“In this painting, I have attempted to convey my vision of a memory
of a day at Disney’s Animal Kingdom — the highlights of the day
and the most vivid moments of the experience.â€
Joe Rohde
Principal creative executive of Disney’s Animal Kingdom
and illustrator of the cover of this year’s Fact Book.
©The Walt Disney Company
Printed on recycled paper.
The Company
1997 Fact Book
Introduction
1
Disney Through the Decades
2
Financial Information
Condensed Consolidated Statements of Income
7
Condensed Consolidated Balance Sheets
8
Condensed Consolidated Statements of Cash Flows
9
Common Stock Statistics
10
Key Financial Ratios
12
Business Segment Overviews
Creative Content
13
Broadcasting
14
Theme Parks and Resorts
15
Financial Supplement
1997 & 1996 Quarterly Condensed
Consolidated Pro Forma Statements of Income
16
Company Tree
17
Supplemental Information
Corporate Headquarters
The Walt Disney Company
500 South Buena Vista Street
Burbank, California 91521
(818) 560-1000
Registrar and Stock Transfer Agent
The Walt Disney Company
Independent Accountants
Price Waterhouse LLP
Information Contacts
Winifred Markus Webb, Vice President
Investor Relations and Shareholder Services
(818) 560-5758
Investor Relations
Sonja Ute Beals, Manager
(818) 560-7854
Shareholder Services
Jennifer La Grow, Director
(818) 553-7200
Corporate Communications
Thomas J. Deegan, Vice President
(818) 560-1572
John Dreyer, Vice President
(818) 560-5300
Information on The Walt Disney Company is located on the
World Wide Web at
http://www.disney.com
Top, right: Michael Eisner, chairman of the board and chief executive
officer of The Walt Disney Company.
Above, right:
The Wonderful World of Disney has returned to ABC’S
Sunday night line-up, providing the quality family entertainment for
which Disney is known.
Above: Disney Cruise Line will make a splash with the launch of its
first ship,
Disney Magic, scheduled to embark on its maiden voyage
in April 1998.
Table of Contents
The Walt Disney Company
1997 Fact Book
The Company Tree
The Walt Disney Company
1997 Fact Book
17
C
R E AT I V E
C
O N T E N T
Walt Disney
Studios
Theatrical Films
Miramax
Home Entertainment
Network TV Production
Hollywood Records
Mammoth Records
Stage Plays
Television
Production/Distribution
TV Network Productions
Domestic Distribution
International Distribution
Consumer Products
Merchandise Licensing
The Disney Store
Walt Disney Records
Disney Publishing
Walt Disney Art Classics
Disney Direct Marketing
Disney Interactive
Disney Online
Fairchild Publications
Televentures
B
ROADCASTING
Cable Network
& International
ESPN
Disney Channel
ABC Broadcast
Network
TV Stations
Radio Network
Radio Stations
T
HEME
P
ARKS
A
ND
R
ESORTS
Walt Disney
Attractions
Disneyland Resort
Walt Disney World Resort
Disney Vacation Club
Disney Cruise Line
Tokyo Disneyland
Walt Disney
Imagineering
Anaheim Sports
The Mighty Ducks of
Anaheim
The Anaheim Angels
Disney Regional
Entertainment
Club Disney
DisneyQuest
The ESPN Zone
Quarter Ended - Fiscal 1997 Dec 31 Mar 31
Jun 30 Sep 30
Revenues
Creative Content
$2,962
$2,487
$2,004
$2,645
Broadcasting
1,872
1,528
1,609
1,492
Theme Parks and Resorts
1,150
1,203
1,369
1,292
$5,984
$5,218
$4,982
$5,429
Operating Income
Creative Content
$ 668
$ 354
$ 257
$ 414
Broadcasting
469
238
337
241
Theme Parks and Resorts
238
236
390
272
1,375
828
984
927
Corporate Activities and Other
(90)
(108)
(69)
(100)
Net Interest Expense
(171)
(184)
(185)
(153)
Income Before Income Taxes
1,114
536
730
674
Income Taxes
(473)
(220)
(305)
(284)
Net Income
$ 641
$ 316
$ 425
$ 390
Earnings Per Share
$
0.93 $ 0.46
$ 0.62
$ 0.57
Quarter Ended - Fiscal 1996 Dec 31 Mar 31 Jun 30
Sep 30
Revenues
Creative Content
$2,812
$2,287
$2,034
$2,431
Broadcasting
1,790
1,369
1,499
1,351
Theme Parks and Resorts
994
1,055
1,249
1,204
$5,596
$4,711
$4,782
$4,986
Operating Income
Creative Content
$ 618
$ 233
$ 249
$ 335
Broadcasting
341
198
309
236
Theme Parks and Resorts
196
202
350
242
1,155
633
908
813
Accounting change for SFAS 121
0
(300)
0
0
1,155
333
908
813
Corporate Activities and Other
(24)
(98)
(66)
(61)
Net Interest Expense
(
167)
(189)
(171)
(171)
Income Before Income Taxes
964
46
671
581
Income Taxes
(418)
(31)
(289)
(250)
Net Income
$ 546
$ 15
$ 382
$ 331
Earnings Per Share
$ 0.79
$ 0.02
$ 0.55
$ 0.48
Net Income Excluding Non-recurring Items
$ 198
Earnings Per Share Excluding Non-recurring Items
$ 0.29
Top, right:
Hercules, Disney’s 35th full-length animated feature, flexed
its muscle both domestically and internationally.
Middle, right:
George of the Jungle was a swinging success, bringing
in over $100 million at the domestic box office.
Below, right: Meeting the characters is a special part of any Disney
Theme Park visit.
Above, left: Richard Nanula, senior executive vice president and chief
financial officer.
Above, right: Sanford Litvack, senior executive vice president and
chief of corporate operations.
1
The Walt Disney Company is a family entertainment company engaged, through its subsidiaries, in animated
and live-action film and television production, character merchandise licensing, consumer products retailing
and book, magazine and music publishing, television and radio broadcasting, cable television programming and
the operation of theme parks and resorts.
Fiscal 1997 marked the first full year of combined Disney and ABC operations. For the year, Disney reported
record results, with significant contributions from each of the company’s three segments: Creative Content,
Broadcasting and Theme Parks and Resorts.
In addition, Disney divested several non-strategic ABC publishing assets in fiscal 1997. The pro forma results
in this book represent Disney’s performance excluding any impact from these publishing assets.
Disney remains committed to its overriding objective of creating shareholder value by continuing to be the
world’s premier entertainment company from a creative, strategic and financial standpoint. The company strives
to maintain and build upon the integrity of the Disney name and franchise, while preserving and fostering the
fundamental values of quality, imagination and guest service. The company’s primary financial objective re-
mains 20% compound annual earnings per share growth over future five-year periods and, secondarily, steady
improvement in return on equity.
Thank you for your interest in The Walt Disney Company.
Sincerely,
Winifred Markus Webb
Vice President, Investor Relations
and Shareholder Services
Introduction
The Walt Disney Company
1997 Fact Book
Quarterly Condensed Consolidated Pro Forma Statements of Income
The Walt Disney Company
1997 Fact Book
(In millions, except per share data)
(Unaudited)
16
Note: Pro forma adjustments reflect the acquisition of ABC, sale of KCAL and the divestiture of certain publishing operations acquired in the ABC acquisition, as if those events had occurred
at the beginning of the years presented.
!!!
!!!
!!!
Theme Parks and Resorts
The Walt Disney Company
1997 Fact Book
T
WO
W
HOLE
N
EW
W
ORLDS
In 1998, Disney will launch its new cruise ship line and open the gates
to a new theme park in Florida. Here are a few facts about these new
ventures at sea and on land:
D
ISNEY
C
RUISE
L
INE
Disney will take to the seas in April 1998 with the launch of
Disney Magic,
followed by
Disney Wonder in December 1998. Each ship has 875 state-
rooms and will sail from Port Canaveral, Florida, on a three- or four-day
cruise with ports of call at Nassau and Castaway Cay, Disney’s private
island.
D
ISNEY
’
S
A
NIMAL
K
INGDOM
The fourth Walt Disney World theme park opens in April 1998. At
over 500 acres, the park will be home to more than 200 species of
animals and 4,000 varieties of trees and plants. Themed lands
include: The Oasis, Safari Village, Dinoland U.S.A., Character Grove
(working title), Conservation Station, Africa and, later, Asia.
FAST FACTS
Disney’s theme parks are the most
at-
tended in the world. Current Disney
Theme Parks include: Magic Kingdom,
Disney-MGM Studios, Epcot, Disney-
land, Tokyo Disneyland and Disneyland
Paris.
Disney’s Animal Kingdom, Walt Disney
World’s 4th gate, will open in the spring
of 1998. Both Disney’s California Ad-
venture next to Disneyland and Tokyo
DisneySea next to Tokyo Disneyland,
are scheduled to open in 2001.
In 1997 the Magic Kingdom at Walt Dis-
ney World broke its own annual atten-
dance record and became the highest-
attended theme park in the world.
R
ESORTS
AND
C
ONVENTION
S
PACE
Opening
Hotel
Gross Meeting
Walt Disney World Date Class Rooms Space (Sq. Ft.)
Contemporary Resort
Oct-71
Premium
1,041
90,000
Polynesian Resort
Oct-71
Premium
853
0
Fort Wilderness Campsites
Nov-71
—
784
0
Fort Wilderness Trailers
Nov-71
—
408
0
Disney Institute
(nee Disney Village Resort)
Jan-72
Premium
584
0
Grand Floridian Beach Resort
Jul-88
Premium
900
40,000
Caribbean Beach Resort
Oct-88
Moderate
2,112
0
Yacht Club Resort
Nov-90
Premium
630
73,000
Beach Club Resort
Nov-90
Premium
583
0
Port Orleans
May-91
Moderate
1,008
0
Dixie Landings
Feb-92
Moderate
2,048
0
All-Star Sports Resort
May-94
Economy
1,920
0
Wilderness Lodge
May-94
First Class
728
0
All-Star Music Resort
Nov-94
Economy
1,920
0
BoardWalk Inn
Jul-96
Premium
378
20,000
Coronado Springs
Aug-97
Moderate
1,967
95,000
Disneyland
Acquired
The Disneyland Hotel
Summer-88
Premium
1,136
150,000
Disneyland Pacific Hotel
Dec-95
Premium
502
26,000
Total
19,502
494,000
Non-Disney Owned Resorts at WDW
6,280 486,854
Top, left: The renovated Tomorrowland at Disneyland, opening in
Spring ’98. Middle, left: In August, 1997, the opening of Coronado
Springs brought 1,967 new hotel rooms and an additional 95,000
square feet of convention space to Walt Disney World. Left: Disney’s
Theme Parks make all their guests feel young.
A
DULT
1-D
AY
P
ASS
P
RICE
H
ISTORY
Walt Disney Calendar
World
Year Disneyland
$28.00
1987
$21.50
28.00
1988
23.50
30.65
1989
25.50
32.75
1990
27.50
34.85
1991
27.50
35.90
1992
28.75
36.95
1993
30.00
38.00
1994
31.00
39.22
1995
33.00
40.81
1996
34.00
42.14 1997
36.00
Prices include sales tax where applicable
15
Theme Parks and Resorts
Operating Income
1997
1996
$990
$1,136
Revenues
1996
1997
$5,014
$4,502
Disney Through the Decades
The Walt Disney Company
1997 Fact Book
October 16, 1923:
The Disney
Brothers Studio
is founded as a
partnership by Walter E. Disney and
Roy O. Disney when Walt signs a
contract with M.J. Winkler to pro-
duce a series of animated short sub-
jects entitled the
Alice Comedies.
November 18, 1928:
Mickey
and
Minnie Mouse
debut in
Steamboat
Willie, Disney’s first animated film
with sound effects and dialogue.
