Compute operating return on sales for all five segments, and for Disney as a whole (assume that Disney?s operating income equals the sum of the segments) for 2015. From a promotional perspective, what units would provide the best return on additional sales dollars?

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements. Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on our evaluation under the framework in Internal Control - Integrated Framework, management concluded that our internal control over financial reporting was effective as of October 3, 2015. The effectiveness of our internal control over financial reporting as of October 3, 2015 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included herein. 61 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of The Walt Disney Company In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows present fairly, in all material respects, the financial position of The Walt Disney Company and its subsidiaries (the Company) at October 3, 2015 and September 27, 2014, and the results of their operations and their cash flows for each of the three years in the period ended October 3, 2015 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 3, 2015, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013 (COSO). The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. A company's internal control over financial reporting is a process designed 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. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/PRICEWATERHOUSECOOPERS LLP Los Angeles, California November 25, 2015 62 CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data) 2014 2015 2013 Revenues: Services $ Products 43,894 $ 40,246 $ 37,280 8,571 8,567 7,761 52,465 48,813 45,041 Cost of services (exclusive of depreciation and amortization) (23,191) (21,356) (20,090) Cost of products (exclusive of depreciation and amortization) (5,173) (5,064) (4,944) Selling, general, administrative and other (8,523) (8,565) (8,365) Depreciation and amortization (2,354) (2,288) (2,192) Total costs and expenses (39,241) (37,273) (35,591) (53) (140) (214) (31) (69) (117) 23 (235) 814 854 688 Income before income taxes 13,868 12,246 9,620 Income taxes (5,016) (4,242) (2,984) 8,852 8,004 6,636 Total revenues Costs and expenses: Restructuring and impairment charges Other expense, net Interest income/(expense), net Equity in the income of investees Net income Less: Net income attributable to noncontrolling interests (503) (470) Net income attributable to The Walt Disney Company (Disney) (500) $ 8,382 $ 7,501 $ 6,136 Diluted $ 4.90 $ 4.26 $ 3.38 Basic $ 4.95 $ 4.31 $ 3.42 Earnings per share attributable to Disney: Weighted average number of common and common equivalent shares outstanding: Diluted 1,709 1,759 1,813 Basic 1,694 1,740 1,792 Dividends declared per share $ 1.81 See Notes to Consolidated Financial Statements 63 $ 0.86 $ 0.75 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) 2014 2015 Net Income $ 8,852 $ 2013 8,004 $ 6,636 Other comprehensive income/(loss), net of tax: 5 92 130 121 135 Pension and postretirement medical plan adjustments (301) (925) Foreign currency translation and other (272) (18) (530) (817) Market value adjustments for investments (87) Market value adjustments for hedges Other comprehensive income/(loss) Comprehensive income 1,963 (80) 2,110 7,187 8,322 8,746 Less: Net income attributable to noncontrolling interests (470) (503) (500) Less: Other comprehensive (income)/loss attributable to noncontrolling interests 77 36 (31) Comprehensive income attributable to Disney $ 7,929 See Notes to Consolidated Financial Statements 64 $ 6,720 $ 8,215 CONSOLIDATED BALANCE SHEETS (in millions, except per share data) October 3, 2015 ASSETS Current assets Cash and cash equivalents Receivables Inventories Television costs and advances Deferred income taxes Other current assets Total current assets Film and television costs Investments Parks, resorts and other property Attractions, buildings and equipment Accumulated depreciation $ Projects in progress Land Intangible assets, net Goodwill Other assets Total assets LIABILITIES AND EQUITY Current liabilities Accounts payable and other accrued liabilities Current portion of borrowings Unearned royalties and other advances Total current liabilities Borrowings Deferred income taxes Other long-term liabilities Commitments and contingencies (Note 14) Equity Preferred stock, $.01 par value Authorized - 100 million shares, Issued - none Common stock, $.01 par value Authorized - 4.6 billion shares, Issued - 2.8 billion shares Retained earnings Accumulated other comprehensive loss $ $ See Notes to Consolidated Financial Statements 65 42,745 (24,844) 17,901 6,028 1,250 25,179 7,172 27,826 2,421 88,182 7,844 4,563 3,927 16,334 12,773 4,051 6,369 $ $ $ $ 3,421 7,822 1,574 1,061 497 794 15,169 5,325 2,696 42,263 (23,722) 18,541 3,553 1,238 23,332 7,434 27,881 2,304 84,141 7,595 2,164 3,533 13,292 12,631 4,098 5,942 Treasury stock, at cost, 1.2 billion shares at October 3, 2015 and 1.1 billion shares at September 27, 2014 Total Disney Shareholders' equity Noncontrolling interests Total equity Total liabilities and equity 4,269 8,019 1,571 1,170 767 962 16,758 6,183 2,643 September 27, 2014 35,122 59,028 (2,421) 91,729 34,301 53,734 (1,968) 86,067 (47,204) 44,525 4,130 48,655 88,182 (41,109) 44,958 3,220 48,178 84,141 $ CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) 2014 2015 OPERATING ACTIVITIES Net income Depreciation and amortization Gains on sales of investments and dispositions Deferred income taxes Equity in the income of investees Cash distributions received from equity investees Net change in film and television costs and advances Equity-based compensation Other Changes in operating assets and liabilities: Receivables Inventories Other assets Accounts payable and other accrued liabilities Income taxes Cash provided by operations $ 8,852 2,354 (91) (102) (814) 752 (922) 410 341 $ 8,004 2,288 (299) 517 (854) 718 (964) 408 234 2013 $ 6,636 2,192 (325) 92 (688) 694 (49) 402 395 (211) 1 34 (49) 354 10,909 (480) (81) (151) 536 (96) 9,780 (374) 51 (30) 367 89 9,452 INVESTING ACTIVITIES Investments in parks, resorts and other property Sales of investments/proceeds from dispositions Acquisitions Other Cash used in investing activities (4,265) 166 (146) (4,245) (3,311) 395 (402) (27) (3,345) (2,796) 479 (2,443) 84 (4,676) FINANCING ACTIVITIES Commercial paper borrowings/(repayments), net Borrowings Reduction of borrowings Dividends Repurchases of common stock Proceeds from exercise of