other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. proceedings and claims that arise in the ordinary course of business. enjoyed worldwide box office success with all of our feature films, there can be no assurance that similar levels of success will be achieved by our subsequent films, including Cars, Ratatouille and our other future projects. losses on trade receivables. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December15, 2005. This technology Ratatouille) on an equal basis. that with respect to theatrical sequels, made-for-home video sequels, television productions, interactive media products and other derivative works related to the Pictures (except for Ratatouille), we will have the opportunity to co-finance From June 2003 to present, Mr.Bax has served as chairman at SmartJog S.A., a company In May 2003, we released Finding Nemo, our fifth animated feature film, which counts as the third original Picture under the Co-Production Agreement. Q: Can I buy or sell stock directly through Disney? be the Companys Chief Executive Officer (CEO). determined for each individual security in the investment portfolio. For our business to be successful, our films must achieve box office success. Q: If I am enrolled in The Walt Disney Company Investment Plan, when will my dividends be reinvested? On January24, 2006, we entered into an Agreement and Plan of Merger with Disney by which Disney has agreed to acquire Pixar. Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use our proprietary Prior to that time, she served at General Motors as Executive Vice President, Global Product Development, Purchasing and Supply Chain from 2013 to 2014, Senior Vice President, Global Product Development from 2011 to 2013, Vice President, Global Human Resources from 2009 to 2011 and Vice President, Global Manufacturing Engineering from 2008 to 2009. In addition to the films produced and in process under the Co-Production Agreement, Pixars creative development group is working on concept market and compete with our animated feature films. . Lasseter-directed Pixar short, Knick Knack, produced in 1989, accompanied Finding Nemo in theaters. Item8. For example, in 1997 we created and produced the Academy Award-winning short film, Geris Game, which Although Disney provides the Company with the most current, NOTES TO FINANCIAL STATEMENTS (Continued). Jr. (1986 Academy Award nominee), every outstanding share held on such date. The television market for our feature films generally follows the theatrical and home video Leased, or Otherwise Marketed, development costs related to software products are expensed as incurred until the technological feasibility of the product has been established. He has been a Director of the Company since September 2018. proportional increase in the number of Pixar common shares authorized from 100million to 200 million. computer-animated feature film. As of December31, 2005, we had approximately 850 employees and contractors. revenues for reversals of reserves which were established in prior years for Finding Nemo international home video reserves. production costs and shares a specified percentage of Toy Story profits with Pixar after certain agreed upon costs and fees are deducted. (2)accelerate the unvested portion of Mr.Lasseters option so that the option would be exercisable in full. (a)We have filed the following documents as part of this Form 10-K: Managements Report on Internal Control Over Financial Reporting, Reports of Independent Registered Public Accounting Firm, Balance Sheets as of January1, 2005 and December31, 2005, Statements of Income for the fiscal years ended January3, 2004, January1,2005, and December31, 2005, Statements of Shareholders Equity and Comprehensive Income as of January3, 2004,January1, 2005, and December31, 2005, Statements of Cash Flows for the fiscal years ended January3, 2004, January1, 2005, and December31, 2005. fiscal year ended December31, 2005 have not reflected, and future reported operating expenses will not reflect, our true level of spending on the production of animated feature films, related products and Overhead. The exercise prices of the First Option and each Subsequent Option will be 100% of the fair market value per share of Pixars Disney may also make subsequent Any such litigation could result in substantial costs and diversion of resources and could have a material adverse effect on our business, operating results or financial condition. Accordingly, Toy Story 2 did not count as one of the five Pictures to be produced. The Co-Production Agreement provides mechanisms for the establishment of production budgets for each Picture (except for Ratatouille). Disney annual revenue for 2020 was $65.388B, a 6.06% decline from 2019. In addition, each outstanding option to purchase Pixar common stock will be converted at the Effective Time into an option Any such delays in feature film releases or product shipments could have a material 123 (SFAS 123), Accounting for Stock-Based Compensation, and supersedes Accounting Principles Board Opinion based on an average foreign currency exchange rate used by Disney for revenue reporting. Animated Feature granted under Pixars stock option plans during fiscal 2005. make an additional investment in Disney shares. to take advantage of the new generation of higher resolution, 2K digital cinema projectors. laws of certain jurisdictions. have been restated to reflect the stock split for all periods presented. films, this level of success is highly unusual in the motion picture industry, and our future releases may not achieve similar results. Business Proprietary Rights.. Distribution Letter Agreement. the underwater murk in Finding Nemo and the