December 16, 1929: The Disney
Brothers
partnership
is
replaced
by four companies
: Walt Disney
Productions, Ltd.; Walt Disney Enter-
prises; Liled Realty and Investment
Company; and the Disney Film Re-
cording Company.
September 5, 1930:
Pluto
makes
his cartoon short debut in
The Chain
Gang.
May 25, 1932: Disney introduces
Goofy
to the public in the cartoon
short
Mickey’s Revue.
July 30, 1932: The
first full-color
animated film
,
Flowers and Trees,
is released and later earns Walt Dis-
ney his first Academy Award
®
for
Best Cartoon Short Subject.
June 1, 1933: The
first Mickey
Mouse Watch
is sold by Ingersoll.
June 9, 1934:
Donald Duck
first
appears in
The Wise Little Hen.
December 21, 1937:
Snow White
and the Seven Dwarfs, the
first fea-
ture-length animated film
, pre-
mieres accompanied by the first com-
prehensive merchandise campaign.
July 19, 1938: Disney first contracts
with art dealer Guthrie Courvoisier to
sell
animation cels
.
September 29, 1938:
Walt Disney
Productions
absorbs the three
other Disney companies created in
1929.
April 2, 1940: Walt Disney Produc-
tions
issues 155,000 shares
of
6% cumulative convertible preferred
stock in the over-the-counter market.
May 6, 1940: Walt Disney Produc-
tions completes its move to its new
studio lot in
Burbank
.
November 13, 1940:
Fantasia
is
released.
December 16, 1952:
WED Enter-
prises
is founded as a private com-
pany owned solely by Walt Disney
to design and create Disneyland.
April 6, 1953:
Retlaw Enterprises
is founded as a private company
solely owned by Walt Disney to con-
trol the merchandising rights to the
name “Walt Disney.â€
November 10, 1953:
Buena Vista
Pictures Distribution
distributes
its first film,
The Living Desert.
October 27, 1954:
Disneyland
, a
one-hour weekly television series
which ultimately aired for 29 seasons
under six different titles, debuts on
ABC.
July 17, 1955:
Disneyland first
opens
its gates in Anaheim, Califor-
nia. Walt Disney Productions invests
$500,000 to own 34.5% of Disney-
land, Inc., the company that owns
Disneyland.
October 3, 1955:
The Mickey
Mouse Club
first airs on ABC.
June 19, 1957: Walt Disney Produc-
tions exercises options to purchase
an
additional 31.0% stake
in
Disneyland
, Inc. for $528,810.
July 6, 1960: Walt Disney Produc-
tions
purchases the remaining
34.5%
interest in Disneyland
,
Inc. for $7.5 million.
February 3, 1965: Walt Disney Pro-
ductions
acquires WED Enter-
prises
from Walt Disney for approxi-
mately $4 million.
December 15, 1966:
Walt Disney
dies.
October 1, 1971: The
Magic King-
dom
opens at Walt Disney World.
December 20, 1971:
Roy O. Dis-
ney
dies.
Top: Walt Disney (pictured) and
his brother, Roy O. Disney,
founded the Company in 1923.
Middle: Imagineers work behind
the scenes designing attractions,
Disney stores and theme parks.
Above:
Fantasia, released in
1940, featured Mickey Mouse as
the Sorcerer’s Apprentice.
2
(In millions)
July 8, 1981: In exchange for
888,461 shares of its common stock,
valued at $46.2 million, Walt Disney
Productions
acquires the rights
to Walt Disney’s name, like-
ness and portrait
, as well as the
steam train and monorail systems at
Disneyland, from Retlaw Enterprises.
October 1, 1982:
Epcot
opens at
Walt Disney World.
April 1, 1983:
Walt Disney Pic-
tures
is incorporated as a separate
company responsible for the devel-
opment, production and marketing of
all live-action films and commercial
television programming.
April 15, 1983:
Tokyo Disneyland
opens six miles from downtown To-
kyo.
April 18, 1983:
Disney Channel
first broadcasts cable television pro-
gramming.
March 9, 1984:
Touchstone Pic-
tures
releases its first film,
Splash.
June 6, 1984: Walt Disney Produc-
tions acquires
Arvida Corpora-
tion
from Bass family interests and
Arvida’s management in exchange for
3.3 million shares of Disney common
stock, valued at $200 million.
June 8, 1984: MM Acquisition Cor-
poration, a company formed by Saul
Steinberg of
Reliance Group
Holdings
, announces its intent to
take over
and dismantle
Walt Dis-
ney Productions
by offering
$67.50 a share for Disney common
stock.
June 11, 1984: Walt Disney Produc-
tions
repurchases 4.2 million
shares
(approximately 11.1%) of
Disney common stock
from Reli-
ance
for $328 million.
September 23, 1984: Walt Disney
Productions welcomes
Michael D.
Eisner
as chairman/CEO and
Frank G. Wells
as president/
COO.
February 6, 1986: Walt Disney Pro-
ductions changes its name to
The
Walt Disney Company
.
March 28, 1987: The first
Disney
Store
opens at the Glendale Galle-
ria in Glendale, California.
January 21, 1988: The Walt Disney
Company acquires the
Wrather
Corporation
, whose assets in-
clude the Disneyland Hotel, land near
Disneyland and leasehold interests
in the Queen Mary and Spruce
Goose, for approximately $161 mil-
lion in cash and $89 million in debt.
June 1, 1988: The opening of
Disney’s Grand Floridian Re-
sort
ushers in an era of accelerated
hotel buildout at Walt Disney World
during which 11 new resort hotels
have been added to date.
May 1, 1989: The
Disney-MGM
Studios
Theme Park and the
Plea-
sure Island
entertainment complex
open at Walt Disney World.
November 6, 1989: 51% of
Euro
Disney S.C.A.
’s 170 million shares
are offered to European investors at
FF72 per share. A subsidiary of The
Walt Disney Company owns the re-
maining 49%.
July 18, 1990:
Hollywood Pic-
tures
releases its first film,
Arachnophobia.
November 1, 1990: The first
inter-
national Disney Store
opens on
London’s Regent Street.
November 4, 1990: Disney Channel
presents its first
American
Teacher Awards
in a ceremony at
the Pantages Theater in Hollywood.
May 6, 1991: The Walt Disney Com-
pany replaces USX Corporation in
the
Dow Jones
30 Industrials.
April 12, 1992: Euro Disney (later re-
named
Disneyland Paris
) opens
20 miles outside of Paris, France.
Top: In 10 years, The Disney Store
has grown from just one store in
Glendale, California, to over 600
stores around the world.
Middle: Epcot allows guests to
explore the 21st century in Future
World and “take a walk around
the world†in World Showcase.
Above: The True-Life Adventure
series included
The Living Desert,
the first film distributed by Buena
Vista Pictures Distribution.
3
O
WNED
AND
O
PERATED
TV S
TATIONS
Broadcasting
The Walt Disney Company
1997 Fact Book
!!!
!!!
!!!
FAST FACTS
At the end of fiscal 1997, ESPN
reached 152 million households inter-
nationally. Domestically, ESPN played
in 72 million households, 50 million
households subscribed to ESPN2 and
ESPNews, at the end of its first year,
boasted roughly 5 million subscriber
households.
There are currently six international Dis-
ney Channels, each specifically tailored
to a particular market. The Channels op-
erate in Taiwan, the United Kingdom,
Australia, Malaysia, France, and the
Middle East.
Monday Night Football aired its 28th
season on ABC in 1997.
R
ADIO
S
TATION
L
IST
D
ISNEY
C
HANNEL
D
OMESTIC
S
UBSCRIBERS
D
ISNEY
’
S
C
ABLE
H
OLDINGS
Channel
Disney’s Interest
Launch Date
ESPN
80%
Sept. 1979
ESPN2
80%
Oct. 1993
ESPNews
80%
Nov. 1996
Disney Channel
100%
Apr. 1983
A&E
37.5%
Feb. 1984
History Channel
37.5%
Jan. 1995
Lifetime
50%
Feb. 1984
E! Entertainment
39.6%
June 1990
Classic Sports Network
80%
May 1995
Top:
NFL Countdown continues
its 11th year on ESPN.
Above:
Dharma & Greg is a popu-
lar addition to ABC’s 1997/98
prime time line-up.
14
City
AM Station
New York
WABC
770
1
Los Angeles
KABC
790
2
KTZN
710
3
Chicago
WLS
890
1
San Francisco
KGO
810
1
KSFO
560
2
Detroit
WJR
760
1
Dallas/Ft. Worth
WBAP
820
1
Washington, D.C.
WMAL
630
1
Atlanta
WDWD
590
3
Minneapolis/St. Paul
KDIZ
1440
3
Formats
: 1-News/Talk; 2-Talk; 3-Radio Disney
City
FM Station
New York
WPLJ
95.5
1
Los Angeles
KLOS
95.5
2
Chicago
WXCD
94.7
2
Detroit
WPLT
96.3
5
WDRQ
93.1
4
Dallas/Ft. Worth
KSCS
96.3
3
Washington, D.C.
WRQX 107.3
1
WJZW 105.9
6
Atlanta
WKHX 101.5
3
WYAY 106.7
3
Minneapolis/St. Paul
KQRS
92.5
2
KXXR
93.7
2
KZNR 105.1
5
KZNT 105.3
5
KZNZ 105.7
5
Formats
: 1-Adult Contemporary; 2-Rock; 3-Country;
4-Dance/Top 40; 5-Alternative; 6-Smooth Jazz
Broadcasting
Pro Forma
Operating Income
1997
1996
$1,084
$1,285
Revenues
1996
1997
$6,501
$6,009
0
5
10
15
20
25
30 million
83 84 85 86 87 88 89 90 91 92 93 94 95 96 97
30 Million In 1997
(In millions)
(as of 9/30)
City
Station Channel
New York
WABC
7
Los Angeles
KABC
7
Chicago
WLS
7
Philadelphia
WPVI
6
San Francisco
KGO
7
Houston
KTRK
13
Raleigh-Durham
WTVD
11
Fresno
KFSN
30
Flint`
WJRT
12
Toledo
WTVG
13
Disney Through the Decades
The Walt Disney Company
1997 Fact Book
Top: ABC is known for its exten-
sive and detailed news coverage.
Above: The ESPN brand is a pow-
erful asset for The Walt Disney
Company.
4
Top: In December 1995, Disney
acquired the Pan Pacific Hotel
and renamed it the Disneyland
Pacific Hotel. Above:
The Lion
King home video is the top-sell-
ing video of all time.
Creative Content
The Walt Disney Company
1997 Fact Book
B
UENA
V
ISTA
H
OME
V
IDEO
T
OP
-S
ELLING
D
OMESTIC
T
ITLES
Title
Industry Rank
The Lion King
1
Snow White and the Seven Dwarfs
2
Aladdin
3
Beauty and the Beast
4
Cinderella
5
Toy Story
6
Bambi
7
Pocahontas
9
101 Dalmatians (animated)
11
Pinocchio
12
The Fox and the Hound
13
Fantasia
15
Sleeping Beauty
18
The Aristocats
19
T
OP
-S
ELLING
I
NTERNATIONAL
T
ITLES
Title
Industry Rank
The Lion King
1
Snow White and the Seven Dwarfs
2
Aladdin
3
The Jungle Book
4
101 Dalmatians (animated)
5
Beauty and the Beast
6
Toy Story
7
Pocahontas
9
Bambi
10
!!!
!!!
!!!
FAST FACTS
Mulan, due to be released in June 1998,
will be Disney’s 36
th
full-length animated
feature.
Creative Content results benefited from
five fiscal 1997 releases that made
roughly $100 million or more at the
domestic box office:
Ransom, 101 Dal-
matians, Con Air, Hercules, and George
of the Jungle.
Buena Vista International passed
$1 billion at the box office this year,
faster than any other distributor ever
has, and became the first international
distributor to reach this figure three
years in a row.
Japan
18%
Rankings as of Sept. 30, 1997.