stock options Contributions from noncontrolling interest holders Other Cash used in financing activities 2,376 2,550 (2,221) (3,063) (6,095) 329 1,012 (402) (5,514) 50 2,231 (1,648) (1,508) (6,527) 404 608 (320) (6,710) (2,050) 3,931 (1,502) (1,324) (4,087) 587 505 (274) (4,214) Impact of exchange rates on cash and cash equivalents (302) (235) (18) Change in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Supplemental disclosure of cash flow information: Interest paid Income taxes paid $ 848 3,421 4,269 $ $ 314 4,396 See Notes to Consolidated Financial Statements 66 $ (510) 3,931 3,421 $ 544 3,387 3,931 $ $ 310 3,483 $ $ 316 2,531 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (in millions) Equity Attributable to Disney Common Stock Shares Balance at September 29, 2012 1,780 $ 31,731 Retained Earnings $ 42,965 Accumulated Other Comprehensive Income (Loss) $ (3,266) Total Disney Equity Treasury Stock $ (31,671) $ 39,759 Noncontrolling Interests $ 2,199 Total Equity $ 41,958 Comprehensive income 6,136 2,079 8,215 531 8,746 Equity compensation activity 27 1,007 1,007 1,007 (71) (4,087) (4,087) Dividends 18 (1,324) (1,324) Acquisition of Lucasfilm 37 679 Contributions Distributions and other Common stock repurchases Balance at September 28, 2013 1,773 $ 1,176 1,855 6 1,861 505 505 5 (1) 4 (520) (516) 33,440 (1,342) $ 47,758 Comprehensive income 7,501 Equity compensation activity 18 844 (84) Dividends 17 Contributions Distributions and other Common stock repurchases Balance at September 27, 2014 1,707 $ 34,301 2,721 $ 48,150 844 844 (6,527) (6,527) (6,527) (1,508) (1,508) 608 608 (576) (576) 53,734 14 828 (60) Dividends 24 Contributions Distributions and other (31) $ (1,968) $ (41,109) $ 44,958 $ 3,220 $ 48,178 (453) 7,929 393 8,322 828 828 (3,087) $ $ Equity compensation activity 35,122 45,429 7,187 8,382 $ $ 467 1,661 $ (34,582) 6,720 (1,525) $ (1,187) Balance at October 3, 2015 $ (781) Comprehensive income Common stock repurchases (4,087) (6,095) (6,095) (6,095) (3,063) (3,063) (1) (32) 59,028 $ (2,421) $ (47,204) See Notes to Consolidated Financial Statements 67 $ 44,525 1,012 1,012 (495) $ 4,130 (527) $ 48,655 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular dollars in millions, except per share amounts) 1 Description of the Business and Segment Information The Walt Disney Company, together with the subsidiaries through which businesses are conducted (the Company), is a diversified worldwide entertainment company with operations in the following business segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products and Interactive. DESCRIPTION OF THE BUSINESS Media Networks The Company operates cable programming services including the ESPN, Disney Channels, ABC Family and UTV/ Bindass networks, broadcast businesses, which include the ABC TV Network and eight owned television stations, radio businesses consisting of the ESPN Radio Network, including 4 owned ESPN radio stations, and the Radio Disney Network, which operates from an owned radio station in Los Angeles. The ABC TV and ESPN Radio Networks have affiliated stations providing coverage to consumers throughout the U.S. The Company also produces original live-action and animated television programming, which may be sold in network, first-run syndication and other television markets worldwide, through online services and on DVD and Blu-ray formats. The Company has interests in media businesses that are accounted for under the equity method including A&E Television Networks LLC (A&E), Seven TV, CTV Specialty Television, Inc., Hulu LLC and Fusion Media Networks LLC. Our Media Networks business also operates branded internet sites. Parks and Resorts The Company owns and operates the Walt Disney World Resort in Florida and the Disneyland Resort in California. The Walt Disney World Resort includes four theme parks (the Magic Kingdom, Epcot, Disney's Hollywood Studios and Disney's Animal Kingdom); 18 resort hotels; a retail, dining and entertainment complex; a sports complex; conference centers; campgrounds; water parks; and other recreational facilities. The Disneyland Resort includes two theme parks (Disneyland and Disney California Adventure), three resort hotels and a retail, dining and entertainment complex. Internationally, the Company manages and has an 81% (85% as of October 3, 2015) effective ownership interest in Disneyland Paris (see Disneyland Paris recapitalization in Note 6), which includes two theme parks (Disneyland Park and Walt Disney Studios Park); seven themed hotels; two convention centers; a shopping, dining and entertainment complex; and a 27-hole golf facility. The Company manages and has a 47% ownership interest in Hong Kong Disneyland Resort (HKDL), which includes one theme park and two resort hotels. The Company has a 43% ownership interest in Shanghai Disney Resort, which is currently under construction, and a 70% ownership interest in the management company of Shanghai Disney Resort. The Company also earns royalties on revenues generated by the Tokyo Disneyland Resort, which includes two theme parks (Tokyo Disneyland and Tokyo DisneySea) and three Disney-branded hotels, and is owned and operated by an unrelated Japanese corporation. The Company manages and markets vacation club ownership interests through the Disney Vacation Club; operates the Disney Cruise Line; the Adventures by Disney guided group vacations business; and Aulani, a hotel and vacation club resort in Hawaii. The Company's Walt Disney Imagineering unit designs and develops theme park concepts and attractions as well as resort properties. Studio Entertainment The Company produces and acquires live-action and animated motion pictures for worldwide distribution to the theatrical, home entertainment and television markets. The Company distributes these products through its own distribution and marketing companies in the U.S. and both directly and through independent companies and joint ventures in foreign markets primarily under the Walt Disney Pictures, Pixar, Marvel, Lucasfilm, Touchstone and UTV banners. We distribute certain motion pictures for DreamWorks Studios under our Touchstone Pictures banner. The Company also produces stage plays and musical recordings, licenses and produces live entertainment events and provides visual and audio effects and other post-production services. Consumer Products The Company licenses its trade names, characters and visual and literary properties to various retailers and publishers throughout the world. The Company also engages in retail, online and wholesale distribution of products through The Disney Store, DisneyStore.com and MarvelStore.com. We operate The Disney Store in North America, Europe and Japan. The Company publishes entertainment and educational books and magazines and comic books for children and families and operates English language learning centers in China. 