The Wonderful World of Disney

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The Wonderful World of Disney

• Presented by
• Mimi Nguyen
• Thu Nguyen
• Albert Kasumaj
• Robin Fu
• Yee Lee
• Kim Vu

Walt Disney Corporation
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Mission Statement

• Dedicated to making the dreams of families and
  children a reality through public service
  initiatives, community outreach and volunteerism
  in the areas of learning, compassion, the arts
  and the environment.

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The Disney Story

• Founded by Walt and Roy E. Disney
• Walt Disney was an American artist and cartoonist
• 1925
• The Disney Bros. Studio opens
• First animated comedy films titled Alice

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Mickey Mouse is Born
1928 in Chicago, Illinois

• In the Plane Crazy cartoon, Mickey Mouse was
  introduced and popularized

• Patent and trademark of Mickey Mouse
• Began producing many Mickey Mouse films.

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The Dream Continues.

• 1950-1960s Walt Disney Productions Ltd major
  producer of films for theaters and television
• October 27, 1954
• First regularly scheduled television series on
  ABC Television Network

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Dreams become Reality

• Longest-running Primetime series in TV history
• The Wonderful World of Walt Disney reigns as a
  classic masterpiece in family entertainment
• Disney Branches out..

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Disneyland Anahiem, CA 1955
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Orlando, FL 1971
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Walt Disney Corporation
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Dream ExpansionOperations of the Company

• Media Networks
• Parks and Resorts
• Studio Entertainment
• Consumer Products

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Media Networks

• BROADCASTING
• ABC Television Network
• 10 owned and operated TV stations
• 59 radio stations
• Television production
• Touchstone
• Buena Vista Production

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Media Networks

• CABLE NETWORK
• All ESPN-branded businesses
• Disney Channel
• International basic TV channels
• Fox Kids International
• Internet Websites

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Cool FACT

• The ABC Television Network and the 226 primary
  affiliated stations reach 99 of all US
  television households.

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Top 5 Industry Revenues in Cable/Media
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Parks and Resorts
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Studio Entertainment

• Produces and acquires

• live-action
• animated motion pictures
• animated television production
• musical recordings
• Disney film and television library distribution

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Examples of Studio Entertainment projects
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Consumer Products

• licenses the companys characters and other
  intellectual property
• direct retail distribution through the Disney
  Store worldwide
• Books and magazines
• produce and license computer software and video
  games

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Walt Disney Corporation Operation Revenues
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Financial Ratios Analysis

• Profit Margin
• (5 yr. pretax)
• Strong 9.5
• Industry 10.7
• Investment Return (ROA)
• Satisfactory 2.4
• Industry 5.4
• Management Efficiency
• (Rev.)
• Satisfactory 234,000
• Industry 470,000

• Growth Ratio (EPS)
• Weak 30.40
• Industry 30.40
• Fina.Condition
• (quick)
• Satisfactory 0.8
• Industry 0.8
• Price Ratio (P-Sale)
• Strong 1.66
• Industry 1.34

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DIS stock(July 25,2003)

• Share Price
• 21.29
• Today 21.92
• Shares Outstanding
• 2 billion
• Free Cash Flow to Equity (FCFE)
• 8.134 billion

• HPR
• 2003 expected 0.32
• Market Capitalization
• Today 43.84 billion

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Risk Analysis

• Beta (systematic risk)
• 2003 1.0025
• Unlevered Beta (all equity no debt)
• 0.065

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Evaluation of DIS Stock

• K (required return on equity)
• Est. 0.25 DCF
• 2003 0.021 CAPM
• Cost of Equity (Ke)
• 2002 0.093
• Cost of Debt (Kd)
• 2002 0.0575

The company is currently UNDERPRICED
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Capital Structure
Debt increases as equity decreases over time
WACC 2002 0.071157346
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MM PropositionModel 3
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Market Efficiency

• Expansion of Walt Disney Internet Groups Motion
  Video Technology (7/14/03) SEMI STRONG form

(7/14/03) 21.31 (7/16/03) 21.05
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Market Efficiency

• House Appropriations Committee restricts networks
  to 35 of national audience WEAK form

• (7/16/03) 21.05
• (7/2103) 20.40

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5-Year Price Index
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Buy, Sell, or Hold?
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Strengths of Disney Corporation

• HPR is POSITIVE
• Capital Structure STABLE
• Stock Underpriced? Price will increase
• Financial Ratio STENGTH
• LOW debt ratio
• Beta is Low?low risk?stable

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And They Lived Happily Ever After
In Conclusion

• Disneyland would never be completed as long as
  there was imagination left in the world.
• Walt Disney

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THE END