. We believe our estimates of fair value are consistent with how a marketplace participant would value our reporting units.

In times of adverse economic conditions in the global economy, the Company’s long-term cash flow projections are subject to a greater degree of uncertainty than usual. If we had established different reporting units or utilized different valuation methodologies or assumptions, the impairment test results could differ, and we could be required to record impairment charges.

The Company is required to compare the fair values of other indefinite-lived intangible assets to their carrying amounts. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized for the excess. Fair values of other indefinite-lived intangible assets are determined based on discounted cash flows or appraised values, as appropriate.

The Company tests long-lived assets, including amortizable intangible assets, for impairment whenever events or changes in circumstances (triggering events) indicate that the carrying amount may not be recoverable. Once a triggering event has occurred, the impairment test employed is based on whether the intent is to hold the asset for continued use or to hold the asset for sale. The impairment test for assets held for use requires a comparison of cash flows expected to be generated over the useful life of an asset group to the carrying value of the asset group. An asset group is established by identifying the lowest level of cash flows generated by a group of assets that are largely independent of the cash flows of other assets and could include assets used across multiple businesses or segments. If the carrying value of an asset group exceeds the estimated undiscounted future cash flows, an impairment would be measured as the difference between the fair value of the group’s long-lived assets and the carrying value of the group’s long-lived assets. The impairment is allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts, but only to the extent the carrying value of each asset is above its fair value. For assets held for sale, to the extent the carrying value is greater than the asset’s fair value less costs to sell, an impairment loss is recognized for the difference. Determining whether a long-lived asset is impaired requires various estimates and assumptions, including whether a triggering event has occurred, the identification of the asset groups, estimates of future cash flows and the discount rate used to determine fair values. If we had established different asset groups or utilized different valuation methodologies or assumptions, the impairment test results could differ, and we could be required to record impairment charges.

The Company has cost and equity investments. The fair value of these investments is dependent on the performance of the investee companies, as well as volatility inherent in the external markets for these investments. In assessing the potential impairment of these investments, we consider these factors, as well as the forecasted financial performance of the investees and market values, where available. If these forecasts are not met or market values indicate an other-than-temporary decline in value, impairment charges may be required.

33

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

Allowance for Doubtful Accounts

We evaluate our allowance for doubtful accounts and estimate collectability of accounts receivable based on our analysis of historical bad debt experience in conjunction with our assessment of the financial condition of individual companies with which we do business. In times of domestic or global economic turmoil, our estimates and judgments with respect to the collectability of our receivables are subject to greater uncertainty than in more stable periods. If our estimate of uncollectible accounts is too low, costs and expenses may increase in future periods, and if it is too high, costs and expenses may decrease in future periods.

Contingencies and Litigation

We are currently involved in certain legal proceedings and, as required, have accrued estimates of the probable and estimable losses for the resolution of these proceedings. These estimates are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies and have been developed in consultation with outside counsel as appropriate. From time to time, we may also be involved in other contingent matters for which we have accrued estimates for a probable and estimable loss. It is possible, however, that future results of operations for any particular quarterly or annual period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to legal proceedings or our assumptions regarding other contingent matters. See Note 10 to the Condensed Consolidated Financial Statements for more detailed information on litigation exposure.

Income Tax Audits

As a matter of course, the Company is regularly audited by federal, state and foreign tax authorities. From time to time, these audits result in proposed assessments. Our determinations regarding the recognition of income tax benefits are made in consultation with outside tax and legal counsel, where appropriate, and are based upon the technical merits of our tax positions in consideration of applicable tax statutes and related interpretations and precedents and upon the expected outcome of proceedings (or negotiations) with taxing and legal authorities. The tax benefits ultimately realized by the Company may differ from those recognized in our future financial statements based on a number of factors, including the Company’s decision to settle rather than litigate a matter, relevant legal precedent related to similar matters and the Company’s success in supporting its filing positions with taxing authorities.

New Accounting Pronouncements

See Note 14 to the Condensed Consolidated Financial Statements for information regarding new accounting pronouncements.

MARKET RISK

The Company is exposed to the impact of interest rate changes, foreign currency fluctuations, commodity fluctuations and changes in the market values of its investments.

Policies and Procedures

In the normal course of business, we employ established policies and procedures to manage the Company’s exposure to changes in interest rates, foreign currencies and commodities using a variety of financial instruments.

Our objectives in managing exposure to interest rate changes are to limit the impact of interest rate volatility on earnings and cash flows and to lower overall borrowing costs. To achieve these objectives, we primarily use interest rate swaps to manage net exposure to interest rate changes related to the Company’s portfolio of borrowings. By policy, the Company targets fixed-rate debt as a percentage of its net debt between minimum and maximum percentages.

Our objective in managing exposure to foreign currency fluctuations is to reduce volatility of earnings and cash flow in order to allow management to focus on core business issues and challenges. Accordingly, the Company enters into various contracts that change in value as foreign exchange rates change to protect the U.S. dollar equivalent value of its existing foreign currency assets, liabilities, commitments and forecasted foreign currency revenues and expenses. The Company utilizes option strategies and forward contracts that provide for the purchase or sale of foreign currencies to hedge probable, but not firmly committed, transactions. The Company also uses forward and option contracts to hedge foreign currency assets and liabilities. The principal foreign currencies hedged are the euro, British pound, Japanese yen and Canadian dollar. Cross-currency swaps are used to effectively convert foreign currency denominated borrowings to U.S. dollar denominated borrowings. By policy, the Company maintains hedge coverage between minimum and maximum percentages of its forecasted foreign exchange exposures generally for periods not to exceed four years. The gains and losses on these contracts offset changes in the U.S. dollar

34

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (continued)

equivalent value of the related exposures. The economic or political conditions in a country could reduce our ability to hedge exposure to currency fluctuations in the country or our ability to repatriate revenue from the country.

Our objectives in managing exposure to commodity fluctuations are to use commodity derivatives to reduce volatility of earnings and cash flows arising from commodity price changes. The amounts hedged using commodity swap contracts are based on forecasted levels of consumption of certain commodities, such as fuel oil and gasoline.

It is the Company’s policy to enter into foreign currency and interest rate derivative transactions and other financial instruments only to the extent considered necessary to meet its objectives as stated above. The Company does not enter into these transactions or any other hedging transactions for speculative purposes.

35

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

See Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures – We have established disclosure controls and procedures to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and made known to the officers who certify the Company’s financial reports and to other members of senior management and the Board of Directors as appropriate to allow timely decisions regarding required disclosure.

Based on their evaluation as of December 31, 2016, the principal executive officer and principal financial officer of the Company have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective.

There have been no changes in our internal controls over financial reporting during the first quarter of fiscal 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

36

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

As disclosed in Note 10 to the Condensed Consolidated Financial Statements, the Company is engaged in certain legal matters, and the disclosure set forth in Note 10 relating to certain legal matters is incorporated herein by reference.

ITEM 1A. Risk Factors

The Private Securities Litigation Reform Act of 1995 (the Act) provides a safe harbor for “forward-looking statements” made by or on behalf of the Company. We may from time to time make written or oral statements that are “forward-looking,” including statements contained in this report and other filings with the Securities and Exchange Commission and in reports to our shareholders. All forward-looking statements are made on the basis of management’s views and assumptions regarding future events and business performance as of the time the statements are made and the Company does not undertake any obligation to update its disclosure relating to forward-looking matters. Actual results may differ materially from those expressed or implied. Such differences may result from actions taken by the Company, including restructuring or strategic initiatives (including capital investments or asset acquisitions or dispositions), as well as from developments beyond the Company’s control, including: changes in domestic and global economic conditions, competitive conditions and consumer preferences; adverse weather conditions or natural disasters; health concerns; international, political or military developments; and technological developments. Such developments may affect entertainment, travel and leisure businesses generally and may, among other things, affect the performance of the Company’s theatrical and home entertainment releases, the advertising market for broadcast and cable television programming, demand for our products and services, expenses of providing medical and pension benefits and performance of some or all company businesses either directly or through their impact on those who distribute our products. Additional factors are discussed in the 2016 Annual Report on Form 10-K under the Item 1A, “Risk Factors.”

37

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about Company purchases of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act during the quarter ended December 31, 2016:

Period	Total Number of Shares Purchased (1)	Weighted Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2)
October 2, 2016 – October 31, 2016	4,170,379	$	92.21	4,141,500	278 million
November 1, 2016 – November 30, 2016	4,911,949	96.22		4,885,500	273 million
December 1, 2016 – December 31, 2016	5,998,579	102.59		5,974,000	267 million
Total	15,080,907	97.64		15,001,000	267 million

⁽¹⁾  79,907 shares were purchased on the open market to provide shares to participants in the Walt Disney Investment Plan (WDIP). These purchases were not made pursuant to a publicly announced repurchase plan or program.

⁽²⁾  Under a share repurchase program implemented effective June 10, 1998, the Company is authorized to repurchase shares of its common stock. On January 30, 2015, the Company’s Board of Directors increased the share repurchase authorization to a total of 400 million shares as of that date. The repurchase program does not have an expiration date.

38

ITEM 6. Exhibits

See Index of Exhibits.

39

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	THE WALT DISNEY COMPANY
	(Registrant)
By:	/s/ CHRISTINE M. MCCARTHY
	Christine M. McCarthy, Senior Executive Vice President and Chief Financial Officer

February 7, 2017

Burbank, California

40

INDEX OF EXHIBITS

Number and Description of Exhibit (Numbers Coincide with Item 601 of Regulation S-K)		Document Incorporated by Reference from a Previous Filing or Filed Herewith, as Indicated below
3.2	Amended and Restated Bylaws	Exhibit 3.2 to the Current Report on Form 8-K of the Company dated November 30, 2016.
12.1	Ratio of Earnings to Fixed Charges	Filed herewith
31(a)	Rule 13a-14(a) Certification of Chief Executive Officer of the Company in accordance with Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31(b)	Rule 13a-14(a) Certification of Chief Financial Officer of the Company in accordance with Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32(a)	Section 1350 Certification of Chief Executive Officer of the Company in accordance with Section 906 of the Sarbanes-Oxley Act of 2002*	Furnished
32(b)	Section 1350 Certification of Chief Financial Officer of the Company in accordance with Section 906 of the Sarbanes-Oxley Act of 2002*	Furnished
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2016 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Equity and (vi) related notes	Filed

* A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

41

EX-12.1

Exhibit 12.1

THE WALT DISNEY COMPANY

RATIO OF EARNINGS TO FIXED CHARGES

(AMOUNTS IN MILLIONS, EXCEPT RATIOS)

	Quarter Ended						Fiscal Year Ended
	Dec. 31, 2016			Jan. 2, 2016			2016			2015			2014			2013			2012
EARNINGS
Income from continuing operations before income taxes	$	3,725		$	4,358		$	14,868		$	13,868		$	12,246		$	9,620		$	9,260
Equity in the income of investees	(118		)	(474		)	(926		)	(814		)	(854		)	(688		)	(627		)
Cash distributions received from equity investees	203			206			799			752			718			694			663
Interest expense, amortization of debt discounts and premiums on all indebtedness and amortization of capitalized interest	139			86			433			325			360			415			525
Imputed interest on operating leases (1)	70			72			282			286			294			292			288
TOTAL EARNINGS	$	4,019		$	4,248		$	15,456		$	14,417		$	12,764		$	10,333		$	10,109
FIXED CHARGES
Interest expense and amortization of debt discounts and premiums on all indebtedness	$	121		$	66		$	354		$	265		$	294		$	349		$	472
Capitalized interest	21			34			139			110			73			77			92
Imputed interest on operating leases (1)	70			72			282			286			294			292			288
TOTAL FIXED CHARGES	$	212		$	172		$	775		$	661		$	661		$	718		$	852
RATIO OF EARNINGS TO FIXED CHARGES (2)	19.0			24.7			19.9			21.8			19.3			14.4			11.9

⁽¹⁾  The portion of operating rental expense which management believes is representative of the interest component of rent expense.

⁽²⁾  The ratio does not adjust for interest on unrecognized tax benefits that are recorded as a component of income tax expense.