68 Interactive The Company creates and distributes branded entertainment and lifestyle content for interactive media platforms. The primary operations include the production and distribution of multi-platform games, the licensing of our properties for games and mobile devices, and the development of branded online services. In June 2015, the Company announced the combination of its Consumer Products and Interactive segments into a single segment. The Company will begin reporting the financial results of the combined segment in fiscal 2016. 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, other expense, interest income/(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 included in segment operating results is as follows: 2014 2015 Media Networks Cable Networks Broadcasting Parks and Resorts Equity in the income of investees included in segment operating income $ 896 (82) $ $ 814 $ 2013 895 (39) (2) $ 854 $ 788 (46) 742 In fiscal 2013, the Company recorded a $55 million charge for our share of expense related to an equity redemption at Hulu LLC (Hulu Equity Redemption). This charge is recorded in Equity in the income of investees in the Consolidated Statement of Income but has been excluded from segment operating income. See Note 3 for further discussion of the transaction. The following segment results include allocations of certain costs, including information technology, pension, legal and other shared services costs, which are allocated based on metrics designed to correlate with consumption. These allocations are agreed-upon amounts between the businesses and may differ from amounts that would be negotiated in arm's length transactions. In addition, all significant intersegment transactions have been eliminated except that Studio Entertainment revenues and operating income include an allocation of Consumer Products and Interactive revenues, which is meant to reflect royalties on revenue generated by Consumer Products and Interactive on merchandise based on intellectual property from certain Studio Entertainment films. 69 2014 2015 Revenues Media Networks Parks and Resorts Studio Entertainment Third parties Intersegment $ Consumer Products Third parties Intersegment Interactive Third parties Intersegment Total consolidated revenues $ Segment operating income (loss) Media Networks Parks and Resorts Studio Entertainment Consumer Products Interactive Total segment operating income $ $ Reconciliation of segment operating income to income before income taxes Segment operating income Corporate and unallocated shared expenses Restructuring and impairment charges Other expense, net Interest income/(expense), net Hulu Equity Redemption charge Income before income taxes $ $ Capital expenditures Media Networks Cable Networks Broadcasting Parks and Resorts Domestic International Studio Entertainment Consumer Products Interactive Corporate Total capital expenditures $ $ 70 23,264 16,162 $ 2013 21,152 15,099 $ 20,356 14,087 6,838 528 7,366 6,988 290 7,278 5,721 258 5,979 5,027 (528) 4,499 4,274 (289) 3,985 3,811 (256) 3,555 1,300 (1) 1,299 48,813 1,066 (2) 1,064 45,041 1,174 1,174 52,465 $ 7,793 3,031 1,973 1,752 132 14,681 $ 14,681 (643) (53) (117) 13,868 $ 127 71 1,457 2,147 107 76 11 269 4,265 $ $ $ $ $ 7,321 2,663 1,549 1,356 116 13,005 $ 13,005 (611) (140) (31) 23 12,246 $ 172 88 1,184 1,504 63 43 5 252 3,311 $ $ $ $ 6,818 2,220 661 1,112 (87) 10,724 10,724 (531) (214) (69) (235) (55) 9,620 176 87 1,140 970 78 45 13 287 2,796 2014 2015 Depreciation expense Media Networks Parks and Resorts Domestic International Studio Entertainment Consumer Products Interactive Corporate Total depreciation expense Amortization of intangible assets Media Networks Parks and Resorts Studio Entertainment Consumer Products Interactive Corporate Total amortization of intangible assets $ 245 $ 1,169 345 55 57 12 249 2,132 12,029 8,499 5,986 5,483 $ 10,632 8,094 5,598 5,114 $ 10,018 8,006 5,185 4,704 $ 40,320 6,507 3,958 1,680 52,465 $ 36,769 6,505 3,930 1,609 48,813 $ 34,021 6,181 3,333 1,506 45,041 10,820 1,964 1,365 532 14,681 $ 9,594 1,581 1,342 488 13,005 $ $ $ $ 71 $ 1,041 327 54 57 20 220 1,957 $ $ $ $ $ 12 2 88 109 13 224 238 $ $ Segment operating income United States and Canada Europe Asia Pacific Latin America and Other $ 1,117 353 48 59 10 239 2,064 $ 30,638 25,510 15,334 7,591 2,087 7,022 88,182 $ Revenues United States and Canada Europe Asia Pacific Latin America and Other 238 $ $ Supplemental revenue data Affiliate Fees Advertising Retail merchandise, food and beverage Theme park admissions $ 21 3 84 102 12 222 $ Identifiable assets(1) Media Networks Parks and Resorts Studio Entertainment Consumer Products Interactive Corporate(2) Total consolidated assets 2013 $ $ 13 2 107 89 24 235 29,566 23,297 15,162 7,526 2,199 6,391 84,141 $ $ 7,871 1,361 1,016 476 10,724 2014 2015 (3) Long-lived assets United States and Canada Europe Asia Pacific Latin America and Other $ $ (1) 53,976 8,254 6,817 182 69,229 $ $ 52,909 8,733 5,084 217 66,943 Identifiable assets include amounts associated with equity method investments, goodwill and intangible assets. Equity method investments by segment are as follows: Media Networks Parks and Resorts Studio Entertainment Consumer Products Interactive Corporate $ $ 2015 2,454 9 2 1 17 2,483 $ $ 2014 2,321 28 2 1 124 2,476 Goodwill and intangible assets by segment are as follows: Media Networks Parks and Resorts Studio Entertainment Consumer Products Interactive Corporate $ $ (2) (3) 2 2015 18,186 376 8,538 6,118 1,650 130 34,998 $ $ 2014 18,270 379 8,679 6,187 1,670 130 35,315 Primarily fixed assets, cash and cash equivalents, deferred tax assets and investments Long-lived assets are total assets less the following: current assets, long-term receivables, deferred taxes, financial investments and derivatives Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements of the Company include the accounts of The Walt Disney Company and its majority-owned and controlled subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. 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, HKDL 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. 