See Note 4 of with Disney regarding the Pictures, Pixar and Disney share equally in the profits of our animated feature films after Disney recovers its distribution fee and its marketing and distribution costs. 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. Robinsons, among others. Mr. Iger is the author of the New York Times best-selling book The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of The Walt Disney Company, published in 2019. pictures itself or enter into similar agreements with third parties. provide us with a competitive advantage. Our research and development department is responsible for creating and further advancing our distinctive computer animated visual effects, such as the moving fur in Monsters, Inc., There can be no assurance that we will be successful in identifying, attracting, hiring, training and retaining such personnel in the future. As Chairman of the ABC Group, Mr. Iger oversaw the broadcast television network and station group, cable television properties, and radio and publishing businesses, and also guided the complex merger between Capital Cities/ABC, Inc. and the Walt Disney Company. To date, we have created and produced six full-length computer-animated feature films, which were marketed and distributed by The Walt Disney Company (along with its subsidiaries hereinafter referred to as Disney). We also have audited, in accordance with the standards of the Accordingly, our RenderMan software may not of our future revenues are expected to be derived, from the use and license of our proprietary technologies. $79.7 million, $79.4 million, and $88.7 million reflects our effective tax rates of 39.0%, 35.9%, and 36.7% for fiscal years 2003, 2004, and 2005, respectively. In addition, Pixar shall finance all production costs and receive all gross receipts of Ratatouille after deduction of (1)a distribution fee Any revisions to our In. As a derivative work, Toy Story 2 is treated as a Picture under the Co-Production Agreement, and all the provisions applicable to the five original Pictures apply. determined that each of Messrs. Graziano and Levy and Ms.Decker is (1)an audit committee financial expert, as that term is defined in Item401(h) of Regulation S-K of the Exchange Act, and (2)independent as defined Warner Bros. released The Polar Express in November 2004. Our operating results have fluctuated in the past, and we expect Interest All Agreement will be distributed through all of these outlets. vest one year after its date of grant and an additional one-third will vest at the end of each year thereafter, provided that the optionee continues to serve as a director on such dates. Distribution of television rights for the animated feature films developed and produced under the Co-Production Agreement and the Distribution Letter Agreement is governed by the Our operations are vulnerable to interruption by fire, earthquake, power loss, telecommunications failure and other events beyond our control. SFAS 153 is effective for financial position or cash flows. Films, and Mr.Lasseter will also provide executive producing services on Feature Films, made-for-home videos and short-subject motion pictures that Mr.Lasseter does not direct. 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 Further, each Picture is to be distributed and marketed under the Walt Disney Pictures brand (or the then current Disney brand for premiere Disney movies) and is to be distributed and marketed by Disney in all markets and media and on a Request Information View 2022 Corporate Social Responsibility Report management used the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). If we were unable to hire, assimilate and In addition, Pixar will finance all production costs and receive all gross receipts of Ratatouille after deduction of (1)a distribution fee paid to Disney, (2)any participations paid to third parties to receive a Subsequent Option, regardless of whether such non-employee director was eligible to receive a First Option. Disney revenue for the twelve months ending December 31, 2022 was $84.415B, a 15.66% increase year-over-year. Pixar has a separately designated standing Audit Committee established in We will not share in any theme park revenues generated as a result of the Pictures. Story under the Feature Film Agreement, and the Pictures (except for Ratatouille) under the Co-Production Agreement have been recorded as cost reimbursements. You can keep your account active and avoid presumed abandonment of your stock in a number of ways, including: Q: How can I determine the cost basis for my investment? The pro forma amounts assume that we had been following the fair value-based method since the beginning of 1996. She has held additional senior leadership roles in media and technology, including as Corporate Vice President of Microsofts Global Advertising Sales, Strategy & Marketing, and as Chief Operating Officerand Executive Vice President, Advertising Sales,of MTVNetworks. As our films are produced digitally, they are uniquely suited to this method of exhibition. Intellectual Property Transactions Group and served on the firms Executive, Partnership, Strategic Planning and Intake Committees. Our contractual arrangement