EX-31.A

Exhibit 31(a)

RULE 13a-14(a) CERTIFICATION IN

ACCORDANCE WITH SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Robert A. Iger, Chairman and Chief Executive Officer of The Walt Disney Company (the “Company”), certify that:

1. I have reviewed this quarterly report on Form 10-Q of the Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 7, 2017	By:	/s/ ROBERT A. IGER
			Robert A. Iger
			Chairman and Chief Executive Officer

EX-31.B

Exhibit 31(b)

RULE 13a-14(a) CERTIFICATION IN

ACCORDANCE WITH SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Christine M. McCarthy, Senior Executive Vice President and Chief Financial Officer of The Walt Disney Company (the “Company”), certify that:

1. I have reviewed this quarterly report on Form 10-Q of the Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 7, 2017	By:	/s/ CHRISTINE M. MCCARTHY
			Christine M. McCarthy
			Senior Executive Vice President and Chief Financial Officer

EX-32.A

Exhibit 32(a)

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

In connection with the Quarterly Report of The Walt Disney Company (the “Company”) on Form 10-Q for the fiscal quarter ended December 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert A. Iger, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

By:	/s/ ROBERT A. IGER
	Robert A. Iger
	Chairman and Chief Executive Officer
	February 7, 2017

* A signed original of this written statement required by Section 906 has been provided to The Walt Disney Company and will be retained by The Walt Disney Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.B

Exhibit 32(b)

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

In connection with the Quarterly Report of The Walt Disney Company (the “Company”) on Form 10-Q for the fiscal quarter ended December 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christine M. McCarthy, Senior Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

By:	/s/ CHRISTINE M. MCCARTHY
	Christine M. McCarthy
	Senior Executive Vice President and Chief Financial Officer
	February 7, 2017

* A signed original of this written statement required by Section 906 has been provided to The Walt Disney Company and will be retained by The Walt Disney Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - shares	3 Months Ended
	Dec. 31, 2016	Feb. 01, 2017
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Trading Symbol	DIS
Entity Registrant Name	WALT DISNEY CO/
Entity Central Index Key	0001001039
Current Fiscal Year End Date	--09-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,581,248,242

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016
Services Revenue	$ 12,406	$ 12,622
Products Revenue	2,378	2,622
Total revenues	14,784	15,244
Cost of services (exclusive of depreciation and amortization)	(7,020)	(7,056)
Cost of products (exclusive of depreciation and amortization)	(1,386)	(1,567)
Selling, general, administrative and other	(1,985)	(2,025)
Depreciation and amortization	(687)	(607)
Total costs and expenses	(11,078)	(11,255)
Restructuring and impairment charges	0	(81)
Interest expense, net	(99)	(24)
Equity in the income of investees	118	474
Income before income taxes	3,725	4,358
Income taxes	(1,237)	(1,448)
Net income	2,488	2,910
Less: Net income attributable to noncontrolling interests	(9)	(30)
Net income attributable to The Walt Disney Company (Disney)	$ 2,479	$ 2,880
Earnings per share attributable to Disney:
Diluted	$ 1.55	$ 1.73
Basic	$ 1.56	$ 1.74
Weighted average number of common and common equivalent shares outstanding:
Diluted (shares)	1,603	1,668
Basic (shares)	1,592	1,654
Dividends declared per share	$ 0.78	$ 0.71

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016
Net income	$ 2,488	$ 2,910
Other Comprehensive Income/(Loss), Net of Tax:
Market value adjustments for investments	(11)	(3)
Market value adjustments for hedges	280	(25)
Pension and postretirement medical plan adjustments	46	42
Foreign currency translation and other	(290)	(113)
Other comprehensive income/(loss)	25	(99)
Comprehensive income	2,513	2,811
Less: Net income attributable to noncontrolling interests	(9)	(30)
Less: Other comprehensive loss attributable to noncontrolling interests	99	51
Comprehensive income attributable to Disney	$ 2,603	$ 2,832

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Dec. 31, 2016	Oct. 01, 2016
Current assets
Cash and Cash Equivalents	$ 3,736	$ 4,610
Receivables	9,878	9,065
Inventories	1,299	1,390
Television costs and advances	821	1,208
Other current assets	931	693
Total current assets	16,665	16,966
Film and television costs	6,572	6,339
Investments	4,220	4,280
Attractions, buildings and equipment	49,912	50,270
Accumulated depreciation	(26,996)	(26,849)
Parks, resorts and other property before projects in progress and land, Total	22,916	23,421
Projects in progress	2,902	2,684
Land	1,236	1,244
Parks, resorts and other property	27,054	27,349
Intangible assets, net	6,892	6,949
Goodwill	27,793	27,810
Other assets	2,380	2,340
Total assets	91,576	92,033
Current liabilities
Accounts payable and other accrued liabilities	9,979	9,130
Current portion of borrowings	5,698	3,687
Unearned royalties and other advances	3,640	4,025
Total current liabilities	19,317	16,842
Borrowings	14,792	16,483
Deferred income taxes	3,888	3,679
Other long-term liabilities	6,402	7,706
Commitments and contingencies
Equity
Preferred stock, $.01 par value, Authorized – 100 million shares, Issued – none	0	0
Common stock, $.01 par value, Authorized – 4.6 billion shares, Issued – 2.9 billion shares	35,906	35,859
Retained earnings	67,327	66,088
Accumulated other comprehensive loss	(3,855)	(3,979)
Stockholders' Equity subtotal before Treasury Stock, Total	99,378	97,968
Treasury stock, at cost, 1.3 billion shares	(56,168)	(54,703)
Total Disney Shareholders' equity	43,210	43,265
Noncontrolling interests	3,967	4,058
Total equity	47,177	47,323
Total liabilities and equity	$ 91,576	$ 92,033

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions	Dec. 31, 2016	Oct. 01, 2016
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, authorized	100	100
Preferred stock, issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized	4,600	4,600
Common stock, issued	2,900	2,900
Treasury stock, shares	1,300	1,300

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016
OPERATING ACTIVITIES
Net income	$ 2,488	$ 2,910
Depreciation and amortization	687	607
Deferred income taxes	(76)	551
Equity in the income of investees	(118)	(474)
Cash distributions received from equity investees	203	206
Net change in film and television costs and advances	440	705
Equity-based compensation	97	106
Other	187	211
Changes in operating assets and liabilities:
Receivables	(1,160)	(2,358)
Inventories	102	134
Other assets	126	91
Accounts payable and other accrued liabilities	(2,763)	(891)
Income taxes	1,047	658
Cash provided by operations	1,260	2,456
INVESTING ACTIVITIES
Investments in parks, resorts and other property	(1,040)	(1,406)
Acquisitions	0	(400)
Other	5	8
Cash used in investing activities	(1,035)	(1,798)
FINANCING ACTIVITIES
Commercial paper borrowings, net	732	1,907
Borrowings	42	382
Reduction of borrowings	(194)	(564)
Repurchases of common stock	(1,465)	(2,352)
Proceeds from exercise of stock options	65	52
Other	(167)	13
Cash used in financing activities	(987)	(562)
Impact of exchange rates on cash and cash equivalents	(112)	(64)
Change in cash and cash equivalents	(874)	32
Cash and cash equivalents, beginning of period	4,610	4,269
Cash and cash equivalents, end of period	$ 3,736	$ 4,301

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions	Total	Disney Shareholders	Non- controlling Interests
Beginning Balance at Oct. 03, 2015	$ 48,655	$ 44,525	$ 4,130
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income/(loss)	2,811	2,832	(21)
Equity compensation activity	128	128	0
Dividends	(1,168)	(1,168)	0
Common stock repurchases	(2,352)	(2,352)	0
Distributions and other	124	(7)	131
Ending Balance at Jan. 02, 2016	48,198	43,958	4,240
Beginning Balance at Oct. 01, 2016	47,323	43,265	4,058
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income/(loss)	2,513	2,603	(90)
Equity compensation activity	48	48	0
Dividends	(1,237)	(1,237)	0
Common stock repurchases	(1,465)	(1,465)	0
Distributions and other	(5)	(4)	(1)
Ending Balance at Dec. 31, 2016	$ 47,177	$ 43,210	$ 3,967

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Principles of Consolidation

3 Months Ended

Dec. 31, 2016

Principles of Consolidation

Principles of Consolidation

These Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. We believe that we have included all normal recurring adjustments necessary for a fair presentation of the results for the interim period. Operating results for the quarter endedDecember 31, 2016 are not necessarily indicative of the results that may be expected for the year ending September 30, 2017. Certain reclassifications have been made in the prior-year financial statements to conform to the current-year presentation.

These financial statements should be read in conjunction with the Company’s 2016 Annual Report on Form 10-K.

The Company enters into relationships or investments with other entities that may be a variable interest entity (VIE). A VIE is consolidated in the financial statements if the Company has the power to direct activities that most significantly impact the economic performance of the VIE and has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE (as defined by ASC 810-10-25-38). Disneyland Paris, Hong Kong Disneyland Resort and Shanghai Disney Resort (collectively the International Theme Parks) are VIEs. Company subsidiaries (the Management Companies) have management agreements with the International Theme Parks, which provide the Management Companies, subject to certain protective rights of joint venture partners, with the ability to direct the day-to-day operating activities and the development of business strategies that we believe most significantly impact the economic performance of the International Theme Parks. In addition, the Management Companies receive management fees under these arrangements that we believe could be significant to the International Theme Parks. Therefore, the Company has consolidated the International Theme Parks in its financial statements.

The terms “Company,” “we,” “us,” and “our” are used in this report to refer collectively to the parent company and the subsidiaries through which our various businesses are actually conducted.

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Segment Information

3 Months Ended

Dec. 31, 2016

Segment Information

Segment Information

The operating segments reported below are the segments of the Company for which separate financial information is available and for which segment results are evaluated regularly by the Chief Executive Officer in deciding how to allocate resources and in assessing performance.

Segment operating results reflect earnings before corporate and unallocated shared expenses, restructuring and impairment charges, interest expense, income taxes and noncontrolling interests. Segment operating income includes equity in the income of investees. Corporate and unallocated shared expenses principally consist of corporate functions, executive management and certain unallocated administrative support functions.

Equity in the income of investees is included in segment operating income as follows:

	Quarter Ended
	December 31, 2016			January 2, 2016
Media Networks	$	119		$	142
Parks and Resorts	(2		)	—
Consumer Products & Interactive Media	1			—
Equity in the income of investees included in segment operating income	118			142
Vice Gain	—			332
Total equity in the income of investees	$	118		$	474

During the quarter ended January 2, 2016, the Company recognized its share of a net gain recorded by A+E Television Networks (A+E), a joint venture owned 50% by the Company, in connection with A+E’s acquisition of an interest in Vice Group Holding, Inc. (Vice) (Vice Gain). The Company’s $332 million share of the Vice Gain is recorded in “Equity in the income of investees” in the Condensed Consolidated Statement of Income but is not included in segment operating income. See Note 3 for further discussion of the transaction.

Segment revenues and segment operating income are as follows:

	Quarter Ended
	December 31, 2016		January 2, 2016
Revenues (1):
Media Networks	$	6,233	$	6,332
Parks and Resorts	4,555		4,281
Studio Entertainment	2,520		2,721
Consumer Products & Interactive Media	1,476		1,910
	$	14,784	$	15,244
Segment operating income(1):
Media Networks	$	1,362	$	1,412
Parks and Resorts	1,110		981
Studio Entertainment	842		1,014
Consumer Products & Interactive Media	642		860
	$	3,956	$	4,267

⁽¹⁾ Studio Entertainment segment revenues and operating income include an allocation of Consumer Products & Interactive Media revenues, which is meant to reflect royalties on sales of merchandise based on certain film properties. The increase to Studio Entertainment revenues and operating income and corresponding decrease to Consumer Products & Interactive Media revenues and operating income totaled $181 million and $262 million for the quarters ended December 31, 2016 and January 2, 2016, respectively.

