-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UHSoamBgeMnu4epy4xMzKBQ0p4Jd1uj4wh8mOOiGWSqMb5uoURH6MOrfxoMreLAS dtriI1glc3AMO2deCV2UrQ== 0001001039-97-000031.txt : 19970801 0001001039-97-000031.hdr.sgml : 19970801 ACCESSION NUMBER: 0001001039-97-000031 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19970731 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WALT DISNEY CO/ CENTRAL INDEX KEY: 0001001039 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 954545390 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-11605 FILM NUMBER: 97649545 BUSINESS ADDRESS: STREET 1: 500 SOUTH BUENA VISTA ST CITY: BURBANK STATE: CA ZIP: 91521 BUSINESS PHONE: 8185601000 MAIL ADDRESS: STREET 1: 500 SOUTH BUENA VISTA ST CITY: BURBANK STATE: CA ZIP: 91521 FORMER COMPANY: FORMER CONFORMED NAME: DC HOLDCO INC DATE OF NAME CHANGE: 19950918 10-K/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A Amendment No. 2 Annual Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934 For the Fiscal Year Ended September 30, 1996 Commission File Number 1-11605 THE WALT DISNEY COMPANY Incorporated in Delaware 500 South Buena Vista Street, Burbank, California 91521 (818) 560-1000 I.R.S. Employer Identification Number 95-4545390 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN INDEX TO FINANCIAL STATEMENTS DECEMBER 31, 1996 Report of Independent Accountants F-2 Statements of Net Assets Available for Benefits F-3 Statement of Changes in Net Assets Available for Benefits F-4 Notes to Financial Statements F-5 Supplementary Schedules Schedule I - Line 27a: Schedule of Assets Held for Investment Purposes F-13 Schedule II - Line 27d: Schedule of Reportable Transactions F-14 Other schedules required by Section 2520.103-10 of the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they were not applicable. F-1 REPORT OF INDEPENDENT ACCOUNTANTS June 20, 1997 To the Participants and Investment and Administrative Committee of the Disney Salaried Savings and Investment Plan In our opinion, the accompanying statements of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Disney Salaried Savings and Investment Plan (the "Plan") at December 31, 1996 and 1995 and the changes in its net assets available for benefits for the year ended December 31, 1996, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information included in Schedules I and II is presented for purposes of additional analysis and is not a required part of the basic financial statements but is additional information required by ERISA. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. PRICE WATERHOUSE, LLP F-2 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (In thousands)
December 31, 1996 1995 Assets Investments At fair value: The Walt Disney Company Common Stock Fund $264,378 $204,999 Shares of registered investment companies: Fidelity Inst. Short-Int. Gov't Portfolio Fund 29,775 27,418 Fidelity U.S. Equity Index Commingled Pool Fund 40,538 25,714 Fidelity U.S. Bond Index Portfolio Fund 6,156 4,068 Fidelity Balanced Fund 12,205 9,186 Fidelity Magellan Fund 68,046 54,582 Participant Loans 10,502 8,575 -------- -------- Total investments 431,600 334,542 -------- -------- Receivables: Employer's contribution - 736 Participants' contributions - 2,905 -------- -------- Total receivables - 3,641 -------- -------- Total assets 431,600 338,183 -------- -------- Net assets available for benefits $431,600 $338,183 ======== ========
The accompanying notes are an integral part of these financial statements. F-3 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (In thousands)
For the Year Ended December 31, 1996 ------------ Additions to net assets attributed to: Investment income Interest $ 757 Dividends 13,847 Net realized gain (loss) on sale of assets 681 ------- 15,285 ------- Net unrealized appreciation in fair value of investments 43,347 ------- Contributions: Participants' 46,018 Employer's 11,277 ------- 57,295 ------- Total additions 115,927 ------- Deductions from net assets attributed to: Benefits paid to participants 22,510 ------- Increase in net assets 93,417 Net assets available for benefits: Beginning of year 338,183 ------- End of year $431,600 ========
The accompanying notes are an integral part of these financial statements. F-4 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (Tabular dollars in thousands) 1. Description of the Plan General The Walt Disney Company (the "Company") implemented the Disney Salaried Savings and Investment Plan (the "Plan") on January 1, 1985. The Plan is a defined contribution plan designed to provide participating employees the opportunity to accumulate retirement funds through a tax-deferred contribution arrangement pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended (the "Code"). In addition to the Code, the Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). For further information regarding the Plan, refer to the Summary Plan Description. Administration of the Plan The Board of Directors of the Company has appointed the Investment and Administrative Committee of The Walt Disney Company Sponsored Qualified Benefit Plans and Key Employees Deferred Compensation and Retirement Plan (the "Committee" or "Plan Administrator") to administer the Plan, interpret its provisions and resolve all issues arising in the administration of the Plan. Administrative expenses of the Plan, such as benefit plan consultation fees (exclusive of brokerage commissions