with Disney also presents other risks. Mr. McDonald is a growth-oriented leader with a proven track record helping large organizations scale and innovate how brands engage with customers in stores, across digital channels, and from their home. Forecasting our operating expenses Also, in our opinion, Mr. Iger was inducted into the Television Academy Hall of Fame in January 2020, and the Broadcasting and Cable Hall of Fame in 2015. Under the Co-Production Agreement, Pixar and Disney agreed to co-finance the feature films and related products do not generate proceeds sufficient to more than offset our share of their production costs, our business, operating results and financial condition will be materially adversely affected. third parties. Therefore, there may be some indirect foreign employees, consultants and vendors, and generally control access to and distribution of our software, documentation and other proprietary information. The home video releases of Pirates of the Caribbean: The Curse of the Black Pearl and Freaky Friday also competed with Finding Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under generally accepted accounting principles are recorded as an element of shareholders equity but are excluded from net SKG, Inc. (DreamWorks), Warner Bros. Entertainment (Warner Bros.), Sony Pictures Entertainment, Fox Entertainment Group Inc. (Fox), Paramount Pictures, Lucasfilm Ltd., Universal Studios, Inc., MGM/UA, and Studio consolidated before a single judge and are referred to as In re Pixar Securities Litigation. Research and development expenses, net of Disney reimbursable expenses, are charged to operations as incurred. each or more. Our contractual arrangement with Disney also presents other risks. Market for Companys Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. After Ratatouille, Disney may begin to release its movies during our release windows. Disney. Pursuant to the Distribution Letter Agreement, the term of the Co-Production Agreement is extended until the delivery of Ratatouille to Disney, which is expected to occur in mid-2007. as Pictures. fields of animation and technical direction. subjective and may differ significantly from actual results. The case is entitled This was the first time that a Pixar title was licensed to a premium cable network. Registrants cannot provide any assurances that patents will issue from any of these pending applications or that, if patents do issue, any claims allowed will be sufficiently broad to protect our technology. us for our share of certain general and administrative costs and certain research and development costs that benefit the productions of the Pictures. Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 10-K has been signed below by the following persons on behalf of the Principal Accounting Fees and Services. The Co-Production Agreement imposes several risks and restrictions on us. outstanding stock options and the fair market value of our Common Stock as of December31, 2005. television production, (4)location-based entertainment that uses unique characters or other elements from any of the Pictures or Toy Story as its primary theme, or (5)an interactive product such as a CD-ROM, DVD, video game or nullifies certain requirements of EITF Issue 03-1 and supersedes EITF Topic D-44, Recognition of Other-Than-Temporary Impairment upon the Planned Sale of a Security Whose Cost Exceeds Fair Value. The FSP addresses the We are subject to risks caused by the availability and cost of insurance. financed by us and distributed by Disney and is scheduled for a summer 2007 release. The contractual maturities of available-for-sale securities as of There was no change in our internal control over financial reporting date. includes Disneys current return reserves, the historical returns for our previous titles, actual rates of returns, inventory. 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 periods (in thousands, except per share data). Total operating expenses increased from $30.5 million in 2003 to $34.9 million in 2004 and decreased to $34.3 million in 2005. To date the Company has not experienced significant Under the Co-Production Agreement, Disney is required to distribute the Pictures in a manner consistent with that of Disneys premiere animated This report appears on page 58 of this Annual Report on Form 10-K. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. Incredibles. In addition, revenue for the fourth quarter of fiscal 2004 was significantly higher than the fourth quarter of fiscal 2005 due to the November 2004 domestic theatrical release of The h235W0P03P0QM-ILI,IT042 &TG0vv 3 endstream endobj 1358 0 obj <>stream In the event that a film does not generate sufficient revenues to offset such costs, Pixar is estimates, it is possible that Disney may make subsequent revisions to those estimates which could result in a change to the Companys estimate of revenue for a given period. pursuant to which Disney markets the feature films and provides access to significant distribution channels, we believe that we presently compete favorably with respect to each of these factors. The term of the Co-Production Agreement continues until we deliver The 2005 fiscal year ended December31, 2005 and consisted of 52 weeks. 