A reconciliation of segment operating income to income before income taxes is as follows:

	Quarter Ended
	December 31, 2016			January 2, 2016
Segment operating income	$	3,956		$	4,267
Corporate and unallocated shared expenses	(132		)	(136		)
Restructuring and impairment charges	—			(81		)
Interest expense, net	(99		)	(24		)
Vice Gain	—			332
Income before income taxes	$	3,725		$	4,358

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Acquisitions

3 Months Ended

Dec. 31, 2016

Acquisitions

Acquisitions

Vice/A+E

Vice is a media company targeting a millennial audience through news and pop culture content and creative brand integration. During the first quarter of fiscal 2016, A+E acquired an 8% interest in Vice in exchange for a 49.9% interest in one of A+E’s cable channels, H2, which has been rebranded as Viceland and programmed with Vice content. As a result of this exchange, A+E recognized a net non-cash gain based on the estimated fair value of H2. The Company’s share of the Vice Gain totaled $332 million and was recorded in “Equity in the income of investees” in the Condensed Consolidated Statement of Income in the first quarter of fiscal 2016. At December 31, 2016, A+E had a 20% interest in Vice.

In addition, during the first quarter of fiscal 2016, the Company acquired an 11% interest in Vice for $400 million of cash.

The Company accounts for its interests in A+E and Vice as equity method investments.

BAMTech

In August 2016, the Company acquired a 15% interest in BAMTech, an entity which holds Major League Baseball’s streaming technology and content delivery businesses, for $450 million. In January 2017, the Company acquired an additional 18% interest for $557 million. In addition, the Company has an option to increase its ownership to 66% by acquiring additional shares at fair market value from Major League Baseball between August 2020 and August 2023. The Company accounts for its interest in BAMTech as an equity method investment.

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Borrowings

3 Months Ended

Dec. 31, 2016

Borrowings

Borrowings

During the quarter ended December 31, 2016, the Company’s borrowing activity was as follows:

	October 1, 2016		Borrowings		Payments			Other Activity			December 31, 2016
Commercial paper with original maturities less than three months(1)	$	777	$	—	$	(117	)	$	1		$	661
Commercial paper with original maturities greater than three months	744		1,594		(745		)	2			1,595
U.S. medium-term notes	16,827		—		—			5			16,832
International Theme Parks borrowings	1,087		13		—			(27		)	1,073
Foreign currency denominated debt and other(2)	735		29		(194		)	(241		)	329
Total	$	20,170	$	1,636	$	(1,056	)	$	(260	)	$	20,490

⁽¹⁾  Borrowings and payments are reported net.

⁽²⁾  The other activity is primarily market value adjustments for debt with qualifying hedges.

The Company has bank facilities with a syndicate of lenders to support commercial paper borrowings as follows:

	Committed Capacity		Capacity Used		Unused Capacity
Facility expiring March 2017	$	1,500	$	—	$	1,500
Facility expiring March 2019	2,250		—		2,250
Facility expiring March 2021	2,250		—		2,250
Total	$	6,000	$	—	$	6,000

All of the above bank facilities allow for borrowings at LIBOR-based rates plus a spread depending on the credit default swap spread applicable to the Company’s debt, subject to a cap and floor that vary with the Company’s debt rating assigned by Moody’s Investors Service and Standard and Poor’s. The spread above LIBOR can range from 0.23% to 1.63%. The Company also has the ability to issue up to $800 million of letters of credit under the facility expiring in March 2019, which if utilized, reduces available borrowings under this facility. As of December 31, 2016, the Company has $172 million of outstanding letters of credit, of which none were issued under this facility. The facilities specifically exclude certain entities, including the International Theme Parks, from any representations, covenants, or events of default and contain only one financial covenant relating to interest coverage, which the Company met on December 31, 2016 by a significant margin.

Interest expense, net

Interest and investment income and interest expense are reported net in the Condensed Consolidated Statements of Income and consist of the following (net of capitalized interest):

	Quarter Ended
	December 31, 2016			January 2, 2016
Interest expense	$	(121	)	$	(66	)
Interest and investment income	22			42
Interest expense, net	$	(99	)	$	(24	)

Interest and investment income includes gains and losses on the sale of publicly and non-publicly traded investments, investment impairments and interest earned on cash and cash equivalents and certain receivables.

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International Theme Park Investments

3 Months Ended

Dec. 31, 2016

Equity Method Investments and Joint Ventures [Abstract]

International Theme Park Investments

International Theme Park Investments

The Company has an 81% effective ownership interest in the operations of Disneyland Paris, a 47% ownership interest in the operations of Hong Kong Disneyland Resort and a 43% ownership interest in the operations of Shanghai Disney Resort. The International Theme Parks are VIEs consolidated in the Company’s financial statements. See Note 1 for the Company’s policy on consolidating VIEs.

The following table summarizes the carrying amounts of the International Theme Parks’ assets and liabilities included in the Company’s Condensed Consolidated Balance Sheets as of December 31, 2016 and October 1, 2016:

	International Theme Parks
	December 31, 2016		October 1, 2016
Cash and cash equivalents	$	717	$	1,008
Other current assets	343		331
Total current assets	1,060		1,339
Parks, resorts and other property	8,960		9,270
Other assets	89		88
Total assets	$	10,109	$	10,697
Current liabilities	$	1,265	$	1,499
Borrowings - long-term	1,073		1,087
Other long-term liabilities	267		256
Total liabilities	$	2,605	$	2,842

The following table summarizes the International Theme Parks’ revenues and costs and expenses included in the Company’s Condensed Consolidated Statement of Income for the quarter ended December 31, 2016:

	December 31, 2016
Revenues	$	737
Costs and expenses	(760		)

International Theme Parks royalty and management fees of $32 million recognized for the quarter ended December 31, 2016 are eliminated in consolidation but are considered in calculating earnings allocated to noncontrolling interests.

For the quarter ended December 31, 2016, International Theme Parks’ cash flows included in the Company’s Condensed Consolidated Statement of Cash Flows are $113 million generated from operating activities, $304 million used in investing activities and $13 million generated from financing activities.

Disneyland Paris

The Company has term loans to Disneyland Paris with outstanding balances totaling €1.0 billion at December 31, 2016 bearing interest at a 4% fixed rate and maturing in 2024. In addition, the Company has provided Disneyland Paris a €0.4 billion line of credit bearing interest at EURIBOR plus 2% and maturing in 2023. At December 31, 2016, €155 million is outstanding under the line of credit. The amounts of the loans and line of credit are eliminated upon consolidation.

The Company has waived royalties and management fees for the fourth quarter of fiscal 2016 through the third quarter of fiscal 2018.

Hong Kong Disneyland Resort

At December 31, 2016, the Government of the Hong Kong Special Administrative Region (HKSAR) and the Company had 53% and 47% equity interests in Hong Kong Disneyland Resort, respectively.

As part of financing the construction of a third hotel, the Company and HKSAR have provided loans with outstanding balances of $136 million and $91 million, respectively, which bear interest at a rate of three month HIBOR plus 2% and mature in September 2025. The amount of the Company’s loan is eliminated upon consolidation.

Shanghai Disney Resort

Shanghai Disney Resort is owned through two joint venture companies, in which Shanghai Shendi (Group) Co., Ltd (Shendi) owns 57% and the Company owns 43%. A management company, in which the Company has a 70% interest and Shendi a 30% interest, is responsible for operating Shanghai Disney Resort.

The Company has provided Shanghai Disney Resort with long-term loans totaling $762 million, bearing interest at rates up to 8%. In addition, the Company has an outstanding balance of $288 million due from Shanghai Disney Resort related to development and pre-opening costs of the resort and outstanding royalties and management fees. The Company has also provided Shanghai Disney Resort with a $157 million line of credit bearing interest at 8%. There is no outstanding balance under the line of credit at December 31, 2016. The amounts of the loan and line of credit are eliminated upon consolidation.

Shendi has provided Shanghai Disney Resort with term loans totaling 6.5 billion yuan (approximately $0.9 billion), bearing interest at rates up to 8% and maturing in 2036; however, early repayment is permitted. Shendi has also provided Shanghai Disney Resort with a 1.4 billion yuan (approximately $197 million) line of credit bearing interest at 8%. There is no outstanding balance under the line of credit at December 31, 2016.

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Pension and Other Benefit Programs

3 Months Ended

Dec. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Pension and Other Benefit Programs

Pension and Other Benefit Programs

The components of net periodic benefit cost are as follows:

	Pension Plans						Postretirement Medical Plans
	Quarter Ended						Quarter Ended
	December 31, 2016			January 2, 2016			December 31, 2016			January 2, 2016
Service costs	$	91		$	80		$	3		$	3
Interest costs	112			115			14			15
Expected return on plan assets	(219		)	(188		)	(12		)	(11		)
Amortization of prior-year service costs	3			3			—			—
Recognized net actuarial loss	101			61			4			2
Net periodic benefit cost	$	88		$	71		$	9		$	9

During the quarter ended December 31, 2016, the Company made $1.3 billion of contributions to its pension and postretirement medical plans. The Company currently does not expect to make any additional material contributions to its pension and postretirement medical plans during the remainder of fiscal 2017. However, final funding amounts for fiscal 2017 will be assessed based on our January 1, 2017 funding actuarial valuation, which we expect to receive during the fourth quarter of fiscal 2017.

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Earnings Per Share

3 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Diluted earnings per share amounts are based upon the weighted average number of common and common equivalent shares outstanding during the period and are calculated using the treasury stock method for equity-based compensation awards (Awards). A reconciliation of the weighted average number of common and common equivalent shares outstanding and the number of Awards excluded from the diluted earnings per share calculation, as they were anti-dilutive, are as follows:

	Quarter Ended
	December 31, 2016	January 2, 2016
Shares (in millions):
Weighted average number of common and common equivalent shares outstanding (basic)	1,592	1,654
Weighted average dilutive impact of Awards	11	14
Weighted average number of common and common equivalent shares outstanding (diluted)	1,603	1,668
Awards excluded from diluted earnings per share	16	4

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Equity

3 Months Ended

Dec. 31, 2016

Equity [Abstract]

Equity

Equity

The Company paid the following dividends in fiscal 2017 and 2016:

Per Share	Total Paid	Payment Timing	Related to Fiscal Period
$0.78	$1.2 billion	Second Quarter of Fiscal 2017	Second Half 2016
$0.71	$1.1 billion	Fourth Quarter of Fiscal 2016	First Half 2016
$0.71	$1.2 billion	Second Quarter of Fiscal 2016	Second Half 2015

During the quarter ended December 31, 2016, the Company repurchased15 million shares of its common stock for $1.5 billion. As of December 31, 2016, the Company had remaining authorization in place to repurchase approximately 267 million additional shares. The repurchase program does not have an expiration date.

The following table summarizes the changes in each component of accumulated other comprehensive income (loss) (AOCI) including our proportional share of equity method investee amounts, which is generally net of 37% estimated tax:

							Unrecognized Pension and  Postretirement Medical  Expense			Foreign Currency Translation and Other(1)			AOCI
	Market Value Adjustments
	Investments			Cash Flow Hedges
Balance at October 1, 2016	$	26		$	(25	)	$	(3,651	)	$	(329	)	$	(3,979	)
Quarter Ended December 31, 2016:
Unrealized gains (losses) arising   during the period	(11		)	324			(22		)	(191		)	100
Reclassifications of realized net (gains) losses to net income	—			(44		)	68			—			24
Balance at December 31, 2016	$	15		$	255		$	(3,605	)	$	(520	)	$	(3,855	)
Balance at October 3, 2015	$	13		$	334		$	(2,497	)	$	(271	)	$	(2,421	)
Quarter Ended January 2, 2016:
Unrealized gains (losses) arising   during the period	(3		)	41			—			(62		)	(24		)
Reclassifications of realized net (gains) losses to net income	—			(66		)	42			—			(24		)
Balance at January 2, 2016	$	10		$	309		$	(2,455	)	$	(333	)	$	(2,469	)

⁽¹⁾  Foreign Currency Translation and Other is net of an average 22% estimated tax at December 31, 2016 as the Company has not recognized deferred tax assets for some of our foreign entities.

