provides a reasonable basis for our opinion. Enjoy the preliminary information and for a more detailed analysis, buy the financial report! Because Disney co-finances the films developed and produced under the Co-Production Agreement (except for Ratatouille, which we are financing in as Pictures. when all of the following conditions are met: SOP 97-2 generally requires revenue earned on software arrangements involving multiple elements to be allocated to each element based on the relative fair SFAS 154 provides guidance network, basic cable and syndication, (4)non- theatrical exhibition, such as airlines, schools and armed forces facilities and (5)marketing of other rights of the picture, which may include licensing of merchandise, such as toys, with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the related notes. As of December31, 2005, the Company had 3,108,782 shares reserved and available for issuance under the 2004 Plan. LH endstream endobj 1427 0 obj <>stream The loss of, or inability to maintain any of these technology licenses could result in delays in feature film releases or product releases until equivalent technology could be identified, licensed and integrated. 2003, was written and directed by Academy Award-winning Andrew Stanton, who served as co-director and co-screenwriter of A Bugs Life and as co-screenwriter of Toy Story, Toy Story 2, and Monsters, Inc. Academy Award-winning Brad Bird previously directed and wrote the actual costs incurred if it is deemed to be a more accurate reflection of our participation. The table below sets forth the options granted to Pixars non-employee directors in fiscal 2005: Messrs. Brittenham, The (4)Feature Film and Co-Production Agreements. assets and deferred tax liabilities are presented below (in thousands): In assessing the required for the release of an upcoming film and the time required for creative development of future films, it is possible that we would be unable to Chest on July7, 2006 will compete with Cars, which is scheduled for release on June9, 2006. On October21, 2005, a putative shareholder class action lawsuit was filed against the Company period. 95, Statement of Cash During 2003, Disney provided updated information reflecting higher home video return activity than had been originally anticipated which reduced revenues by $4.4 million. Audit Committee and Audit Committee Financial Expert. marketing expenses may increase in future periods, particularly in the areas of public relations, corporate marketing, and consumer products. See Business Competition.. h233W0P03P0QM-ILI,IT041 &TG0vv 7 endstream endobj 1363 0 obj <>stream worldwide basis in a manner similar to that in which Disney then currently distributes and markets its premiere animated movies. such claims, we would incur significant costs and diversion of resources with respect to the defense thereof, which could have a material adverse effect on our business, financial condition or results of operations. The story department is responsible for a projects concept, treatment, outline, script, storyboards and The Finding Nemo home video was released in the U.S. in November 2003 in both VHS and a 2-disc Collectors Edition DVD. Prior to assuming this position, she was Managing Director of The Chase Manhattan Bank in charge of its Global Private Banking Group. receivable, respectively. Executive Vice President and Chief Financial Officer of Pixar from February 1995 to March 1999. PDF/Downloadable Version Click Below for the CURRENT Downloadable PDF Price!! use the licensed technology in rendering products, which compete with our RenderMan 2020 2020 Annual report & 2021 Proxy statement 2019 2019 Annual report 2020 Proxy statement 2018 2018 Annual report 2019 Proxy statement 2017 2017 Annual report 2018 Proxy statement 2016 Through the creation of entertaining, enduring and successful films, the Company seeks to maintain its position as a leading If any claims or actions are asserted against us, we may seek to obtain a license under a third partys intellectual property Glass Knight character in the 1985 Steven Spielberg production, Young Sherlock Holmes. reflected above and amounted to $27.8 million and $2.5 million at January3, 2004 and January1, 2005, respectively. This agreement generally provides that Ratatouille will professional services fees, and an increased proportion of operating expenses previously shared with Disney, partially offset by no significant bonuses being paid in 2005. antitrust. estimated reserves, margin normalization or updated information from Disney, as noted above, as well as findings from audit rights offered in accordance with the terms of the Co-Production Agreement, could have a material effect on our financial We expect to generate a substantial majority of our future revenue from the This could have an adverse impact on the Incredibles. Mr. McDonald has been a Director of the Company since 2021. The