03-1, The Meaning of Other-Than-Temporary Impairment and Its Application to In December2004, the Financial Accounting success will be achieved by our subsequent films, including Cars, Ratatouille and other future projects beyond the Co-Production Agreement. 2 and A Bugs Life after Disney recovers its marketing, distribution and other predefined costs and fees. The pro forma disclosures previously permitted under SFAS 123 no longer will be an alternative to financial statement recognition. A: The reinvestment of your dividends will be completed within five business days of the dividend payment date. our operating costs, which could in turn adversely affect our profitability. As of In October 2020, the Company announced a strategic reorganization of our media and entertainment businesses to accelerate the growth of our direct-to-consumer (DTC) strategy. Works based on Toy Story including Toy Story 2 are to be governed by the Co-Production Agreement and not the original Feature Film Agreement. h270T0P070R0QM-ILI,IT02 &TG0vv C& endstream endobj 1380 0 obj <>stream Co-Production Agreement without a license from Disney. period. C-05-4290 JSW. SFAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June15, 2005. feature film produced under the Co-Production Agreement to our entertainment law firm in consideration for services rendered. In 1997, the primary theme and (B)television productions, Pixar and Disney are to agree mutually upon the terms and the conditions under which such work will be financed, produced and distributed, subject to certain specified requirements in the case of h24U0P04S0QM-ILI,IT0(&TG0vv D endstream endobj 1377 0 obj <>stream Substantially all of the Companys resources this Form 10-K regarding the scheduled release dates for our next films are forward-looking, and the actual release dates may differ. Based on the individual-film-forecast-computation method, all Toy Story film production costs were fully 2 were each re-released in VHS and 2-disc Collectors Edition DVD. regarding the timing of the theatrical release and related products, the marketing and distribution strategy, and the extent of promotional support are important factors in determining the success of our motion pictures and related products. He has served as a Director of Illumina since 2014 and was a director of Citrix Systems, Inc. from 2014 to 2016. For further details, refer to Managements Discussion and Analysis of technology, which allows animators to manipulate hundreds of motion control points within a single character, allows for more intricacy and subtlety of character and personality than traditional two-dimensional cel-based animation. As a theatrical sequel, Toy Story 2 is a derivative work of the original Toy Story and therefore it does not count toward the five original 2006, the defendants removed the action to the United States District Court for the Northern District of California. In 2005, our effective tax rate was lower than the statutory tax Agreement) dated as of January27, 2006 with Disney regarding the distribution of a feature length animated film currently entitled Ratatouille. While box office success is often a good indicator of general audience acceptance, the relative success of follow-on products is not We cannot provide any assurances that such a license would be available to us on commercially reasonable terms or at all. Under the Co-Production Agreement, profits from the Pictures are shared equally between Pixar and Computershares contact information is located in the Transfer Agent section of this FAQ. Prior to founding Revolution Studios, Mr.Roth served as Chairman of the Walt Disney Studios from April 1996 to amortized each quarter depends on how much future revenue we expect to receive from each film. Prices for electricity have in the past risen dramatically and may increase in the future. Cars is directed by Pixars two-time Academy Published 7 January 2022. Agreement. During 2005, our The following table summarizes the number of outstanding options granted to from the University of California, Los Angeles. Our relationship with Disney dates back to 1986, when we entered into a Production overhead, a component of film costs, includes allocable costs of individuals or departments with exclusive or significant responsibility for the production of our films. Links to individual state unclaimed property programs may be found by visiting: www.unclaimed.org. Shares of the Registrants Common Stock held by each executive officer and director have been excluded in that such persons may be deemed to be affiliates. period, using the treasury stock method for options. Q: Do you have a shareholder benefit program? 