Top:
Con Air, a summer block-
buster starring Nicolas Cage, con-
tributed to Disney’s success this
year.
Above: Winnie the Pooh contin-
ues to gain popularity, resulting
in strong Pooh merchandise per-
formance.
13
1997 M
ERCHANDISE
L
ICENSING
R
EVENUES
Domestic
42%
International
58%
’97
’96
’95
âž
A Goofy Movie
âž
Pocahontas
âž
Snow White and
the Seven Dwarfs
âž
The Lion King
âž
A Goofy Movie
âž
Toy Story
âž
Oliver &
Company
âž
James and the
Giant Peach
âž
The Hunchback
of Notre Dame
âž
Cinderella
âž
Pocahontas
âž
The Many
Adventures of
Winnie the Pooh
âž
The Aristocats
âž
Aladdin and the
King of Thieves
âž
Oliver &
Company
Fiscal Year Domestic
Animated Release
Schedule
Theatrical
Home Video
Creative Content
Pro Forma
Operating Income
1997
1996
$1,435
$1,693
Revenues
1996
1997
$10,098
$9,564
âž
Hercules
âž
James and the
Giant Peach
âž
Toy Story
âž
Bambi
âž
The Hunchback of
Notre Dame
âž
Fun and Fancy Free
âž
Pooh’s Grand
Adventure
âž
Sleeping Beauty
T
HE
D
ISNEY
S
TORE
, I
NC
.
93 94 95 96 97
N. America
214 273 337 402 460
Europe
19
37 63 82 101
Asia-Pacific 6 14 29 46 75
Total
239 324 429 530 636
(Stores as of 9/30)
September 15, 1992: Disney Chan-
nel presents the first annual perfor-
mance of
Disney’s Young Musi-
cians Symphony Orchestra
.
September 30, 1992: Disney’s
Filmed Entertainment
group be-
comes the first studio to earn over
$500 million in a single year.
December 9, 1992: The National
Hockey League awards Disney a
franchise that would later become
The
Mighty Ducks of Anaheim
.
January 24, 1993:
Mickey’s
Toontown
opens at Disneyland.
June 30, 1993: Buena Vista Pictures
Distribution acquires
Miramax
Film
Corporation.
July 21, 1993: The Walt Disney Com-
pany raises $300 million from a his-
toric
100-year bond issue.
February 16, 1994: Disney commits
$500,000 to create
Disney
GOALS
, a program designed to of-
fer organized athletics, supplemen-
tary education and community ser-
vice to local underprivileged youths.
April 3, 1994:
Frank Wells
, presi-
dent and chief operating officer, dies.
April 18, 1994: Disney’s first stage
show
,
Beauty and the Beast: A
New Musical
, officially opens on
Broadway, breaking attendance and
box-office records.
June 2, 1994:
Sunset Boulevard
,
the location for
The Twilight Zone
â„¢
Tower of Terror attraction, opens at
Disney-MGM Studios.
June 24, 1994: Walt Disney Pictures
releases
The Lion King
, which be-
comes Disney’s most profitable film
ever.
July 3, 1994:
The Lion King
soundtrack
hits #1 on the Billboard
chart, where it stays for nine con-
secutive weeks.
September 6, 1994: Disney Theme
Parks welcome their
one billionth
guest.
October 20, 1994: The Walt Disney
Company sells a portion of its shares
in
Euro Disney S.C.A.
, operator
of Disneyland Paris, to a Saudi Ara-
bian investor, reducing its ownership
interest to 39%.
November 4, 1994: The first
Walt
Disney Gallery
opens at
MainPlace in Santa Ana, California.
March 3, 1995: The
Indiana
Jones
â„¢
Adventure
opens at Dis-
neyland.
March 3, 1995:
The Lion King be-
comes the
top-selling
home
video
of all time, selling over 30 mil-
lion units domestically and surpass-
ing the record set in 1994 by
Snow
White and the Seven Dwarfs.
June 1, 1995:
Space Mountain
opens at
Disneyland Paris.
July 13, 1995: The
Pocahontas
soundtrack
reaches #1 on the Bill-
board chart.
July 31, 1995: The Walt Disney Com-
pany announces its intention to ac-
quire
Capital Cities/ABC
for ap-
proximately $19 billion.
December 11, 1995: Disney com-
pletes the purchase of the Pan Pa-
cific Hotel, just south of The Disney-
land Hotel, and renames it the
Dis-
neyland Pacific Hotel
.
January 4, 1996: Stockholders of
Disney and
Capital Cities/ABC
approve the merger in their respec-
tive
Special Meetings of Share-
holders
held in New York City.
February 6, 1996:
Richard
Nanula
, who left the post of chief
financial officer in 1995 to run The
Disney Store Worldwide, returns as
chief financial officer and senior ex-
ecutive vice president.
February 9, 1996: The acquisition of
Capital Cities/ABC
becomes ef-
fective and CCB stock trades for the
last time.
(In millions)
February 9, 1996:
The Disney In-
stitute
opens at Walt Disney World.
February 22, 1996: Disney Online
launches
Disney.com
, a Web site
designed to promote a vast range of
Disney products on the Internet.
April 3, 1996: Disney and
Mattel
an-
nounce an agreement to expand
Mattel’s production of merchandise
associated with Disney characters.
May 15, 1996: Disney forms a part-
nership with the
California Angels
baseball team, in which Disney has a
25% interest and operating control.
May 22, 1996: The world’s largest
Disney Store
to date, at 40,000
square feet, opens on New York’s
Fifth Avenue and sets the all-time
record for single-day volume in a Dis-
ney Store.
May 23, 1996: Disney joins
McDonald’s
in a 10-year multina-
tional marketing alliance linking
McDonald’s 18,700 restaurants to
Disney film releases, theme parks
and home video releases.
July 17, 1996: Disney announces
plans to open
Disney’s California
Adventure
theme park in 2001 as
part of the expanded Disneyland
Resort in Anaheim.
August 29, 1996:
Disney/ABC In-
ternational Television
and the
KirchGroup enter an exclusive 10-
year pay television agreement that
provides this German media group
with the rights to Disney’s films in
Germany and German-speaking
Europe.
October 1, 1996:
Walt Disney
World
begins a 16-month-long cel-
ebration of its 25th anniversary.
October 1, 1996: The 52,000 square
foot
World of Disney Store
opens at Walt Disney World.
November 1, 1996: ESPN, Inc.,
launches
ESPNews
, a 24-hour-a-
day sports news network.
November 18, 1996:
Radio Dis-
ney
, a live, music-intensive radio
network for children debuts, offering
fun, high-energy entertainment and
family-oriented programming for kids
under the age of 12.
November 22, 1996: Disney sells
Los Angeles Television Channel 9,
KCAL
, to Young Broadcasting Inc.,
New York, for $387 million, a condi-
tion of the ABC acquisition.
November 27, 1996: A live action
version of
101 Dalmatians
is re-
leased and breaks the record for the
biggest theatrical Thanksgiving open-
ing ever.
November 27, 1996:
Disney Inter-
active
introduces the
101 Dalma-
tians Animated StoryBook, its first
computer software title released si-
multaneously with the film.
January 28, 1997: Comcast Corpo-
ration and ABC Cable Networks
agree to form a new organization to
acquire a majority interest in
E! En-
tertainment Television
, a cable
service that provides entertainment
programming as well as news and in-
formation about the entertainment
world and its personalities.
February 21, 1997:
Club Disney
,
an interactive children’s developmen-
tal play center and Disney’s first re-
gional entertainment concept, opens
its first unit in Thousand Oaks, Cali-
fornia.
February 24, 1997: Disney an-
nounces a joint venture with
Pixar
to create five animated films over the
next 10 years.
March 25, 1997: Disney announced
that its employees will commit
one
million hours of volunteer ser-
vice
through the year 2000 in re-
sponse to the Presidents’ Summit for
America’s Future.
March 28, 1997: Walt Disney World
opens the
Wide World of Sports
complex with an Atlanta Braves pre-
season baseball game.
Top: Miramax’s
The English Pa-
tient was both a financial and ar-
tistic success, earning over $78
million at the domestic box office
and the 1997 Academy Award
®
for Best Picture. Above: The
World of Disney Store’s vast ar-
ray of merchandise makes it dif-
ficult for customers to leave
empty-handed.
5
Top:
Mickey’s Toon Town, the
home of many Disney characters,
is a favorite destination for many
of the younger guests at Disney-
land. Above: ESPN-The Store
combines the strength of the
ESPN brand and Disney’s exper-
tise in retail stores.
Key Financial Ratios
The Walt Disney Company
1997 Fact Book
Left: Walt Disney World’s 25th
anniversary has attracted millions
of guests during the last year.
Below, left:
Mulan, Disney’s next
major animated feature, is
based on a Chinese legend.
Below: Roy E. Disney, vice chair-
man of the Board and chairman
of Feature Animation, is the son
of Roy O. Disney and nephew of
Walt Disney.
12
Year Ended Sept. 30
1997
1996
Operating Performance
Operating income/total revenues
19.0%
17.5%
Income before income taxes/total revenues
14.1%
12.8%
Net income/total revenues
8.2%
7.3%
Return on Investment
Net income/average stockholders’ equity
10.6%
9.2%
Net income/average total assets
4.8%
4.0%
Capital Structure
Borrowings/average stockholders’ equity
66.3%
78.2%
Borrowings/average total book capitalization
29.8%
33.9%
Borrowings/total market capitalization
20.5%
29.0%
Debt Service Coverage
Income before net interest and taxes/net interest
5.4x
4.7x
Note: Revenues, income and 1996 balance sheet information are presented on a pro forma basis, excluding non-recurring items.
Year Ended Sept. 30
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
Stock Price
High
$84
1/2
$69
3/4
$62
3/4
$48
5/8
$47
7/8
$41
1/8
$32
1/2
$34
1/8
$31
1/8
$20
$20
5/8
Low
$62
1/2
$53
3/8
$37
3/4
$37
1/8
$33
1/4
$25
7/8
$21
1/2
$21
23/32
$15
1/8
$10
5/16
$9
7/8
Close (September 30)
$80
5/8
$63
1/4
$57
3/8
$38
7/8
$37
3/4
$36
1/4
$28
1/2
$22
21/32
$30
7/32
$16
1/32
$19
13/32
Cash Dividends Per Share
$0.508 $0.420 $0.345 $0.288 $0.240 $0.201 $0.168 $0.139 $0.115 $0.095 $0.080
Quarterly Dividend as of Sept. 30 $0.133 $0.110 $0.090 $0.075
$0.063 $0.053 $0.044 $0.036 $0.030 $0.025 $0.020
Average Shares Outstanding (in millions) 687 689**
530
545
545
537
533
549
552
550 551
Price/Earnings Ratio 25.4x * 23.3x * 22.1x
19.1x 23.2x †23.8x 23.8x 15.1x 23.8x 16.9x 24.0x
Dividend Payout Ratio 16.0% * 15.5%
*
13.3%
14.3% 14.7% â€
13.2%
14.0%
9.3%
9.1%
10.0%
9.9%
Dividend Yield 0.7%
0.7%
0.6%
0.8%
0.6%
0.6%
0.6%
0.6%
0.4%
0.6%
0.4%
Book Value Per Share $25.76
$23.87
$ 1 2 . 6 9
$10.51
$9.39
$8.97
$7.43
$6.62
$5.62
$4.43
$ 3 . 5 0
Market Value of Equity (in millions) $54,099
$42,631
$30,076
$20,377
$20,215
$19,010
$14,843
$11,944
$16,354
$8,542
$10,223
*
Based on pre-goodwill pro forma earnings per share, excluding non-recurring items, of $3.18 in 1997 and $2.71 in 1996.
**
1996 shares outstanding are presented on a pro forma basis.
â€
The 1993 amounts exclude the impact of accounting changes and a Euro Disney reserve.