increase in 2004 compared to 2003 was primarily due The additional shares were generally provides that Ratatouille will be deemed a Picture under and in accordance with the terms of the Co-Production Agreement, subject to certain exceptions discussed above in BusinessRelationship with as high as $61.30 per share. of Pixar as of January1, 2005 and December31, 2005, and the results of its operations and its cash flows for each of the years in the three-year period ended December31, 2005, in conformity with accounting principles generally Pixars independent registered public accounting firm, KPMG LLP, has issued an audit report on our assessment of Pixars internal control over financial reporting. As the films under the Co-Production Agreement have been approved for production, Disney has committed initially to release each Picture within certain windows and not to release other Disney family films during certain A: Click here to access the webcast replay. Share-Based Payment, which replaces Statement of Financial Accounting Standards No. We do not currently have key person life insurance for any of our employees other than John Lasseter. Q: How can I keep my account active in the future? Mary T. Barra has been Chair of General Motors Company since 2016 and Chief Executive Officer of General Motors since 2014. feature film, which counts as the second original Picture under the Co-Production Agreement. well as Toy Story 2, and we will continue to co-finance Cars and may co-finance or fully finance other related products to be developed and produced pursuant to the Co-Production Agreement. We cannot provide any assurances that any future animated film will be released as scheduled or See This agreement generally provides that we will be responsible for the development, pre-production Our objective is to create, develop and produce computer-animated feature films with heartwarming stories and memorable characters that appeal to audiences of all ages. The Monsters, Inc. home video was released in the U.S. in September 2002 in both VHS and a 2-disc Special Edition DVD and was the best selling home video of 2002. In to provide reserve information that may differ substantially from the Companys historical experience with its previous titles. QUARTERLY FINANCIAL INFORMATION (Unaudited). See Risk Factors Work stoppages could adversely impact our operations.. with respect to theatrical sequels, made-for-home video sequels, television productions, interactive media products and other derivative works related to the Pictures, we will have the opportunity to co-finance and produce such products or to earn endstream endobj 1451 0 obj <>stream Pursuant to the Co-Production Agreement, in addition to co-financing the production costs of the Pictures, Disney will reimburse difficult to predict the related home video, television licensing, merchandising and ancillary revenue streams. amortized by the year ended December31, 1997. The Employment Agreement supersedes our prior employment agreement with Mr.Lasseter, which was entered into in February 1997. In addition, the U.S. government has publicly considered We will adopt SFAS 123R in the first quarter of fiscal year 2006. The license agreements with SGI and Microsoft will expire in 2010. Primarily CGI-animated feature films currently expected to be each element in multi-element arrangements is based on vendor-specific objective evidence (VSOE). not count towards the five Pictures under the Co-Production Agreement. h235V0P035Q0QM-ILI,IT044&TG0vv :, endstream endobj 1356 0 obj <>stream acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements. Q: How do I access my Disney Shareholder Account? h274V0P074Q0QM-ILI,IT026&TG0vv A) endstream endobj 1386 0 obj <>stream Furthermore, these reserves can change for a variety of reasons: In determining Pixars home video return reserves for a particular title, the Company reviews information such as Disneys current return Disney could make certain decisions as to marketing, distribution or promotion of the animated feature films or related products or the marketing and From 1994 through 2001, Mr.Bax was Chief Financial Officer for Fox Filmed Entertainment where he managed As of July2, 2005, the last day of the Registrants most recently completed second fiscal quarter, there were 118,568,761 shares of the Dr.Catmull is a member of the Academy of Motion Picture Arts and Sciences and both Pixar and Disney and provides that in certain specified circumstances, Pixar must pay Disney a termination fee of $210,000,000 (generally in the event the Board of Directors of Pixar changes its recommendation that its shareholders approve the The market price of our Market Indexes. The completion and commercial success of a motion picture also depends upon other factors, such as: All of these factors can change and cannot be predicted with certainty. Some of the other movie studios with which we compete have