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 Termination. use our proprietary information, products or technology without authorization, or to develop similar or superior technology independently. thereafter quarterly, within 45 days after the end of the quarter. Ringmaster is a production management software system for scheduling, 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 Microsystems, Inc. and from October 1981 to May 1985 as Chief Financial Officer of Apple. Find PUMA's annual reports as well as statements about our quarterly results. In February 2020, he assumed the role of Executive Chairman and directed the companys creative endeavors until his retirement in December 2021. In the Accordingly, no revenue has been recognized for such reimbursements; rather, we passive royalties on such products. Directors and Executive Officers of the Company. film directors, producers, animators, other creative personnel and technical directors, could have a material adverse effect on our business, operating results or financial condition. facilities and other expenditures are neither capitalized by us nor allocated to and paid for by Disney, and precede or are not subsequently followed by an increase in revenue, our business, operating results and financial condition will be would be capitalized. We currently have a number of patents in force in the United States and in foreign countries, as well as a number of patent applications pending in the United States and in foreign countries. Q: Where are your shares traded? scheduled releases of our animated feature films. See Disney pursuant to the example above, Disney has certain rights to compel us to complete works in production. a significant extent on the performance of a number of senior management personnel and other key employees, especially our film directors, producers, animators, creative personnel and technical directors. Committees policy is to pre-approve all audit and permissible non-audit services provided by the Companys independent registered public accounting firm. Direct-to-Consumer revenues for the quarter increased 8% to $4.9 billion and operating loss increased $0.8 billion to $1.5 billion. the accompanying Index to Exhibits immediately following the signature page of this Form 10-K. (c)Financial Statement Schedule. broadcast and basic cable television, and international television. that we license from third parties, including software that we integrate and use with our internally developed software. films, animation products, and software. through set top boxes and other devices and through unlicensed broadcasts on free TV and the Internet. We expect continuing increases to our operating expenses to fund greater Enjoy the preliminary information and for a more detailed analysis, buy the financial report! Disney under the Co-Production Agreement. Q: When and where was the 2023 Annual Meeting of Shareholders? h273U0P073S0QM-ILI,IT066&TG0vv < endstream endobj 1412 0 obj <>stream Pixar has won Home video sales continue to be among the largest contributors to lifetime revenues of our films. persons that no Forms 5 were required for such persons, we believe that during fiscal 2005 all Section16(a) filing requirements applicable to our executive officers, directors and 10% shareholders were complied with. television productions; and. For example, SFAS 123 permits us to recognize forfeitures as they occur while SFAS 123R proprietary rights associated with Ratatouille. worldwide basis in a manner similar to that in which Disney then currently distributes and markets its premiere animated movies. such action and the duration and effectiveness of such action. Competition for the caliber of talent required to make our films, particularly our film directors, producers, animators, creative personnel and technical directors, will continue to intensify as more studios build Disneys Companies are required to recognize an expense for compensation cost related to This is PUMA. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Ms. Lagomasino has been a Director of the Company since 2015. losses on trade receivables. This could have an adverse impact on the commercial success required for us to The service was launched in the U.S. . on Form 8-K, and amendments to such reports are available, free of charge, on the Investors Relations section of our website (www.pixar.com) as soon as reasonably practicable after we electronically file such material with, or furnish it 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 A summary of activity under the option plans during fiscal years 2003, 2004 and 2005 are as follows: For various price ranges, weighted-average characteristics of outstanding stock options at h05T0P05R0QM-ILI,IT050&TG0vv 03 endstream endobj 1454 0 obj <>stream h274T0P074R0QM-ILI,IT02 &TG0vv * endstream endobj 1385 0 obj <>stream Unless Disney provides a sufficient rationale as to why the market and sales performance are substantially different Film revenue for 2005 included $151.7 million from The Incredibles, primarily attributable to worldwide home video revenues and consumer products In addition to the films produced and in process under the Co-Production Agreement, Pixars creative development group is working on concept 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 and cloth and human skin simulation. The Merger Agreement contains certain termination rights for Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the Effective Time), each issued and outstanding share of Common Stock of Pixar will be converted into the right to receive 2.3 We have audited the accompanying balance sheets of Pixar as of January1, 2005 and December31, 2005, and the related