Disney Through the Decades
The Walt Disney Company
1997 Fact Book
April 2, 1997: Disney announces the
launch of the
The Disney Chan-
nel-Middle East
, bringing Disney
programming seven days a week, 24
hours a day, to 23 nations in the
Middle East and North Africa.
April 3, 1997: Disney purchases a
significant equity stake in
Starwave
Corporation
, a leading producer of
Internet media, and assumes opera-
tional control of the company.
April 4, 1997:
Knight-Ridder, Inc.
announces an agreement with Dis-
ney to purchase four newspapers
owned by ABC, Inc., for $1.65 bil-
lion.
April 8, 1997: Disney Channel and
ESPN reach a multi-year distribution
agreement with
TCI Communica-
tions Inc.
April 14, 1997: ABC, Inc. signs
agreements under which
ABC Ra-
dio
will acquire two radio stations:
WJZW-FM in Washington DC, and
WDRQ-FM in Detroit.
April 23, 1997: Disney Online intro-
duces
Disney’s Daily Blast
, the
Company’s first major offering of
kids’ content and programming on
the Internet.
May 6, 1997: ESPN announces
ESPN Magazine
, a new sports
magazine embodying the style of
ESPN, to debut in early 1998.
July 21, 1997: Disney agrees to pur-
chase
Mammoth Records
, one of
the top independent labels in the mu-
sic industry.
August 1, 1997:
Coronado
Springs Resort
opens at Walt Dis-
ney World.
August 6, 1997: Disney announces
its second regional entertainment
concept,
DisneyQuest
, a high-tech
virtual-reality entertainment center to
open in Orlando in 1998 and Chicago
in 1999.
Top:
The Lion King has had
record-shattering success on
Broadway since opening night on
November 13, 1997. Above:
Downtown Disney West Side
makes Walt Disney World nightlife
even more exciting, adding new
restaurants, clubs and stores.
6
September 3, 1997: ESPN reaches
an agreement to acquire
Classic
Sports Network
which features
the greatest games, heroes and sto-
ries in the history of sports.
September 4, 1997: Buena Vista
Home Entertainment announces that
it is entering the
Digital Video
Disc (DVD)
market in the US.
September 15, 1997:
Downtown
Disney West Side
opens at Walt
Disney World, showcasing a House
of Blues, a Wolfgang Puck’s restau-
rant, Bongos Cuban Café, Cirque
du Soleil and a Virgin Megastore.
September 16, 1997:
ESPN-The
Store
debuts in Glendale, California.
September 28, 1997:
The Wonder-
ful World of Disney
returns to its
original prime-time home on ABC.
October 14, 1997: ESPN announces
the launch of
The ESPN Zone
, a
sports-themed dining and entertain-
ment venue.
November 13, 1997:
The Lion
King
debuts on Broadway in the
newly refurbished
New
Amsterdam Theatre
.
November 26, 1997: Oriental Land
Company announces its intent to
proceed with
Tokyo DisneySea
,
a new theme park adjacent to Tokyo
Disneyland.
Club Disney brings quality Disney
entertainment to a local level.
Top:
A Bug’s Life will be Disney’s
second picture produced in asso-
ciation with Pixar.
Above: Disney’s Daily Blast
(www.Disneyblast.com) is quickly
becoming a popular destination
for kids on the Internet.
11
F
ISCAL
Y
EAR
-E
ND
S
TOCK
P
RICE
1955
1956
1967
1971
1972
1986
1992
2 for 1
2 for 1
2 for 1
2 for 1
4 for 1
4 for 1
1
2
4
8
16
64
256
Year Ended Sept. 30
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
Stock Price
High
$84
1/2
$69
3/4
$62
3/4
$48
5/8
$47
7/8
$41
1/8
$32
1/2
$34
1/8
$31
1/8
$20
$20
5/8
Low
$62
1/2
$53
3/8
$37
3/4
$37
1/8
$33
1/4
$25
7/8
$21
1/2
$21
23/32
$15
1/8
$10
5/16
$9
7/8
Close (September 30)
$80
5/8
$63
1/4
$57
3/8
$38
7/8
$37
3/4
$36
1/4
$28
1/2
$22
21/32
$30
7/32
$16
1/32
$19
13/32
Cash Dividends Per Share
$0.508 $0.420 $0.345 $0.288 $0.240 $0.201 $0.168 $0.139 $0.115 $0.095 $0.080
Quarterly Dividend as of Sept. 30 $0.133 $0.110 $0.090 $0.075
$0.063 $0.053 $0.044 $0.036 $0.030 $0.025 $0.020
Average Shares Outstanding (in millions) 687 689**
530
545
545
537
533
549
552
550 551
Price/Earnings Ratio 25.4x * 23.3x * 22.1x
19.1x 23.2x †23.8x 23.8x 15.1x 23.8x 16.9x 24.0x
Dividend Payout Ratio 16.0% * 15.5%
*
13.3%
14.3% 14.7% â€
13.2%
14.0%
9.3%
9.1%
10.0%
9.9%
Dividend Yield 0.7%
0.7%
0.6%
0.8%
0.6%
0.6%
0.6%
0.6%
0.4%
0.6%
0.4%
Book Value Per Share $25.76
$23.87
$ 1 2 . 6 9
$10.51
$9.39
$8.97
$7.43
$6.62
$5.62
$4.43
$ 3 . 5 0
Market Value of Equity (in millions) $54,099
$42,631
$30,076
$20,377
$20,215
$19,010
$14,843
$11,944
$16,354
$8,542
$10,223
*
Based on pre-goodwill pro forma earnings per share, excluding non-recurring items, of $3.18 in 1997 and $2.71 in 1996.
**
1996 shares outstanding are presented on a pro forma basis.
â€
The 1993 amounts exclude the impact of accounting changes and a Euro Disney reserve.
7
(In millions, except per share data)
Year Ended Sept. 30
1997
1996
1997
1996
Revenues Pro Forma
As Reported
Creative Content
$10,098
$9,564
$10,937
$10,159
Broadcasting
6,501
6,009
6,522
4,078
Theme Parks and Resorts
5,014
4,502
5,014
4,502
21,613
20,075
22,473
18,739
Costs and Expenses
Creative Content
8,405
8,129
9,055
8,598
Broadcasting
5,216
4,925
5,228
3,296
Theme Parks and Resorts
3,878
3,512
3,878
3,512
17,499
16,566
18,161
15,406
Operating Income
Creative Content
1,693
1,435
1,882
1,561
Broadcasting
1,285
1,084
1,294
782
Theme Parks and Resorts
1,136
990
1,136
990
4,114
3,509
4,312
3,333
Gain on sale of KCAL
0
0
135
0
Accounting change
for SFAS 121
0
(300)
0
(300)
4,114
3,209
4,447
3,033
Corporate Activities and Other
(367)
(249)
(367)
(309)
Net Interest Expense
(693)
(698)
(693)
(438)
Acquisition-related Costs
0
0
0
(225)
Income Before Income Taxes
3,054
2,262
3,387
2,061
Income Taxes
(1,282)
(988)
(1,421)
(847)
Net Income
$1,772
$1,274
$1,966
$1,214
Earnings Per Share
$2.58
$1.85
$2.86
$1.96
Net Income Excluding Non-recurring Items
$1,772
$1,457
$1,886
$1,534
Earnings Per Share Excluding Non-recurring Items
$2.58
$2.11
$2.75
$2.48
Average Common Shares Outstanding
687
689
687
619
(In millions, except per share data)
Notes:
1-Pro forma adjustments reflect the acquisition of ABC, sale of KCAL and the divestiture of certain publishing operations acquired
in the ABC acquisition, as if those events had occurred at the beginning of the years presented.
2-Non-recurring items refer to the gain on sale of KCAL, accounting change for SFAS 121 acquisition-related costs.
The Walt Disney Company
1997 Fact Book
Condensed Consolidated Statements of Income
Common Stock Statistics
The Walt Disney Company
1997 Fact Book
Type
Record Date
Issued
2 for 1
Aug. 17, 1956
Aug. 20, 1956
2 for 1
Oct. 26, 1967
Nov. 15, 1967
2 for 1
Feb. 4, 1971
March 1, 1971
2 for 1
Dec. 6, 1972
Jan. 15, 1973
4 for 1
Feb. 10, 1986
March 5, 1986
4 for 1
Apr. 20, 1992
May 15, 1992
10
S
TOCK
S
PLITS
1955
1956
1967
1971
1972
1986
1992
2 for 1
2 for 1
2 for 1
2 for 1
4 for 1
4 for 1
1
2
4
8
16
64
256
One share purchased in 1955 for $34, un-
touched for 42 years, totaled $20,640 as of Sep-
tember 30, 1997. This represents a 16% aver-
age annual return versus the S&P 500’s 8% av-
erage annual return over the same time period.
