background image

“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

background image

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

background image

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.

background image

!!!

!!!

!!!

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)

background image

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

background image

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)

background image

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.

background image

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% †

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.

†

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

background image

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% †

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.

†

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

background image

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

background image

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

background image

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% †

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.

†

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

background image

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% †

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.

†

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

background image

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.

background image

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)

background image

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

background image

!!!

!!!

!!!

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)

background image

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.

background image

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

background image

“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