human skin in The Incredibles. In addition, the costs for marketing, distribution and promotion of the films and related products are incurred well in Piracy and the unauthorized recording, transmission and distribution of our content are increasing challenges. To be successful, we need to attract and retain qualified personnel. In the animation stage, the digital models are animated, or brought to life, in three dimensions by changing the animation controls over time RenderMan. Adjustments based on filed returns are generally recorded in the period when the In These revisions reduced the Companys reserves by $5.1 million, of which approximately $2.0 million increased the Companys the event that Disney terminates the Co-Production Agreement, we would be required to seek alternative channels for distribution of our animated feature films and related products. Income statements, balance sheets, cash flow statements and key ratios. sequels, television productions such as Buzz Lightyear of Star Command, interactive media products such as Monsters, Inc., Finding Nemo and The Incredibles interactive games, and other derivative works as more The basic elements of this highly complex process are outlined below. If we are unable to develop enhancements to our existing technologies or new technologies as required, or if the costs associated with developing those technologies continue to increase, our business, operating 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 each Picture and any related merchandise and other ancillary All of the shares subject to a Subsequent Option will vest one feature film agreement with Disney, which provided for the development, production and distribution of up to three feature-length motion pictures (the Feature Film Agreement). The story boards are then transferred to video so that they can be electronically edited into a photo play of the film called a story reel, a process that enables editing of the film Unless required by law, we undertake no In May 2005, the FASB issued Statement No. We have also made adjustments to our home video revenues for estimates on return reserves that may differ by the listing standards of the NASDAQ National Market and Section10A(m)(3) of the Exchange Act. In 2003, we created and produced the Academy Award-nominated, Boundin which accompanied The Incredibles in theaters. During fiscal 2005, the Company increased its return reserves by approximately $8.3 million primarily for differences in Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the She is a director of the Americas Society and served as a Trustee of the National Geographic Society from 2007 to 2015. The complaint asserts a class period from January18, 2005 to June30, 2005. h04V0P04Q0QM-ILI,IT016&TG0vv - endstream endobj 1436 0 obj <>stream distributed under the Feature Film Agreement. SFAS 154 is effective for accounting changes and Any revisions to our estimated reserves, margin normalization or updated information from Disney, as noted above, as well as findings from audit rights The decline is likely due to the company focusing on keeping its content exclusive to its streaming services. There is no family relationship between any executive officer or director of Pixar. In making this assessment, A: Disney common stock is traded on the New York Stock Exchange. Bugs Life, Toy Story 2, Monsters, Inc., Finding Nemo and The Incredibles. software, and could adversely impact sales of RenderMan. Upon termination by For example, SFAS 123 permits us to recognize forfeitures as they occur while SFAS 123R The loss of the services of any of Messrs. Jobs, Lasseter, Bax, Dr.Catmull, Ms.Scali or of other key several of these legal matters be resolved against Pixar in the same reporting period, the operating results of a particular reporting period could be materially adversely affected. If we elect to co-finance and produce a Derivative Work, the Co-Production Agreement provides for the following: (1) with respect to theatrical motion pictures and made-for-home video productions, the terms and conditions of the Co-Production Marionette is used internally at Pixar on Linux and Unix workstations. Technological advances, such as the digital distribution of motion pictures, could increase the Until 1996, we had generated recurring revenue primarily from the license of our RenderMan software, amounts we received under software development contracts and fees for animated television commercial development. The Governance and Nominating Committee of the Board has approved a process for handling letters received by the Company and addressed to non-management members of the Board. In May 1991, we entered into a We are also dependent on Disney for receiving 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 Shareholder Litigation. There can be no assurance that the steps we take will prevent misappropriation of our technology or that our confidentiality or license agreements will be enforceable. record date for any vote of shareholders of Pixar on the Merger Agreement and the transactions contemplated thereby) in favor of the approval of the principal terms of the Merger Agreement and approval of the Merger. within 45 days after the end of each calendar month for the first three years after the films release then quarterly thereafter, subject to certain exceptions, and we have the right to audit Disneys books and records relating to the Disneys exceptional entertainment experiences, widely diverse content, and unique skill in managing businesses in an integrated manner led to strong results. 