Details about AOCI components reclassified to net income are as follows:

Gains/(losses) in net income:	Affected line item in the   Condensed Consolidated   Statements of Income:	Quarter Ended
		December 31, 2016			January 2, 2016
Cash flow hedges	Primarily revenue	$	70		$	105
Estimated tax	Income taxes	(26		)	(39		)
		44			66
Pension and postretirement   medical expense	Costs and expenses	(108		)	(67		)
Estimated tax	Income taxes	40			25
		(68		)	(42		)
Total reclassifications for the period		$	(24	)	$	24

At December 31, 2016 and October 1, 2016, the Company held available-for-sale investments in unrecognized gain positions totaling $29 million and $49 million, respectively, and no investments in significant unrecognized loss positions.

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Equity-Based Compensation

3 Months Ended

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity-Based Compensation

Equity-Based Compensation

Compensation expense related to stock options, stock appreciation rights and restricted stock units (RSUs) is as follows:

	Quarter Ended
	December 31, 2016		January 2, 2016
Stock options(1)	$	20	$	23
RSUs	77		83
Total equity-based compensation expense (2)	$	97	$	106
Equity-based compensation expense capitalized during the period	$	21	$	15

⁽¹⁾  Includes stock appreciation rights.

⁽²⁾  Equity-based compensation expense is net of capitalized equity-based compensation and excludes amortization of previously capitalized equity-based compensation costs.

Unrecognized compensation cost related to unvested stock options and RSUs was $221 millionand $770 million, respectively, as of December 31, 2016.

The weighted average grant date fair values of options granted during the quarters ended December 31, 2016 and January 2, 2016 were $25.78 and $31.17, respectively.

During the quarter ended December 31, 2016, the Company made equity compensation grants consisting of 4.5 million stock options and 3.6 million RSUs.

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Commitments and Contingencies

3 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Matters

Beef Products, Inc. v. American Broadcasting Companies, Inc. OnSeptember 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 about a product, Lean Finely Textured Beef, that was included in ground beef and hamburger meat. Plaintiffs’ complaint sought actual and consequential damages in excess of $400 million (which in March 2016 they asserted could be as much as $1.9 billion), statutory damages (including treble damages) pursuant to South Dakota’s Agricultural Food Products Disparagement Act, and punitive damages. Trial is set for June 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.

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 December 31, 2016, the remaining debt service obligation guaranteed by the Company was $316 million, of which $51 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 these bonds.

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 and vacation ownership units. 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 December 31, 2016. The activity in the current period 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 approximately $0.7 billion as of December 31, 2016. The activity in the current period related to the allowance for credit losses was not material.

Income Taxes

During the quarter ended December 31, 2016, the Company decreased its gross unrecognized tax benefits by $23 million to $821 million.

In the next twelve months, it is reasonably possible that our unrecognized tax benefits could change due to resolutions of open tax matters. These resolutions would reduce our unrecognized tax benefits by approximately $120 million, of which $23 million would reduce our income tax expense and effective tax rate if recognized.

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Fair Value Measurements

3 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants and is classified in one of the following three categories:

Level 1 - Quoted prices for identical instruments in active markets

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable

The Company’s assets and liabilities measured at fair value are summarized in the following tables by fair value measurement Level:

	Fair Value Measurement at December 31, 2016
	Level 1		Level 2			Level 3		Total
Assets
Investments	$	55	$	—		$	—	$	55
Derivatives
Interest rate	—		16			—		16
Foreign exchange	—		1,025			—		1,025
Other	—		12			—		12
Liabilities
Derivatives
Interest rate	—		(149		)	—		(149		)
Foreign exchange	—		(339		)	—		(339		)
Other	—		(1		)	—		(1		)
Total recorded at fair value	$	55	$	564		$	—	$	619
Fair value of borrowings	$	—	$	19,597		$	1,389	$	20,986

	Fair Value Measurement at October 1, 2016
	Level 1		Level 2			Level 3		Total
Assets
Investments	$	85	$	—		$	—	$	85
Derivatives
Interest rate	—		132			—		132
Foreign exchange	—		596			—		596
Other	—		6			—		6
Liabilities
Derivatives
Interest rate	—		(13		)	—		(13		)
Foreign exchange	—		(510		)	—		(510		)
Other	—		(4		)	—		(4		)
Total recorded at fair value	$	85	$	207		$	—	$	292
Fair value of borrowings	$	—	$	19,500		$	1,579	$	21,079

 The fair values of Level 2 derivatives are primarily determined by internal discounted cash flow models that use observable inputs such as interest rates, yield curves and foreign currency exchange rates. Counterparty credit risk, which is mitigated by master netting agreements and collateral posting arrangements with certain counterparties, did not have a material impact on derivative fair value estimates.

Level 2 borrowings, which include commercial paper and U.S. medium-term notes, are valued based on quoted prices for similar instruments in active markets.

Level 3 borrowings, which include International Theme Park borrowings and other foreign currency denominated borrowings, are generally valued based on historical market transactions, prevailing market interest rates and the Company’s current borrowing cost and credit risk.

The Company’s financial instruments also include cash, cash equivalents, receivables and accounts payable. The carrying values of these financial instruments approximate the fair values.

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Derivative Instruments

3 Months Ended

Dec. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

The Company manages its exposure to various risks relating to its ongoing business operations according to a risk management policy. The primary risks managed with derivative instruments are interest rate risk and foreign exchange risk.

The Company’s derivative positions measured at fair value are summarized in the following tables:

	As of December 31, 2016
	Current Assets			Other Assets			Other Accrued Liabilities			Other Long- Term Liabilities
Derivatives designated as hedges
Foreign exchange	$	429		$	298		$	(106	)	$	(103	)
Interest rate	—			16			(127		)	—
Other	8			4			(1		)	—
Derivatives not designated as hedges
Foreign exchange	259			39			(129		)	(1		)
Interest rate	—			—			—			(22		)
Gross fair value of derivatives	696			357			(363		)	(126		)
Counterparty netting	(306		)	(149		)	338			117
Cash collateral (received)/paid	(243		)	(63		)	1			—
Net derivative positions	$	147		$	145		$	(24	)	$	(9	)

	As of October 1, 2016
	Current Assets			Other Assets			Other Accrued Liabilities			Other Long- Term Liabilities
Derivatives designated as hedges
Foreign exchange	$	278		$	191		$	(209	)	$	(163	)
Interest rate	—			132			(13		)	—
Other	3			3			(4		)	—
Derivatives not designated as hedges
Foreign exchange	125			2			(133		)	(5		)
Gross fair value of derivatives	406			328			(359		)	(168		)
Counterparty netting	(241		)	(199		)	316			124
Cash collateral (received)/paid	(77		)	(44		)	7			—
Net derivative positions	$	88		$	85		$	(36	)	$	(44	)

Interest Rate Risk Management

The Company is exposed to the impact of interest rate changes primarily through its borrowing activities. The Company’s objective is to mitigate the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. In accordance with its policy, the Company targets its fixed-rate debt as a percentage of its net debt between a minimum and maximum percentage. The Company primarily uses pay-floating and pay-fixed interest rate swaps to facilitate its interest rate risk management activities.

The Company designates pay-floating interest rate swaps as fair value hedges of fixed-rate borrowings effectively converting fixed-rate borrowings to variable rate borrowings indexed to LIBOR. As of December 31, 2016 and October 1, 2016, the total notional amount of the Company’s pay-floating interest rate swaps was $8.3 billion and $8.3 billion, respectively. The following table summarizes adjustments related to fair value hedges included in “Interest expense, net” in the Condensed Consolidated Statements of Income.

	Quarter Ended
	December 31, 2016			January 2, 2016
Gain (loss) on interest rate swaps	$	(232	)	$	(55	)
Gain (loss) on hedged borrowings	232			55

In addition, the Company realized net benefits of $12 million and $23 million for the quarters ended December 31, 2016 and January 2, 2016, respectively, in “Interest expense, net” related to pay-floating interest rate swaps.

The Company may designate pay-fixed interest rate swaps as cash flow hedges of interest payments on floating-rate borrowings. Pay-fixed swaps effectively convert floating-rate borrowings to fixed-rate borrowings. The unrealized gains or losses from these cash flow hedges are deferred in AOCI and recognized in interest expense as the interest payments occur. The Company did not have pay-fixed interest rate swaps that were designated as cash flow hedges of interest payments at December 31, 2016 or at October 1, 2016 and gains and losses related to pay-fixed swaps recognized in earnings for the quarters ended December 31, 2016 and January 2, 2016 were not material.

To facilitate its interest rate risk management activities, the Company sold an option in November 2016 to enter into a future pay-floating interest rate swap indexed to LIBOR for $0.5 billion in future borrowings. The fair value of this contract as of December 31, 2016 was not material. The option is not designated as a hedge and does not qualify for hedge accounting, accordingly any changes in value will be recorded in earnings.

Foreign Exchange Risk Management

The Company transacts business globally and is subject to risks associated with changing foreign currency exchange rates. The Company’s objective is to reduce earnings and cash flow fluctuations associated with foreign currency exchange rate changes, enabling management to focus on core business issues and challenges.

The Company enters into option and forward contracts that change in value as foreign currency exchange rates change to protect the value of its existing foreign currency assets, liabilities, firm commitments and forecasted but not firmly committed foreign currency transactions. In accordance with policy, the Company hedges its forecasted foreign currency transactions for periods generally not to exceed four years within an established minimum and maximum range of annual exposure. The gains and losses on these contracts offset changes in the U.S. dollar equivalent value of the related forecasted transaction, asset, liability or firm commitment. The principal currencies hedged are the euro, Japanese yen, Canadian dollar and British pound. Cross-currency swaps are used to effectively convert foreign currency-denominated borrowings into U.S. dollar denominated borrowings.

The Company designates foreign exchange forward and option contracts as cash flow hedges of firmly committed and forecasted foreign currency transactions. As of December 31, 2016 and October 1, 2016, the notional amounts of the Company’s net foreign exchange cash flow hedges were $5.2 billion and $5.6 billion, respectively. Mark-to-market gains and losses on these contracts are deferred in AOCI and are recognized in earnings when the hedged transactions occur, offsetting changes in the value of the foreign currency transactions. Gains and losses recognized related to ineffectiveness for the quarters ended December 31, 2016 and January 2, 2016 were not material. Net deferred gains recorded in AOCI for contracts that will mature in the next twelve months totaled $332 million.

Foreign exchange risk management contracts with respect to foreign currency denominated assets and liabilities are not designated as hedges and do not qualify for hedge accounting. The notional amounts of these foreign exchange contracts at December 31, 2016 and October 1, 2016 were $3.5 billion and $3.3 billion, respectively. The following table summarizes the net foreign exchange gains or losses recognized on foreign currency denominated assets and liabilities and the net foreign exchange gains or losses on the foreign exchange contracts we entered into to mitigate our exposure with respect to foreign currency denominated assets and liabilities for the quarters ended December 31, 2016 and January 2, 2016 by the corresponding line item in which they are recorded in the Condensed Consolidated Statements of Income.

	Costs and Expenses						Interest expense, net						Income Tax expense
Quarter Ended:	December 31, 2016			January 2, 2016			December 31, 2016			January 2, 2016			December 31, 2016			January 2, 2016
Net gains (losses) on foreign currency denominated assets and liabilities	$	(233	)	$	(89	)	$	7		$	10		$	23		$	23
Net gains (losses) on foreign exchange risk management contracts not designated as hedges	221			79			(7		)	(12		)	(31		)	—
Net gains (losses)	$	(12	)	$	(10	)	$	—		$	(2	)	$	(8	)	$	23

Commodity Price Risk Management

The Company is subject to the volatility of commodities prices and the Company designates certain commodity forward contracts as cash flow hedges of forecasted commodity purchases. Mark-to-market gains and losses on these contracts are deferred in AOCI and are recognized in earnings when the hedged transactions occur, offsetting changes in the value of commodity purchases. The notional amount of these commodities contracts at December 31, 2016 and October 1, 2016 and related gains or losses recognized in earnings for the quarters ended December 31, 2016 and January 2, 2016 were not material.