on the purchase or sale of Company stock) may be paid from the assets of the Plan unless the Company, at its discretion, pays such expenses. Investment expenses incurred by the Investment Funds are charged to the respective funds. Participation Participation in the Plan is available to all domestic salaried employees of the Company and its subsidiaries participating in the Plan who are regularly scheduled to work 1,000 hours or more during a year. To be eligible, employees must be age 18 or older and have completed one year of employment during which they must also work at least 1,000 hours. Effective March 4, 1993, the Plan was amended to accept direct cash rollovers from other qualified plans after the employee had met the one-year eligibility requirement. On January 12, 1995, the Plan was further amended to accept direct cash rollovers from other qualified plans regardless of whether the employee had met the one-year eligibility requirement. However, such funds would not be available for hardship distributions or loans until after the employee has met the one-year eligibility requirement and has become a participant of the Plan. Contributions Participants are permitted to authorize income deferrals in whole percentages, up to 10 percent of their base compensation on a pre-tax basis, through weekly payroll deductions. A participant's total tax-deferred contributions and the Company's matching contributions, in any Plan year, cannot exceed the limits provided under Section 415 of the Code. F-5 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 1. Description of the Plan (continued) Contributions (continued) Effective January 1, 1987, the Plan ceased to accept voluntary post-tax contributions. Post-tax contributions made prior to January 1, 1987 may remain in the Plan and continue to share in the Plan's investment results on a tax-deferred basis. Income earned on voluntary contributions is not taxable for Federal income tax purposes until withdrawal and such post-tax contributions are recovered tax free when withdrawn or distributed. The Company currently contributes a matching amount equal to 50 percent of a participant's pre-tax contributions up to a maximum of 2 percent of such participant's base compensation. The Company may make matching contributions either in cash, which is invested exclusively in the Company's common stock, or directly in shares of the Company's common stock and, at its discretion, the Company may change the level of matching contributions or cease making matching contributions. Participants are fully vested immediately in all contributions including the Company's matching contributions made to the Plan and all earnings thereon. Investments The assets of the Plan are administered under a trust agreement between the Company and Fidelity Institutional Retirement Services Company ("Fidelity" or the "Trustee"). The trust agreement provides that assets of the Plan may be invested in the following pooled investment funds (collectively the six funds are referred to as the "Investment Funds"), which are established and directed by Fidelity: The Walt Disney Company Common Stock Fund This fund invests entirely in The Walt Disney Company common stock. Fidelity Institutional Short-Intermediate Government Portfolio Fund This fund invests only in fixed income securities issued by the U.S. government or issued by U.S. government agencies. Fidelity U.S. Equity Index Commingled Pool Fund This fund invests in a pool of equity securities that correspond to the total return on the Standard and Poor's 500 Index. Fidelity U.S. Bond Index Portfolio Fund This fund invests in U.S. government, corporate, mortgage and asset-backed fixed income securities in proportion to their representations in the Lehman Brothers Aggregate Bond Index. Fidelity Balanced Fund This fund invests in a broadly diversified portfolio including U.S. government fixed income securities, U.S. government corporate fixed income securities and U.S. equity securities. F-6 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 1. Description of the Plan (continued) Investments (continued) Fidelity Magellan Fund This fund invests primarily in common stock and securities convertible into common stock; however, up to 20 percent of the Fund may be invested in fixed income securities. Additionally, the Fund may invest in foreign securities, high-yield securities, and may buy and sell options and futures contracts relating to securities in the Fund. The Walt Disney Company common stock may be held in the Fund. Participants may direct the investment of their contributions into one or more investment funds established for the Plan. Participants may elect to change the investment of their contributions or to transfer all or part of their account balances among the various investment funds. Only four such elections may be made in any year and must be made in multiples of 10 percent of the amounts in an Investment Fund. All funds are immediately and fully invested in the Investment Funds upon receipt by Fidelity. Benefits, Distributions and Withdrawals A participant's entire account balance, adjusted for investment gains or losses, is available for immediate distribution upon termination of employment. Participants' account balances under $3,500 are automatically distributed within 90 days following the participant's severance date. The participant has 60 days following the participant's severance