72 Reporting Period The Company's fiscal year ends on the Saturday closest to September 30 and consists of fifty-two weeks with the exception that approximately every six years, we have a fifty-three week year. When a fifty-three week year occurs, the Company reports the additional week in the fourth quarter. Fiscal 2014 and 2013 were fifty-two week years. Fiscal 2015 is a fifty-three week year, which began on September 28, 2014 and ended on October 3, 2015. Reclassifications Certain reclassifications have been made in the fiscal 2014 and fiscal 2013 financial statements and notes to conform to the fiscal 2015 presentation. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results may differ from those estimates. Revenues and Costs from Services and Products The Company generates revenue from the sale of both services and tangible products and revenues and operating costs are classified under these two categories in the Consolidated Statements of Income. Certain costs related to both the sale of services and tangible products are not specifically allocated between the service or tangible product revenue streams but are instead attributed to the principal revenue stream. The cost of services and tangible products exclude depreciation and amortization. Significant service revenues include: Affiliate fees Advertising revenues Revenue from the licensing and distribution of film and television properties Admissions to our theme parks, charges for room nights at hotels and sales of cruise vacation packages Licensing of intellectual property in our consumer products and publishing businesses Significant operating costs related to the sale of services include: Amortization of programming, production, participations and residuals costs Distribution costs Operating labor Facilities and infrastructure costs Significant tangible product revenues include: The sale of food, beverage and merchandise at our retail locations The sale of DVDs, Blu-ray discs and video game discs and accessories The sale of books and magazines Significant operating costs related to the sale of tangible products include: Costs of goods sold Amortization of programming, production, participations and residuals costs Distribution costs Operating labor Retail occupancy costs Game development costs Revenue Recognition Television advertising revenues are recognized when commercials are aired. Revenues from television subscription services related to the Company's primary cable programming services are recognized as services are provided. 73 Revenues from advance theme park ticket sales are recognized when the tickets are used. Revenues from expiring multiuse tickets are recognized ratably over the estimated usage period. For non-expiring, multi-day tickets, revenues are recognized over a five-year time period based on estimated usage. The estimated usage periods are derived from historical usage patterns. Revenues from the theatrical distribution of motion pictures are recognized when motion pictures are exhibited. Revenues from home entertainment and video game sales, net of anticipated returns and customer incentives, are recognized on the later of the delivery date or the date that the product can be sold by retailers. Revenues from the licensing of feature films and television programming are recorded when the content is available for telecast by the licensee and when certain other conditions are met. Revenues from the sale of electronic formats of feature films and television programming are recognized when the product is received by the consumer. Merchandise licensing advances and guarantee royalty payments are recognized based on the contractual royalty rate when the licensed product is sold by the licensee. Non-refundable advances and minimum guarantee royalty payments in excess of royalties earned are generally recognized as revenue at the end of the contract period. Revenues from our branded online and mobile operations are recognized as services are rendered. Advertising revenues at our internet operations are recognized when advertisements are viewed online. Taxes collected from customers and remitted to governmental authorities are presented in the Consolidated Statements of Income on a net basis. Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivables. The allowance for doubtful accounts is estimated based on our analysis of trends in overall receivables aging, specific identification of certain receivables that are at risk of not being paid, past collection experience and current economic trends. Advertising Expense Advertising costs are expensed as incurred. Advertising expense for fiscal years 2015, 2014 and 2013 was $2.6 billion, $2.8 billion and $2.6 billion, respectively. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and marketable securities with original maturities of three months or less. Investments Debt securities that the Company has the positive intent and ability to hold to maturity are classified as \"held-tomaturity\" and reported at amortized cost. Debt securities not classified as held-to-maturity and marketable equity securities are considered \"available-for-sale\" and recorded at fair value with unrealized gains and losses included in accumulated other comprehensive income/(loss) (AOCI). All other equity securities are accounted for using either the cost method or the equity method. The Company regularly reviews its investments to determine whether a decline in fair value below the cost basis is other than temporary. If the decline in fair value is determined to be other than temporary, the cost basis of the investment is written down to fair value. Translation Policy The U.S. dollar is the functional currency for the majority of our international operations. The local currency is the functional currency for the International Theme Parks, international locations of The Disney Stores, our UTV businesses in India, our English language learning centers in China and certain international equity method investments. For U.S. dollar functional currency locations, foreign currency assets and liabilities are remeasured into U.S. dollars at end-of-period exchange rates, except for non-monetary balance sheet accounts, which are remeasured at historical exchange rates. Revenue and expenses are remeasured at average exchange rates in effect during each period, except for those expenses related to the non-monetary balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from foreign currency remeasurement are included in income. For local currency functional locations, assets and liabilities are translated at end-of-period rates while revenues and expenses are translated at average rates in effect during the period. Equity is translated at historical