Financial Analysis Behind the Magic at Walt Disney World Resort
Financial Analysis Behind the Magic at Walt Disney World Resort
Financial Analysis Behind the Magic at Walt Disney World Resort
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<strong>Financial</strong> <strong>Analysis</strong><br />
<strong>Behind</strong> <strong>the</strong> <strong>Magic</strong> <strong>at</strong><br />
<strong>Walt</strong> <strong>Disney</strong> <strong>World</strong> <strong>Resort</strong>
Stephanie Janik<br />
Vice President<br />
Oper<strong>at</strong>ions Finance<br />
<strong>Walt</strong> <strong>Disney</strong> <strong>World</strong> <strong>Resort</strong>
Kevin Lansberry<br />
Vice President<br />
Downtown <strong>Disney</strong> Oper<strong>at</strong>ions<br />
<strong>Walt</strong> <strong>Disney</strong> <strong>World</strong> <strong>Resort</strong>
Wh<strong>at</strong> does <strong>Disney</strong> do?
Studio Entertainment<br />
<strong>Walt</strong> <strong>Disney</strong> Studios<br />
Television Production<br />
& Distribution<br />
Media Networks<br />
ABC Television Network<br />
Cable/Intern<strong>at</strong>ional Networks<br />
ESPN<br />
The Company<br />
Organiz<strong>at</strong>ional Overview<br />
The<br />
<strong>Walt</strong> <strong>Disney</strong><br />
Company<br />
Consumer Products<br />
<strong>Disney</strong> C<strong>at</strong>alog<br />
Licensing<br />
Parks & <strong>Resort</strong>s<br />
<strong>Walt</strong> <strong>Disney</strong> <strong>World</strong> <strong>Resort</strong><br />
<strong>Disney</strong>land <strong>Resort</strong><br />
Tokyo <strong>Disney</strong> <strong>Resort</strong><br />
<strong>Disney</strong>land Paris<br />
Hong Kong <strong>Disney</strong>land<br />
(equity investment)<br />
<strong>Disney</strong> Vac<strong>at</strong>ion Club<br />
<strong>Disney</strong> Cruise Line<br />
Adventures by <strong>Disney</strong><br />
<strong>Walt</strong> <strong>Disney</strong> Imagineering<br />
<strong>Disney</strong> Regional Entertainment
The Company<br />
FY 2007 Segment Revenues: $35.5 Billion<br />
Media Networks<br />
42%<br />
Studio<br />
Entertainment<br />
21%<br />
Consumer Products<br />
7%<br />
Parks & <strong>Resort</strong>s<br />
30%
The Company<br />
FY 2007 Segment Oper<strong>at</strong>ing Income: $7.8 Billion<br />
Media Networks<br />
55%<br />
Studio<br />
Entertainment<br />
15%<br />
Parks & <strong>Resort</strong>s<br />
22%<br />
Consumer Products<br />
8%
<strong>Disney</strong>’s Palm<br />
& Magnolia<br />
Golf Courses<br />
4<br />
<strong>Disney</strong>’s<br />
Fort Wilderness Homes<br />
& Campground<br />
1971
<strong>Disney</strong>’s Animal<br />
Kingdom Lodge<br />
<strong>Magic</strong><br />
Kingdom<br />
Park<br />
<strong>Disney</strong>’s<br />
Grand Floridian<br />
Beach <strong>Resort</strong><br />
<strong>Disney</strong>’s<br />
Wedding Pavilion<br />
<strong>Disney</strong>’s<br />
Polynesian<br />
<strong>Resort</strong><br />
<strong>Disney</strong>’s<br />
Coronado Springs<br />
<strong>Resort</strong><br />
<strong>Disney</strong>’s<br />
Animal<br />
<strong>Walt</strong> <strong>Disney</strong> <strong>World</strong><br />
Speedway<br />
Kingdom Blizzard Beach<br />
<strong>Disney</strong>-MGM<br />
Studios<br />
<strong>Disney</strong>’s<br />
All Star Sports <strong>Resort</strong><br />
Seven Seas<br />
Lagoon<br />
<strong>Disney</strong>’s<br />
All Star Music <strong>Resort</strong><br />
<strong>Disney</strong>’s<br />
All Star Movies <strong>Resort</strong><br />
<strong>Walt</strong> <strong>Disney</strong> <strong>World</strong><br />
Dolphin<br />
<strong>Walt</strong> <strong>Disney</strong> <strong>World</strong><br />
Swan<br />
<strong>Disney</strong>’s<br />
Contemporary<br />
<strong>Resort</strong><br />
Bay Lake<br />
<strong>Disney</strong>’s<br />
Wilderness Lodge<br />
Monorail<br />
<strong>Disney</strong>’s<br />
Yacht & Beach<br />
Club <strong>Resort</strong>s<br />
River<br />
Country<br />
<strong>Disney</strong>’s<br />
Port Orleans<br />
<strong>Resort</strong><br />
<strong>Disney</strong>’s<br />
Sports Complex<br />
6<br />
<strong>Disney</strong>’s<br />
Fort Wilderness Homes<br />
& Campground<br />
<strong>Disney</strong>’s<br />
Old Key West<br />
<strong>Resort</strong><br />
Epcot<br />
<strong>Disney</strong>’s<br />
BoardWalk<br />
<strong>Disney</strong>’s<br />
Dixie Landings<br />
<strong>Resort</strong><br />
Typhoon<br />
Lagoon<br />
<strong>Disney</strong>’s<br />
Caribbean Beach<br />
<strong>Disney</strong>’s <strong>Resort</strong><br />