1
2
2
Condensed Consolidated balance Sheets
The Walt Disney Company
1997 Fact Book
8
Condensed Consolidated Statements of Cash Flows
The Walt Disney Company
1997 Fact Book
9
Year Ended Sept. 30
1997
1996
Net Income
$1,966
$1,214
Items Not Requiring Cash Outlays
Amortization of film and television costs
3,781
2,762
Depreciation
738
672
Amortization of intangible assets
439
301
Gain on sale of KCAL
(135)
—
Accounting change
—
300
Other
(15)
22
Changes in
Investments in trading securities
—
85
Receivables
(386)
(426)
Inventories
(6)
(95)
Other assets
(169)
(160)
Accounts and taxes payable and accrued liabilities
566
(246)
Unearned royalty and other advances
(7)
274
Deferred income taxes
(292)
(78)
5,098
3,411
Total Cash Provided by Operations
7,064
4,625
Investing Activities
Proceeds from disposal of KCAL
387
—
Proceeds from disposal of publishing operations
1,214
—
Acquisition of ABC, net of cash acquired
—
(8,432)
Film and television costs
(5,054)
(3,678)
Investments in theme parks, resorts and other property, net
(1,922)
(1,745)
Investment in and loan for E! Entertainment
(321)
—
Investments, net
(25)
391
Other
(180)
—
Total Investing Activities
(5,901)
(13,464)
Financing Activities
Borrowings
2,437
13,560
Proceeds from formation of REITs
1,312
—
Reduction of borrowings
(4,078)
(4,872)
Repurchases of common stock
(633)
(462)
Dividends
(342)
(271)
Exercise of stock options and other
180
85
Total Financing Activities
(1,124)
8,040
Increase (Decrease) in Cash and Cash Equivalents
39
(799)
Cash and Cash Equivalents, Beginning of Year
278
1,077
Cash and Cash Equivalents, End of Year
$
317
$
278
(In millions)
(In millions)
Year Ended Sept. 30
1997
1996
Assets
Cash and cash equivalents
$
317
$
278
Receivables
3,726
3,343
Inventories
942
951
Film and television costs
4,401
3,259
Investments
1,897
1,009
Theme parks, resorts and other property, at cost
Attractions, buildings and equipment
11,787
11,019
Accumulated depreciation
(4,857)
(4,448)
6,930
6,571
Projects in progress
1,928
1,342
Land
93
118
8,951
8,031
Intangible assets, net
16,011
18,045
Other assets
1,531
1,710
Total Assets
$
37,776
$
36,626
Liabilities and Stockholders’ Equity
A
ccounts payable and other accrued liabilities
$
5,577
$
5,694
Income taxes payable
995
582
Borrowings
11,068
12,342
Unearned royalty and other advances
1,172
1,179
Deferred income taxes
1,679
743
Stockholders’ equity
Common stock
8,534
8,576
Retained earnings
9,557
7,933
Cumulative translation and other
(12)
39
18,079
16,548
Treasury stock
(462)
(462)
Shares held by TWDC Stock Compensation Fund
(332)
—
17,285
16,086
Total Liabilities and Stockholders’ Equity
$
37,776
$
36,626
(In millions)
7,064
4,625
Total Cash Provided by Operations
Condensed Consolidated balance Sheets
The Walt Disney Company
1997 Fact Book
8
Condensed Consolidated Statements of Cash Flows
The Walt Disney Company
1997 Fact Book
9
Year Ended Sept. 30
1997
1996
Net Income
$1,966
$1,214
Items Not Requiring Cash Outlays
Amortization of film and television costs
3,781
2,762
Depreciation
738
672
Amortization of intangible assets
439
301
Gain on sale of KCAL
(135)
—
Accounting change
—
300
Other
(15)
22
Changes in
Investments in trading securities
—
85
Receivables
(386)
(426)
Inventories
(6)
(95)
Other assets
(169)
(160)
Accounts and taxes payable and accrued liabilities
566
(246)
Unearned royalty and other advances
(7)
274
Deferred income taxes
(292)
(78)
5,098
3,411
Total Cash Provided by Operations
7,064
4,625
Investing Activities
Proceeds from disposal of KCAL
387
—
Proceeds from disposal of publishing operations
1,214
—
Acquisition of ABC, net of cash acquired
—
(8,432)
Film and television costs
(5,054)
(3,678)
Investments in theme parks, resorts and other property, net
(1,922)
(1,745)
Investment in and loan for E! Entertainment
(321)
—
Investments, net
(25)
391
Other
(180)
—
Total Investing Activities
(5,901)
(13,464)
Financing Activities
Borrowings
2,437
13,560
Proceeds from formation of REITs
1,312
—
Reduction of borrowings
(4,078)
(4,872)
Repurchases of common stock
(633)
(462)
Dividends
(342)
(271)
Exercise of stock options and other
180
85
Total Financing Activities
(1,124)
8,040
Increase (Decrease) in Cash and Cash Equivalents
39
(799)
Cash and Cash Equivalents, Beginning of Year
278
1,077
Cash and Cash Equivalents, End of Year
$
317
$
278
(In millions)
(In millions)
Year Ended Sept. 30
1997
1996
Assets
Cash and cash equivalents
$
317
$
278
Receivables
3,726
3,343
Inventories
942
951
Film and television costs
4,401
3,259
Investments
1,897
1,009
Theme parks, resorts and other property, at cost
Attractions, buildings and equipment
11,787
11,019
Accumulated depreciation
(4,857)
(4,448)
6,930
6,571
Projects in progress
1,928
1,342
Land
93
118
8,951
8,031
Intangible assets, net
16,011
18,045
Other assets
1,531
1,710
Total Assets
$
37,776
$
36,626
Liabilities and Stockholders’ Equity
A
ccounts payable and other accrued liabilities
$
5,577
$
5,694
Income taxes payable
995
582
Borrowings
11,068
12,342
Unearned royalty and other advances
1,172
1,179
Deferred income taxes
1,679
743
Stockholders’ equity
Common stock
8,534
8,576
Retained earnings
9,557
7,933
Cumulative translation and other
(12)
39
18,079
16,548
Treasury stock
(462)
(462)
Shares held by TWDC Stock Compensation Fund
(332)
—
17,285
16,086
Total Liabilities and Stockholders’ Equity
$
37,776
$
36,626
(In millions)
7,064
4,625
Total Cash Provided by Operations
Year Ended Sept. 30
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
Stock Price
High
$84
1/2
$69
3/4
$62
3/4
$48
5/8
$47
7/8
$41
1/8
$32
1/2
$34
1/8
$31
1/8
$20
$20
5/8
Low
$62
1/2
$53
3/8
$37
3/4
$37
1/8
$33
1/4
$25
7/8
$21
1/2
$21
23/32
$15
1/8
$10
5/16
$9
7/8
Close (September 30)
$80
5/8
$63
1/4
$57
3/8
$38
7/8
$37
3/4
$36
1/4
$28
1/2
$22
21/32
$30
7/32
$16
1/32
$19
13/32
Cash Dividends Per Share
$0.508 $0.420 $0.345 $0.288 $0.240 $0.201 $0.168 $0.139 $0.115 $0.095 $0.080
Quarterly Dividend as of Sept. 30 $0.133 $0.110 $0.090 $0.075
$0.063 $0.053 $0.044 $0.036 $0.030 $0.025 $0.020
Average Shares Outstanding (in millions) 687 689**
530
545
545
537
533
549
552
550 551
Price/Earnings Ratio 25.4x * 23.3x * 22.1x
19.1x 23.2x †23.8x 23.8x 15.1x 23.8x 16.9x 24.0x
Dividend Payout Ratio 16.0% * 15.5%
*
13.3%
14.3% 14.7% â€
13.2%
14.0%
9.3%
9.1%
10.0%
9.9%
Dividend Yield 0.7%
0.7%
0.6%
0.8%
0.6%
0.6%
0.6%
0.6%
0.4%
0.6%
0.4%
Book Value Per Share $25.76
$23.87
$ 1 2 . 6 9
$10.51
$9.39
$8.97
$7.43
$6.62
$5.62
$4.43
$ 3 . 5 0
Market Value of Equity (in millions) $54,099
$42,631
$30,076
$20,377
$20,215
$19,010
$14,843
$11,944
$16,354
$8,542
$10,223
*
Based on pre-goodwill pro forma earnings per share, excluding non-recurring items, of $3.18 in 1997 and $2.71 in 1996.
**
1996 shares outstanding are presented on a pro forma basis.
â€
The 1993 amounts exclude the impact of accounting changes and a Euro Disney reserve.
7
(In millions, except per share data)
Year Ended Sept. 30
1997
1996
1997
1996
Revenues Pro Forma
As Reported
Creative Content
$10,098
$9,564
$10,937
$10,159
Broadcasting
6,501
6,009
6,522
4,078
Theme Parks and Resorts
5,014
4,502
5,014
4,502
21,613
20,075
22,473
18,739
Costs and Expenses
Creative Content
8,405
8,129
9,055
8,598
Broadcasting
5,216
4,925
5,228
3,296
Theme Parks and Resorts
3,878
3,512
3,878
3,512
17,499
16,566
18,161
15,406
Operating Income
Creative Content
1,693
1,435
1,882
1,561
Broadcasting
1,285
1,084
1,294
782
Theme Parks and Resorts
1,136
990
1,136
990
4,114
3,509
4,312
3,333
Gain on sale of KCAL
0
0
135
0
Accounting change
for SFAS 121
0
(300)
0
(300)
4,114
3,209
4,447
3,033
Corporate Activities and Other
(367)
(249)
(367)
(309)
Net Interest Expense
(693)
(698)
(693)
(438)
Acquisition-related Costs
0
0
0
(225)
Income Before Income Taxes
3,054
2,262
3,387
2,061
Income Taxes
(1,282)
(988)
(1,421)
(847)
Net Income
$1,772
$1,274
$1,966
$1,214
Earnings Per Share
$2.58
$1.85
$2.86
$1.96
Net Income Excluding Non-recurring Items
$1,772
$1,457
$1,886
$1,534
Earnings Per Share Excluding Non-recurring Items
$2.58
$2.11
$2.75
$2.48
Average Common Shares Outstanding
687
689
687
619
(In millions, except per share data)
Notes:
1-Pro forma adjustments reflect the acquisition of ABC, sale of KCAL and the divestiture of certain publishing operations acquired
in the ABC acquisition, as if those events had occurred at the beginning of the years presented.
2-Non-recurring items refer to the gain on sale of KCAL, accounting change for SFAS 121 acquisition-related costs.
The Walt Disney Company
1997 Fact Book
Condensed Consolidated Statements of Income
Common Stock Statistics
The Walt Disney Company
1997 Fact Book
Type
Record Date
Issued
2 for 1
Aug. 17, 1956
Aug. 20, 1956
2 for 1
Oct. 26, 1967
Nov. 15, 1967
2 for 1
Feb. 4, 1971
March 1, 1971
2 for 1
Dec. 6, 1972
Jan. 15, 1973
4 for 1
Feb. 10, 1986
March 5, 1986
4 for 1
Apr. 20, 1992
May 15, 1992
10
S
TOCK
S
PLITS
1955
1956
1967
1971
1972
1986
1992
2 for 1
2 for 1
2 for 1
2 for 1
4 for 1
4 for 1
1
2
4
8
16
64
256
One share purchased in 1955 for $34, un-
touched for 42 years, totaled $20,640 as of Sep-
tember 30, 1997. This represents a 16% aver-
age annual return versus the S&P 500’s 8% av-
erage annual return over the same time period.
1
2
2
Year Ended Sept. 30
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
Stock Price
High
$84
1/2
$69
3/4
$62
3/4
$48
5/8
$47
7/8
$41
1/8
$32
1/2
$34
1/8
$31
1/8
$20
$20
5/8
Low
$62
1/2
$53
3/8
$37
3/4
$37
1/8
$33
1/4
$25
7/8
$21
1/2
$21
23/32
$15
1/8
$10
5/16
$9
7/8
Close (September 30)
$80
5/8
$63
1/4
$57
3/8
$38
7/8
$37
3/4
$36
1/4
$28
1/2
$22
21/32
$30
7/32
$16
1/32
$19
13/32
Cash Dividends Per Share
$0.508 $0.420 $0.345 $0.288 $0.240 $0.201 $0.168 $0.139 $0.115 $0.095 $0.080
Quarterly Dividend as of Sept. 30 $0.133 $0.110 $0.090 $0.075
$0.063 $0.053 $0.044 $0.036 $0.030 $0.025 $0.020
Average Shares Outstanding (in millions) 687 689**
530
545
545
537
533
549
552
550 551
Price/Earnings Ratio 25.4x * 23.3x * 22.1x
19.1x 23.2x †23.8x 23.8x 15.1x 23.8x 16.9x 24.0x
Dividend Payout Ratio 16.0% * 15.5%
*
13.3%
14.3% 14.7% â€
13.2%
14.0%
9.3%
9.1%
10.0%
9.9%
Dividend Yield 0.7%
0.7%
0.6%
0.8%
0.6%
0.6%
0.6%
0.6%
0.4%
0.6%
0.4%
Book Value Per Share $25.76
$23.87
$ 1 2 . 6 9
$10.51
$9.39
$8.97
$7.43
$6.62
$5.62
$4.43
$ 3 . 5 0
Market Value of Equity (in millions) $54,099
$42,631
$30,076
$20,377
$20,215
$19,010
$14,843
$11,944
$16,354
$8,542
$10,223
*
Based on pre-goodwill pro forma earnings per share, excluding non-recurring items, of $3.18 in 1997 and $2.71 in 1996.
**
1996 shares outstanding are presented on a pro forma basis.
â€
The 1993 amounts exclude the impact of accounting changes and a Euro Disney reserve.
Disney Through the Decades
The Walt Disney Company
1997 Fact Book
April 2, 1997: Disney announces the
launch of the
The Disney Chan-
nel-Middle East
, bringing Disney
programming seven days a week, 24
hours a day, to 23 nations in the
Middle East and North Africa.
April 3, 1997: Disney purchases a
significant equity stake in
Starwave
Corporation
, a leading producer of
Internet media, and assumes opera-
tional control of the company.
April 4, 1997:
Knight-Ridder, Inc.
announces an agreement with Dis-
ney to purchase four newspapers
owned by ABC, Inc., for $1.65 bil-
lion.
April 8, 1997: Disney Channel and
ESPN reach a multi-year distribution
agreement with
TCI Communica-
tions Inc.
April 14, 1997: ABC, Inc. signs
agreements under which
ABC Ra-
dio
will acquire two radio stations:
WJZW-FM in Washington DC, and
WDRQ-FM in Detroit.
April 23, 1997: Disney Online intro-
duces
Disney’s Daily Blast
, the
Company’s first major offering of
kids’ content and programming on
the Internet.
May 6, 1997: ESPN announces
ESPN Magazine
, a new sports
magazine embodying the style of
ESPN, to debut in early 1998.