rates and the resulting cumulative translation adjustments are included as a component of AOCI. 74 Inventories Inventory primarily includes vacation timeshare units, merchandise, materials and supplies. Carrying amounts of vacation ownership units are recorded at the lower of cost or net realizable value. Carrying amounts of merchandise, materials and supplies inventories are generally determined on a moving average cost basis and are recorded at the lower of cost or market. Film and Television Costs Film and television costs include capitalizable production costs, production overhead, interest, development costs and acquired production costs and are stated at the lower of cost, less accumulated amortization, or fair value. Acquired programming costs for the Company's cable and broadcast television networks are stated at the lower of cost, less accumulated amortization, or net realizable value. Acquired television broadcast program licenses and rights are recorded when the license period begins and the program is available for use. Marketing, distribution and general and administrative costs are expensed as incurred. Film and television production, participation and residual costs are expensed over the applicable product life cycle based upon the ratio of the current period's revenues to estimated remaining total revenues (Ultimate Revenues) for each production. 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. For acquired film libraries, remaining revenues include amounts to be earned for up to twenty years from the date of acquisition. Costs of film and television productions are subject to regular recoverability assessments, which compare the estimated fair values with the unamortized costs. The Company bases these fair value measurements on the Company's assumptions about how market participants would price the asset at the balance sheet date, which may be different than the amounts ultimately realized in future periods. The amount by which the unamortized costs of film and television productions exceed their estimated fair values is written off. Film development costs for projects that have been abandoned or have not been set for production within three years are generally written off. The costs of television broadcast rights for acquired series, movies and other programs are expensed 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. Rights costs for multi-year sports programming arrangements are amortized 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. Individual programs are written off when there are no plans to air or sublicense the program. The net realizable values of network 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). The net realizable values of other cable programming assets are reviewed on an aggregated basis for each cable network. Internal-Use Software Costs The Company expenses costs incurred in the preliminary project stage of developing or acquiring internal use software, such as research and feasibility studies as well as costs incurred in the post-implementation/operational stage, such as maintenance and training. Capitalization of software development costs occurs only after the preliminary-project stage is complete, management authorizes the project and it is probable that the project will be completed and the software will be used for the function intended. As of October 3, 2015 and September 27, 2014, capitalized software costs, net of accumulated depreciation, totaled $753 million and $761 million, respectively. The capitalized costs are amortized on a straight-line basis over the estimated useful life of the software, ranging from 3-10 years. Software Product Development Costs Software product development costs incurred prior to reaching technological feasibility are expensed. We have determined that technological feasibility of our video game software is generally not established until substantially all product development is complete. 75 Parks, Resorts and Other Property Parks, resorts and other property are carried at historical cost. Depreciation is computed on the straight-line method over estimated useful lives as follows: Attractions Buildings and improvements Leasehold improvements Land improvements Furniture, fixtures and equipment 25 - 40 years 20 - 40 years Life of lease or asset life if less 20 - 40 years 3 - 25 years Goodwill, Other Intangible Assets and Long-Lived Assets 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 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 flow) 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. 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. 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. Fair values of other indefinite-lived intangible assets are determined based on discounted cash flows or appraised values, as appropriate. The Company has determined that there are currently no legal, competitive, economic or other factors that materially limit the useful life of our FCC licenses and trademarks. Amortizable intangible assets are generally amortized on a straight-line basis over periods up to 40 years. The costs to periodically renew our intangible assets are expensed as incurred. 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 against 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 longlived 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 amount, 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. The Company tested its goodwill and other intangible assets, investments and long-lived assets for impairment and recorded non-cash impairment charges of $10 million, $46 million and $5 million in fiscal years 2015, 2014 and 2013, respectively. The fiscal 2014 impairment charges related to radio FCC licenses held by businesses in the Media Networks segment. The fair values of the radio FCC licenses were derived from market transactions. These impairment charges were recorded in \"Restructuring and impairment charges\" in the Consolidated Statements of Income. 