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THE WALT DISNEY COMPANY &MARVEL ENTERTAINMENT

Josh Bohnenkamp Kyle Edington Jaylen Edomwande Samantha Ludwig

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The Walt Disney Company

Studio Entertainment

Walt Disney Pictures

Pixar Animation Studios

Touchstone Pictures

Hollywood Pictures

Miramax Films

Walt Disney Animation

Disneynature

MARVEL STUDIOS

Parks and Resorts

Disney World

Disneyland

Hong Kong Disneyland

Disneyland Resort Paris

Tokyo Disney

Disney Cruise lines

Disney Consumer Products

Company Franchises

Interactive media group

Disney Publishing Worldwide

MARVEL Entertainment

Divisions

Media Networks

Broadcasting

ABC

10 Local affiliated ABC

networks

Cable

ABC Family

ESPN Networks

SOAPnet

Jetix

Disney Channel

Disney XD

Radio Disney

Disney Interactive

Media Group

Disney Interactive

Studios

Disney Online

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Disney’s Integration of MARVEL

Review Issues from Fall Quarter

Provide Three Alternatives

Defend our Selected Alternative

Review Financial Implications

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Demographic Statistics

Ages 8-18Male and Female – over 7.5 hours a dayTV – Video Games – Computer

U.S. Population Projections (In Thousands) 2010 Percentage 2015 Percentage 2020 PercentageMALE 152,753 160,424 168,258

Under 18 years 38,437 24% 39,877 24% 41,695 25%Under 5 years 10,779 7% 11,278 7% 11,671 7%5 to 13 years 18,945 12% 19,900 12% 20,806 12%

14 to 17 years 8,713 5% 8,699 5% 9,218 5%

2010 Percentage 2015 Percentage 2020 PercentageFEMALE 157,479 165,116 173,128

Under 18 years 36,780 26% 38,229 24% 39,990 23%Under 5 years 10,320 7% 10,798 7% 11,175 7%5 to 13 years 18,178 12% 19,111 12% 19,985 12%

14 to 17 years 8,281 5% 8,320 5% 8,830 5%

*2000 Census - released 2008

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COMPANY HIGHLIGHTS & FALL QUARTER REVIEW

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Issues (from Fall Quarter)

Demographics

Disney Retail

Theme Parks

Character Image/Portrayal

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ALTERNATIVE #1Creation of a MARVEL Theme Park

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North American Attendance

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Alternative 1: MARVEL Theme Park

Experience

Exclusively MARVEL Characters

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Alternative 1 Decision: Hold

Theme Park in Dubai – under development

Unknown MARVEL Characters

Transition of MARVEL Characters to being family friendly

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ALTERNATIVE #2Disney-MARVEL Retail Opportunities

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Alternative 2 – MARVEL Retail

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Disney Retail

$700 million in revenue

United States, Canada, Europe & Japan

Retail rollercoaster 2004-2008The Children’s Place, LLC

“Imagination Park” – Steve Jobs’ vision Requires $.75-$1 MillionRevamp 340 stores

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Disney’s need to focus on their retail revitalization

Disney has the opportunity to test their retail “imagination parks” before opening MARVEL retail

Creation of broader market to strengthen MARVEL fan base

Alternative 2 Decision: Hold

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ALTERNATIVE #3Character Development Pipeline

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Proven Method

1. Introduce New Talent on an established show2. Create a new television series3. Recording Contract4. Play songs on Radio 5. Concert Series6. Merchandising & Licensing Opportunities

Disney Channel Life Cycle

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2006Miley Cyrus

Hannah Montana

2007Selena Gomez

2008Jonas Brothers

2005High School

Musical

2009Demi Lovato

2010Bridget Mendler

Introduction TV Series Recording Contract

Air Play on Radio Disney Concert Series Licensing &

Merchandise

Introduction TV Series Recording Contract

Concert Series

Miley Cyrus

Selena Gomez

Jonas Brothers

Demi Lovato

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BCG Matrix

Business Growth

Rate

Position/Market Share

CASH COW DOG

STAR ????