Risk Management – Other Derivatives Not Designated as Hedges

The Company enters into certain other risk management contracts that are not designated as hedges and do not qualify for hedge accounting. These contracts, which include certain swap contracts, are intended to offset economic exposures of the Company and are carried at market value with any changes in value recorded in earnings. The notional amount and fair value of these contracts at December 31, 2016 and October 1, 2016 were not material. The related gains or losses recognized in earnings were not material for the quarters ended December 31, 2016 and January 2, 2016.

Contingent Features and Cash Collateral

The Company has master netting arrangements by counterparty with respect to certain derivative financial instrument contracts. The Company may be required to post collateral in the event that a net liability position with a counterparty exceeds limits defined by contract and that vary with the Company’s credit rating. In addition, these contracts may require a counterparty to post collateral to the Company in the event that a net receivable position with a counterparty exceeds limits defined by contract and that vary with the counterparty’s credit rating. If the Company’s or the counterparty’s credit ratings were to fall below investment grade, such counterparties or the Company would also have the right to terminate our derivative contracts, which could lead to a net payment to or from the Company for the aggregate net value by counterparty of our derivative contracts. The aggregate fair values of derivative instruments with credit-risk-related contingent features in a net liability position by counterparty were $34 million and $86 million on December 31, 2016 and October 1, 2016, respectively.

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Restructuring and Impairment Charges

3 Months Ended

Dec. 31, 2016

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure

Restructuring and Impairment Charges

The Company recorded $81 million of restructuring and impairment charges in the prior-year quarter for an investment impairment and contract termination and severance costs.

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New Accounting Pronouncements

3 Months Ended

Dec. 31, 2016

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements

New Accounting Pronouncements

Restricted Cash

In November 2016, the Financial Accounting Standards Board (FASB) issued guidance that requires restricted cash to be presented with cash and cash equivalents in the statement of cash flows. The guidance is required to be adopted retrospectively, and is effective beginning in the first quarter of the Company’s 2019 fiscal year (with early adoption permitted). At December 31, 2016 and October 1, 2016, the Company held restricted cash of approximately $335 million and $150 million, respectively, primarily associated with collateral received from counterparties to its derivative contracts. The Company’s restricted cash balances are presented in the Condensed Consolidated Balance Sheets as Other current assets and Other assets based on the maturity dates of the related derivatives. Under the new guidance, changes in the Company’s restricted cash will continue to be classified as either operating activities or investing activities in the Condensed Consolidated Statements of Cash Flows, depending on the nature of the activities that gave rise to the restricted cash balance.

Intra-Entity Transfers of Assets Other Than Inventory

In October 2016, the FASB issued guidance that requires the income tax consequences of an intra-entity transfer of an asset other than inventory to be recognized when the transfer occurs instead of when the asset is sold to an outside party. The new guidance is effective beginning with the first quarter of the Company’s 2019 fiscal year (with early adoption permitted as of the beginning of an annual period). The guidance is required to be adopted retrospectively by recording a cumulative-effect adjustment to retained earnings as of the beginning of the adoption period. The Company is assessing the potential impact this guidance will have on its financial statements.

Stock Compensation - Employee Share-based Payments

In March 2016, the FASB issued guidance to amend certain aspects of accounting for employee share-based awards, including accounting for income taxes related to those transactions. This guidance will require recognizing excess tax benefits and deficiencies (that result from an increase or decrease in the value of an award from grant date to the vesting date or exercise date) on share-based compensation arrangements in the tax provision, instead of in equity as under the current guidance. In addition, these amounts will be classified as an operating activity in the statement of cash flows, instead of as a financing activity. The Company reported excess tax benefits of $0.2 billion and $0.3 billion in fiscal 2016 and 2015, respectively. In addition, cash paid for shares withheld to satisfy employee taxes will be classified as a financing activity, instead of as an operating activity. Cash paid for employee taxes was $0.2 billion and $0.3 billion in fiscal 2016 and 2015, respectively. The fiscal 2016 and 2015 amounts of excess tax benefits and cash paid for employee taxes are not necessarily indicative of future amounts that may arise in years following implementation of the new accounting pronouncement.

The Company adopted the new guidance in the first quarter of fiscal 2017 as follows:

• Excess tax benefits of $38 million in the current quarter were recognized as a benefit in “Income taxes” in the Condensed Consolidated Statement of Income and classified as a source in operating activities in the Condensed Consolidated Statement of Cash Flows. The guidance required prospective adoption for the statement of income and allowed for either prospective or retrospective adoption for the statement of cash flows. The Company elected to prospectively adopt the effect to the statement of cash flows and accordingly, did not restate the Condensed Consolidated Statement of Cash Flows for the quarter ended January 2, 2016.

• Cash paid for shares withheld to satisfy employee taxes of $135 million for the quarter ended December 31, 2016 was classified as a use in financing activities in the Condensed Consolidated Statement of Cash Flows. The guidance required retrospective adoption; accordingly, a $94 million use was reclassified from an operating activity to a financing activity in the Condensed Consolidated Statement of Cash Flows for the quarter ended January 2, 2016.

Leases

In February 2016, the FASB issued a new lease accounting standard, which requires the present value of committed operating lease payments to be recorded as right-of-use lease assets and lease liabilities on the balance sheet. As of October 1, 2016, the Company had an estimated $3.1 billion in undiscounted future minimum lease commitments. The Company is currently assessing the impact of the new guidance on its financial statements. The guidance is required to be adopted retrospectively, and is effective beginning in the first quarter of the Company’s 2020 fiscal year (with early adoption permitted).

Revenue from Contracts with Customers

In May 2014, the FASB issued guidance that replaces the existing accounting standards for revenue recognition with a single comprehensive five-step model, eliminating industry-specific accounting rules. The core principle is to recognize revenue upon the transfer of goods or services to customers at an amount that reflects the consideration expected to be received. Since its issuance, the FASB has amended several aspects of the new guidance, including provisions that address revenue recognition associated with the licensing of intellectual property. The new guidance, including the amendments, is effective beginning with the first quarter of the Company’s 2019 fiscal year (with early adoption permitted beginning fiscal year 2018). The guidance may be adopted either by restating all years presented in the Company’s financial statements or by recording the impact of adoption as an adjustment to retained earnings at the beginning of the year of adoption. We are continuing to assess the potential impact of this guidance, including the impact on those areas currently subject to industry-specific guidance such as licensing of intellectual property. As part of our assessment, we are reviewing representative samples of customer contracts to determine the impact on revenue recognition under the new guidance. Our method of adoption will in part be based on the degree of change identified in our assessment.

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Segment Information (Tables)

3 Months Ended

Dec. 31, 2016

Equity In Income of Investees By Segment

Equity in the income of investees is included in segment operating income as follows:

	Quarter Ended
	December 31, 2016			January 2, 2016
Media Networks	$	119		$	142
Parks and Resorts	(2		)	—
Consumer Products & Interactive Media	1			—
Equity in the income of investees included in segment operating income	118			142
Vice Gain	—			332
Total equity in the income of investees	$	118		$	474

Financial Information by Operating Segments

Segment revenues and segment operating income are as follows:

	Quarter Ended
	December 31, 2016		January 2, 2016
Revenues (1):
Media Networks	$	6,233	$	6,332
Parks and Resorts	4,555		4,281
Studio Entertainment	2,520		2,721
Consumer Products & Interactive Media	1,476		1,910
	$	14,784	$	15,244
Segment operating income(1):
Media Networks	$	1,362	$	1,412
Parks and Resorts	1,110		981
Studio Entertainment	842		1,014
Consumer Products & Interactive Media	642		860
	$	3,956	$	4,267

⁽¹⁾ Studio Entertainment segment revenues and operating income include an allocation of Consumer Products & Interactive Media revenues, which is meant to reflect royalties on sales of merchandise based on certain film properties. The increase to Studio Entertainment revenues and operating income and corresponding decrease to Consumer Products & Interactive Media revenues and operating income totaled $181 million and $262 million for the quarters ended December 31, 2016 and January 2, 2016, respectively.

Reconciliation of Segment Operating Income to Income before Income Taxes

A reconciliation of segment operating income to income before income taxes is as follows:

	Quarter Ended
	December 31, 2016			January 2, 2016
Segment operating income	$	3,956		$	4,267
Corporate and unallocated shared expenses	(132		)	(136		)
Restructuring and impairment charges	—			(81		)
Interest expense, net	(99		)	(24		)
Vice Gain	—			332
Income before income taxes	$	3,725		$	4,358

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Borrowings (Tables)

3 Months Ended

Dec. 31, 2016

Borrowing Activity

During the quarter ended December 31, 2016, the Company’s borrowing activity was as follows:

	October 1, 2016		Borrowings		Payments			Other Activity			December 31, 2016
Commercial paper with original maturities less than three months(1)	$	777	$	—	$	(117	)	$	1		$	661
Commercial paper with original maturities greater than three months	744		1,594		(745		)	2			1,595
U.S. medium-term notes	16,827		—		—			5			16,832
International Theme Parks borrowings	1,087		13		—			(27		)	1,073
Foreign currency denominated debt and other(2)	735		29		(194		)	(241		)	329
Total	$	20,170	$	1,636	$	(1,056	)	$	(260	)	$	20,490

⁽¹⁾  Borrowings and payments are reported net.

⁽²⁾  The other activity is primarily market value adjustments for debt with qualifying hedges.

Line of Credit Facilities

The Company has bank facilities with a syndicate of lenders to support commercial paper borrowings as follows:

	Committed Capacity		Capacity Used		Unused Capacity
Facility expiring March 2017	$	1,500	$	—	$	1,500
Facility expiring March 2019	2,250		—		2,250
Facility expiring March 2021	2,250		—		2,250
Total	$	6,000	$	—	$	6,000

Interest Expense, net

Interest and investment income and interest expense are reported net in the Condensed Consolidated Statements of Income and consist of the following (net of capitalized interest):

	Quarter Ended
	December 31, 2016			January 2, 2016
Interest expense	$	(121	)	$	(66	)
Interest and investment income	22			42
Interest expense, net	$	(99	)	$	(24	)

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International Theme Park Investments (Tables)

3 Months Ended

Dec. 31, 2016

Consolidating Balance Sheets

Impact of Consolidating Financial Statements of International Theme Parks

The following table summarizes the carrying amounts of the International Theme Parks’ assets and liabilities included in the Company’s Condensed Consolidated Balance Sheets as of December 31, 2016 and October 1, 2016:

	International Theme Parks
	December 31, 2016		October 1, 2016
Cash and cash equivalents	$	717	$	1,008
Other current assets	343		331
Total current assets	1,060		1,339
Parks, resorts and other property	8,960		9,270
Other assets	89		88
Total assets	$	10,109	$	10,697
Current liabilities	$	1,265	$	1,499
Borrowings - long-term	1,073		1,087
Other long-term liabilities	267		256
Total liabilities	$	2,605	$	2,842

Consolidating Income Statements

Impact of Consolidating Financial Statements of International Theme Parks

The following table summarizes the International Theme Parks’ revenues and costs and expenses included in the Company’s Condensed Consolidated Statement of Income for the quarter ended December 31, 2016:

	December 31, 2016
Revenues	$	737
Costs and expenses	(760		)

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Pension and Other Benefit Programs (Tables)

3 Months Ended

Dec. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Net Periodic Benefit Cost

The components of net periodic benefit cost are as follows:

	Pension Plans						Postretirement Medical Plans
	Quarter Ended						Quarter Ended
	December 31, 2016			January 2, 2016			December 31, 2016			January 2, 2016
Service costs	$	91		$	80		$	3		$	3
Interest costs	112			115			14			15
Expected return on plan assets	(219		)	(188		)	(12		)	(11		)
Amortization of prior-year service costs	3			3			—			—
Recognized net actuarial loss	101			61			4			2
Net periodic benefit cost	$	88		$	71		$	9		$	9

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Earnings Per Share (Tables)

3 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

Reconciliation of Weighted Average Number of Common and Common Equivalent Shares Outstanding and Awards Excluded from Diluted Earnings Per Share Calculation

A reconciliation of the weighted average number of common and common equivalent shares outstanding and the number of Awards excluded from the diluted earnings per share calculation, as they were anti-dilutive, are as follows:

	Quarter Ended
	December 31, 2016	January 2, 2016
Shares (in millions):
Weighted average number of common and common equivalent shares outstanding (basic)	1,592	1,654
Weighted average dilutive impact of Awards	11	14
Weighted average number of common and common equivalent shares outstanding (diluted)	1,603	1,668
Awards excluded from diluted earnings per share	16	4

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Equity (Tables)

3 Months Ended

Dec. 31, 2016

Equity [Abstract]

Dividends Declared

The Company paid the following dividends in fiscal 2017 and 2016:

Per Share	Total Paid	Payment Timing	Related to Fiscal Period
$0.78	$1.2 billion	Second Quarter of Fiscal 2017	Second Half 2016
$0.71	$1.1 billion	Fourth Quarter of Fiscal 2016	First Half 2016
$0.71	$1.2 billion	Second Quarter of Fiscal 2016	Second Half 2015

Changes in Accumulated Other Comprehensive Income (Loss), Net of Tax

The following table summarizes the changes in each component of accumulated other comprehensive income (loss) (AOCI) including our proportional share of equity method investee amounts, which is generally net of 37% estimated tax:

							Unrecognized Pension and  Postretirement Medical  Expense			Foreign Currency Translation and Other(1)			AOCI
	Market Value Adjustments
	Investments			Cash Flow Hedges
Balance at October 1, 2016	$	26		$	(25	)	$	(3,651	)	$	(329	)	$	(3,979	)
Quarter Ended December 31, 2016:
Unrealized gains (losses) arising   during the period	(11		)	324			(22		)	(191		)	100
Reclassifications of realized net (gains) losses to net income	—			(44		)	68			—			24
Balance at December 31, 2016	$	15		$	255		$	(3,605	)	$	(520	)	$	(3,855	)
Balance at October 3, 2015	$	13		$	334		$	(2,497	)	$	(271	)	$	(2,421	)
Quarter Ended January 2, 2016:
Unrealized gains (losses) arising   during the period	(3		)	41			—			(62		)	(24		)
Reclassifications of realized net (gains) losses to net income	—			(66		)	42			—			(24		)
Balance at January 2, 2016	$	10		$	309		$	(2,455	)	$	(333	)	$	(2,469	)

⁽¹⁾  Foreign Currency Translation and Other is net of an average 22% estimated tax at December 31, 2016 as the Company has not recognized deferred tax assets for some of our foreign entities.

Details about AOCI Components Reclassified to Net Income

Details about AOCI components reclassified to net income are as follows:

Gains/(losses) in net income:	Affected line item in the   Condensed Consolidated   Statements of Income:	Quarter Ended
		December 31, 2016			January 2, 2016
Cash flow hedges	Primarily revenue	$	70		$	105
Estimated tax	Income taxes	(26		)	(39		)
		44			66
Pension and postretirement   medical expense	Costs and expenses	(108		)	(67		)
Estimated tax	Income taxes	40			25
		(68		)	(42		)
Total reclassifications for the period		$	(24	)	$	24

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Equity-Based Compensation (Tables)

3 Months Ended

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Compensation Expense Related to Stock Options, Stock Appreciation Rights and Restricted Stock Units (RSUs)

Compensation expense related to stock options, stock appreciation rights and restricted stock units (RSUs) is as follows:

	Quarter Ended
	December 31, 2016		January 2, 2016
Stock options(1)	$	20	$	23
RSUs	77		83
Total equity-based compensation expense (2)	$	97	$	106
Equity-based compensation expense capitalized during the period	$	21	$	15

⁽¹⁾  Includes stock appreciation rights.

⁽²⁾  Equity-based compensation expense is net of capitalized equity-based compensation and excludes amortization of previously capitalized equity-based compensation costs.

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Fair Value Measurements (Tables)

3 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value

The Company’s assets and liabilities measured at fair value are summarized in the following tables by fair value measurement Level:

	Fair Value Measurement at December 31, 2016
	Level 1		Level 2			Level 3		Total
Assets
Investments	$	55	$	—		$	—	$	55
Derivatives
Interest rate	—		16			—		16
Foreign exchange	—		1,025			—		1,025
Other	—		12			—		12
Liabilities
Derivatives
Interest rate	—		(149		)	—		(149		)
Foreign exchange	—		(339		)	—		(339		)
Other	—		(1		)	—		(1		)
Total recorded at fair value	$	55	$	564		$	—	$	619
Fair value of borrowings	$	—	$	19,597		$	1,389	$	20,986

	Fair Value Measurement at October 1, 2016
	Level 1		Level 2			Level 3		Total
Assets
Investments	$	85	$	—		$	—	$	85
Derivatives
Interest rate	—		132			—		132
Foreign exchange	—		596			—		596
Other	—		6			—		6
Liabilities
Derivatives
Interest rate	—		(13		)	—		(13		)
Foreign exchange	—		(510		)	—		(510		)
Other	—		(4		)	—		(4		)
Total recorded at fair value	$	85	$	207		$	—	$	292
Fair value of borrowings	$	—	$	19,500		$	1,579	$	21,079

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Derivative Instruments (Tables)

3 Months Ended

Dec. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Gross Fair Value of Derivative Positions

The Company’s derivative positions measured at fair value are summarized in the following tables:

	As of December 31, 2016
	Current Assets			Other Assets			Other Accrued Liabilities			Other Long- Term Liabilities
Derivatives designated as hedges
Foreign exchange	$	429		$	298		$	(106	)	$	(103	)
Interest rate	—			16			(127		)	—
Other	8			4			(1		)	—
Derivatives not designated as hedges
Foreign exchange	259			39			(129		)	(1		)
Interest rate	—			—			—			(22		)
Gross fair value of derivatives	696			357			(363		)	(126		)
Counterparty netting	(306		)	(149		)	338			117
Cash collateral (received)/paid	(243		)	(63		)	1			—
Net derivative positions	$	147		$	145		$	(24	)	$	(9	)

	As of October 1, 2016
	Current Assets			Other Assets			Other Accrued Liabilities			Other Long- Term Liabilities
Derivatives designated as hedges
Foreign exchange	$	278		$	191		$	(209	)	$	(163	)
Interest rate	—			132			(13		)	—
Other	3			3			(4		)	—
Derivatives not designated as hedges
Foreign exchange	125			2			(133		)	(5		)
Gross fair value of derivatives	406			328			(359		)	(168		)
Counterparty netting	(241		)	(199		)	316			124
Cash collateral (received)/paid	(77		)	(44		)	7			—
Net derivative positions	$	88		$	85		$	(36	)	$	(44	)

Adjustments Related to Fair Value Hedges Included in Interest Expense, net in the Consolidated Statements of Income

The following table summarizes adjustments related to fair value hedges included in “Interest expense, net” in the Condensed Consolidated Statements of Income.

	Quarter Ended
	December 31, 2016			January 2, 2016
Gain (loss) on interest rate swaps	$	(232	)	$	(55	)
Gain (loss) on hedged borrowings	232			55

Net Gains or Losses Recognized in Costs and Expenses on Economic Exposures Associated with Foreign Currency Exchange Rates

The following table summarizes the net foreign exchange gains or losses recognized on foreign currency denominated assets and liabilities and the net foreign exchange gains or losses on the foreign exchange contracts we entered into to mitigate our exposure with respect to foreign currency denominated assets and liabilities for the quarters ended December 31, 2016 and January 2, 2016 by the corresponding line item in which they are recorded in the Condensed Consolidated Statements of Income.

	Costs and Expenses						Interest expense, net						Income Tax expense
Quarter Ended:	December 31, 2016			January 2, 2016			December 31, 2016			January 2, 2016			December 31, 2016			January 2, 2016
Net gains (losses) on foreign currency denominated assets and liabilities	$	(233	)	$	(89	)	$	7		$	10		$	23		$	23
Net gains (losses) on foreign exchange risk management contracts not designated as hedges	221			79			(7		)	(12		)	(31		)	—
Net gains (losses)	$	(12	)	$	(10	)	$	—		$	(2	)	$	(8	)	$	23

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Equity in the Income of Investees included in Segment Operating Results (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016
Schedule of Equity Method Investments
Equity in the income of investees	$ 118	$ 474
Vice Media
Schedule of Equity Method Investments
Equity in the income of investees	0	332
Media Networks
Schedule of Equity Method Investments
Equity in the income of investees	119	142
Parks and Resorts
Schedule of Equity Method Investments
Equity in the income of investees	(2)	0
Consumer Products and Interactive
Schedule of Equity Method Investments
Equity in the income of investees	1	0
Total Segments
Schedule of Equity Method Investments
Equity in the income of investees	$ 118	$ 142

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Financial Information by Operating Segments (Details) - USD ($) $ in Millions		3 Months Ended
		Dec. 31, 2016	Jan. 02, 2016
Segment Reporting Information
Revenues:		$ 14,784	$ 15,244
Segment operating income		3,956	4,267
Media Networks
Segment Reporting Information
Revenues:		6,233	6,332
Segment operating income		1,362	1,412
Parks and Resorts
Segment Reporting Information
Revenues:		4,555	4,281
Segment operating income		1,110	981
Studio Entertainment
Segment Reporting Information
Revenues:	[1]	2,520	2,721
Segment operating income	[1]	842	1,014
Consumer Products and Interactive
Segment Reporting Information
Revenues:	[1]	1,476	1,910
Segment operating income	[1]	$ 642	$ 860

[1] Studio Entertainment segment revenues and operating income include an allocation of Consumer Products & Interactive Media revenues, which is meant to reflect royalties on sales of merchandise based on certain film properties. The increase to Studio Entertainment revenues and operating income and corresponding decrease to Consumer Products & Interactive Media revenues and operating income totaled $181 million and $262 million for the quarters ended December 31, 2016 and January 2, 2016, respectively.

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Financial Information by Operating Segments- Intersegment Eliminations (Details) - USD ($) $ in Millions		3 Months Ended
		Dec. 31, 2016	Jan. 02, 2016
Segment Reporting Information
Revenues:		$ 14,784	$ 15,244
Studio Entertainment
Segment Reporting Information
Revenues:	[1]	2,520	2,721
Consumer Products and Interactive
Segment Reporting Information
Revenues:	[1]	1,476	1,910
Intersegment Eliminations | Studio Entertainment
Segment Reporting Information
Revenues:		181	262
Intersegment Eliminations | Consumer Products and Interactive
Segment Reporting Information
Revenues:		$ (181)	$ (262)

[1] Studio Entertainment segment revenues and operating income include an allocation of Consumer Products & Interactive Media revenues, which is meant to reflect royalties on sales of merchandise based on certain film properties. The increase to Studio Entertainment revenues and operating income and corresponding decrease to Consumer Products & Interactive Media revenues and operating income totaled $181 million and $262 million for the quarters ended December 31, 2016 and January 2, 2016, respectively.