76 The Company expects its aggregate annual amortization expense for existing amortizable intangible assets for fiscal years 2016 through 2020 to be as follows: 2016 $ 209 2017 2018 197 2019 2020 187 181 192 Risk Management Contracts In the normal course of business, the Company employs a variety of financial instruments (derivatives) including interest rate and cross-currency swap agreements and forward and option contracts to manage its exposure to fluctuations in interest rates, foreign currency exchange rates and commodity prices. The Company formally documents all relationships between hedges and hedged items as well as its risk management objectives and strategies for undertaking various hedge transactions. The Company primarily enters into two types of derivatives: hedges of fair value exposure and hedges of cash flow exposure. Hedges of fair value exposure are entered into in order to hedge the fair value of a recognized asset, liability, or a firm commitment. Hedges of cash flow exposure are entered into in order to hedge a forecasted transaction (e.g. forecasted revenue) or the variability of cash flows to be paid or received, related to a recognized liability or asset (e.g. floating rate debt). The Company designates and assigns the derivatives as hedges of forecasted transactions, specific assets or specific liabilities. When hedged assets or liabilities are sold or extinguished or the forecasted transactions being hedged occur or are no longer expected to occur, the Company recognizes the gain or loss on the designated derivatives. The Company's hedge positions are measured at fair value on the balance sheet. Realized gains and losses from hedges are classified in the income statement consistent with the accounting treatment of the items being hedged. The Company accrues the differential for interest rate swaps to be paid or received under the agreements as interest rates change as adjustments to interest expense over the lives of the swaps. Gains and losses on the termination of effective swap agreements, prior to their original maturity, are deferred and amortized to interest expense over the remaining term of the underlying hedged transactions. The Company enters into derivatives that are not designated as hedges and do not qualify for hedge accounting. These derivatives are intended to offset certain economic exposures of the Company and are carried at fair value with changes in value recorded in earnings. Cash flows from hedging activities are classified in the Consolidated Statements of Cash Flows under the same category as the cash flows from the related assets, liabilities or forecasted transactions (see Notes 8 and 16). Income Taxes Deferred income tax assets and liabilities are recorded with respect to temporary differences in the accounting treatment of items for financial reporting purposes and for income tax purposes. Where, based on the weight of available evidence, it is more likely than not that some amount of recorded deferred tax assets will not be realized, a valuation allowance is established for the amount that, in management's judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized. A tax position must meet a minimum probability threshold before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Earnings Per Share The Company presents both basic and diluted earnings per share (EPS) amounts. Basic EPS is calculated by dividing net income attributable to Disney by the weighted average number of common shares outstanding during the year. Diluted EPS is based upon the weighted average number of common and common equivalent shares outstanding during the year, which is calculated using the treasury-stock method for equity-based awards (Awards). Common equivalent shares are excluded from the computation in periods for which they have an anti-dilutive effect. Stock options for which the exercise price exceeds the average market price over the period are anti-dilutive and, accordingly, are excluded from the calculation. 77 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: 2014 2015 Weighted average number of common and common equivalent shares outstanding (basic) Weighted average dilutive impact of Awards Weighted average number of common and common equivalent shares outstanding (diluted) Awards excluded from diluted earnings per share 3 2013 1,694 15 1,740 19 1,792 21 1,709 1,759 1,813 3 6 2 Acquisitions Maker Studios On May 7, 2014, the Company acquired Maker Studios, Inc. (Maker), a leading network of online video content, for approximately $500 million of cash consideration. Maker shareholders may also receive up to $450 million of additional cash upon final determination of Maker's achievement of certain performance targets for calendar years 2014 and 2015. The Company recognized a $198 million liability for the fair value of the contingent consideration (determined by a probability weighting of potential payouts), of which approximately $100 million was paid in fiscal 2015 for calendar year 2014. Subsequent changes in the estimated fair value, if any, will be recognized in earnings. The majority of the purchase price has been allocated to goodwill, which is not deductible for tax purposes. Goodwill reflects the synergies expected from enhancing the presence of Disney's franchises and brands through the use of Maker's distribution platform, advanced technology and business intelligence capability. The revenue and net income of Maker included in the Company's Consolidated Statements of Income for fiscal years 2015 and 2014 were not material. Lucasfilm On December 21, 2012, the Company acquired Lucasfilm Ltd. LLC (Lucasfilm), a privately held entertainment company. This acquisition will allow Disney to utilize Lucasfilm's content across our multiple platforms, businesses and markets, which we believe will generate growth as well as significant long-term value. Under the terms of the merger agreement, Disney issued 37.1 million shares and made a cash payment of $2.2 billion. Based on the $50.00 per share closing price of Disney shares on December 21, 2012, the transaction had a value of $4.1 billion. The following table summarizes our allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed. The excess of the purchase price over those fair values and the related deferred income tax liability was allocated to goodwill, which is not deductible for tax purposes. Estimated Fair Value $ 2.6 2.3 (0.8) (in billions) Intangible assets Goodwill Deferred income tax liability $ 4.1 Intangible assets primarily consist of intellectual property based on the Star Wars franchise with an estimated useful life of approximately 40 years. The goodwill reflects the value to Disney from leveraging Lucasfilm intellectual property across our distribution channels, taking advantage of Disney's established global reach. Hulu On October 5, 2012, Hulu LLC (Hulu) redeemed Providence Equity Partners' 10% equity interest in Hulu for $200 million, increasing the Company's ownership interest in Hulu from 29% to 32%. In connection with the transaction, Hulu incurred a charge of approximately $174 million primarily related to employee equity-based compensation and borrowed $338 million under a five-year term loan, which was guaranteed by the Company and the other partners. The Company's share of the charge totaled $55 million and was recorded in equity in the income of investees in fiscal 2013. 