July 21, 1997: Disney agrees to pur-
chase
Mammoth Records
, one of
the top independent labels in the mu-
sic industry.
August 1, 1997:
Coronado
Springs Resort
opens at Walt Dis-
ney World.
August 6, 1997: Disney announces
its second regional entertainment
concept,
DisneyQuest
, a high-tech
virtual-reality entertainment center to
open in Orlando in 1998 and Chicago
in 1999.
Top:
The Lion King has had
record-shattering success on
Broadway since opening night on
November 13, 1997. Above:
Downtown Disney West Side
makes Walt Disney World nightlife
even more exciting, adding new
restaurants, clubs and stores.
6
September 3, 1997: ESPN reaches
an agreement to acquire
Classic
Sports Network
which features
the greatest games, heroes and sto-
ries in the history of sports.
September 4, 1997: Buena Vista
Home Entertainment announces that
it is entering the
Digital Video
Disc (DVD)
market in the US.
September 15, 1997:
Downtown
Disney West Side
opens at Walt
Disney World, showcasing a House
of Blues, a Wolfgang Puck’s restau-
rant, Bongos Cuban Café, Cirque
du Soleil and a Virgin Megastore.
September 16, 1997:
ESPN-The
Store
debuts in Glendale, California.
September 28, 1997:
The Wonder-
ful World of Disney
returns to its
original prime-time home on ABC.
October 14, 1997: ESPN announces
the launch of
The ESPN Zone
, a
sports-themed dining and entertain-
ment venue.
November 13, 1997:
The Lion
King
debuts on Broadway in the
newly refurbished
New
Amsterdam Theatre
.
November 26, 1997: Oriental Land
Company announces its intent to
proceed with
Tokyo DisneySea
,
a new theme park adjacent to Tokyo
Disneyland.
Club Disney brings quality Disney
entertainment to a local level.
Top:
A Bug’s Life will be Disney’s
second picture produced in asso-
ciation with Pixar.
Above: Disney’s Daily Blast
(www.Disneyblast.com) is quickly
becoming a popular destination
for kids on the Internet.
11
F
ISCAL
Y
EAR
-E
ND
S
TOCK
P
RICE
1955
1956
1967
1971
1972
1986
1992
2 for 1
2 for 1
2 for 1
2 for 1
4 for 1
4 for 1
1
2
4
8
16
64
256
February 9, 1996:
The Disney In-
stitute
opens at Walt Disney World.
February 22, 1996: Disney Online
launches
Disney.com
, a Web site
designed to promote a vast range of
Disney products on the Internet.
April 3, 1996: Disney and
Mattel
an-
nounce an agreement to expand
Mattel’s production of merchandise
associated with Disney characters.
May 15, 1996: Disney forms a part-
nership with the
California Angels
baseball team, in which Disney has a
25% interest and operating control.
May 22, 1996: The world’s largest
Disney Store
to date, at 40,000
square feet, opens on New York’s
Fifth Avenue and sets the all-time
record for single-day volume in a Dis-
ney Store.
May 23, 1996: Disney joins
McDonald’s
in a 10-year multina-
tional marketing alliance linking
McDonald’s 18,700 restaurants to
Disney film releases, theme parks
and home video releases.
July 17, 1996: Disney announces
plans to open
Disney’s California
Adventure
theme park in 2001 as
part of the expanded Disneyland
Resort in Anaheim.
August 29, 1996:
Disney/ABC In-
ternational Television
and the
KirchGroup enter an exclusive 10-
year pay television agreement that
provides this German media group
with the rights to Disney’s films in
Germany and German-speaking
Europe.
October 1, 1996:
Walt Disney
World
begins a 16-month-long cel-
ebration of its 25th anniversary.
October 1, 1996: The 52,000 square
foot
World of Disney Store
opens at Walt Disney World.
November 1, 1996: ESPN, Inc.,
launches
ESPNews
, a 24-hour-a-
day sports news network.
November 18, 1996:
Radio Dis-
ney
, a live, music-intensive radio
network for children debuts, offering
fun, high-energy entertainment and
family-oriented programming for kids
under the age of 12.
November 22, 1996: Disney sells
Los Angeles Television Channel 9,
KCAL
, to Young Broadcasting Inc.,
New York, for $387 million, a condi-
tion of the ABC acquisition.
November 27, 1996: A live action
version of
101 Dalmatians
is re-
leased and breaks the record for the
biggest theatrical Thanksgiving open-
ing ever.
November 27, 1996:
Disney Inter-
active
introduces the
101 Dalma-
tians Animated StoryBook, its first
computer software title released si-
multaneously with the film.
January 28, 1997: Comcast Corpo-
ration and ABC Cable Networks
agree to form a new organization to
acquire a majority interest in
E! En-
tertainment Television
, a cable
service that provides entertainment
programming as well as news and in-
formation about the entertainment
world and its personalities.
February 21, 1997:
Club Disney
,
an interactive children’s developmen-
tal play center and Disney’s first re-
gional entertainment concept, opens
its first unit in Thousand Oaks, Cali-
fornia.
February 24, 1997: Disney an-
nounces a joint venture with
Pixar
to create five animated films over the
next 10 years.
March 25, 1997: Disney announced
that its employees will commit
one
million hours of volunteer ser-
vice
through the year 2000 in re-
sponse to the Presidents’ Summit for
America’s Future.
March 28, 1997: Walt Disney World
opens the
Wide World of Sports
complex with an Atlanta Braves pre-
season baseball game.
Top: Miramax’s
The English Pa-
tient was both a financial and ar-
tistic success, earning over $78
million at the domestic box office
and the 1997 Academy Award
®
for Best Picture. Above: The
World of Disney Store’s vast ar-
ray of merchandise makes it dif-
ficult for customers to leave
empty-handed.
5
Top:
Mickey’s Toon Town, the
home of many Disney characters,
is a favorite destination for many
of the younger guests at Disney-
land. Above: ESPN-The Store
combines the strength of the
ESPN brand and Disney’s exper-
tise in retail stores.
Key Financial Ratios
The Walt Disney Company
1997 Fact Book
Left: Walt Disney World’s 25th
anniversary has attracted millions
of guests during the last year.
Below, left:
Mulan, Disney’s next
major animated feature, is
based on a Chinese legend.
Below: Roy E. Disney, vice chair-
man of the Board and chairman
of Feature Animation, is the son
of Roy O. Disney and nephew of
Walt Disney.
12
Year Ended Sept. 30
1997
1996
Operating Performance
Operating income/total revenues
19.0%
17.5%
Income before income taxes/total revenues
14.1%
12.8%
Net income/total revenues
8.2%
7.3%
Return on Investment
Net income/average stockholders’ equity
10.6%
9.2%
Net income/average total assets
4.8%
4.0%
Capital Structure
Borrowings/average stockholders’ equity
66.3%
78.2%
Borrowings/average total book capitalization
29.8%
33.9%
Borrowings/total market capitalization
20.5%
29.0%
Debt Service Coverage
Income before net interest and taxes/net interest
5.4x
4.7x
Note: Revenues, income and 1996 balance sheet information are presented on a pro forma basis, excluding non-recurring items.
Disney Through the Decades
The Walt Disney Company
1997 Fact Book
Top: ABC is known for its exten-
sive and detailed news coverage.
Above: The ESPN brand is a pow-
erful asset for The Walt Disney
Company.
4
Top: In December 1995, Disney
acquired the Pan Pacific Hotel
and renamed it the Disneyland
Pacific Hotel. Above:
The Lion
King home video is the top-sell-
ing video of all time.
Creative Content
The Walt Disney Company
1997 Fact Book
B
UENA
V
ISTA
H
OME
V
IDEO
T
OP
-S
ELLING
D
OMESTIC
T
ITLES
Title
Industry Rank
The Lion King
1
Snow White and the Seven Dwarfs
2
Aladdin
3
Beauty and the Beast
4
Cinderella
5
Toy Story
6
Bambi
7
Pocahontas
9
101 Dalmatians (animated)
11
Pinocchio
12
The Fox and the Hound
13
Fantasia
15
Sleeping Beauty
18
The Aristocats
19
T
OP
-S
ELLING
I
NTERNATIONAL
T
ITLES
Title
Industry Rank
The Lion King
1
Snow White and the Seven Dwarfs
2
Aladdin
3
The Jungle Book
4
101 Dalmatians (animated)
5
Beauty and the Beast
6
Toy Story
7
Pocahontas
9
Bambi
10
!!!
!!!
!!!
FAST FACTS
Mulan, due to be released in June 1998,
will be Disney’s 36
th
full-length animated
feature.
Creative Content results benefited from
five fiscal 1997 releases that made
roughly $100 million or more at the
domestic box office:
Ransom, 101 Dal-
matians, Con Air, Hercules, and George
of the Jungle.
Buena Vista International passed
$1 billion at the box office this year,
faster than any other distributor ever
has, and became the first international
distributor to reach this figure three
years in a row.
Japan
18%
Rankings as of Sept. 30, 1997.
Top:
Con Air, a summer block-
buster starring Nicolas Cage, con-
tributed to Disney’s success this
year.
Above: Winnie the Pooh contin-
ues to gain popularity, resulting
in strong Pooh merchandise per-
formance.
13
1997 M
ERCHANDISE
L
ICENSING
R
EVENUES
Domestic
42%
International
58%
’97
’96
’95
âž
A Goofy Movie
âž
Pocahontas
âž
Snow White and
the Seven Dwarfs
âž
The Lion King
âž
A Goofy Movie
âž
Toy Story
âž
Oliver &
Company
âž
James and the
Giant Peach
âž
The Hunchback
of Notre Dame
âž
Cinderella
âž
Pocahontas
âž
The Many
Adventures of
Winnie the Pooh
âž
The Aristocats
âž
Aladdin and the
King of Thieves
âž
Oliver &
Company
Fiscal Year Domestic
Animated Release
Schedule
Theatrical
Home Video
Creative Content
Pro Forma
Operating Income
1997
1996
$1,435
$1,693
Revenues
1996
1997
$10,098
$9,564
âž
Hercules
âž
James and the
Giant Peach
âž
Toy Story
âž
Bambi
âž
The Hunchback of
Notre Dame
âž
Fun and Fancy Free
âž
Pooh’s Grand
Adventure
âž
Sleeping Beauty
T
HE
D
ISNEY
S
TORE
, I
NC
.
93 94 95 96 97
N. America
214 273 337 402 460
Europe
19
37 63 82 101
Asia-Pacific 6 14 29 46 75
Total
239 324 429 530 636
(Stores as of 9/30)
September 15, 1992: Disney Chan-
nel presents the first annual perfor-
mance of
Disney’s Young Musi-
cians Symphony Orchestra
.
September 30, 1992: Disney’s
Filmed Entertainment
group be-
comes the first studio to earn over
$500 million in a single year.
December 9, 1992: The National
Hockey League awards Disney a
franchise that would later become
The
Mighty Ducks of Anaheim
.
January 24, 1993:
Mickey’s
Toontown
opens at Disneyland.
June 30, 1993: Buena Vista Pictures
Distribution acquires
Miramax
Film
Corporation.
July 21, 1993: The Walt Disney Com-
pany raises $300 million from a his-
toric
100-year bond issue.
February 16, 1994: Disney commits
$500,000 to create
Disney
GOALS
, a program designed to of-
fer organized athletics, supplemen-
tary education and community ser-
vice to local underprivileged youths.
April 3, 1994:
Frank Wells
, presi-
dent and chief operating officer, dies.
April 18, 1994: Disney’s first stage
show
,
Beauty and the Beast: A
New Musical
, officially opens on
Broadway, breaking attendance and
box-office records.
June 2, 1994:
Sunset Boulevard
,
the location for
The Twilight Zone
â„¢
Tower of Terror attraction, opens at
Disney-MGM Studios.
June 24, 1994: Walt Disney Pictures
releases
The Lion King
, which be-
comes Disney’s most profitable film
ever.