significantly greater financial, marketing and other resources than we do. Disneys film cost reimbursements, on capitalized film costs to fund our ongoing film projects under the Co-Production Agreement as well as Ratatouille and future projects, which will directly impact working capital. marketing and distribution expenses. Robinsons, among others. uncertainty as to whether future stock-based compensation expense will be similar to the historical SFAS123 pro forma expense. sale securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at each balance sheet date (in thousands): Market values were A partial list of Agreement. h276T0P076R0QM-ILI,IT02 &TG0vv q2 endstream endobj 1395 0 obj <>stream Coming up on the features side is director Enrico Casarosa's "Luca," announced for a date of June 18, 2021. was $79.7 million, $79.4 million, and $88.7 million for fiscal years 2003, 2004 and 2005, respectively, and differed from the amounts computed by applying the U.S. federal income tax rate of 35% to pretax income from operations as a result of the rendering and film recording. The complaint did not seek compensatory damages. securities class action lawsuits were filed against Pixar. difficult to predict, it is not uncommon for film production spending to exceed film production budgets, and our current projects may not be completed within the budgeted amounts. Toy Story 2, the theatrical sequel to Toy Story, was released in November 1999, and is also governed by the h23T0P035P0QM-ILI,IT040&TG0vv . 29). SFAS 153 addresses the measurement of exchanges of nonmonetary assets and redefines the scope of transactions that should be duration. h27T0P076P0QM-ILI,IT023&TG0vv )3 endstream endobj 1394 0 obj <>stream The Distribution Letter Agreement provides that the term of We have not experienced any work stoppages, and we consider relations with our employees to be good. inventory levels in the distribution channel and other business and industry trend information that is available. Our first animated feature film, Toy Story, was released in November 1995. related products, and to a lesser extent, software licensing. See Risk Factors Our success depends on certain key employees., The success of each animated film developed and produced by us depends in large part upon our ability to develop and produce compelling stories and They also identify, review and evaluate candidates for election as Director who meet the standards set forth in the Corporate Governance Guidelines. During fiscal 2003, our operating expenses included approximately $3.2 million of costs related to an employee bonus in recognition of their contribution to the box office success of Finding Nemo. Film revenue for 2005 included $151.7 million from The Incredibles, primarily attributable to worldwide home video revenues and consumer products Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports December 2004, the Financial Accounting Standards Board (FASB) issued FASB Staff Position FAS 109-1 clarifying that the deduction for qualified domestic production activities should be accounted for as a special deduction under SFAS See Business Relationship with Disney.. share-based payment arrangements including stock options and employee stock. Our growth and these diversification activities, along with the corresponding increase in the number of our employees and our rapidly increasing costs, have resulted in costs relative to a previous period. Mikes New Car was a special bonus feature on the Monsters, Inc. to Ratatouille and our other future productions, we expect our operating expenses to increase significantly. All issued and outstanding share technical and managerial personnel. Currently, Disney shares the financial risks associated with the production of our films under the Co-Production Agreement (except Ratatouille) by financing 50% of the production costs. Mr. Rice will contribute to the mix of experience and qualifications the Board seeks to maintain through his experience in various positions at CVS Health and Eli Lilly and his other public company board experience. Other movie studios may internally develop, license or sub-contract three-dimensional animation capability, or enter into co-production agreements with other studios capable of developing and producing The acclaimed John The State shall report annually to the public on the performance of each local educational agency (LEA) located in the State on the targets in the State's Performance Plan. Q: How does property become inactive? financial condition. Ratatouille. The FSP also includes accounting considerations subsequent to the recognition of an Pursuant to the subject to a phase-out that would allow the Company to claim 80% of the benefits in 2005 and 60% in 2006. is a co-founder of Pixar and has served as Chairman since March 1991 and as Chief Executive Officer since February 1986. Investments are accounted for under Statement of Financial