Pop Century<br />
To Tampa<br />
Today<br />
Planet<br />
Hollywood<br />
Pleasure<br />
Island<br />
St. Rd. 535<br />
<strong>Disney</strong>’s Sar<strong>at</strong>oga<br />
Springs <strong>Resort</strong><br />
To Orlando (20 miles)<br />
<strong>Disney</strong><br />
Village Marketplace<br />
Intern<strong>at</strong>ional Drive<br />
To Airport (30 miles)<br />
Osceola<br />
Parkway
Inspir<strong>at</strong>ion<br />
Inspir<strong>at</strong>ion<br />
The Guest Experience<br />
Consider<strong>at</strong>ion<br />
Memories<br />
Arrival<br />
Departure<br />
<strong>Resort</strong> Stay<br />
Theme Park Experience
Inspir<strong>at</strong>ion and Consider<strong>at</strong>ion
<strong>Financial</strong> <strong>Analysis</strong> Concepts:<br />
Inspir<strong>at</strong>ion and Consider<strong>at</strong>ion<br />
• Pricing Theory<br />
• Revenue Management<br />
• Marketing and Sales <strong>Analysis</strong>
<strong>Financial</strong> <strong>Analysis</strong> & Metrics:<br />
• External Factors<br />
Marketing and Sales<br />
– Consumer Confidence & Economic Indic<strong>at</strong>ors<br />
– Competitive Environment<br />
• Internal Factors<br />
– Awareness and Consider<strong>at</strong>ion<br />
– Marketing and Sales Spend as a % of Revenue<br />
– Mix of Media Channel (Traditional v. New)<br />
– Mix of Sales Channel
External Factors<br />
• The Consumer Confidence Index continued to decline, dropping<br />
from 87.3 in January to a five-year low of 75.0 in February<br />
• Infl<strong>at</strong>ion soared in January pushed by higher fuel/energy, food and<br />
medical costs. The increase drove <strong>the</strong> annual infl<strong>at</strong>ion r<strong>at</strong>e to it’s<br />
highest r<strong>at</strong>e in 25 years<br />
• The housing market continued to be neg<strong>at</strong>ive with sales of existing<br />
homes falling to <strong>the</strong> lowest level in a decade and median prices for<br />
homes dropping for <strong>the</strong> fifth straight month
Arrival and <strong>Resort</strong> Stay
<strong>Disney</strong>’s <strong>Magic</strong>al Express<br />
• Capital Investment<br />
• Oper<strong>at</strong>ing Costs<br />
• Incremental <strong>Resort</strong><br />
Room Nights<br />
• Incremental Theme<br />
Park Attendance<br />
• Incremental Revenue<br />
and Oper<strong>at</strong>ing Income
<strong>Financial</strong> <strong>Analysis</strong> & Metrics:<br />
Arrival and <strong>Resort</strong> Stay<br />
• Average Daily Room R<strong>at</strong>e<br />
• Occupancy<br />
• Average Length of Stay<br />
• Revenue per Room<br />
• Cost of Sales / Inventory Management<br />
• Labor Productivity<br />
• Oper<strong>at</strong>ing Income and Margin <strong>Analysis</strong>
Theme Park Experience
Theme Park Experience
<strong>Financial</strong> <strong>Analysis</strong> & Metrics:<br />
Theme Park Experience<br />
• Revenue per Attendee<br />
• Current Trip Individuals<br />
• Visits per Guest<br />
• Incremental Oper<strong>at</strong>ing Income and Margin
Departure
<strong>Financial</strong> <strong>Analysis</strong> & Metrics:<br />
Departure<br />
• Income St<strong>at</strong>ements (Profit & Loss)<br />
• Balance Sheet<br />
• Internal Controls / Sarbanes Oxley<br />
Compliance
Memories and . . . Inspir<strong>at</strong>ion
<strong>Financial</strong> <strong>Analysis</strong> & Metrics:<br />
New Business Opportunities<br />
• Net Present Value<br />
• Internal R<strong>at</strong>e of Return<br />
• Str<strong>at</strong>egic Value and Cannibaliz<strong>at</strong>ion<br />
• Return on Invested Capital
Management Audit<br />
Food & Beverage<br />
Capital and <strong>Financial</strong> Planning<br />
Annual Pricing – Theme Parks and <strong>Resort</strong>s<br />
Str<strong>at</strong>egic Pricing (<strong>Resort</strong>s, Theme Parks, Food & Beverage and Merchandise)<br />
<strong>Resort</strong>s<br />
Finance<br />
Human Resources<br />
Merchandise<br />
Sales<br />
Theme Parks Finance<br />
New Business Development<br />
<strong>Disney</strong>’s Hollywood Studios<br />
<strong>Resort</strong> Pricing<br />
<strong>Resort</strong> Accounting<br />
Products and Services<br />
<strong>Financial</strong> Systems<br />
Planned Work / FAM Accounting<br />
Sports and Recre<strong>at</strong>ion<br />
Inventory Finance<br />
Food & Beverage<br />
Inform<strong>at</strong>ion Technology<br />
<strong>Disney</strong> Vac<strong>at</strong>ion Club<br />
Marketing<br />
Advisory & Assurance<br />
Promotional Pricing
Questions?
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