Walt Disney Yen Fin

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Exhibit 1 The Walt Disney Company and Subsidiaries, Consolidated Statement of Income, Year
Ended September 30 (in thousands, except per share data)

1984 1983 1982

Revenues:
Entertainment and recreation $1,097,359 $1,031,202 $725,610
Filmed entertainment 244,552 165,458 202,102
Community development 204,384
Consumer products 109,682 110,697 102,538
$1,655,977 $1,307,357 $1,030,250

Costs and Expenses:

Entertainment and recreation $904,664 $834,324 $592,965
Filmed entertainment 242,303 198,843 182,463
Community development 162,158
Consumer products 55,819 53,815 54,706
$1,364,944 $1,086,982 $830,134

Income (Loss) Before Corporate

Expenses and Unusual Charges:
Entertainment and recreation $192,695 $196,878 $132,645
Filmed entertainment 2,249 (33,385) 19,639
Community development 42,226
Consumer products 53,863 56,882 47,832
$291,033 $220,375 $200,116

Corporate Expenses (Income):

General and administrative $59,570 $35,554 $30,957
Design projects abandoned 7,032 7,295 5,147
Interest expense (income)—net 41,738 14,066 (14,781)
$108,340 $56,915 $21,323

Income Before Unusual Charges,

Taxes on Income and Accounting
Change $182,693 $163,460 $178,793
Unusual charges 165,960

Income Before Taxes on Income and

Accounting Change $16,733 $163,460 $178,793
Taxes on income (benefit) (5,000) 70,300 78,700
Income Before Accounting Change $21,733 $93,160 $100,093
Cumulative effect of change in
accounting for investment tax
credits 76,111
Net income $97,844 $93,160 $100,093

Earnings per Share:

Income before accounting change $0.61 $2.70 $3.01
 Cumulative effect of change in
accounting 2.12
$2.73 $2.70 $3.01
Average Number of Common and
Common Equivalent Shares
Outstanding 35,849 34,481 33,225
Exhibit 2 The Walt Disney Company and Subsidiaries Consolidated Balance Sheet,
Year Ended September 30 (in thousands)

1984 1983
Assets

Cash $35,346 $18,055

Accounts and notes receivable (net) 172,762 104,746
Taxes on income refundable 60,000 70,000
Merchandise inventories 83,467 77,945
Film production costs 102,462 127,010
Real estate inventories 229,424
Entertainment attractions and other property 2,413,985 2,251,297
Less accumulated depreciation (600,156) (504,365)
$1,813,829 $1,746,932
Construction and design projects in progress 94,710 108,190
Land 28,807 16,687
$1,937,346 $1,871,809

Other assets 118,636 111,630

$2,739,443 $2,381,195

Liabilities and Stockholders’ Equity

Accounts payable, payroll and other accrued liabilities $239,992 $182,709

Taxes on income payable 24,145 13,982
Borrowings 861,909 352,575
Unearned deposits and advances 178,907 109,556
Deferred taxes on income 279,005 321,845
Commitments and contingencies
Stockholders’ Equity:
Common shares, no par
Issued and outstanding—33,729 and 34,509 shares 359,988 661,934
Retained earnings 795,497 738,594
1,155,485 1,400,528
$2,739,443 $2,381,195
Exhibit 3 Analysis of Outstanding Borrowings (in millions)

3/31 9/30 9/30

1985 1984 1983

Unsecured borrowings under revolving line of

credit and bank term loans $168.7 $408.0

Commercial paper 352.2 200.2 $118.2

15.75% Eurodollar notes, due 9/1/86a -- 100.0 100.0

12.50% Eurodollar notes, due 1/10/87 150.0

12.50% Eurodollar notes, due 3/15/89b 75.0 75.0 75.0

8.60% yen term loan, due 2/1/93c 50.0 53.1 59.4

Other 58.4 25.6

$854.3 $861.9 $352.6

a
Called on October 17, 1984.
b
Of the $75 million outstanding, the company swapped $50 million into yen liabilities of approximately ¥12 billion.
This synthetic yen borrowing was due 3/14/89 and had a cost of 7.40% payable annually.

Outstanding yen principal at March 31, 1985 was ¥12.5 billion, with semiannual yen principal payments of ¥765
c

million.
Exhibit 4 Historical Summary of Average Yen/Dollar Exchange Rates and Price Indexes

Year Yen/Dollar U.S. CPI Japan CPI

1980 225.70 100.0 100.0

1981 220.10 110.4 104.9
1982 248.30 117.1 107.8
1983 237.40 120.9 109.9
1984:
I 230.80 125.0 111.4
II 229.70 125.6 112.3
III 243.60 126.6 112.2
IV 246.10 128.3 113.5

Average 1984 237.30 126.1 112.3

1985:
I 257.50 128.6 113.7
II 250.80 130.2 114.7

Sources: Economic Report of the President and International Financial Statistics

 Exhibit 5 Yen Long-Dated Foreign Exchange Forwards

Outright Forwards
Years Bid Offer
Spot 247.95 248.05
### 242.05 242.65
### 235.95 239.05
### 227.95 231.55
### 217.95 222.55
### 208.95 213.55
### 200.95 210.55
### 192.95 204.05
### 185.95 199.05
### 178.95 192.55
### 172.95 189.05
Exhibit 6 Cash Flows of 10-Year ECU Eurobond with
Sinking Fund (millions)

