U.S. Securities and Exchange Commission
Washington, D.C. 20549
NOTICE OF EXEMPT SOLICITATION
Submitted pursuant to Rule 14a-6(g)
1. Name of the Registrant:
The Walt Disney Company
2. Name of person relying on exemption:
Roy E. Disney, Patricia A. Disney, Roy P. Disney, Susan Disney Lord,
Abigail E. Disney, Timothy J. Disney, Shamrock Holdings, Inc., Shamrock
Holdings of California, Inc. and Stanley P. Gold
3. Address of person relying on exemption:
4444 Lakeside Drive, 2nd Floor, Burbank, California 91505
4. Written materials. Attach written materials required to be submitted
pursuant to Rule 14a-6(g)(1):
The attached materials were posted on the savedisney.com website:
Key Questions
For Walt Disney Company Institutional Investors and Analysts
SaveDisney.com suggests 9 hot topics for discussion at today's investor
conference in Orlando, Florida. Read More.
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Key Questions for Walt Disney Company Institutional
Investors and Analysts
February 11. 2004. As institutional investors and analysts gather at Walt
Disney World for a conference with Walt Disney Company management, we at
SaveDisney.com suggest a series of key questions for attendees. We'd love
to hear direct answers to the following queries, and we bet you would too!
1. The Company has publicly stated that Roy and Stanley's statements have
been "factually inaccurate and misleading". Please specify the inaccuracies
or misleading statements.
2. Free Cash Flow was exceptionally strong in fiscal year 2003. With
earnings per share forecast to grow in excess of 30% in 2004, will there be
a commensurate increase in Free Cash Flow? If not, please provide a
detailed explanation.
3. The Company has indicated that 2004 earnings will be at least 30% higher
than 2003, and the first quarter of 2004 will be very strong. We understand
that a substantial portion of the expected increase in the first quarter's
earnings will be attributable to 1) The accounting change for the NFL
sports rights amortization expense, 2) The strong first quarter studio
results driven by Finding Nemo, Pirates of the Caribbean and The Lion King
DVD sales; and 3) Cost cutting at ABC Network - the absence of no war
coverage costs, no comparable Super Bowl costs and reduced license fees for
The Practice. What is the actual impact of each of these non recurring
items on first quarter earnings per share?
4. Regarding the ABC Network:
a. What guarantees did the Network give to advertisers in the
"upfronts" for the 2003/2004 season?
b. Considering the current weak ratings, what is the likelihood that
the network will experience "make goods" for the current season? If so,
please quantify.
c. We understand that the network has increased its usage of "variable
license fee" arrangements. If so, what is the likely impact on future
syndication profits of such risk sharing arrangements?
d. Bob Iger has indicated publicly that ABC will be profitable in
2005. Please update this guidance.
5. Regarding Theme Parks:
a. Capital expenditures have declined substantially from 1998 to 2003.
Please provide a detailed explanation for what appears to be substantial
under investment in the parks over the last 2 fiscal years.
b. Is it reasonable to assume maintenance capital expenditure will
remain well below $1 billion per year (approximately 15% of revenue) for
the foreseeable future? Why?
c. The Company has indicated that rising employee benefit costs have
contributed to the decreasing margins (from peak of 24% several years ago
to current levels of 14%). We have heard that management is considering a
shift from a defined benefit plan to a defined contribution plan for its
park employees in June 2004. Please comment.
6. Given the very poor performance of ABC Family Channel, will there be an
"impairment" charge within the next 12 months? If so, how much?
7. Regarding the Disney Stores:
a. Please provide an update on the sale process.
b. Is the "write-down" reserve previously established adequate to
handle the ultimate resolution of this matter?
8. According to EuroDisney's reported financial statements, it appears that
without the line-of-credit provided by The Walt Disney Company, EuroDisney
would have had difficulty meeting its obligations last year. A financial
restructuring of EuroDisney is likely - either before the bank waivers
expire in March 2004 or shortly thereafter. Will the Company be required to
report EuroDisney on a consolidated basis in the future? Is any loss
reserve necessary regarding the Company's investment in this business?
9. Regarding ESPN:
a. What is the current status of negotiations with Cox?
b. Which major distributor contracts come up for renewal in 2004, 2005
and 2006?
c. It has been recently disclosed that future affiliate fee rate
increases would be below the historical 20% figure. What is the likely
bottom line impact of this change in 2004, 2005 and 2006?
d. NFL Sunday night football appears to account for approximately 1/3
of ESPN's primetime ratings. Does the Company anticipate "content
protection" clauses in its future contracts with distributors? If so,
please discuss more fully.
e. What are the Company's plans should it be unsuccessful in tendering
in 2005/2006 for all or a part of its current NFL sports rights package?
Good luck, gang... We'll be waiting for the answers!