July 3, 1994:
The Lion King
soundtrack
hits #1 on the Billboard
chart, where it stays for nine con-
secutive weeks.
September 6, 1994: Disney Theme
Parks welcome their
one billionth
guest.
October 20, 1994: The Walt Disney
Company sells a portion of its shares
in
Euro Disney S.C.A.
, operator
of Disneyland Paris, to a Saudi Ara-
bian investor, reducing its ownership
interest to 39%.
November 4, 1994: The first
Walt
Disney Gallery
opens at
MainPlace in Santa Ana, California.
March 3, 1995: The
Indiana
Jones
â„¢
Adventure
opens at Dis-
neyland.
March 3, 1995:
The Lion King be-
comes the
top-selling
home
video
of all time, selling over 30 mil-
lion units domestically and surpass-
ing the record set in 1994 by
Snow
White and the Seven Dwarfs.
June 1, 1995:
Space Mountain
opens at
Disneyland Paris.
July 13, 1995: The
Pocahontas
soundtrack
reaches #1 on the Bill-
board chart.
July 31, 1995: The Walt Disney Com-
pany announces its intention to ac-
quire
Capital Cities/ABC
for ap-
proximately $19 billion.
December 11, 1995: Disney com-
pletes the purchase of the Pan Pa-
cific Hotel, just south of The Disney-
land Hotel, and renames it the
Dis-
neyland Pacific Hotel
.
January 4, 1996: Stockholders of
Disney and
Capital Cities/ABC
approve the merger in their respec-
tive
Special Meetings of Share-
holders
held in New York City.
February 6, 1996:
Richard
Nanula
, who left the post of chief
financial officer in 1995 to run The
Disney Store Worldwide, returns as
chief financial officer and senior ex-
ecutive vice president.
February 9, 1996: The acquisition of
Capital Cities/ABC
becomes ef-
fective and CCB stock trades for the
last time.
(In millions)
July 8, 1981: In exchange for
888,461 shares of its common stock,
valued at $46.2 million, Walt Disney
Productions
acquires the rights
to Walt Disney’s name, like-
ness and portrait
, as well as the
steam train and monorail systems at
Disneyland, from Retlaw Enterprises.
October 1, 1982:
Epcot
opens at
Walt Disney World.
April 1, 1983:
Walt Disney Pic-
tures
is incorporated as a separate
company responsible for the devel-
opment, production and marketing of
all live-action films and commercial
television programming.
April 15, 1983:
Tokyo Disneyland
opens six miles from downtown To-
kyo.
April 18, 1983:
Disney Channel
first broadcasts cable television pro-
gramming.
March 9, 1984:
Touchstone Pic-
tures
releases its first film,
Splash.
June 6, 1984: Walt Disney Produc-
tions acquires
Arvida Corpora-
tion
from Bass family interests and
Arvida’s management in exchange for
3.3 million shares of Disney common
stock, valued at $200 million.
June 8, 1984: MM Acquisition Cor-
poration, a company formed by Saul
Steinberg of
Reliance Group
Holdings
, announces its intent to
take over
and dismantle
Walt Dis-
ney Productions
by offering
$67.50 a share for Disney common
stock.
June 11, 1984: Walt Disney Produc-
tions
repurchases 4.2 million
shares
(approximately 11.1%) of
Disney common stock
from Reli-
ance
for $328 million.
September 23, 1984: Walt Disney
Productions welcomes
Michael D.
Eisner
as chairman/CEO and
Frank G. Wells
as president/
COO.
February 6, 1986: Walt Disney Pro-
ductions changes its name to
The
Walt Disney Company
.
March 28, 1987: The first
Disney
Store
opens at the Glendale Galle-
ria in Glendale, California.
January 21, 1988: The Walt Disney
Company acquires the
Wrather
Corporation
, whose assets in-
clude the Disneyland Hotel, land near
Disneyland and leasehold interests
in the Queen Mary and Spruce
Goose, for approximately $161 mil-
lion in cash and $89 million in debt.
June 1, 1988: The opening of
Disney’s Grand Floridian Re-
sort
ushers in an era of accelerated
hotel buildout at Walt Disney World
during which 11 new resort hotels
have been added to date.
May 1, 1989: The
Disney-MGM
Studios
Theme Park and the
Plea-
sure Island
entertainment complex
open at Walt Disney World.
November 6, 1989: 51% of
Euro
Disney S.C.A.
’s 170 million shares
are offered to European investors at
FF72 per share. A subsidiary of The
Walt Disney Company owns the re-
maining 49%.
July 18, 1990:
Hollywood Pic-
tures
releases its first film,
Arachnophobia.
November 1, 1990: The first
inter-
national Disney Store
opens on
London’s Regent Street.
November 4, 1990: Disney Channel
presents its first
American
Teacher Awards
in a ceremony at
the Pantages Theater in Hollywood.
May 6, 1991: The Walt Disney Com-
pany replaces USX Corporation in
the
Dow Jones
30 Industrials.
April 12, 1992: Euro Disney (later re-
named
Disneyland Paris
) opens
20 miles outside of Paris, France.
Top: In 10 years, The Disney Store
has grown from just one store in
Glendale, California, to over 600
stores around the world.
Middle: Epcot allows guests to
explore the 21st century in Future
World and “take a walk around
the world†in World Showcase.
Above: The True-Life Adventure
series included
The Living Desert,
the first film distributed by Buena
Vista Pictures Distribution.
3
O
WNED
AND
O
PERATED
TV S
TATIONS
Broadcasting
The Walt Disney Company
1997 Fact Book
!!!
!!!
!!!
FAST FACTS
At the end of fiscal 1997, ESPN
reached 152 million households inter-
nationally. Domestically, ESPN played
in 72 million households, 50 million
households subscribed to ESPN2 and
ESPNews, at the end of its first year,
boasted roughly 5 million subscriber
households.
There are currently six international Dis-
ney Channels, each specifically tailored
to a particular market. The Channels op-
erate in Taiwan, the United Kingdom,
Australia, Malaysia, France, and the
Middle East.
Monday Night Football aired its 28th
season on ABC in 1997.
R
ADIO
S
TATION
L
IST
D
ISNEY
C
HANNEL
D
OMESTIC
S
UBSCRIBERS
D
ISNEY
’
S
C
ABLE
H
OLDINGS
Channel
Disney’s Interest
Launch Date
ESPN
80%
Sept. 1979
ESPN2
80%
Oct. 1993
ESPNews
80%
Nov. 1996
Disney Channel
100%
Apr. 1983
A&E
37.5%
Feb. 1984
History Channel
37.5%
Jan. 1995
Lifetime
50%
Feb. 1984
E! Entertainment
39.6%
June 1990
Classic Sports Network
80%
May 1995
Top:
NFL Countdown continues
its 11th year on ESPN.
Above:
Dharma & Greg is a popu-
lar addition to ABC’s 1997/98
prime time line-up.
14
City
AM Station
New York
WABC
770
1
Los Angeles
KABC
790
2
KTZN
710
3
Chicago
WLS
890
1
San Francisco
KGO
810
1
KSFO
560
2
Detroit
WJR
760
1
Dallas/Ft. Worth
WBAP
820
1
Washington, D.C.
WMAL
630
1
Atlanta
WDWD
590
3
Minneapolis/St. Paul
KDIZ
1440
3
Formats
: 1-News/Talk; 2-Talk; 3-Radio Disney
City
FM Station
New York
WPLJ
95.5
1
Los Angeles
KLOS
95.5
2
Chicago
WXCD
94.7
2
Detroit
WPLT
96.3
5
WDRQ
93.1
4
Dallas/Ft. Worth
KSCS
96.3
3
Washington, D.C.
WRQX 107.3
1
WJZW 105.9
6
Atlanta
WKHX 101.5
3
WYAY 106.7
3
Minneapolis/St. Paul
KQRS
92.5
2
KXXR
93.7
2
KZNR 105.1
5
KZNT 105.3
5
KZNZ 105.7
5
Formats
: 1-Adult Contemporary; 2-Rock; 3-Country;
4-Dance/Top 40; 5-Alternative; 6-Smooth Jazz
Broadcasting
Pro Forma
Operating Income
1997
1996
$1,084
$1,285
Revenues
1996
1997
$6,501
$6,009
0
5
10
15
20
25
30 million
83 84 85 86 87 88 89 90 91 92 93 94 95 96 97
30 Million In 1997
(In millions)
(as of 9/30)
City
Station Channel
New York
WABC
7
Los Angeles
KABC
7
Chicago
WLS
7
Philadelphia
WPVI
6
San Francisco
KGO
7
Houston
KTRK
13
Raleigh-Durham
WTVD
11
Fresno
KFSN
30
Flint`
WJRT
12
Toledo
WTVG
13
!!!
!!!
!!!
Theme Parks and Resorts
The Walt Disney Company
1997 Fact Book
T
WO
W
HOLE
N
EW
W
ORLDS
In 1998, Disney will launch its new cruise ship line and open the gates
to a new theme park in Florida. Here are a few facts about these new
ventures at sea and on land:
D
ISNEY
C
RUISE
L
INE
Disney will take to the seas in April 1998 with the launch of
Disney Magic,
followed by
Disney Wonder in December 1998. Each ship has 875 state-
rooms and will sail from Port Canaveral, Florida, on a three- or four-day
cruise with ports of call at Nassau and Castaway Cay, Disney’s private
island.
D
ISNEY
’
S
A
NIMAL
K
INGDOM
The fourth Walt Disney World theme park opens in April 1998. At
over 500 acres, the park will be home to more than 200 species of
animals and 4,000 varieties of trees and plants. Themed lands
include: The Oasis, Safari Village, Dinoland U.S.A., Character Grove
(working title), Conservation Station, Africa and, later, Asia.
FAST FACTS
Disney’s theme parks are the most
at-
tended in the world. Current Disney
Theme Parks include: Magic Kingdom,
Disney-MGM Studios, Epcot, Disney-
land, Tokyo Disneyland and Disneyland
Paris.
Disney’s Animal Kingdom, Walt Disney
World’s 4th gate, will open in the spring
of 1998. Both Disney’s California Ad-
venture next to Disneyland and Tokyo
DisneySea next to Tokyo Disneyland,
are scheduled to open in 2001.
In 1997 the Magic Kingdom at Walt Dis-
ney World broke its own annual atten-
dance record and became the highest-
attended theme park in the world.
R
ESORTS
AND
C
ONVENTION
S
PACE
Opening
Hotel
Gross Meeting
Walt Disney World Date Class Rooms Space (Sq. Ft.)
Contemporary Resort
Oct-71
Premium
1,041
90,000
Polynesian Resort
Oct-71
Premium
853
0
Fort Wilderness Campsites
Nov-71
—
784
0
Fort Wilderness Trailers
Nov-71
—
408
0
Disney Institute
(nee Disney Village Resort)
Jan-72
Premium
584
0
Grand Floridian Beach Resort
Jul-88
Premium
900
40,000
Caribbean Beach Resort
Oct-88
Moderate
2,112
0
Yacht Club Resort
Nov-90
Premium
630
73,000
Beach Club Resort
Nov-90
Premium
583
0
Port Orleans
May-91
Moderate
1,008
0
Dixie Landings
Feb-92
Moderate
2,048
0
All-Star Sports Resort
May-94
Economy
1,920
0
Wilderness Lodge
May-94
First Class
728
0
All-Star Music Resort
Nov-94
Economy
1,920
0
BoardWalk Inn
Jul-96
Premium
378
20,000
Coronado Springs
Aug-97
Moderate
1,967
95,000
Disneyland
Acquired
The Disneyland Hotel
Summer-88
Premium
1,136
150,000
Disneyland Pacific Hotel
Dec-95
Premium
502
26,000
Total
19,502
494,000
Non-Disney Owned Resorts at WDW
6,280 486,854
Top, left: The renovated Tomorrowland at Disneyland, opening in
Spring ’98. Middle, left: In August, 1997, the opening of Coronado
Springs brought 1,967 new hotel rooms and an additional 95,000
square feet of convention space to Walt Disney World. Left: Disney’s
Theme Parks make all their guests feel young.