2 were each re-released in VHS and 2-disc Collectors Edition DVD. h274V0P074Q0QM-ILI,IT026&TG0vv A) endstream endobj 1386 0 obj <>stream value of stock options is amortized to expense over the vesting period, and additional options may be granted in future years. Disney relating to home video expenses, which decreased previously recorded home video expenses by $3.2 million for all of our film titles on a cumulative basis. Our management evaluated, with the participation of our Chief Executive theatrical releases of Disneys National Treasure and Miramaxs Finding Neverland in November2004 competed with the worldwide theatrical release of The Incredibles, and the home video release of these films Notwithstanding the foregoing, we own the copyright and all other intellectual property rights in and to all computer programs and other technology we develop or discover before, during or after Executive Vice President and General Counsel since March 2003. each Picture and any related merchandise as well as other ancillary products, after recovery of all marketing and distribution costs (which Disney finances), a distribution fee paid to Disney and any other predefined fees or costs, including any advances in graphics processing unit technology that may impinge on the market for software rendering solutions. Additionally, we received updated information which resulted in an increase of $3.5 million to our revenues. third parties. reasonable terms. Further, the theatrical success of a feature film can be a significant factor in determining the amount of revenues generated from the sale of the related products. All payments to Pixar from Disney for development and production of Toy Story under the Feature Our production coordination staff h273V0P073Q0QM-ILI,IT066&TG0vv 4 endstream endobj 1411 0 obj <>stream The ultimate realization of deferred tax assets is dependent upon the generation Financial Condition and Results of Operations in Item7 of this Form 10-K. With respect to capitalized film production costs, our policy is to amortize these costs over the expected revenue streams as we recognize revenues from the associated films. Q: How can I obtain SEC documents such as a prospectus, a 10-K, or a 10-Q? 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. [ 1] Date: Nov 24, 2021 SFAS 123R will also require a classification change in the statement of cash flows; whereby, a portion of the tax benefit from stock options It establishes retrospective application as the required method for reporting a change in accounting principle. We have an obligation to finance production costs. Pixar's Annual Report & Profile shows critical firmographic facts: What is the company's size? Components of Capitalized Film Production Costs. an opinion on the effectiveness of our internal controls), we could lose investor confidence in the accuracy and completeness of our financial reports, which may have an adverse effect on our stock price. title, we have and may continue to record reserves more consistent with our historical experience. realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. h23T0P032P0QM-ILI,IT01J&TG0vv endstream endobj 1339 0 obj <>stream Our films are distributed to television markets throughout the world. In the event a film is not set for production within three years from the time of the first capitalized transaction, all such costs will be expensed. established by management, having the relevant authority to do so, for an element not yet sold separately. In addition, there have been advances in graphics processing unit technology that may impinge on the market for software rendering solutions. services of Steve Jobs, John Lasseter, Edwin E.Catmull, Simon Bax, and Lois Scali. The options granted to our non-employee directors pursuant to the Director Plan were made on substantially the same terms as are now made under the Equity Plan. reflected in the above table. Pixar was incorporated in the state of California on We have three core proprietary technologies: (1)Marionette, an animation software system for articulating, With regard to the Pictures (except for Ratatouille), we capitalize film production costs in excess of reimbursable amounts distribution by Disney. We intend to release all of our films on television, which includes Pay-Per-View, pay television and network television. Disney domestically distributed Valiant, a co-production with Vanguard Entertainment, in August 2005, and released Chicken Little, the first film produced by Disneys new CGI feature animation 2006. Only stock option incentive awards have been granted under the 2004 Plan as of December31, 2005. The Incredibles, which had a higher amortization percentage as compared to Finding Nemo in the prior year. share-based payment arrangements including stock options and employee stock purchase plans. model to be moved or animated. h24T0P04R0QM-ILI,IT0 &TG0vv = endstream endobj 1375 0 obj <>stream films. Although we are moving towards a strategy to release our films theatrically worldwide within a narrower timeframe relative to our earlier films, successful, we must develop appealing creative content.. Written Inquiries: Merger Related Litigation. components of income taxes are as follows (in thousands): Charge in lieu of taxes attributable to employer stock option plans. The first four original Pictures under the Co-Production Agreement were A Bugs Life, Monsters, Inc., Finding Nemo and The h235W0P03P0QM-ILI,IT042 &TG0vv 3 endstream endobj 1358 0 obj <>stream Capitalized production overhead does not include general and administrative and research and development expenses. 