date to elect whether or not to rollover the funds into an IRA or another qualified plan. If no election is made, the funds will be dispersed to the participant less 20 percent for federal withholding tax. Participants with account balances of $3,500 or more may elect a distribution at anytime before age 65. All amounts must be distributed when the participant reaches age 65. Under Section 401(k) of the Code, in service withdrawals of tax-deferred contributions by participants are available only in amounts necessary to satisfy a financial hardship and will be made if the Committee determines that the reason for the hardship complies with applicable requirements under the Code. A participant may withdraw his or her post-tax contributions twice each Plan year. The minimum amount of each post-tax contribution withdrawal is $500. Loans Participants are permitted to borrow from their accounts subject to certain limitations and conditions established to comply with the current requirements of the Code. All loans made to participants are secured by their accounts with a right of set-off. Voluntary post-tax contributions and any earnings thereon are not available for loans. Participants may borrow up to 50 percent of their account balance not to exceed $50,000 in any consecutive twelve month period. A participant may only have one loan outstanding. F-7 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 1. Description of the Plan (continued) Loans (continued) Loans may have a term of up to four years. However, the term can be extended to ten years if the loan is used to acquire or construct a principal residence of the participant. The interest rate on loans is currently prime plus 1 percent. Plan Amendment or Termination The Company reserves the right to amend or modify, at any time, the provisions of the Plan. Although the Company expects to continue the Plan indefinitely, the Board of Directors of the Company may terminate the Plan for any reason. If the Plan is terminated each participant will receive, as prescribed by ERISA and its related regulations, and in the form and manner determined by the Committee, a payment equal to the value of the participant's account at the time of liquidation. Related Party Transactions Certain Plan investments are shares of mutual funds managed by Fidelity. Fidelity is the trustee as defined by the Plan, and, therefore, these transactions qualify as party-in-interest. 2. Summary of Significant Accounting Policies Basis of Accounting The financial statements of the Plan are prepared using the accrual basis of accounting. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Actual results could differ from those estimates. Contribution Policy Contributions are recorded in the period during which the Company makes payroll deductions from the employees' earnings. Matching company contributions are recorded in the same period. Investment Valuation and Income Recognition Investments in securities traded on national security exchanges are valued on the basis of the closing price on the last trading day of the year. Investments in commingled funds are valued at the redemption prices established by the Trustee, which are based on the market value of the fund assets. Participant loans are valued at cost which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. F-8 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 2. Summary of Significant Accounting Policies (continued) Realized Gains and Losses on Security Transactions Realized gains and losses on security transactions are computed based upon the sales proceeds less the fair value of the investments at the beginning of the year or the acquisition cost, if acquired during the year. Unrealized Appreciation/Depreciation in Fair Value of Investments The appreciation or depreciation in the fair value of investments held at year end is based on values established at the most recent year-end valuation date as compared to the previous year-end valuation or the purchase cost if the investment was acquired within the year. Payment of Benefits Benefits are recorded when paid. F-9 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 3. Summary of Changes in Net Assets Available for Benefits by Investment Program
-------------------------------------------------------------------------------------- The Walt Inst. U.S. Disney Short- Equity U.S. Company Inter Index Bond Common Gov't Commingled Index Stock Portfolio Pool Portfolio Balanced Magellan Loan Fund Fund Fund Fund Fund Fund Fund Total -------- ----------- ----------- ----------- -------- ---------- ------- --------- Additions to net assets attributed to: Investment income Interest $ 11 $ - $ - $ - $ - $ - $ 746 $ 757 Dividends 1,521 1,903 - 348 511 9,564 - 13,847 Net realized gain(loss)on sale of assets 1,489 (89) 246 (40) (19) (906) - 681 -------- ----------- ----------- --------- -------- --------- -------- -------- 3,021 1,814 246 308 492 8,658 746 15,285 -------- ----------- ----------- --------- -------- --------- -------- -------- Net unrealized appreciation (depreciation)in fair value of investments 38,622 (514) 6,534 (109) 522 (1,708) - 43,347 -------- ----------- ----------- --------- -------- --------- ------- -------- Contributions Participants 19,052 3,246 6,241 1,927 3,021 12,531 - 46,018 Employer 11,277 - - - - - - 11,277 -------- ----------- --------- -------- --------- --------- ------- -------- 30,329 3,246 