statements of income, Mr.Docter and Mr.Stanton are currently working on future To date, all research and development costs not reimbursed by Disney have been expensed as incurred. For example, DreamWorks successfully produced and released Antz in 1998, Shrek in 2001, Shrek 2 and Shark Tale in 2004, such volatility to continue. Animated dioramas, which are test sequences to prove that the major technical issues in creating the film have been addressed, are also created in . values of the elements. For fiscal year 2006, we will be dependent primarily on the worldwide theatrical and worldwide home video C-05-4290 JSW. We also create new short films Over his 15 years leading Disney, Mr. Iger was the steward of one of the worlds largest media companies and some of the most respected and beloved brands around the globe. See accompanying notes Ratatouille, except that Disney shall own theme park rights to Ratatouille in perpetuity. attorney with the law firm of Wilson Sonsini Goodrich& Rosati since 1966 and currently serves as Chairman. Our income tax rate for fiscal year 2005 was different from the U.S. statutory rate primarily due to state taxes, a tax benefit associated with certain income earned outside the United Investment Portfolio. together with the additional land purchases noted above represents our Emeryville Campus. The SFAS 123R will also require a classification change in the statement of cash flows; whereby, a portion of the tax benefit from stock options See Business Competition.. time at Twentieth Century Fox, Mr.Roth was a producer/director and co-founded Morgan Creek Pictures. In the opinion of management, Pixar does not have a potential liability related to any current legal proceedings and claims that He earned his B.F.A. For example, in 1997 we created and produced the Academy Award-winning short film, Geris Game, which Coming up on the features side is director Enrico Casarosa's "Luca," announced for a date of June 18, 2021. Income statements, balance sheets, cash flow statements and key ratios. A: Complete a Stock Transfer Form and submit it along with any additional required documents to The Walt Disney Companys Transfer Agent, Computershare Investor Services (Computershare). dismissed the action voluntarily. The increase in sales and marketing expense in 2005 compared to 2004 primarily resulted from increased marketing and publicity initiatives and higher employee related costs. The information required to be furnished pursuant to these items is set forth under the captions Managements Report on Internal Control Over Financial Reporting and Report of Independent Zoom, How to Eat Fried Worms, Santa Clause 3, Eragon, and Charlotte's Web, among others. Any such 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, balances earning interest at higher average rates. Effect on Prior Agreements. In November 2001, we released Monsters, Inc., our fourth animated by Disney and, except for Ratatouille, to give Disney a right to negotiate with respect to animated television productions or animated made-for-home video productions that we propose to produce during the term of the Co-Production Agreement. 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 Changes in internal control over financial reporting. Overview. corporate insurance. Under the Co-Production We do not carry earthquake insurance for earthquake related losses and although we carry business interruption insurance for other potential losses, there can be no share-based payment arrangements including stock options and employee stock purchase plans. A: Please allow the post office at least 10 mailing days to deliver your check. based on an average foreign currency exchange rate used by Disney for revenue reporting. the carrying value of an asset may not be recoverable. We capitalize our share of direct film production costs in accordance with deferred tax provision based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed during the subsequent year. 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 Accordingly, our RenderMan software may not provide us with a competitive advantage. and produce such products or to earn passive royalties on such products. Primarily CGI-animated feature films currently expected to be released by major studios in 2006 include Ice Age 2, The Wild, Over the Hedge, Monster House, The Ant Bully, Open Season, Barnyard, For fiscal years 2003, 2004, and 2005 Disney Replacement checks are mailed within 7-10 business days once a request has been submitted. of interest income on investments. To achieve the desired quality level, on reserves for returns. Amy Chang serves on the Board of Directors of Procter & Gamble and Marqeta, and as an advisor to more than a dozen companies. The Company has utilized margin normalization, such as with There can be no assurance that these third-party technology licenses will continue to be available to us on commercially reasonable terms. animated film currently entitled Ratatouille. may differ from those reported by Disney. In the event of a short-term power outage, we have installed UPS (uninterrupted power source) equipment to protect our RenderFarm and other sensitive

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