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. Merger Related Litigation. In addition, we On January27, 2006, an action, titled Jonathan Levene v. Pixar, et al., was filed in The Audit Committee currently consists of Messrs. Graziano and Levy and Ms.Decker. and A Bugs Life after Disney recovers its marketing, distribution and other predefined costs and fees. currently believe our internal control over financial reporting is effective, the effectiveness of our internal controls to future periods is subject to the risk that our controls may become inadequate because of changes in conditions, and, as a During 2003, Disney increased its return Disney first signalled an intention to move into the streaming market in 2016, by acquiring a minority stake in streaming technology developer BAMTech. 150 Royall Street Suite 101 Merchandise), subject to. See Business Employees and Executive Officers of the Company.. A: No, we do not have a shareholder benefit program. There can be no assurance, however, that under such circumstances a license would be available on reasonable terms or at all. Mr. Iger has been named TIMEs Businessperson of the Year (2019); one ofForbesmagazine's Worlds Most Powerful People (2018); one of the Top Gun CEOs byForbesmagazine (2009); one of Fortune magazines 25 Most Powerful People in Business (2006, 2007); one of the Best CEOs byInstitutional Investormagazine (2008, 2009, 2010, 2011); MarketWatch's CEO of the Year (2006); and CEO of the Year byChief Executivemagazine (2014). Pursuant to the Co-Production Agreement, we receive statements and payments of our share of gross receipts monthly Finding Nemos domestic home video return reserves, and to a lesser extent Monsters, Inc. home video return reserves and Finding Nemos international home video reserves. For example, Disney is entitled to terminate the Co-Production Agreement in the event that certain types of competitors directly or indirectly acquire or control a 50% or greater ownership interest in Pixar or Our films will continue to compete with the feature films of other movie studios for optimal release dates, audience acceptance, and exhibition outlets. General and administrative expenses may continue to increase in future estimates of revenue to be received, primarily for Finding Nemo and Monsters, Inc. If we are unable to assert that our internal control over financial reporting is effective in any future period (or if our auditors are unable to express The Prior to his tenure at EFI, he was a partner at the law firm of Wilson Sonsini Goodrich& Rosati specializing in intellectual property protection and licensing. to provide reserve information that may differ substantially from the Companys historical experience with its previous titles. 2020 Annual Report 3.4 MB. Such expenses incurred for Pixar business approximated $91,000, $0, and $26,000 during 2003, 2004, and 2005, respectively. introduce products for PCs that would be competitive with RenderMan in terms of Under the Co-Production Our investments have increased from $473.6 million at January 3, 2004 to $826.1 million at January 1, 2005 to $1.0 billion at December31, During fiscal 2003, the Company increased its return reserves by approximately $23.6 million for differences in its reserve estimates primarily for film directors, producers, animators, other creative personnel and technical directors, could have a material adverse effect on our business, operating results or financial condition. together with the additional land purchases noted above represents our Emeryville Campus. Substantially all of our revenues have been derived, and substantially all Derivative works include theatrical sequels such as Toy Story2, made-for-home video To ensure prompt handling of unexpected matters, the Audit Committee delegates to the Chairman of the Audit budgets without Disneys written approval, subject to certain limited exceptions. management used the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Similar to return reserves, these expense estimates are reviewed and may be adjusted periodically to ensure that the most accurate depiction of the Companys participation Informal Inquiry by the SEC. Revenue recognized from multiple-element arrangements is allocated to undelivered elements of the arrangement, such as support services, based on the fair value of the elements. For more information, see Business Model and Products Agreement) dated as of January27, 2006 with Disney regarding the distribution of a feature length animated film currently entitled Ratatouille. Pursuant to Section404 of the Sarbanes-Oxley Act of 2002, (Section 404) and the rules and regulations Postal Service. Financial instruments that potentially subject Pixar to concentrations of credit risk consist primarily of cash equivalents, investments and trade accounts receivable. 2005, (Exact name of registrant as specified in its charter). 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. deemed a Picture under and in accordance with the terms of the Co-Production Agreement, subject to certain exceptions, including but not limited The Company makes certain estimates and served as President since January 2001. consisting of highly skilled story artists, animators and other artists trained in the art of animation, especially computer-animation. In order for our feature films and related products to be successful, we must develop Award-winner John Lasseter, who directed Toy increased responsibilities for our management team. 6, Elements of We cannot provide any assurance we will be successful in accomplishing all of these activities on a timely and cost-effective basis. The complaint sought class certification and certain forms of equitable relief, including enjoining the consummation of the The Company believes the process for developing software is essentially h02V0P02Q0QM-ILI,IT015&TG0vv 1 endstream endobj 1441 0 obj <>stream impairment, the unamortized film production costs will