Financial Information Disney Corp

Millons of dollars except per share

Balance Sheet 2017 2018 Income Statement 2018

Cash & Equivalents 4,064 4,155 Revenues 59,434
Working Capital 37,825 40,011 Costs or services&products (32,726)
Fixed Assets 28,406 29,540 Margen Bruto 26,708
Net Assets 70,295 73,706 Selling, general, administrative & other (8,860)
Short term debt 6,172 3,790 Other Income 106
Long term debt 19,119 17,084 EBITDA 17,954
Equity 45,004 52,832 Depreciation & amortization (3,011)
Net Assets 70,295 73,706 EBIT 14,943
Interest expenses (682)
Earning per share 8.40 EBT 14,261
Price of shares 114.83 Income Tax (1,663)
Equity Beta 0.901 Net Income 12,598

Total debt 25,291 20,874

Marketcap 172,218 Shares 1,499,762
Assets market Value 193,092 Income Tax 11.7%
MarketValue / Book Value 3.3
ROIC 6.8%
Turnover 0.3
Margin 22%
ROE 7.32%
Debt/Assets 10.8%

Income Statement 2018

Revenues 59,434
Costs or services&products (32,726)
Margen Bruto 26,708
Selling, general, administrative & other (8,860)
Other Income 106
EBITDA 17,954
Depreciation & amortization (3,011)
EBIT 14,943
Income Tax (1,743)
NOPAT 13,200
Interest expenses (682)
Tax shield interest expenses 80
Net Income 12,598
% / vtas Cash Flow 2018
100% EBITDA 17,954
-55% Income Tax (1,743)
45% Working capital requeriments (2,186)
-15% Cash form operations 14,025
0% Capex (4,145) (4,145)
30% Free Cash Flow 9,880
-5% Interest expense net (602)
25% Debt (4,417)
-1% Dividends (6,092)
24% Common stock issued 1,322
-3% Cash form financing activities (9,789)
21% Net Cash Flow 91

% / vtas
100%
-55%
45%
-15%
0%
30%
-5%
25%
-3%
22%
-1%
0%
21%
 Cobertura Default
Calif Intereses spread
AAA > 8,5 2.00%
AA 6,5 - 8,5 2.25%
A+ 4,0 - 6,5 2.50%
A 3,0 - 4 2.75%
BBB 2,50 - 3,0 3.50%
BB+ 2,25 - 2,50 4.25%
BB 2,00 - 2,25 5.00%
B+ 1,75 - 2,00 6.00%
B 1,50 - 1,75 7.25%
B- 1,25 - 1,50 8.50%
CCC 0,80 - 1,25 10.00%
CC 0,65- 0,80 12.00%
C 0,20 - 0,65 15.00%
D < 0,20 20.00%
Risk Free Rate 3.00%
Risk Premium 5.50%
Disney's Beta 0.901
Disney's shares price 114.83
Disney's Q shares 1,499,762
Marginal 2018
Income tax 32.0% 11.7%
Debt / Equity 12.1%

Disney's unlevered Beta 0.8324

Sep-20 Debt u$sb Entreprise vaMrktcap d/E tax beta unlevered
1.08 68.3 262.7 194.4 0.35133745 32% 0.8717344
 % s/Total Assets Bu
Media Networks 59% 0.7056
Parks & Resorts 30% 0.5849
Studio Entertainment 10% 1.3027
Consumer products 1% 1.0690
Situación actual Debt Equity Assets Net EBIT NOPAT + AMORT -
20,874 172,218 193,092 14,943 13,200 3,011

ke = Risk Free Rate + Risk PremiumBeta Lv

7.96% 3.00% 5.50% 0.901

ki = tlr + def spread

5.00% 3.00% 2.00%

wacc = ke * PN/AN + ki * D/AN * Esc fiscal

7.46% 7.96% 89.2% 5.00% 10.8% 68%

Debt/Assets Debt / Equity B l ke Spread ki

0% 0% 0.8324 7.6% 2.00% 5.0%
Actual 10.8% 12% 0.9010 8.0% 2.00% 5.0%
20% 25% 0.9739 8.4% 2.25% 5.3%
30% 43% 1.0750 8.9% 2.50% 5.5%
40% 67% 1.2097 9.7% 3.50% 6.5%
50% 100% 1.3984 10.7% 5.00% 8.0%
60% 150% 1.6814 12.2% 8.50% 11.5%

Costo de capital estimado por negocio

Beta u Beta 10,8% TLR PM ke

Media Networks 0.7056 0.764 3.00% 5.50% 7.20%
Parks & Resorts 0.5849 0.633 3.00% 5.50% 6.48%
Studio Entertainment 1.3027 1.410 3.00% 5.50% 10.76%
Consumer products 1.069 1.157 3.00% 5.50% 9.36%
Disney Corp 0.901 3.00% 5.50% 7.96%

Estimación de efecto en el Beta de Disney Corp por venta del negocio de Studio Entertainment

Situación actual % s/tot activos $ activos

Media Networks 59% $ 113,924
Parks & Resorts 30% $ 57,928
Studio Entertainment 10% $ 19,309
Consumer products 1% $ 1,931
$ 193,092

Se asume venta de los activos sin cambio en el mix de financiación

Se asume que no se alternan los flujos de fondos de los otros negocios por pérdida de sinergias

Nueva situación $ activos % s/tot activos Beta u

Media Networks $ 113,924 66% 0.7056
Parks & Resorts $ 57,928 33% 0.5849
Consumer products $ 1,931 1% 1.0690
$ 173,783 100% 0.6694

ke = Risk Free Rate + Risk PremiumBeta Lv

6.99% 3.00% 5.50% 0.7245773

ki = tlr + def spread

5.00% 3.00% 2.00%

wacc = ke * PN/AN + ki * D/AN * Esc fiscal

6.60% 6.99% 89.19% 5.00% 10.81% 68.00%
 CAPEX +/- WCR = FCF t g Bu
(4,145) (2,186) 9,880 32.0% 2.2% 0.832393457 193,092

12.00%

10.00%

7.58%
8.00% 7.46% 7.40% 7.36%
WACC Int expense Int cov E.Value
7.58% - - 188,934 6.00%
7.46% 1,044 14.32 193,092 2.2%
7.40% 2,027 7.37 195,479 1.2% 4.00%
7.36% 3,186 4.69 196,946 2.0%
7.56% 5,020 2.98 189,572 -3.7% 2.00%
8.07% 7,724 1.93 173,146 -8.7%
9.59% 13,323 1.12 137,255 -20.7% 0.00%
0% 11% 20% 30%

WACC

ki WACC
5.00% 6.79%
5.00% 6.15%
5.00% 9.96%
5.00% 8.72%
5.00% 7.46%

Studio Entertainment
 250,000

9.59%
200,000
8.07%
7.46% 7.40% 7.36% 7.56%
150,000

100,000

50,000

-
11% 20% 30% 40% 50% 60%

WACC E.Value
Debt/AssetsDebt / Equity Bl ke (%) Spread (%) ki (%) WACC (%) Int expense ($)
0% 0%
10.8% 12%
20% 25%
30% 43%
40% 67%
50% 100%
60% 150%
Int cov (x) E.Value ($)