-----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, F40QvsYVQc3hKnnwsk7vn2aGxbozq2/Lw3mTCnkHjBn0JlSPGIhXK3hzStpjlpOj cRDWhZhwWWo21yYjZe3n/Q== 0000898430-01-501159.txt : 20010629 0000898430-01-501159.hdr.sgml : 20010629 ACCESSION NUMBER: 0000898430-01-501159 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20010628 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: SEC FILE NUMBER: 001-11605 FILM NUMBER: 1670636 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 d10ka.txt AMENDMENT #1 TO FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended September 30, 2000 Commission File Number 1-11605 [LOGO OF THE WALT DISNEY COMPANY] Incorporated in Delaware I.R.S. Employer Identification No. 500 South Buena Vista Street, Burbank, California 91521 95-4545390 (818) 560-1000 Securities Registered Pursuant to Section 12(b) of the Act: Name of Each Exchange Title of Each Class on Which Registered Disney Common Stock, $.01 par value New York Stock Exchange Securities Registered Pursuant to Section 12(g) of the Act: None. Item 14: Exhibits The registrant is filing this Form 10-K/A to provide financial statements for the Disney Hourly Savings and Investment Plan, the ABC, Inc. Savings and Investment Plan, the Disney Salaried Savings and Investment Plan and the Go.com Savings and Investment Plan in accordance with Section 15(d) of the Securities Exchange act of 1934. The fiscal year end of the plans was December 31, 2000 whereas the registrant's fiscal year end was September 30, 2000. The Walt Disney Company Index to Exhibits Exhibit Number Description - ---------------- ------------------------------------------------------------- 99.1 Financial statements for the Disney Hourly Savings and Investment Plan for the fiscal year ended December 31, 2000 99.2 Financial statements for the ABC, Inc. Savings and Investment Plan for the fiscal year ended December 31, 2000 99.3 Financial statements for the Disney Salaried Savings and Investment Plan for the fiscal year ended December 31, 2000 99.4 Financial statements for the Go.com Savings and Investment Plan for the fiscal year ended December 31, 2000 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE WALT DISNEY COMPANY ______________________________ (Registrant) By: /s/ THOMAS O. STAGGS ______________________________ (Thomas O. Staggs, Senior Executive Vice President and Chief Financial Officer) June 29, 2001 Burbank, California EX-99.1 2 dex991.txt FINANCIAL STATEMENTS FOR THE DISNEY HOURLY Exhibit 99.1 DISNEY HOURLY SAVINGS AND INVESTMENT PLAN REPORT ON FINANCIAL STATEMENTS DECEMBER 31, 2000 DISNEY HOURLY SAVINGS AND INVESTMENT PLAN INDEX TO FINANCIAL STATEMENTS DECEMBER 31, 2000 Page ---- Report of Independent Accountants F-2 Financial Statements: Statement of Net Assets Available for Benefits as of December 31, 2000 F-3 Statement of Changes in Net Assets Available for Benefits For the seven months ended December 31, 2000 F-4 Notes to Financial Statements F-5 Other schedules required by the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are either not applicable or have been filed directly with the Department of Labor as part of the Master Trust filing. F-1 REPORT OF INDEPENDENT ACCOUNTANTS --------------------------------- To the Participants and Plan Administrator of the Disney Hourly Savings and Investment Plan In our opinion, the accompanying statement 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 Hourly Savings and Investment Plan (the "Plan") at December 31, 2000, and the changes in net assets available for benefits for the seven months ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. 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 audit. We conducted our audit of these statements in accordance with auditing standards generally accepted in the United States of America 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 audit provides a reasonable basis for our opinion. June 15, 2001 F-2 DISNEY HOURLY SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS (In thousands)
December 31, 2000 ------------ Assets Investments in master trust: At fair value: The Walt Disney Company Common Stock Fund*,** $ 332 Shares of registered investment companies: Fidelity Magellan Fund* 208 PIMCO Total Return Fund 28 Fidelity Growth & Income Portfolio Fund* 74 Sequoia Fund 24 Fidelity Diversified International Fund 59 Putnam New Opportunities Fund* 172 Fidelity Asset Manager Fund* 66 Fidelity US Equity Index Pool 49 Fidelity Retirement Money Market Portfolio Fund 59 MAS Small Cap Value Portfolio-Adviser Class 34 ------ Total investments 1,105 ------ Receivables: Participants' contributions 176 Employer's contribution 42 ------ Total receivables 218 ------ Net assets available for benefits $1,323 ======
* Investment balance represents 5% or more of the Plan's net assets available for benefits. ** Nonparticipant-directed The accompanying notes are an integral part of these financial statements. F-3 DISNEY HOURLY SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (In thousands)
