Locate the 2004 financial statements for The Walt Disney Company on the Internet at http://www.disney.com. Once you have located those financial statements, consider the following questions.
1. In Note 12 on financial instruments, Disney explains how the company manages interest rate risk and foreign exchange risk. What types of instruments does Disney use to manage foreign exchange risk? What specific currency risk is Disney trying to hedge against? Does Disney speculate with its foreign currency transactions?
2. What types of instruments does Disney use to manage interest rate risk? According to Note 12, what interesting accounting treatment with respect to $148 million in financial instruments related to interest rate risk?
3. What interesting details about pending lawsuits does Disney include in the notes to the financial statements?
4. Disney has four primary business segments: Media Networks, Parks and Resorts, Studio Entertainment, and Consumer Products. Which of these four yields the highest return on assets (Operating income/Identifiable assets)? (Note: Use information from the financial statement notes.)
5. Find Disney’s Quarterly Financial Summary. Do you detect any seasonal pattern in Disney’s revenues? Explain.