Par: ECU 80 million

Price: 100.250%
Coupon: 9.125%
Fees: 2.000%
Expenses: $75,000
Dollar/ECU: 0.7420

Cash Flows
Year (million ECU)

0 78.499
1 (7.300)
2 (7.300)
3 (7.300)
4 (7.300)
5 (7.300)
6 (23.300)
7 (21.840)
8 (20.380)
9 (18.920)
10 (17.460)
Exhibit 7 ECU/Yen Swap Flows, in Millions (assuming $/ECU of .7420 and yen/dollar of 248)

Disney’s Swap Flows: French Utility’s Swap Flows:

Received from/(paid to) IBJ Received from/(paid to) IBJ
Year ECU Yen ECU Yen
(A) (B) (C) (D)

0.0 (78.499) 14445.153 80.000b (14,445.153)b 6.89%

0.5 (483.226) 483.226 7.50%
1.0 7.300 (483.226) (7.350) 483.226 0.61%
1.5 (483.226) 483.226
2.0 7.300 (483.226) (7.350) 483.226
2.5 (483.226) 483.226
3.0 7.300 (483.226) (7.350) 483.226
3.5 (483.226) 483.226
4.0 7.300 (483.226) (7.350) 483.226
4.5 (483.226) 483.226
5.0 7.300 (1,808.141) (7.350) 1,808.141
5.5 (1,764.650) 1,764.650
6.0 23.300 (1,721.160) (23.350) 1,721.160
6.5 (1,677.670) 1,677.670
7.0 21.840 (1,634.179) (21.880) 1,634.179
7.5 (1,590.689) 1,590.689
8.0 20.380 (1,547.199) (20.410) 1,547.199
8.5 (1,503.708) 1,503.708
9.0 18.920 (1,460.218) (18.940) 1,460.218
9.5 (1,416.728) 1,416.728
10.0 17.460 (1,520.450) (17.470) 1,520.450

Note: These cash flows exclude fees paid to either IBJ or Goldman Sachs.

a
The initial yen principal received by Disney from IBJ are relevant only to the swap transaction and the calculation of an all-in
yen financing cost. By exchanging the initial yen for dollars in the spot market, Disney would eventually obtain new dollar
financing.

b
The principal amounts for the French utility are strictly notional; no net new funding would be obtained by the utility as a result
of the swap.
Amortizing term loan

PV of 8b yen growing perpetuity

PPP mighht mean no FX risk in very long run
Ho long does PPP deviations last : 5 years? 10 Years?
semi-annually compounded 14445.15
-467.1299
reduction in borrowing cost -451.5699
-436.5283
-421.9876
-407.9314
-394.3433
-381.2078
-368.5099
-356.235
-1288.564
-1215.681
-1146.224
-1080.046
-1017
-956.9642
-899.7958
-845.3735
-793.5791
-744.2971
-772.1815
-1E-08
Exhibit 8 Summary of the French Utility’s Outstanding Publicly Traded Eurobonds—as of Mid-1985
(excluding domestic issues, private placements, and term loans)

Life (Years) Yield to

Currency Amount Issue Date Maturity Original Remaining Coupon Maturity
(millions)

Dollars 20 May-71 May-86 15 0.8 8.500% 9.32%

Dollars 50 Jun-77 Jun-87 10 1.9 8.500% 9.30%
Dollars 100 Aug-76 Sep-86 10 1.2 8.900% 9.08%
Dollars 100 Apr-79 Apr-86 7 0.8 9.625% 9.09%
Dollars 125 Jun-80 Jul-88 8 3.0 10.000% 10.09%
Dollars 225 Jun-85 Jul-95 10 10.0 10.000% 10.80%
Dollars 100 Apr-83 May-93 10 7.8 11.125% 10.76%
Dollars 100 May-80 May-90 10 4.9 11.250% 10.84%
Dollars 150 Oct-82 Oct-87 5 2.3 12.750% 9.57%
Dollars 200 Apr-82 Apr-89 7 3.8 14.375% 10.45%
Dollars 500 Sep-84 Sep-94 10 9.2 0.000% 11.44%
Dollars 300 Mar-85 Mar-97 12 11.7 LIBOR+1/4 9.66%
Dollars 400 Feb-84 Feb-99 15 13.7 LIBOR+1/8 9.70%

ECU 75 Feb-85 Mar-95 10 9.7 9.750% 9.37%

ECU 60 Dec-82 Jan-93 10 7.5 12.500% 10.00%

Yen 20,000 Jan-85 Jan-95 10 9.6 6.875% 6.83%

DM 200 Sep-83 Oct-93 10 8.3 8.375% 7.12%

DM 100 Sep-82 Sep-92 10 7.2 8.875% 7.38%

Source: The Association of International Bond Dealers

 French Utility Disney
ECU 9.37% < 9.125% Some markets are thin. Dominated by individuals. Name recognitiion markets.
Yen 6.83% 7.50%
Rating AAA A

Arbitrage opporunity for Disnety to borrow ECU and utility to borrow yen
But fx risk for both
GS says do a swap

Arbitrage gains will be shared between utility, Disney, GS, Jap bank
tiion markets.