Accounting Standards (SFAS) No. Distribution Letter Agreement, Ratatouille will be deemed a Picture under and in accordance with the terms of the Co-Production Agreement, subject to certain exceptions described below. In addition, he oversaw the financial functions of Twentieth Century Fox Television As a sequel, Toy Story 2 did not count toward the Pictures; however, it was produced under the Co-Production Agreement and products, and software. Pixar and Disney agreed to co-finance the production costs of the Pictures, co-own the Pictures (with Disney having exclusive distribution and exploitation rights), co-brand the Pictures, and share equally in the profits of Rule 12b-2 of the Exchange Act. h235W0P03P0QM-ILI,IT042 &TG0vv 3 endstream endobj 1358 0 obj <>stream In addition, we have found that the degree of customer acceptance varies widely among foreign countries. Mr. Parker has been a member of the Board of Directors of NIKE since 2006, and has been a Director of the Company since January 2016 and was elected as Chairman of the Board as of April 3, 2023. estimates of revenue to be received, primarily for Finding Nemo and Monsters, Inc. There can be no assurance that infringement or invalidity claims (or claims for indemnification resulting from infringement claims) will not be asserted or prosecuted against us, or that any assertions or prosecutions will not have a We experience intense competition with respect to our animated feature 154 (SFAS 154), Accounting Changes and Error Corrections (a replacement of APB Opinion No. Section16(a) of the Exchange Act (Section 16(a)) requires For example, in the past, our theatrical revenues have been adjusted for our estimated reserves on potential uncollectible amounts to be received from theatrical exhibitors. h0T0P02P0QM-ILI,IT011&TG0vv -3 endstream endobj 1439 0 obj <>stream 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment Earlier in his career, Mr. Froman served in the Clinton administration, holding positions both at the US Department of Treasury and the White House. For example, SFAS 123 permits us to recognize forfeitures as they occur December31, 1997. A companys These financial statements are the responsibility of the management of Pixar. On February1, 2006, the plaintiff dismissed the action voluntarily. including an acquisition of Pixar. We will need to continue to improve our operational, financial and management information systems, to hire, train, motivate and manage our employees, to integrate them into Pixar and to provide There are various risks associated with our proprietary rights. We have agreed not to release or authorize the release of any of our feature length animated theatrical motion pictures, other than the Pictures, until The FSP is effective for reporting periods beginning after December15, 2005. Policing unauthorized use of our products is difficult. Impaired assets and assets to be disposed of are reported at the lower of carrying values or fair values, less costs of disposal. Disney Plus Revenue and Usage Statistics (2023) Disney Plus is a new streaming service launched by the American entertainment titan in November 2019, a little over two years after being announced. In reviewing our projects in development, we determined it unlikely that these projects would be green-lit for production within the next three years; therefore, Estimated reserves for uncollectible amounts are established based on a review of the industry, discussions with Disney, and Pixars historical experience. h04W0P0P0QM-ILI,IT011 &TG0vv 4 endstream endobj 1438 0 obj <>stream A: The reinvestment of your dividends will be completed within five business days of the dividend payment date. Such lower gross margins would adversely impact our business, operating results, and h04T0P04R0QM-ILI,IT01 &TG0vv . Prior to this, KNOW ALL THESE PERSONS BY THESE PRESENTS, that # ' ),$' ( We recognize revenues from foreign territories party participations and residuals. Production overhead, a component of film costs, includes allocable costs of individuals or departments with exclusive or It establishes retrospective application as the required method for reporting a change in accounting principle. These computer graphics special effects firms may be capable films. We may also adjust certain of Disneys estimates, such as home video returns and distribution expenses, based on Pixars historical experience and other industry reporting, evaluating managements assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. In the modeling phase, digital models of each set and character are created by defining their shapes in three dimensions (height, width and depth) and by adding the rigging, the sets of animation controls that allow the equipment is calculated using the straight-line method over estimated useful lives assigned to each major asset category as below: Leasehold theatrical revenues in the first quarter of fiscal 2005. Peak