6,241 1,927 3,021 12,531 - 57,295 -------- ----------- --------- -------- --------- --------- ------- -------- Total additions 71,972 4,546 13,021 2,126 4,035 19,481 746 115,927 -------- --------- -------- -------- --------- --------- ------- -------- Deductions from net assets attributed to: -------- --------- -------- -------- --------- --------- ------- -------- Payments to participants 14,153 1,740 1,557 242 834 3,480 504 22,510 -------- --------- -------- -------- --------- --------- ------- -------- Inter-fund transfers (682) (690) 3,052 102 (374) (3,472) 2,064 0 -------- --------- -------- -------- --------- --------- ------- -------- Increase (decrease)in net assets for the year 57,137 2,116 14,516 1,986 2,827 12,529 2,306 93,417 Net assets available for benefits Beginning of year 207,241 27,659 26,022 4,170 9,378 55,517 8,196 338,183 -------- --------- -------- -------- --------- -------- -------- --------- End of year $264,378 $29,775 $40,538 $ 6,156 $ 12,205 $68,046 $10,502 $431,600 ======== ========= ======== ======== ========= ======== ======== =========
F-10 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 4. Income Taxes The Company has received an Internal Revenue Service determination letter stating that the Plan qualifies under Section 401(a) of the Code and is therefore exempt from Federal income tax under Section 501(a) of the Code. Since the Plan is qualified under Section 401(a) of the Code, under applicable state law it is also exempt from state income taxes. The Plan Administrator and the Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Code. Accordingly, no provision for income taxes is made in the accompanying financial statements. 5. Reconciliation of Financial Statements to Form 5500 The following is a reconciliation of net assets available for benefits according to the financial statements to Form 5500:
December 31, 1996 1995 ------ ------ Net assets available for benefits per the financial statements $431,600 $338,183 Amounts allocated to withdrawing participants - (1,788) -------- --------- Net assets available for benefits per Form 5500 $431,600 $336,395 ======== ========
The following is a reconciliation of benefits paid to participants according to the financial statements to Form 5500:
Year Ended December 31, 1996 Benefits paid to participants per the financial statements $22,510 Less: Amounts allocated to withdrawing participants at December 31, 1995 (1,788) -------- Benefits paid to participants per Form 5500 $20,722 ========
Amounts allocated to withdrawing participants are recorded on Form 5500 for benefit claims that have been processed and approved for payment prior to December 31 but not yet paid as of that date. F-11 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 6. Subsequent Events Effective April 1, 1997, the Plan was amended as follows: Applications for loans and certain distributions are now made via the Disney 401(k) Service Line at Fidelity Investments. The Disney Common Stock Fund was unitized, which allows for daily trading for the purchase or sale of stock. The PIMCO Total Return Fund, Fidelity Growth & Income Portfolio Fund, Sequoia Fund, Fidelity Diversified International Fund and Putnam New Opportunities Fund were added to the Plan. The Fidelity U.S. Bond Index Portfolio Fund, Fidelity Balanced Fund and Fidelity U.S. Equity Index Commingled Pool Fund were eliminated from the Plan. Account balances in the Fidelity U.S. Bond Index Portfolio Fund as of April 1, 1997 were transferred into the PIMCO Total Return Fund. Account balances in the Fidelity Balanced Fund and Fidelity U.S. Equity Index Commingled Pool Fund as of April 1, 1997 were transferred into the Fidelity Growth & Income Portfolio Fund. F-12 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN SCHEDULE I LINE 27a: SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 1996 (DOLLARS ARE NOT IN THOUSANDS)
CURRENT SHARE DESCRIPTION OF INVESTMENTS COSTS VALUE - --------- ------------------------------------- ------------ ------------ 3,790,368 *The Walt Disney Company Common Stock $146,151,979 $264,378,134 3,160,871 * Fidelity Inst. Short-Inter Gov't Portfolio Fund 30,408,614 29,775,404 1,996,942 * Fidelity U.S. Equity Index Commingled Pool Fund 26,873,388 40,537,922 582,912 * Fidelity U.S. Bond Index Portfolio Fund 6,175,341 6,155,555 866,874 * Fidelity Balanced Fund 11,433,587 12,205,585 843,716 * Fidelity Magellan Fund 62,125,477 10,501,570 Participant Loans 10,501,570 10,501,570 ------------ ------------ (Maturities go through 2006 Interest rate range from 7.00% to 10.00%) $293,669,956 $431,599,895 ============ ============
* Parties-in-interest F-13 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN SCHEDULE II LINE 27d: SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996 (DOLLARS ARE NOT IN THOUSANDS)
Current Value of Identity Number Cost of Asset on of of Selling/ Assets Trans- party Description Trans- Purchase Distribution Lease Expense Sold/ action involved of Assets actions Price Price Rental Incurred Distributed Date Net gain - --------- ------------ ------- ------------- ------------- ---------- ---------- ------------- ---------- ------------- The Walt * The Walt Disney Disney Company Company Common Stock 150 $40,390,276 94 $21,122,331 $12,652,438 $ 8,469,893 Fidelity * Magellan 228 25,896,502 Fund 171 9,818,405 9,266,857 551,548 * Parties-in-interest
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