be written down to fair value. Request Information View 2022 Corporate Social Responsibility Report No member of the Compensation Committee is or was formerly an officer or an employee of Pixar. including an acquisition of Pixar. Under appropriate circumstances, we have in the past elected and might in the future elect to license our rendering technology. television productions; and. These pro forma amounts may not be representative of future disclosures since the estimated fair accounting for stock-based compensation plans in accordance with Accounting Principles Board Opinion (APB) No. Disney pursuant to the example above, Disney has certain rights to compel us to complete works in production. Click Below for the CURRENT Downloadable PDF Price!! h277T0P077R0QM-ILI,IT06 &TG0vv (9 endstream endobj 1415 0 obj <>stream 123 Revised 2004 (SFAS 123R), Share-Based Payment. The statement replaces SFAS 123, supersedes APB 25, and amends SFAS No. We have a cooperative working environment and a non-hierarchical culture that encourages each member of the creative team, regardless of position or department, to consider the ideas of all other We also received a settlement on Monsters, Inc. Item1 of this Form 10-K. Pixar was formed in 1986 when Steve Jobs purchased the computer division of additional equity or convertible debt securities would result in additional dilution to our shareholders. Mikes New Car was a special bonus feature on the Monsters, Inc. h275W0P07P0QM-ILI,IT062 &TG0vv 7 endstream endobj 1408 0 obj <>stream Software revenue includes software license revenue, principally from For the years ended Ms. Chang has been a Director of the Company since 2021. Mr.Lasseter has written and directed a number of short films and television commercials while at Pixar: Luxo Because Disney co-finances the films developed and produced under the Co-Production Agreement (except for Ratatouille, case is entitled Mataraza v. Pixar, et al., Case No. securities with an effective maturity of 24 months or less. The Company has obligations to pay portions of any revenue derived from each Unless otherwise indicated in the. We have received no written comments regarding our periodic or current reports from the staff of the SEC that were issued 180 days or more preceding the The reporting of a correction of an error by restating previously issued financial statements is also addressed by SFAS 154. Marionette is our software system for articulating, animating and lighting for computer animation. The 2022 UNHCR Refugee Education Report draws on data from more than 40 countries across the world, enabling UNHCR to paint the clearest picture yet of the state of refugee education - and illustrate how refugee children and youth are falling behind their non-refugee peers when it comes to access to an inclusive quality education. 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 There can be no assurance that these third-party technology licenses will continue to be available to us on commercially reasonable terms. Disney), to develop and produce up to three computer-animated feature films (the Feature Film Agreement). Managements annual report on internal control over financial reporting; audit report of the independent registered public accounting Disney under the Co-Production Agreement. For example, Disney is entitled Ratatouille to Disney. On December16, 2004, the Financial Accounting Standards Board We recognize film revenue from the distribution of all our animated feature films and related products when earned and reasonably estimable in accordance In Mr.Roth recently directed the family comedy Christmas with the Kranks, starring Tim Allen and Jamie Lee Curtis which is based on John Grishams best selling novel Committees policy is to pre-approve all audit and permissible non-audit services provided by the Companys independent registered public accounting firm. In addition, Disneys exclusive distribution and exploitation rights with respect to Ratatouille shall be for a period of 10 years from initial theatrical exhibition of Ratatouille or 11 years from delivery of Our fiscal year 2006 earnings are expected to include Q: When will Disney declare the next dividend? Cost of revenue was $38.1 million in 2003, $29.9 million in 2004, and $39.4 million in 2005, and represents primarily amortization of capitalized film costs. Our responsibility is to He officially joined the Disney senior management team in 1996 as Chairman of the Disney-owned ABC Group, and in 1999, was given the additional responsibility of President, Walt Disney International. relatively unchanged in 2004 compared to 2003. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in the early stages of a business enterprise, h00T0P00R0QM-ILI,IT01 &TG0vv * endstream endobj 1430 0 obj <>stream Although Mr.Jobs spends time The budgets for Cars and subsequent films and related products are expected to be greater than the budgets for our previous films. h06T0P06R0 Additionally, distribution and provided that there will be no distribution fee payable to Disney. Picture under and in accordance with the terms of the Co-Production Agreement, subject to certain exceptions, including but not limited to those noted below. These financial statements are the responsibility of the management of Pixar. The story department is responsible for a projects concept, treatment, outline, script, storyboards and Our relationship with Disney dates back to 1986, when we entered into a He also won the Coons h27T0P077P0QM-ILI,IT061&TG0vv : endstream endobj 1414 0 obj <>stream This diversification of risk is consistent with its policy to safeguard principal and maintain liquidity.

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