A
DULT
1-D
AY
P
ASS
P
RICE
H
ISTORY
Walt Disney Calendar
World
Year Disneyland
$28.00
1987
$21.50
28.00
1988
23.50
30.65
1989
25.50
32.75
1990
27.50
34.85
1991
27.50
35.90
1992
28.75
36.95
1993
30.00
38.00
1994
31.00
39.22
1995
33.00
40.81
1996
34.00
42.14 1997
36.00
Prices include sales tax where applicable
15
Theme Parks and Resorts
Operating Income
1997
1996
$990
$1,136
Revenues
1996
1997
$5,014
$4,502
Disney Through the Decades
The Walt Disney Company
1997 Fact Book
October 16, 1923:
The Disney
Brothers Studio
is founded as a
partnership by Walter E. Disney and
Roy O. Disney when Walt signs a
contract with M.J. Winkler to pro-
duce a series of animated short sub-
jects entitled the
Alice Comedies.
November 18, 1928:
Mickey
and
Minnie Mouse
debut in
Steamboat
Willie, Disney’s first animated film
with sound effects and dialogue.
December 16, 1929: The Disney
Brothers
partnership
is
replaced
by four companies
: Walt Disney
Productions, Ltd.; Walt Disney Enter-
prises; Liled Realty and Investment
Company; and the Disney Film Re-
cording Company.
September 5, 1930:
Pluto
makes
his cartoon short debut in
The Chain
Gang.
May 25, 1932: Disney introduces
Goofy
to the public in the cartoon
short
Mickey’s Revue.
July 30, 1932: The
first full-color
animated film
,
Flowers and Trees,
is released and later earns Walt Dis-
ney his first Academy Award
®
for
Best Cartoon Short Subject.
June 1, 1933: The
first Mickey
Mouse Watch
is sold by Ingersoll.
June 9, 1934:
Donald Duck
first
appears in
The Wise Little Hen.
December 21, 1937:
Snow White
and the Seven Dwarfs, the
first fea-
ture-length animated film
, pre-
mieres accompanied by the first com-
prehensive merchandise campaign.
July 19, 1938: Disney first contracts
with art dealer Guthrie Courvoisier to
sell
animation cels
.
September 29, 1938:
Walt Disney
Productions
absorbs the three
other Disney companies created in
1929.
April 2, 1940: Walt Disney Produc-
tions
issues 155,000 shares
of
6% cumulative convertible preferred
stock in the over-the-counter market.
May 6, 1940: Walt Disney Produc-
tions completes its move to its new
studio lot in
Burbank
.
November 13, 1940:
Fantasia
is
released.
December 16, 1952:
WED Enter-
prises
is founded as a private com-
pany owned solely by Walt Disney
to design and create Disneyland.
April 6, 1953:
Retlaw Enterprises
is founded as a private company
solely owned by Walt Disney to con-
trol the merchandising rights to the
name “Walt Disney.â€
November 10, 1953:
Buena Vista
Pictures Distribution
distributes
its first film,
The Living Desert.
October 27, 1954:
Disneyland
, a
one-hour weekly television series
which ultimately aired for 29 seasons
under six different titles, debuts on
ABC.
July 17, 1955:
Disneyland first
opens
its gates in Anaheim, Califor-
nia. Walt Disney Productions invests
$500,000 to own 34.5% of Disney-
land, Inc., the company that owns
Disneyland.
October 3, 1955:
The Mickey
Mouse Club
first airs on ABC.
June 19, 1957: Walt Disney Produc-
tions exercises options to purchase
an
additional 31.0% stake
in
Disneyland
, Inc. for $528,810.
July 6, 1960: Walt Disney Produc-
tions
purchases the remaining
34.5%
interest in Disneyland
,
Inc. for $7.5 million.
February 3, 1965: Walt Disney Pro-
ductions
acquires WED Enter-
prises
from Walt Disney for approxi-
mately $4 million.
December 15, 1966:
Walt Disney
dies.
October 1, 1971: The
Magic King-
dom
opens at Walt Disney World.
December 20, 1971:
Roy O. Dis-
ney
dies.
Top: Walt Disney (pictured) and
his brother, Roy O. Disney,
founded the Company in 1923.
Middle: Imagineers work behind
the scenes designing attractions,
Disney stores and theme parks.
Above:
Fantasia, released in
1940, featured Mickey Mouse as
the Sorcerer’s Apprentice.
2
(In millions)
Quarter Ended - Fiscal 1997 Dec 31 Mar 31
Jun 30 Sep 30
Revenues
Creative Content
$2,962
$2,487
$2,004
$2,645
Broadcasting
1,872
1,528
1,609
1,492
Theme Parks and Resorts
1,150
1,203
1,369
1,292
$5,984
$5,218
$4,982
$5,429
Operating Income
Creative Content
$ 668
$ 354
$ 257
$ 414
Broadcasting
469
238
337
241
Theme Parks and Resorts
238
236
390
272
1,375
828
984
927
Corporate Activities and Other
(90)
(108)
(69)
(100)
Net Interest Expense
(171)
(184)
(185)
(153)
Income Before Income Taxes
1,114
536
730
674
Income Taxes
(473)
(220)
(305)
(284)
Net Income
$ 641
$ 316
$ 425
$ 390
Earnings Per Share
$
0.93 $ 0.46
$ 0.62
$ 0.57
Quarter Ended - Fiscal 1996 Dec 31 Mar 31 Jun 30
Sep 30
Revenues
Creative Content
$2,812
$2,287
$2,034
$2,431
Broadcasting
1,790
1,369
1,499
1,351
Theme Parks and Resorts
994
1,055
1,249
1,204
$5,596
$4,711
$4,782
$4,986
Operating Income
Creative Content
$ 618
$ 233
$ 249
$ 335
Broadcasting
341
198
309
236
Theme Parks and Resorts
196
202
350
242
1,155
633
908
813
Accounting change for SFAS 121
0
(300)
0
0
1,155
333
908
813
Corporate Activities and Other
(24)
(98)
(66)
(61)
Net Interest Expense
(
167)
(189)
(171)
(171)
Income Before Income Taxes
964
46
671
581
Income Taxes
(418)
(31)
(289)
(250)
Net Income
$ 546
$ 15
$ 382
$ 331
Earnings Per Share
$ 0.79
$ 0.02
$ 0.55
$ 0.48
Net Income Excluding Non-recurring Items
$ 198
Earnings Per Share Excluding Non-recurring Items
$ 0.29
Top, right:
Hercules, Disney’s 35th full-length animated feature, flexed
its muscle both domestically and internationally.
Middle, right:
George of the Jungle was a swinging success, bringing
in over $100 million at the domestic box office.
Below, right: Meeting the characters is a special part of any Disney
Theme Park visit.
Above, left: Richard Nanula, senior executive vice president and chief
financial officer.
Above, right: Sanford Litvack, senior executive vice president and
chief of corporate operations.
1
The Walt Disney Company is a family entertainment company engaged, through its subsidiaries, in animated
and live-action film and television production, character merchandise licensing, consumer products retailing
and book, magazine and music publishing, television and radio broadcasting, cable television programming and
the operation of theme parks and resorts.
Fiscal 1997 marked the first full year of combined Disney and ABC operations. For the year, Disney reported
record results, with significant contributions from each of the company’s three segments: Creative Content,
Broadcasting and Theme Parks and Resorts.
In addition, Disney divested several non-strategic ABC publishing assets in fiscal 1997. The pro forma results
in this book represent Disney’s performance excluding any impact from these publishing assets.
Disney remains committed to its overriding objective of creating shareholder value by continuing to be the
world’s premier entertainment company from a creative, strategic and financial standpoint. The company strives
to maintain and build upon the integrity of the Disney name and franchise, while preserving and fostering the
fundamental values of quality, imagination and guest service. The company’s primary financial objective re-
mains 20% compound annual earnings per share growth over future five-year periods and, secondarily, steady
improvement in return on equity.
Thank you for your interest in The Walt Disney Company.
Sincerely,
Winifred Markus Webb
Vice President, Investor Relations
and Shareholder Services
Introduction
The Walt Disney Company
1997 Fact Book
Quarterly Condensed Consolidated Pro Forma Statements of Income
The Walt Disney Company
1997 Fact Book
(In millions, except per share data)
(Unaudited)
16
Note: Pro forma adjustments reflect the acquisition of ABC, sale of KCAL and the divestiture of certain publishing operations acquired in the ABC acquisition, as if those events had occurred
at the beginning of the years presented.
Introduction
1
Disney Through the Decades
2
Financial Information
Condensed Consolidated Statements of Income
7
Condensed Consolidated Balance Sheets
8
Condensed Consolidated Statements of Cash Flows
9
Common Stock Statistics
10
Key Financial Ratios
12
Business Segment Overviews
Creative Content
13
Broadcasting
14
Theme Parks and Resorts
15
Financial Supplement
1997 & 1996 Quarterly Condensed
Consolidated Pro Forma Statements of Income
16
Company Tree
17
Supplemental Information
Corporate Headquarters
The Walt Disney Company
500 South Buena Vista Street
Burbank, California 91521
(818) 560-1000
Registrar and Stock Transfer Agent
The Walt Disney Company
Independent Accountants
Price Waterhouse LLP
Information Contacts
Winifred Markus Webb, Vice President
Investor Relations and Shareholder Services
(818) 560-5758
Investor Relations
Sonja Ute Beals, Manager
(818) 560-7854
Shareholder Services
Jennifer La Grow, Director
(818) 553-7200
Corporate Communications
Thomas J. Deegan, Vice President
(818) 560-1572
John Dreyer, Vice President
(818) 560-5300
Information on The Walt Disney Company is located on the
World Wide Web at
http://www.disney.com
Top, right: Michael Eisner, chairman of the board and chief executive
officer of The Walt Disney Company.
Above, right:
The Wonderful World of Disney has returned to ABC’S
Sunday night line-up, providing the quality family entertainment for
which Disney is known.
Above: Disney Cruise Line will make a splash with the launch of its
first ship,
Disney Magic, scheduled to embark on its maiden voyage
in April 1998.
Table of Contents
The Walt Disney Company
1997 Fact Book
The Company Tree
The Walt Disney Company
1997 Fact Book
17
C
R E AT I V E
C
O N T E N T
Walt Disney
Studios
Theatrical Films
Miramax
Home Entertainment
Network TV Production
Hollywood Records
Mammoth Records
Stage Plays
Television
Production/Distribution
TV Network Productions
Domestic Distribution
International Distribution
Consumer Products
Merchandise Licensing
The Disney Store
Walt Disney Records
Disney Publishing
Walt Disney Art Classics
Disney Direct Marketing
Disney Interactive
Disney Online
Fairchild Publications
Televentures
B
ROADCASTING
Cable Network
& International
ESPN
Disney Channel
ABC Broadcast
Network
TV Stations
Radio Network
Radio Stations
T
HEME
P
ARKS
A
ND
R
ESORTS
Walt Disney
Attractions
Disneyland Resort
Walt Disney World Resort
Disney Vacation Club
Disney Cruise Line
Tokyo Disneyland
Walt Disney
Imagineering
Anaheim Sports
The Mighty Ducks of
Anaheim
The Anaheim Angels
Disney Regional
Entertainment
Club Disney
DisneyQuest
The ESPN Zone
“In this painting, I have attempted to convey my vision of a memory
of a day at Disney’s Animal Kingdom — the highlights of the day
and the most vivid moments of the experience.â€
Joe Rohde
Principal creative executive of Disney’s Animal Kingdom
and illustrator of the cover of this year’s Fact Book.
©The Walt Disney Company
Printed on recycled paper.
The Company
1997 Fact Book