78 In July 2013, Fox Entertainment Group, NBCUniversal and the Company agreed to provide Hulu with $750 million in cash to fund Hulu's operations and investments for future growth. As of October 3, 2015, the Company has contributed its $257 million share, which increased its ownership to 33%. The Company will continue to guarantee its share of Hulu's $338 million term loan. The Company accounts for its interest in Hulu as an equity method investment. Goodwill The changes in the carrying amount of goodwill for the years ended October 3, 2015 and September 27, 2014 are as follows: Media Networks Balance at Sept. 28, 2013 Acquisitions Dispositions Other, net (1) Balance at Sept. 27, 2014 Acquisitions Dispositions Other, net Balance at Oct. 3, 2015 (1) 4 $ $ $ 16,071 270 37 16,378 3 (27) 16,354 Parks and Resorts $ $ $ 253 15 23 291 291 Studio Entertainment $ $ $ 6,591 219 46 6,856 2 (22) 6,836 Consumer Products $ 2,942 4 21 2,967 (1) 2,966 $ $ Interactive $ $ $ Total 1,467 39 (117) 1,389 (10) 1,379 $ $ $ 27,324 547 10 27,881 5 (1) (59) 27,826 Includes the reallocation of $120 million of goodwill from the Interactive segment to other operating segments as a result of restructuring the Interactive segment. Dispositions and Other Expense, net Other expense, net is as follows: $ 2014 (143) $ 112 (31) 2015 Venezuelan foreign currency translation loss Celador litigation charge Gain on sale of equity interest in ESS Gain on sale of property and other Other expense, net $ $ 2013 $ $ (321) 219 33 (69) Venezuela foreign currency loss The Company has operations in Venezuela, including film and television distribution and merchandise licensing and has net monetary assets denominated in Venezuelan bolivares (BsF), which primarily consist of cash. The Venezuelan government (Government) has foreign currency exchange controls, which centralize the purchase and sale of all foreign currency at an official rate determined by the Government, currently 6.3 BsF per U.S. dollar. Although the Company has historically been unable to repatriate its cash at the official rate, we translated our net monetary assets at the official rate through December 28, 2013. In January 2014, the Government announced that currency arising from certain transactions could be exchanged at an alternative rate (SICAD 1), which fluctuates based on Government-run auctions. The ability to convert currency in the SICAD 1 market was dependent on market factors and Government discretion. In March 2014, the Government launched a new currency exchange market (SICAD 2), which allowed entities to submit a daily application to exchange foreign currency with financial institutions that are registered with the Venezuelan central bank. Foreign currency exchange rates under SICAD 2 fluctuated daily. The ability to convert in the SICAD 2 market was also dependent on market factors including the availability of U.S. dollars. Although a small portion of the Company's cash may have been eligible to be exchanged at SICAD 1, the majority was only eligible for exchange at SICAD 2. Accordingly, the Company began translating its BsF denominated net monetary assets at the SICAD 2 rate resulting in a loss of $143 million in the second quarter of fiscal 2014 based on the SICAD 2 rate, which was 50.9 BsF per U.S. dollar at March 29, 2014. 79 In February 2015, the Government combined the SICAD 1 and SICAD 2 exchange mechanisms (SICAD) and introduced another exchange mechanism, SIMADI. The SIMADI exchange mechanism allows for trading BsF at prices set by the market. The Company does not believe it can successfully convert currency at the SICAD rate and therefore, in the second quarter of fiscal 2015, the Company began translating its BsF denominated net monetary assets at the SIMADI rate resulting in an immaterial loss included in "Costs and expenses" in the Consolidated Statements of Income. As of October 3, 2015, the SIMADI rate was 199.4 BsF per U.S. dollar, and the Company had net monetary assets of approximately 2.6 billion BsF. Gain on sale of property and other In fiscal 2014, the Company recognized $83 million of gains primarily due to the sale of a property and $29 million for a portion of a settlement of an affiliate contract dispute. In fiscal 2013, the Company recognized $33 million of gains on the sale of businesses. Celador litigation charge In connection with the Company's litigation with Celador International Ltd., the Company recorded and paid a $321 million charge in fiscal 2013. ESPN STAR Sports On November 7, 2012, the Company sold its 50% equity interest in ESPN STAR Sports (ESS) to the joint venture partner of ESS for $335 million resulting in a gain of $219 million ($125 million after tax and allocation to noncontrolling interest) in fiscal 2013. 5 Investments Investments consist of the following: October 3, 2015 $ 2,483 Investments, equity basis Investments, other September 27, 2014 $ 2,476 220 160 $ 2,643 $ 2,696 Investments, Equity Basis A summary of combined financial information for equity investments, which primarily includes media investments such as A&E, CTV Specialty Television, Inc., Hulu and Seven TV, is as follows: 2014 2015 2013 Results of Operations: Revenues $ 6,561 $ 6,573 $ 6,231 Net income $ 1,912 $ 2,003 $ 1,470 October 3, 2015 Balance Sheet Current assets Non-current assets Current liabilities Non-current liabilities Shareholders' equity September 27, 2014 September 28, 2013 $ 3,676 6,429 $ 2,640 6,294 $ 2,662 5,495 $ 10,105 $ 8,934 $ 8,157 $ 1,614 4,128 4,363 $ 1,504 3,298 4,132 $ 1,357 3,368 3,432 $ 10,105 $ 8,934 $ 8,157 As of October 3, 2015, the book value of the Company's equity method investments exceeded our share of the book value of the investees' underlying net assets by approximately $0.5 billion, which represents amortizable intangible assets and goodwill arising from acquisitions. 