Walt Disney Co. (NYSE:DIS)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes exhibited a significant decline from US$16,211 million in 2019 to a negative value of US$-2,053 million in 2020, indicating a substantial operational downturn during that period. Subsequently, there was a gradual recovery over the next years, with NOPAT rising to US$2,215 million in 2021, US$6,699 million in 2022, before declining moderately to US$3,406 million in 2023 and then increasing again to US$6,260 million in 2024. This pattern reflects volatility in operational profitability, with partial recoveries following a major dip in 2020.

Cost of Capital

The cost of capital remained relatively stable across the years, fluctuating mildly between 14.53% and 15.21%. It started at 15.21% in 2019 and then decreased slightly to its lowest point at 14.53% in 2022. Thereafter, it showed a modest increase, reaching 14.99% in 2024. These minor changes suggest consistent capital costs without significant volatility during the observed period.

Invested Capital

Invested capital maintained a somewhat stable level, beginning at US$169,178 million in 2019 and rising modestly to a peak of US$174,594 million in 2020. Thereafter, it showed a slight decline, fluctuating just below the peak and ultimately decreasing to US$166,066 million in 2024. This overall pattern denotes relatively steady investment levels with a marginal reduction towards the end of the period.

Economic Profit

Economic profit was consistently negative throughout the period, indicating that the returns did not exceed the cost of capital at any point. The economic loss widened significantly from a negative US$9,522 million in 2019 to a maximum negative of US$27,529 million in 2020. While the losses decreased somewhat in the following years, reaching US$18,579 million in 2022, they increased again in 2023 to US$22,292 million before improving to a loss of US$18,633 million in 2024. This persistent negative economic profit highlights ongoing challenges in value creation relative to capital costs.

Net Income (Loss) Attributable to The Walt Disney Company

The net income demonstrates significant variability over the analyzed years. Initially, there was a strong positive net income of 11,054 million US dollars in the fiscal year ending September 28, 2019. However, this was followed by a substantial decline resulting in a net loss of 2,864 million US dollars in the fiscal year ending October 3, 2020. Recovery began in the subsequent years, with net income returning to positive figures of 1,995 million US dollars in 2021, increasing to 3,145 million US dollars in 2022. There was a slight decline to 2,354 million US dollars in 2023, followed by a pronounced increase to 4,972 million US dollars in 2024. Overall, the net income figures show a sharp dip likely attributable to extraordinary or cyclical factors around 2020, with a clear recovery trend in the subsequent periods.

Net Operating Profit After Taxes (NOPAT)

The NOPAT figures follow a pattern similar to net income, reflecting operational profitability after tax adjustments. Starting at a robust 16,211 million US dollars in 2019, there was a notable drop to -2,053 million US dollars in 2020, indicating operational losses during that period. A gradual recovery is observed in the following years, with an increase to 2,215 million US dollars in 2021, and a significant rise to 6,699 million US dollars in 2022. The year 2023 saw a decrease to 3,406 million US dollars, but this was followed by another increase to 6,260 million US dollars in 2024. These fluctuations suggest a period of operational challenges in 2020, followed by a strong recovery and intermittent volatility in the subsequent years.

Summary of Trends

Both net income and NOPAT experienced a pronounced decline in the fiscal year 2020, reflecting a challenging environment for the company during that period. The figures suggest a recovery trajectory beginning in 2021, with steady improvements through 2022 and 2024. Despite some fluctuations in 2023, the overall trend is positive, indicating enhanced profitability and operational efficiency over the longer term. The data points to resilience and a capacity to recover from significant setbacks, with profitability levels approaching or exceeding pre-2020 values by 2024.

The data reveals notable fluctuations in both income tax expenses on income from continuing operations and cash operating taxes over the periods analyzed.

Income Tax Expense on Income from Continuing Operations

This metric shows a significant decline from 3,031 million US dollars in 2019 to a low of 25 million in 2021, indicating a substantial reduction in tax expenses relative to income during that year. However, there is an upward trend following 2021, rising to 1,732 million in 2022, then slightly decreasing to 1,379 million in 2023, before increasing again to 1,796 million in 2024. Despite these fluctuations, the 2024 figure remains lower than the 2019 value but is substantially higher than the minimal level seen in 2021.

Cash Operating Taxes

Cash operating taxes exhibit a consistent upward trend over the entire period, starting at 1,297 million US dollars in 2019 and increasing steadily each year. The rise becomes more pronounced from 2022 onwards, with an increase from 1,891 million in 2022 to 3,100 million in 2023, followed by a slight decrease to 2,982 million in 2024. Overall, cash operating taxes more than doubled from 2019 to their peak in 2023, indicating increased tax payments in operational cash flows.

The contrasting trends between income tax expense and cash operating taxes suggest differing impacts on accounting income versus cash flow basis taxes, with income tax expense experiencing volatility, while cash operating taxes show a clear upward pattern until 2023, stabilizing slightly in the latest period.

