Risk Assessment -Television networks could suffer from online TV and online rental growth.

Risk Factor Word Count

Television Networks 182

Financial Markets 175

Entertainment 126

Benefit 115

Cost 95

Consumer Taste 84

Events 45

Growth 31

Economic Conditions 27

Health Concerns 16

Competition 15

Income Statement - Studio Entertainment has only increase 1% in 2015 compared to 22% in 2014.

Line Item 2015 (In millions) 2014 (In millions) 2013 (In millions) 2015 Vs. 2014 2014 Vs. 2013

Media Network 23,264 21,152 20,356 10% 4%

Parks and Resorts 16,162 15,099 14,087 7% 7%

Studio Entertainment

7,366 7,278 5,979 1% 22%

Consumer Products 4,499 3,985 3,555 13% 12%

Interactive 1,174 1,299 1,064 (10)% 22%

Revenue 52,465 48,813 45,041 7% 8%

Advertising 8,361 8,031 7,923 4% 1%

Retail Merchandise, food and beverage

5,986 5,598 5,185 7% 8%

Theme Park Admissions

5,483 5,114 4,704 7% 9%

Games 968 1,056 812 (8)% 30%

Balance Sheet- Television cost and advances have decreased by 57% from 2014 to 2015.

Line Item 2015 (In millions) 2014 (In millions) 2013 (In millions) 2015 Vs. 2014 2014 Vs. 2013

Cash and Cash Equivalents

4,269 3,421 3,931 25% -13%

Receivables 8,019 7,822 6,694 3% 17%

Inventories 1,571 1,574 1,487 0% 6%

Television cost and Advances

1,170 1,061 634 10% 67%

Film and television costs 6,183 5,325 4,783 16% 11%

Investments 2,643 2,696 2,849 -2% -5%

Attractions, buildings and equipment

42,745 42,263 41,192 1% 3%

Projects in Progress 6,028 3,553 2,476 70% 43%

Land 1,250 1,238 1,171 1% 6%

Goodwill 27,826 27,881 27,324 0% 2%

Trend Series - Projects in progress have increase significantly by 100% in 2015.

Line Item 2013 (In Millions) 2014 (In Millions) 2015 (In Millions)

Cash and Cash Equivalent 3,931 87% 109%

Receivables 6,694 117% 120%

Inventories 1,487 106% 106%

Television Cost and Advances 634 167% 185%

Film and Television Costs 4,783 111% 129%

Investments 2,849 95% 93%

Attractions, Buildings and Equipment 41,192 103% 104%

Projects in Progress 2,476 143% 243%

Land 1,171 106% 107%

Goodwill 27,324 102% 102%

Competitive Analysis- Walt Disney is leading the market against their competitors in every aspect.

The Walt Disney Company

Twenty-First Century Fox, Inc.

Time Warner Inc.

Revenue 54.32B 26.50B 28.12B

Gross Margin 0.46 0.36 0.43

Operating Margin 0.26 0.21 0.25

Net Income 9.08B 2.46B 3.80B

Market Capacity 159.32B 53.32B 53.11B

Operating Margin 0.26 0.21 0.25

P/E Ratio 18.25 23.46 14.44

EPS 5.35 1.19 4.63

EBITDA 16.44B 6.14B 7.64B

Board Analysis - The board is made up of a very diverse group with men and women.

Board Members Age Sex Race Employer/Firm College Director Since Tenure

Robert A. Iger 65 M White The Walt Disney Company

Ithaca College 2005 11

Susan Arnold 60 W White The Carlyle Group University of Pittsburg 2007 9

John S. Chen 59 M Asian Blackberry, Ltd California Institute of Technology

2004 12

Jack Dorsey 38 M White Twitter, Inc. New York University 2013 3

Maria Elena Lagomasino 66 W Hispanic WE Family Offices Columbia University 2015 1

Fred H. Langhammer 71 M White The Estée Lauder Companies Inc.

Johns Hopkins University

2005 11

Aylwin B. Lewis 60 M African-American

Potbelly Sandwich Works University of Houston 2004 12

Monica C. Lozano 59 W Hispanic Hispanic Media, Inc. University of Oregon 2000 16

Robert W. Matschullat 69 M White Seagram Company Ltd. Stanford University 2002 14

Mark G. Parker 60 M White NIKE, Inc. Pennsylvania State University

2016 1

Sheryl Sandberg 46 W White Facebook, Inc. Harvard University 2010 6

Orin C. Smith 74 M White Starbucks Corporation Harvard University 2006 10

TOWS Analysis- Walt Disney needs to approach new market segments and expand.

Strengths (S) Weaknesses (W)

Opportunities (O)

Threats (T)

SO Strategies WO Strategies

ST Strategies WT Strategies

1.) Strengthen entertainment industries internationally.

2.) Create characters based off national or regional appeal.

A.) Strong product portfolio.

B.) Brand reputation.

C.) Diversified business

D.) Dependent on North America for income.

E.) Interactive losses.

F.) Decline in cinemas.

1.) Intense Competition.

2.) Increased Piracy.

3.) Strong growth of online TV and online movie rental.

1A.) Expand business segments into new markets. For example, expand into India or Brazil.

2E.) Create new video games based off different countries.

2C.) Create and online streaming application with Disney movies and TV shows. Possibly a paid subscription.

1F.) Release old Disney cinemas into theaters.

Memorandum to Walt Disney Board

To: Walt Disney Board of Directors

From: Melissa Miller

Subject: Analytical review of Company

Date: March 4th, 2016

Television networks could suffer from online TV and online rental growth. The top three risk that

Walt Disney faces are television networks, financial markets, and entertainment. With this, studio entertainment has only increase 1% in 2015 compared to 22% in 2014. Television cost and advances have decreased by 57% from 2014 to 2015. Following along with projects in progress have increase significantly by 100% in 2015. Overall, Walt Disney is leading the market against their competitors in every aspect. When it comes to their board it is made up of a very diverse group with men and women. To stay competitive Walt Disney needs to approach new market segments and expand.

It is recommended that Walt Disney takes action with the increasing popularity of online movie streaming and develop a plan to compete with this type of competition. Also, Walt Disney could cater to the needs of people belonging to different social classes, sub-cultures and age groups. This would help with the expansion into different counties.