80 Investments, Other As of October 3, 2015 and September 27, 2014, the Company held $36 million and $100 million, respectively, of securities classified as available-for-sale, $81 million and $81 million, respectively, of non-publicly traded cost-method investments and $43 million and $39 million, respectively, of investments in leveraged leases. In fiscal years 2015, 2014 and 2013, the Company had realized gains of $31 million, $165 million and $40 million, respectively, on available-for-sale securities. In fiscal years 2015 and 2014, the Company had realized gains of $11 million and $53 million on non-publicly traded cost-method investments. In fiscal 2013, the Company had no significant realized gains or losses on non-publicly traded costmethod investments. In fiscal years 2015, 2014 and 2013, the Company recorded non-cash charges of $14 million, $13 million and $37 million, respectively, to reflect other-than-temporary losses in value of certain investments. Realized gains and losses on available-for-sale and non-publicly traded cost-method investments are reported in "Interest income/(expense), net" in the Consolidated Statements of Income. 6 International Theme Park Investments The Company has a 47% ownership interest in the operations of HKDL, a 43% ownership interest in the operations of Shanghai Disney Resort and an 81% effective ownership interest in the operations of Disneyland Paris. As a result of a recapitalization completed in November 2015, our effective ownership in Disneyland Paris decreased from 85% at October 3, 2015 (see Disneyland Paris recapitalization discussion below). The International Theme Parks are VIEs consolidated in the Company's financial statements. See Note 2 for the Company's policy on consolidating VIEs. The following tables present summarized balance sheet information for the Company as of October 3, 2015 and September 27, 2014, reflecting the impact of consolidating the International Theme Parks balance sheets. As of October 3, 2015 Cash and cash equivalents Other current assets Total current assets Investments/Advances Parks, resorts and other property Other assets Total assets Current portion of borrowings Other current liabilities Total current liabilities Borrowings Deferred income taxes and other long-term liabilities Equity Total liabilities and equity Before International Theme Parks Consolidation $ 3,488 12,237 15,725 7,505 17,431 43,540 $ 84,201 International Theme Parks and Adjustments $ 781 252 1,033 (4,862) $ $ $ 81 4,562 11,331 15,893 12,454 10,225 45,629 84,201 $ $ 7,748 62 3,981 1 440 441 319 195 3,026 3,981 $ $ $ $ Total 4,269 12,489 16,758 2,643 25,179 43,602 88,182 4,563 11,771 16,334 12,773 10,420 48,655 88,182 Before International Theme Parks Consolidation $ 2,645 11,445 14,090 6,627 17,081 42,920 $ 80,718 Cash and cash equivalents Other current assets Total current assets Investments/Advances Parks, resorts and other property Other assets Total assets Current portion of borrowings Other current liabilities Total current liabilities Borrowings Deferred income taxes and other long-term liabilities Equity Total liabilities and equity $ $ As of September 27, 2014 International Theme Parks and Adjustments $ 776 $ 303 1,079 (3,931) 6,251 24 $ 3,423 $ 2,164 10,318 12,482 12,378 9,859 45,999 80,718 $ $ 810 810 253 181 2,179 3,423 $ $ Total 3,421 11,748 15,169 2,696 23,332 42,944 84,141 2,164 11,128 13,292 12,631 10,040 48,178 84,141 The following table presents summarized income statement information of the Company for the year ended October 3, 2015, reflecting the impact of consolidating the International Theme Parks income statements. Before International Theme Parks Consolidation(1) $ 50,280 (36,951) (53) (31) (56) 742 13,931 (5,002) $ 8,929 Revenues Cost and expenses Restructuring and impairment charges Other expense, net Interest income/(expense), net Equity in the income of investees Income before income taxes Income taxes Net income (1) International Theme Parks and Adjustments $ 2,185 (2,290) 31 (61) 72 (63) (14) (77) $ $ $ Total 52,465 (39,241) (53) (117) 814 13,868 (5,016) 8,852 In fiscal 2015, royalty and management fees from the International Theme Parks totaling $60 million are included in Revenues, and our share of the net income/(loss) of the International Theme Parks is included in Equity in the income of investees. 82 The following table presents summarized cash flow statement information of the Company for the year ended October 3, 2015, reflecting the impact of consolidating the International Theme Parks cash flow statements. Before International Theme Parks Consolidation $ 10,742 (2,118) (855) (6,642) (284) 843 2,645 $ 3,488 Cash provided by operations Investments in parks, resorts and other property Cash (used in)/provided by other investing activities Cash (used in)/provided by financing activities Impact of exchange rates on cash and cash equivalents Change in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year International Theme Parks and Adjustments $ 167 (2,147) 875 1,128 (18) 5 776 $ 781 $ $ Total 10,909 (4,265) 20 (5,514) (302) 848 3,421 4,269 Disneyland Paris During calendar 2015, Disneyland Paris completed a recapitalization consisting of the following: A 0.4 billion equity rights offering of which the Company funded 0.2 billion in February 2015. The Company purchased shares that were unsubscribed by other Disneyland Paris shareholders, which increased the Company's effective ownership by approximately four percentage points. In February 2015, the Company converted 0.6 billion of its loans to Disneyland Paris into equity at a conversion price of 1.25 per share. The conversion increased the Company's effective ownership by an additional 23 percentage points. In addition, Disneyland Paris repaid 0.3 billion that was outstanding under then existing lines of credit from the Company. These lines of credit have been replaced by a new 0.4 billion line of credit from the Company bearing interest at EURIBOR plus 2% and maturing in 2023. There is no outstanding balance under the new line of credit at October 3, 2015. As of October 3, 2015, the total outstanding balance of loans provided by the Company to Disneyland Paris was 1.0 billion. In September 2015, the Company completed a mandatory tender offer to the other Disneyland Paris shareholders and acquired 0.1 billion in shares at 1.25 per share, which increased the Company's effective ownership by an additional eight percentage points. Following the completion of the mandatory tender offer and to offset the dilution caused by the loan conversion, in November 2015 certain Disneyland Paris shareholders purchased 0.05 billion in shares from the Company at 1.25 per share, which decreased the Company's effective ownership by four percentage points. As of November 17, 2015, the Company has an 81% effective ownership interest in Disneyland Paris. As a result of the recapitalization, the Company wrote off a $399 million deferred income tax asset (see Note 9). Hong Kong Disneyland Resort At October 3, 2015, the Government of the Hong Kong Special Administrative