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Reconciliation of Segment Operating Income to Income before Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016
Reconciling Items for Operating Income (Loss) from Segment to Consolidated
Segment operating income	$ 3,956	$ 4,267
Corporate and unallocated shared expenses	(132)	(136)
Restructuring and impairment charges	0	(81)
Interest expense, net	(99)	(24)
Vice Gain	0	332
Income before income taxes	$ 3,725	$ 4,358

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Segment Information Segment Information - Additional Details (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016
Schedule of Equity Method Investments
Vice Gain	$ 0	$ 332
A And E Television Networks Llc
Schedule of Equity Method Investments
Equity Method Investment, Ownership Percentage		50.00%
Vice Media
Schedule of Equity Method Investments
Equity Method Investment, Ownership Percentage		11.00%
Vice Gain		$ 332

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Acquisitions - Additional Information (Details) - USD ($) $ in Millions	1 Months Ended		3 Months Ended
	Jan. 31, 2017	Aug. 31, 2016	Dec. 31, 2016	Jan. 02, 2016
Business Acquisition And Equity Method Investments
Vice Gain			$ 0	$ 332
Vice Media
Business Acquisition And Equity Method Investments
Equity Method Investment, Ownership Percentage				11.00%
Vice Gain				$ 332
Payments to Acquire Equity Method Investments				$ 400
Vice Media | Equity Interest Held By A&E
Business Acquisition And Equity Method Investments
Equity Method Investment, Ownership Percentage			20.00%	8.00%
Vice Media | Equity Interest Held By A&E | Retained Investment in Subsidiary
Business Acquisition And Equity Method Investments
Business Combination, Consideration Transferred, Other				49.90%
BAMTech, LLC
Business Acquisition And Equity Method Investments
Equity Method Investment, Ownership Percentage		15.00%
Payments to Acquire Equity Method Investments		$ 450
BAMTech, LLC | Maximum | Equity Securities
Business Acquisition And Equity Method Investments
Equity Method Investment, Ownership Percentage			66.00%
BAMTech, LLC | Subsequent Event
Business Acquisition And Equity Method Investments
Equity Method Investment, Ownership Percentage	18.00%
Payments to Acquire Equity Method Investments	$ 557

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Borrowing Activity (Details) $ in Millions	3 Months Ended
	Dec. 31, 2016 USD ($)
Borrowings [Roll Forward]
Borrowings beginning balance	$ 20,170
Borrowings	1,636
Payments	(1,056)
Other Activity	(260)
Borrowings ending balance	20,490
Commercial paper with original maturities less than three months
Borrowings [Roll Forward]
Borrowings beginning balance	777
Borrowings	0	[1]
Payments	(117)	[1]
Other Activity	1
Borrowings ending balance	661
Commercial paper with original maturities greater than three months
Borrowings [Roll Forward]
Borrowings beginning balance	744
Borrowings	1,594
Payments	(745)
Other Activity	2
Borrowings ending balance	1,595
U.S. medium-term notes
Borrowings [Roll Forward]
Borrowings beginning balance	16,827
Borrowings	0
Payments	0
Other Activity	5
Borrowings ending balance	16,832
International Theme Parks borrowings
Borrowings [Roll Forward]
Borrowings beginning balance	1,087
Borrowings	13
Payments	0
Other Activity	(27)
Borrowings ending balance	1,073
Foreign currency denominated debt and other
Borrowings [Roll Forward]
Borrowings beginning balance	735
Borrowings	29
Payments	(194)
Other Activity	(241)	[2]
Borrowings ending balance	$ 329

[1] Borrowings and payments are reported net.

[2] The other activity is primarily market value adjustments for debt with qualifying hedges.

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Borrowings Line of Credit Facilities (Details) $ in Millions	3 Months Ended
	Dec. 31, 2016 USD ($)
Line of Credit Facility
Line of Credit Facility, Maximum Borrowing Capacity	$ 6,000
Line of Credit Facility, Amount Outstanding	0
Line of Credit Facility, Remaining Borrowing Capacity	$ 6,000
Existing Line of Credit 3
Line of Credit Facility
Line of Credit Facility, Expiration Date	Mar. 31, 2017
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,500
Line of Credit Facility, Amount Outstanding	0
Line of Credit Facility, Remaining Borrowing Capacity	$ 1,500
Existing Line of Credit 2
Line of Credit Facility
Line of Credit Facility, Expiration Date	Mar. 31, 2019
Line of Credit Facility, Maximum Borrowing Capacity	$ 2,250
Line of Credit Facility, Amount Outstanding	0
Line of Credit Facility, Remaining Borrowing Capacity	$ 2,250
Existing Line Of Credit 1
Line of Credit Facility
Line of Credit Facility, Expiration Date	Mar. 31, 2021
Line of Credit Facility, Maximum Borrowing Capacity	$ 2,250
Line of Credit Facility, Amount Outstanding	0
Line of Credit Facility, Remaining Borrowing Capacity	$ 2,250

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Borrowings Interest Expense, net (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016
Interest expense	$ (121)	$ (66)
Interest and investment income	22	42
Interest expense, net	$ (99)	$ (24)

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Borrowings - Additional Information (Details) $ in Millions	3 Months Ended
	Dec. 31, 2016 USD ($)
Line of Credit Facility
Line of Credit Facility, Interest Rate Description	All of the above bank facilities allow for borrowings at LIBOR-based rates plus a spread depending on the credit default swap spread applicable to the Company’s debt, subject to a cap and floor that vary with the Company’s debt rating assigned by Moody’s Investors Service and Standard and Poor’s. The spread above LIBOR can range from 0.23% to 1.63%.
Line of Credit Facility, Maximum Borrowing Capacity	$ 6,000
Letters of Credit Outstanding, Amount	172
Letter of Credit
Line of Credit Facility
Line of Credit Facility, Maximum Borrowing Capacity	$ 800
Minimum
Line of Credit Facility
Variable Spread Above LIBOR	0.23%
Maximum
Line of Credit Facility
Variable Spread Above LIBOR	1.63%

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Impact of Consolidating Balance Sheets of International Theme Parks (Details) - USD ($) $ in Millions	Dec. 31, 2016	Oct. 01, 2016	Jan. 02, 2016	Oct. 03, 2015
Schedule of Condensed Consolidating Balance Sheets [Line Items]
Cash and cash equivalents	$ 3,736	$ 4,610	$ 4,301	$ 4,269
Other current assets	931	693
Total current assets	16,665	16,966
Parks, resorts and other property	27,054	27,349
Other assets	2,380	2,340
Total assets	91,576	92,033
Current liabilities	19,317	16,842
Borrowings - long-term	14,792	16,483
International Theme Parks
Schedule of Condensed Consolidating Balance Sheets [Line Items]
Cash and cash equivalents	717	1,008
Other current assets	343	331
Total current assets	1,060	1,339
Parks, resorts and other property	8,960	9,270
Other assets	89	88
Total assets	10,109	10,697
Current liabilities	1,265	1,499
Borrowings - long-term	1,073	1,087
Other long-term liabilities	267	256
Total liabilities	$ 2,605	$ 2,842

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Impact of Consolidating Income Statements of International Theme Parks (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Revenues:	$ 14,784	$ 15,244
Cost and expenses	(11,078)	$ (11,255)
International Theme Parks
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Revenues:	737
Cost and expenses	$ (760)

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International Theme Park Investments - Additional Information (Details) € in Millions, ¥ in Millions, $ in Millions	3 Months Ended
	Dec. 31, 2016 CNY (¥) Property	Dec. 31, 2016 EUR (€) Property	Dec. 31, 2016 USD ($) Property	Jan. 02, 2016 USD ($)	Dec. 31, 2016 USD ($)
Noncontrolling Interest
Net Cash Provided by Operating Activities			$ 1,260	$ 2,456
Net Cash Used in Investing Activities			(1,035)	(1,798)
Net Cash Provided by Financing Activities			(987)	$ (562)
Letters of Credit Outstanding, Amount					$ 172
International Theme Parks
Noncontrolling Interest
Royalties And Management Fees			32
Net Cash Provided by Operating Activities			113
Net Cash Used in Investing Activities			304
Net Cash Provided by Financing Activities			$ 13
Disneyland Paris
Noncontrolling Interest
Effective Ownership Interest		81.00%			81.00%
Hong Kong Disneyland Resort
Noncontrolling Interest
Effective Ownership Interest		47.00%			47.00%
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners		53.00%			53.00%
Shanghai Disney Resort
Noncontrolling Interest
Effective Ownership Interest		43.00%			43.00%
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners		57.00%			57.00%
Shanghai Disney Resort Management Company
Noncontrolling Interest
Effective Ownership Interest		70.00%			70.00%
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners		30.00%			30.00%
Maximum
Noncontrolling Interest
Variable Spread Above Reference Rate	1.63%	1.63%	1.63%
Scenario, Plan | Hong Kong Disneyland Resort
Noncontrolling Interest
Number Of Hotels To Be Built | Property	3	3	3
Intercompany Line of Credit Expiring Twenty Twenty-Three | Disneyland Paris
Noncontrolling Interest
Variable Interest Entity, Financial or Other Support, Amount | €		€ 400
Letters of Credit Outstanding, Amount | €		€ 155
Unused lines of Credit | Shanghai Disney Resort
Noncontrolling Interest
Variable Interest Entity, Financial or Other Support, Amount			$ 157
Debt Instrument, Interest Rate, Stated Percentage		8.00%			8.00%
EURIBOR | Intercompany Line of Credit Expiring Twenty Twenty-Three | Disneyland Paris
Noncontrolling Interest
Variable Spread Above Reference Rate	2.00%	2.00%	2.00%
Term Loan Expiring Twenty Twenty-Four | Disneyland Paris
Noncontrolling Interest
Variable Interest Entity, Financial or Other Support, Amount | €		€ 1,000
Debt Instrument, Interest Rate, Stated Percentage		4.00%			4.00%
Loans | Hong Kong Disneyland Resort
Noncontrolling Interest
Variable Interest Entity, Financial or Other Support, Amount			$ 136
Variable Interest Entity, Financial or Other Support, Amount from Noncontrolling Interests			91
Loans | Shanghai Disney Resort
Noncontrolling Interest
Variable Interest Entity, Financial or Other Support, Amount			762
Variable Interest Entity, Financial or Other Support, Amount from Noncontrolling Interests	¥ 6,500		$ 900
Loans | Maximum | Shanghai Disney Resort
Noncontrolling Interest
Debt Instrument, Interest Rate, Stated Percentage		8.00%			8.00%
Loans | HIBOR | Hong Kong Disneyland Resort
Noncontrolling Interest
Variable Spread Above Reference Rate	2.00%	2.00%	2.00%
Development and pre-opening cost loan and outstanding roylties and management fees | Shanghai Disney Resort
Noncontrolling Interest
Variable Interest Entity, Financial or Other Support, Amount			$ 288
Line of Credit | Shanghai Disney Resort
Noncontrolling Interest
Debt Instrument, Interest Rate, Stated Percentage		8.00%			8.00%
Variable Interest Entity, Financial or Other Support, Amount from Noncontrolling Interests	¥ 1,400		$ 197

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Net Periodic Benefit Cost (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016
Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Service costs	$ 91	$ 80
Interest costs	112	115
Expected return on plan assets	(219)	(188)
Amortization of prior-year service costs	3	3
Recognized net actuarial loss	101	61
Net periodic benefit cost	88	71
Postretirement Medical Plans
Defined Benefit Plan Disclosure [Line Items]
Service costs	3	3
Interest costs	14	15
Expected return on plan assets	(12)	(11)
Amortization of prior-year service costs	0	0
Recognized net actuarial loss	4	2
Net periodic benefit cost	$ 9	$ 9

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Pension and Other Benefit Programs - Additional Information (Details) $ in Millions	3 Months Ended
	Dec. 31, 2016 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Contributions by Employer	$ 1,300

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Reconciliation of Weighted Average Number of Common and Common Equivalent Shares Outstanding and Awards Excluded from Diluted Earnings Per Share Calculation (Details) - shares shares in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016
Shares (in millions):
Weighted average number of common and common equivalent shares outstanding (basic)	1,592	1,654
Weighted average dilutive impact of Awards	11	14
Weighted average number of common and common equivalent shares outstanding (diluted)	1,603	1,668
Awards excluded from diluted earnings per share	16	4

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Equity Dividends Paid (Details) - USD ($) $ / shares in Units, $ in Billions	3 Months Ended
	Dec. 31, 2016	Apr. 02, 2016	Oct. 03, 2015
Dividends, Common Stock [Abstract]
Common Stock, Dividends, Per Share, Cash Paid	$ 0.78	$ 0.71	$ 0.71
Dividends, Common Stock, Cash	$ 1.2	$ 1.1	$ 1.2

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Changes in Accumulated Other Comprehensive Loss, Net of Tax (Details) - USD ($) $ in Millions		3 Months Ended
		Dec. 31, 2016	Jan. 02, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
AOCI, Beginning Balance		$ (3,979)	$ (2,421)
Unrealized gains (losses) arising during the period		100	(24)
Reclassifications of realized net (gains) losses to net income		24	(24)
AOCI, Ending Balance		(3,855)	(2,469)
Investments
Accumulated Other Comprehensive Income (Loss) [Line Items]
AOCI, Beginning Balance		26	13
Unrealized gains (losses) arising during the period		(11)	(3)
Reclassifications of realized net (gains) losses to net income		0	0
AOCI, Ending Balance		15	10
Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) [Line Items]
AOCI, Beginning Balance		(25)	334
Unrealized gains (losses) arising during the period		324	41
Reclassifications of realized net (gains) losses to net income		(44)	(66)
AOCI, Ending Balance		255	309
Unrecognized Pension and Postretirement Medical Expense
Accumulated Other Comprehensive Income (Loss) [Line Items]
AOCI, Beginning Balance		(3,651)	(2,497)
Unrealized gains (losses) arising during the period		(22)	0
Reclassifications of realized net (gains) losses to net income		68	42
AOCI, Ending Balance		(3,605)	(2,455)
Foreign Currency Translation and Other(1)
Accumulated Other Comprehensive Income (Loss) [Line Items]
AOCI, Beginning Balance	[1]	(329)	(271)
Unrealized gains (losses) arising during the period	[1]	(191)	(62)
Reclassifications of realized net (gains) losses to net income	[1]	0	0
AOCI, Ending Balance	[1]	$ (520)	$ (333)

[1] Foreign Currency Translation and Other is net of an average 22% estimated tax at December 31, 2016 as the Company has not recognized deferred tax assets for some of our foreign entities.