Total reported debt & leases

The total reported debt and leases exhibited an overall decreasing trend from 2019 to 2024. Starting at $50,841 million in 2019, the amount increased to a peak of $62,323 million in 2020, likely reflecting heightened borrowing or leasing activities during that year. Subsequently, there was a consistent decline through 2024, culminating in $49,517 million, which is slightly below the 2019 level. This pattern indicates a strategic reduction in debt and lease obligations following the 2020 peak.

Total Disney Shareholder’s equity

Shareholder’s equity showed a generally upward trajectory over the period. Beginning at $88,877 million in 2019, equity decreased to $83,583 million in 2020, which might be associated with the elevated debt levels that year. From 2020 onward, equity increased steadily, reaching $100,696 million by 2024. This growth suggests an improvement in retained earnings or additional equity infusions, leading to stronger financial stability and increased net asset value.

Invested capital

Invested capital remained relatively stable throughout the period but demonstrated a slight overall decline from 2019 through 2024. Starting at $169,178 million in 2019, the value peaked slightly in 2020 at $174,594 million and fluctuated modestly thereafter. By 2024, invested capital was recorded at $166,066 million, indicating a minor contraction of about 2% from the 2019 figure. This stability implies steady investment levels in the company's operational assets despite fluctuations in debt and equity.

Summary

The data reflects a period of financial adjustment characterized by a peak in debt and leases in 2020, followed by a systematic reduction through 2024. Concurrently, shareholder equity experienced a dip in 2020 but then strengthened significantly, surpassing the pre-2020 levels by 2024. Invested capital remained mostly stable, suggesting consistent asset base maintenance. Overall, these trends suggest an emphasis on deleveraging and improving equity position while maintaining steady investment in capital assets over the analyzed timeframe.

Economic Profit

The economic profit exhibits a consistently negative trend throughout the analyzed period. Starting at -9,522 million USD in 2019, it significantly deteriorated to -27,529 million USD by 2020. Although there was a partial recovery in 2021 and 2022, the economic profit remained substantially negative, with values of -23,359 million USD and -18,579 million USD respectively. In the last two years, it worsened again to -22,292 million USD in 2023 before improving to -18,633 million USD in 2024. This pattern indicates persistent challenges in generating economic value over the invested capital, although some fluctuations suggest efforts toward mitigation.

Invested Capital

Invested capital demonstrates relative stability with slight fluctuations. Beginning at 169,178 million USD in 2019, it increased moderately to peak at 174,594 million USD in 2020. Subsequent years show minor variations, remaining in a narrow range between approximately 167,000 and 174,000 million USD, with a slight decrease observed in 2024 to 166,066 million USD. This suggests a consistent level of capital allocation, with modest reductions in the most recent year.

Economic Spread Ratio

The economic spread ratio remains negative for all periods, reflecting that returns on invested capital are consistently below the company's cost of capital. The ratio worsened sharply from -5.63% in 2019 to -15.77% in 2020, then improved gradually but remained deeply negative across subsequent years (-13.51% in 2021, -10.68% in 2022). The 2023 and 2024 years show a slight increase in negativity to -12.83% and -11.22% respectively, indicating persistent underperformance relative to the cost of capital, albeit with some improvements compared to the worst periods.

Adjusted Revenues

The adjusted revenues exhibit an overall increasing trend from 2019 to 2024. Starting at approximately $70.7 billion in 2019, revenues dipped to around $64.9 billion in 2020, likely reflecting external challenges during that year. Subsequently, revenues recovered and grew steadily, reaching approximately $91.3 billion by 2024. This progression signifies a robust recovery and growth trajectory over the latter years.

Economic Profit

Economic profit demonstrates persistent negative values throughout the periods, indicating that the company consistently experienced economic losses according to this metric. The largest economic loss occurred in 2020, with a value close to -$27.5 billion. Although the losses remained substantial, a gradual improvement is observed after 2020, with economic profit losses reducing to approximately -$18.6 billion by 2024. This pattern suggests some recovery, albeit economic profitability remains a challenge.

Economic Profit Margin

The economic profit margin mirrors the behavior of economic profit, remaining in negative territory across all years. The margin plunged sharply in 2020 to approximately -42.4%, the most severe contraction in the analyzed timespan. Subsequent years show a consistent but moderate improvement in margin, improving to around -20.4% by 2024. Despite this improvement, margins remain significantly negative, indicating ongoing struggles with economic efficiency.

Summary of Trends

While adjusted revenues indicate strong growth and resilience post-2020, the economic profit and associated margin reflect continued economic losses. The severe setback in 2020 affected both profitability and economic margins, but incremental recovery is evident thereafter. The data suggests that operational performance in terms of revenue generation has improved markedly, whereas economic profitability has yet to turn positive, pointing to potential inefficiencies or high costs that continue to impact overall economic gains.