High Low

High

Low

Bridget Mendler’s

Good Luck Charlie

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The Miley/Hannah Montana Effect

Original Television Season cost = $15.6 million

85 episodes$225 million in ticket salesBest selling Miley Cyrus autobiography2 sold-out concert toursMerchandise – from books to clothing

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STRATEGY IMPLEMENTATION DIAGRAM

MARVEL Library

Brand Strategy

Character Development

Distribution of Content

Market Strategies

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Objective

Incorporate the MARVEL Library into various channels

Effective targeting the of ‘under 18’ boy market

Generate larger fan base

MARVEL Library

Brand Strategy

Character Development

Distribution of Content

Market Strategies

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Modified MARVEL Pipeline (TV)

1. On new episodes of MARVEL television series, give new characters guest spots.

2. These recurring roles can lead to a new series based on the new characters

3. Develop supplemental entertainment4. Create a made-for-television movie, or direct

release DVD5. License merchandise for the character.

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Estimated MARVEL Time Line - Television

20152011Spider-Man and his

Amazing Friends

2012 2013 2014

Introduce on a current

Television Series

New Animated TV Series

Supplemental Entertainment

Made for TV Movie or Direct Release DVD

Licensing and Merchandising (throughout)

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Modified MARVEL Pipeline (Movie)

1. Release a feature length film with new MARVEL Characters

2. Create a new television series to the new MARVEL Character to add to the value of the characters popularity

3. Develop supplemental entertainment4. Create a made-for-TV movie, or5. License merchandise for the character.

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Estimated MARVEL Time Line- Movie

20152011THOR

The First Avenger: Captain America

2012 2013 2014

Release Feature Film to

Theaters

Create Animated TV

Series

Supplemental Entertainment

Made for TV Movie or Direct Release DVD

Licensing and Merchandising (throughout)

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Current Example –

2012The Avengers

2008Iron Man

The Incredible Hulk

2009 2010Iron Man 2

2011The First Avenger: Captain America

Release Feature Film to Theaters

Re-Release Animated

Series

Feature Film Sequel

Role in new film

Licensing and Merchandising (throughout)

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Value Chain - Highlights

Access to Technology3D DevelopmentsPixar Animation

Consolidating Redundant Groups

In House Movie Production

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Alternative 3 – Decision: GO

Television presents a Low Cost/Low Risk

Cable Networks – Profitable

Combining successful Development Methods

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FINANCIAL SITUATION

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Financial Analysis

Acquisition of MARVEL aimed at generating long-term profits

MARVEL shareholders received $30 per share plus .745 Disney shares

This resulted in roughly 59 million new shares issued by Disney

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Return On Investment

High School Musical$5 million – Made for TV Movie cost$150 million in Operating Income

Hannah MontanaEst. Cost 85 Episodes: $700,000 per = $60 mil. totalMovie Budget: $30 mil. Gross: $225 mil.Concert Tours: Average Gross - $45 millionTotal Estimated Value: $1 billion

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Financial Analysis

Past performance when using this pipeline formula has been very successful

Cable networks and televisionLOW RISK80% of NI from Cable Networks

Effective use of MARVEL’s 5,000 characters will allow Disney to become more profitable

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Financial Analysis

Disney’s revenues were over $36 billion with a net income of $3.3 billion in 2009

Disney’s profitability ratios are very strong compared to industry medians

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Projected Financials - EPS

EPS for 2009 were 1.76

We expect this number to increase about 10% over the next 3 years to about 2.40 in 2012

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0.5

1

1.5

2

2.5 2.28

1.761.91

2.212.4

2008 2009 2010 2011 2012

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Projected Financials – Net Income

Disney will average a 4% increase in Net Income over the next 5 years with over $4.3 billion in 2013

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500 4,427

3,307 3,439 3,714

4,011 4,332

2008 2009 2010 2011 2012 2013

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CONCLUSION

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Excellent Opportunities

NOW Television & Movie Franchise Development

FUTURE ConsiderationsTheme Parks Retail Stores

The Walt Disney CompanyPro Forma Income Statement- in millions

Sep-09 Sep-10 Sep-11Revenue $ 36,149 37,590 39,093Cost of Goods Sold 30,452 31,061 31,682Gross Profit 5,697 6,529 7,411Gross Profit Margin 15.80% 17.4% 19.0%SG&A Expense -- -- --

Depreciation & Amortization 1,631 1,664 1,697Operating Income 6,124 6,705 8,065Operating Margin 16.90% 18% 21%Nonoperating Income 919 660 1,166Nonoperating Expenses -466 -484 -512Income Before Taxes 5,658 6,218 7,224Income Taxes 2,049 2,477 3,208Net Income After Taxes 3,609 3,741 4,016

Continuing Operations 3,307 3,439 3,714Discontinued Operations 0 0 0Total Operations 3,307 3,439 3,714Total Net Income 3,307 3,439 3,714