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Equity Changes in Accumulated Other Comprehensive Loss, Net of Tax - Tax Rate (Details)	3 Months Ended
	Dec. 31, 2016
Tax rate on Components of AOCI, excluding Foreign Currency Translation
Accumulated Other Comprehensive Income (Loss) [Line Items]
Tax Rate on AOCI Balances	37.00%
Tax Rate on Components of AOCI, Foreign Currency Translation
Accumulated Other Comprehensive Income (Loss) [Line Items]
Tax Rate on AOCI Balances	22.00%

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Details about AOCI Components Reclassified to Net Income (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016
Details about AOCI Components Reclassified to Net Income
Primarily revenue	$ 14,784	$ 15,244
Income taxes	(1,237)	(1,448)
Net income attributable to The Walt Disney Company (Disney)	2,479	2,880
Reclassification out of Accumulated Other Comprehensive Income
Details about AOCI Components Reclassified to Net Income
Net income attributable to The Walt Disney Company (Disney)	(24)	24
Gain/(loss) in net income from Cash flow hedges | Reclassification out of Accumulated Other Comprehensive Income
Details about AOCI Components Reclassified to Net Income
Primarily revenue	70	105
Income taxes	(26)	(39)
Net income attributable to The Walt Disney Company (Disney)	44	66
Gain/(loss) in net income from Pension and postretirement medical expense | Reclassification out of Accumulated Other Comprehensive Income
Details about AOCI Components Reclassified to Net Income
Primarily included in the computation of net periodic benefit cost	(108)	(67)
Income taxes	40	25
Net income attributable to The Walt Disney Company (Disney)	$ (68)	$ (42)

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Equity - Additional Information (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016	Oct. 01, 2016
Equity [Abstract]
Common stock repurchases, shares	15
Common stock repurchases	$ 1,465	$ 2,352
Remaining shares authorized for repurchase	267
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax	$ 29		$ 49

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Compensation Expense Related to Stock Options, Stock Appreciation Rights and Restricted Stock Units (Details) - USD ($) $ in Millions		3 Months Ended
		Dec. 31, 2016	Jan. 02, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options/rights	[1]	$ 20	$ 23
RSUs		77	83
Total equity-based compensation expense	[2]	97	106
Equity-based compensation expense capitalized during the period		$ 21	$ 15

[1] Includes stock appreciation rights.

[2] Equity-based compensation expense is net of capitalized equity-based compensation and excludes amortization of previously capitalized equity-based compensation costs.

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Equity-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date fair values of options issued	$ 25.78	$ 31.17
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 221
Stock compensation granted, number of shares	4.5
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 770
Stock compensation granted, number of shares	3.6

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Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions		1 Months Ended	3 Months Ended
	Sep. 13, 2012	Mar. 31, 2016	Dec. 31, 2016
Commitments and Contingencies Disclosure [Line Items]
Unrecognized Tax Benefits, Decrease Resulting from Current Period Tax Positions			$ 23
Unrecognized Tax Benefits			821
Unrecognized tax benefits expected reduction due to resolutions of open tax matters			120
Unrecognized Tax Benefits that Would Impact Effective Tax Rate			23
Syndicated programming
Commitments and Contingencies Disclosure [Line Items]
Long-term receivables, net of allowance for credit losses			800
Mortgage Receivable
Commitments and Contingencies Disclosure [Line Items]
Long-term receivables, net of allowance for credit losses			$ 700
Allowance for credit losses related to long-term receivables, percentage			4.00%
Guarantee Obligations
Commitments and Contingencies Disclosure [Line Items]
Guarantor Obligations, Maximum Exposure, Undiscounted			$ 316
Remaining debt service obligation guaranteed, principal			$ 51
Beef Products | Minimum
Commitments and Contingencies Disclosure [Line Items]
Loss Contingency, Damages Sought, Value	$ 400
Beef Products | Maximum
Commitments and Contingencies Disclosure [Line Items]
Loss Contingency, Damages Sought, Value		$ 1,900

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Assets and Liabilities Measured at Fair Value (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Dec. 31, 2016	Oct. 01, 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	$ 55	$ 85
Total	619	292
Fair value of borrowings	20,986	21,079
Interest rate
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset	16	132
Derivative Liabilities	(149)	(13)
Foreign exchange
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset	1,025	596
Derivative Liabilities	(339)	(510)
Other Derivative
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset	12	6
Derivative Liabilities	(1)	(4)
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	55	85
Total	55	85
Fair value of borrowings	0	0
Level 1 | Interest rate
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset	0	0
Derivative Liabilities	0	0
Level 1 | Foreign exchange
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset	0	0
Derivative Liabilities	0	0
Level 1 | Other Derivative
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset	0	0
Derivative Liabilities	0	0
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	0	0
Total	564	207
Fair value of borrowings	19,597	19,500
Level 2 | Interest rate
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset	16	132
Derivative Liabilities	(149)	(13)
Level 2 | Foreign exchange
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset	1,025	596
Derivative Liabilities	(339)	(510)
Level 2 | Other Derivative
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset	12	6
Derivative Liabilities	(1)	(4)
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	0	0
Total	0	0
Fair value of borrowings	1,389	1,579
Level 3 | Interest rate
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset	0	0
Derivative Liabilities	0	0
Level 3 | Foreign exchange
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset	0	0
Derivative Liabilities	0	0
Level 3 | Other Derivative
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative Asset	0	0
Derivative Liabilities	$ 0	$ 0

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Gross Fair Value of Derivative Positions (Details) - USD ($) $ in Millions	Dec. 31, 2016	Oct. 01, 2016
Current Assets
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement	$ 696	$ 406
Derivative Asset, Counterparty Netting Offset	(306)	(241)
Derivative Asset, Collateral, Obligation to Return Cash, Offset	(243)	(77)
Net derivative positions	147	88
Current Assets | Derivatives designated as hedges | Foreign exchange
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement	429	278
Current Assets | Derivatives designated as hedges | Interest rate
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement	0	0
Current Assets | Derivatives designated as hedges | Other Derivative
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement	8	3
Current Assets | Derivatives not designated as hedges | Foreign exchange
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement	259	125
Current Assets | Derivatives not designated as hedges | Interest rate
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement	0
Other Assets
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement	357	328
Derivative Asset, Counterparty Netting Offset	(149)	(199)
Derivative Asset, Collateral, Obligation to Return Cash, Offset	(63)	(44)
Net derivative positions	145	85
Other Assets | Derivatives designated as hedges | Foreign exchange
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement	298	191
Other Assets | Derivatives designated as hedges | Interest rate
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement	16	132
Other Assets | Derivatives designated as hedges | Other Derivative
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement	4	3
Other Assets | Derivatives not designated as hedges | Foreign exchange
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement	39	2
Other Assets | Derivatives not designated as hedges | Interest rate
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement	0
Other Accrued Liabilities
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement	(363)	(359)
Derivative Liability, Counterparty netting offset	338	316
Derivative Liability, Collateral, Right to Reclaim Cash, Offset	(1)	(7)
Net derivative positions	(24)	(36)
Other Accrued Liabilities | Derivatives designated as hedges | Foreign exchange
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement	(106)	(209)
Other Accrued Liabilities | Derivatives designated as hedges | Interest rate
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement	(127)	(13)
Other Accrued Liabilities | Derivatives designated as hedges | Other Derivative
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement	(1)	(4)
Other Accrued Liabilities | Derivatives not designated as hedges | Foreign exchange
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement	(129)	(133)
Other Accrued Liabilities | Derivatives not designated as hedges | Interest rate
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement	0
Other Long-Term Liabilities
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement	(126)	(168)
Derivative Liability, Counterparty netting offset	117	124
Derivative Liability, Collateral, Right to Reclaim Cash, Offset	0	0
Net derivative positions	(9)	(44)
Other Long-Term Liabilities | Derivatives designated as hedges | Foreign exchange
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement	(103)	(163)
Other Long-Term Liabilities | Derivatives designated as hedges | Interest rate
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement	0	0
Other Long-Term Liabilities | Derivatives designated as hedges | Other Derivative
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement	0	0
Other Long-Term Liabilities | Derivatives not designated as hedges | Foreign exchange
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement	(1)	$ (5)
Other Long-Term Liabilities | Derivatives not designated as hedges | Interest rate
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement	$ (22)

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Adjustments Related to Fair Value Hedges Included in Net Interest Expense in Consolidated Statements of Income (Details) - Interest rate - Interest Expense - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) on interest rate swaps	$ (232)	$ (55)
Gain (loss) on hedged borrowings	$ 232	$ 55

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Net Gains or Losses Recognized on Economic Exposures Associated With Foreign Currency Exchange Contracts (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016
Costs and Expenses
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) on foreign currency denominated assets and liabilities	$ (233)	$ (89)
Net gains (losses) on foreign exchange risk management contracts not designated as hedges	221	79
Net gains (losses)	(12)	(10)
Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) on foreign currency denominated assets and liabilities	7	10
Net gains (losses) on foreign exchange risk management contracts not designated as hedges	(7)	(12)
Net gains (losses)	0	(2)
Income Taxes
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (losses) on foreign currency denominated assets and liabilities	23	23
Net gains (losses) on foreign exchange risk management contracts not designated as hedges	(31)	0
Net gains (losses)	$ (8)	$ 23

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Derivative Instruments - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016	Oct. 01, 2016
Derivative [Line Items]
Hedging Period for Foreign Currency Transactions, Maximum	4 years
Net deferred gains recorded in AOCI for contracts that will mature in the next twelve months	$ 332
Aggregate fair value of derivative instruments with credit-risk-related contingent features in a net liability position by counterparty	34		$ 86
Interest rate | Interest Expense
Derivative [Line Items]
Realized net benefits from derivative instruments	12	$ 23
Derivatives designated as hedges | Interest rate | Fair Value Hedging
Derivative [Line Items]
Derivative, Notional Amount	8,300		8,300
Derivatives designated as hedges | Foreign exchange | Cash Flow Hedging
Derivative [Line Items]
Derivative, Notional Amount	5,200		5,600
Not Designated as Hedging Instrument | Interest rate
Derivative [Line Items]
Derivative, Notional Amount	500
Not Designated as Hedging Instrument | Foreign exchange
Derivative [Line Items]
Derivative, Notional Amount	$ 3,500		$ 3,300

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Restructuring and Impairment Charges - Additional Details (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2016	Jan. 02, 2016
Restructuring and Related Activities [Abstract]
Restructuring and impairment charges	$ 0	$ 81

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New Accounting Pronouncements New Accounting Pronouncements - Additional Details (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Dec. 31, 2016	Jan. 02, 2016	Oct. 01, 2016	Oct. 03, 2015
Emerging Issues Task Force 16-A [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Restricted Cash and Cash Equivalents	$ 335		$ 150
Accounting Standards Update 2016-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Excess Tax Benefit from Share-based Compensation	38		200	$ 300
Payments Related to Tax Withholding for Share-based Compensation	$ 135	$ 94	200	$ 300
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating Leases, Future Minimum Payments Due			$ 3,100