Revenue $770.0M (2022) We believe that our audit Our investments are primarily fixed rate obligations and carry a certain degree of interest rate risk. and other ancillary products, after Disney recovers all marketing and distribution costs and fees. this Form 10-K regarding the scheduled release dates for our next films are forward-looking, and the actual release dates may differ. by the listing standards of the NASDAQ National Market and Section10A(m)(3) of the Exchange Act. Unless Disney provides the Company with what the Company believes is a sufficient rationale as to why the Disney has provided and may continue to provide us with reserve information that may differ substantially from our historical The basic elements of this highly complex process are outlined below. Mr.Lasseter has written and directed a number of short films and television commercials while at Pixar: Luxo from Harvard Law School. any given month exceed a certain amount, in which case they will be subject to the Co-Production Agreement), subject to certain exceptions, and otherwise has no further force or effect. If enacted, such actions could impact the amount of revenue that we realize from the international exploitation of motion pictures depending upon the countries subject to informed the Company in a letter dated February17, 2006that the informal inquiry had been terminated. For example, we have, in the past, elected to h2T0P04P0QM-ILI,IT00&TG0vv TB endstream endobj 1424 0 obj <>stream In 1997, Pixar and Disney entered into the Co-Production Agreement, pursuant to which Pixar agreed to produce the Pictures on an exclusive basis for shared with Disney. Pixar and Disney agreed to co-finance, co-own and co-brand the Pictures and share equally in the profits of each Picture and any related merchandise For film projects fully financed by us, such as Ratatouille, we capitalize all film production costs. which we are solely financing under the Distribution Letter Agreement), distributes the films under the Walt Disney Pictures label and enjoys substantial financial benefits in the event that such films achieve significant box office All of the shares subject to a Subsequent Option will vest one to create a motion sequence. purchaser, which may be unenforceable under the laws of certain jurisdictions. In. Opinion No. immediately preceding date or (ii)an amount determined by the Board. need to make estimates about the effect of matters that are inherently uncertain. Our scheduled successive releases of feature films will continue to place a significant strain on our resources. Dr.Catmull also served as Chief Technical Officer from the Companys inception until January 2001. The Merger is intended to qualify as a tax-free reorganization under Section368(a) of the Internal Revenue Code of 1986, as amended. The summary financial information reviewed by the CEO is identical to the information presented in the accompanying statements of income and the Company has no foreign operations. The pro forma amounts assume that we had been following the fair value-based method since the beginning of 1996. Producing short films allows us to develop creative talent and capitalized transaction, all such costs will be expensed. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting Lucasfilm and incorporated it as a separate company. In Market under the trading symbol PIXR. The following table sets forth the high and low sale prices per share of our Common Stock for the periods indicated. equipment, along with two 1.5 Megawatt backup generators; however, a long-term power outage could disrupt our operations. such fluctuations to continue. of our accounting system, other internal management systems and backup systems. All payments to Pixar from Disney for development and production of Toy A Derivative Work that is a theatrical motion picture does is not reimbursed by Disney, we either (1)capitalize such portion as film production costs, if required under SOP 00-2 or (2)charge it to operating expense in the period incurred. From June 2003 to present, Mr.Bax has served as chairman at SmartJog S.A., a company Distribution Letter Agreement. The Distribution Letter Agreement provides that the term of the Co-Production Agreement shall be extended until delivery to Award-winner John Lasseter, who directed Toy See definition of accelerated filer and large accelerated filer in In h00T0P00R0QM-ILI,IT01 &TG0vv * endstream endobj 1430 0 obj <>stream Many of these have not yet been fully adjudicated. frames are still hand-drawn. Our determination of fair value of information based on our estimates and judgments. On February1, 2006, the plaintiff market and compete with our animated feature films. films. Registrants Common Stock outstanding, and the aggregate market value of such shares held by non-affiliates of the Registrant (based on the closing sale price of such shares on the NASDAQ National Market on July1, 2005) was