For the Seven Months Ended December 31, 2000 -------------------- Additions to net assets attributed to: Investment income(loss): Dividends $ 45 Net depreciation in fair value of investments (206) ------ (161) ------ Contributions: Participant 1,212 Employer 274 ------ 1,486 ------ Total additions 1,325 ------ Deductions from net assets attributed to: Benefits paid to participant 2 ------ Net increase 1,323 Net assets available for benefits: Beginning of period 0 ------ End of period $1,323 ======
The accompanying notes are an integral part of these financial statements. F-4 DISNEY HOURLY 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 Hourly Savings and Investment Plan (the "Plan") on June 1, 2000. 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. The assets of the Plan are administered under a trust agreement between the Company and Fidelity Institutional Retirement Services Company ("Fidelity" or the "Trustee"). Pursuant to the trust agreement, Fidelity executes most of the day-to-day activities of administration. 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 hourly employees of the Company and its subsidiaries who are covered by a collective bargaining agreement that provides for participation in the Plan and who are regularly scheduled to work 750 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 750 hours. The Plan accepts direct cash rollovers from other qualified plans regardless of whether the employee has met the one-year eligibility requirement. However, such funds are not 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. F-5 DISNEY HOURLY SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 1. Description of the Plan (continued) - --------------------------------------- Contributions Participants are permitted to authorize income deferrals in whole percentages, up to 15 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. Income earned on voluntary contributions is not taxable for Federal income tax purposes until withdrawal. The Company currently contributes a matching amount equal to 50 percent of the first 4 percent of compensation a participant contributes to the Plan. 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. Vesting Participants are fully vested immediately in their own contributions and are fully vested in their Company matching contributions after they have completed three years of service with the Company. Forfeitures Nonvested employer contributions are forfeited upon termination and revert to the Company. These amounts are used to reduce future employer contributions. Investments Participants may direct the investment of their contributions in any 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 (excluding Company matching contributions) among the various investment funds. Such elections must be made in 1 percent increments. 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 $5,000 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 distributed to the participant less 20 percent for federal withholding tax. Participants with account balances of $5,000 or more may elect a distribution at any time following termination, before age 65. All amounts must be distributed when the participant reaches age 65. F-6 DISNEY HOURLY SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 1. Description of the Plan (continued) - --------------------------------------- Benefits, Distributions and Withdrawals (continued) 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. 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 off-set. 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. 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. 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. Company contributions are recorded in the same period. F-7 DISNEY HOURLY SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 2. Summary of Significant Accounting Policies (continued) - ---------------------------------------------------------- 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. Net Appreciation/Depreciation in Fair Value of Investments The net appreciation or depreciation in the fair value of investments disclosed in the Statement of Changes in Net Assets Available for Benefits consists of realized gains or losses and unrealized appreciation (depreciation) on investments. Payment of Benefits Benefits are recorded when paid. Recent Accounting Pronouncements Effective January 1, 2001, the Plan is required to adopt SFAS 133, "Accounting for Derivative Instruments and Hedging Activities", as amended. This standard establishes a new model for accounting for derivatives and hedging activities and supersedes and amends a number of existing standards. All derivatives are required to be recognized in the statement of net assets available for benefits as either assets or liabilities and measured at fair value. The new standard will not have a material impact on the Plan's financial statements. 3. Investments - --------------- During the seven months ended December 31, 2000, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value as follows: The Walt Disney Company Common Stock Fund $ (83) Shares of registered investment companies (123) ------- $ (206) ======= F-8 DISNEY HOURLY SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 4. Nonparticipant-Directed Investments - --------------------------------------- Information about the significant components of the changes in net assets relating to the nonparticipant-directed investment (The Walt Disney Company Common Stock Fund) is as follows:
Seven Months Ended December 31, 2000 ------------------ Changes in Net Assets: Contributions $ 409 Dividends 2 Net depreciation (83) Net transfers from participant-directed Investments 4 -------- $ 332 ========
5. Income Taxes - ---------------- The Company intends to file for 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 was designed to be 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. 6. 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 the Trustee as a party-in-interest for which a statutory exemption exists. Fees paid by the Plan to the trustee for the seven months ended December 31, 2000 were immaterial. 7. Investment in Disney 401(k) Master Trust - -------------------------------------------- The Plan's investments are held in the Disney 401(k) Master Trust, which includes the assets of the Employee Profit Sharing Plan of ABC, Inc., the Disney Salaried Savings & Investment Plan, the Go.com Savings and Investment Plan, and the ABC, Inc. Savings and Investment Plan, which are defined contribution plans sponsored by the Company. Each participating plan has a specific interest in the Master Trust. Assets of the Master Trust are allocated to the participating plans according to the elections of participants within each plan. At December 31, 2000, the Plan's interest in the net assets of the Master Trust was approximately 0.05%. Investment income of the Master Trust for the seven months ended December 31, 2000 was allocated based upon each Plan's interest within each of the investment funds held by the Master Trust. F-9 DISNEY HOURLY SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 7. Investment in Disney 401(k) Master Trust (continued) - -------------------------------------------------------- Investments held by the Master Trust are as follows: December 31, 2000 ----------------- Investments, at fair value: The Walt Disney Company Common Stock Fund $ 817,279 The Go.com Stock Fund 791 Shares of registered investment companies 1,210,143 Participant loans 30,915 ---------- Total $2,059,128 ========== The investment income(loss) of the Master Trust is as follows: For the seven months Ended December 31, 2000 ----------------------- Investment Income(Loss): Interest and dividends $ 97,442 Net depreciation (460,335) --------- Total $(362,893) ========= The net (depreciation)/appreciation (including net realized gains/losses) in the fair value of the investments held by the Master Trust is as follows: For the seven months Ended December 31, 2000 ----------------------- Net (Depreciation)/Appreciation: The Walt Disney Company Common Stock Fund $(361,829) The Go.com Stock Fund (1,160) Shares of registered investment companies (97,346) --------- Total $(460,335) ========= F-10 EX-99.2 3 dex992.txt FINANCIAL STATEMENT FOR THE ABC, INC. Exhibit 99.2 ABC, INC. SAVINGS & INVESTMENT PLAN REPORT ON FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999 ABC, INC. SAVINGS & INVESTMENT PLAN INDEX TO FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999
Page ---- Report of Independent Accountants F-2 Financial Statements: Statements of Net Assets Available for Benefits as of December 31, 2000 and 1999 F-3 Statement of Changes in Net Assets Available for Benefits For the year ended December 31, 2000 F-4 Notes to Financial Statements F-5
Other schedules required by the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are either not applicable or have been filed directly with the Department of Labor as part of the Master Trust filing. F-1 REPORT OF INDEPENDENT ACCOUNTANTS --------------------------------- To the Participants and Plan Administrator of the ABC, Inc. Savings & 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 ABC, Inc. Savings & Investment Plan (the "Plan") at December 31, 2000 and 1999, and the changes in net assets available for benefits for the year ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. 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 auditing standards generally accepted in the United States of America 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 our opinion. June 15, 2001 F-2 ABC, INC. SAVINGS & INVESTMENT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (In thousands)
December 31, ---------------------- 2000 1999 ---------- ---------- Assets Investments in master trust: At fair value The Walt Disney Company Common Stock Fund*,** $ 437,479 $ 465,112 Shares of registered investment companies: Fidelity Retirement Money Market Portfolio Fund* 173,564 134,557 Fidelity Institutional Short-Intermediate Government Portfolio Fund - 20,390 Fidelity Asset Manager Fund* 76,200 69,132 Fidelity Growth & Income Portfolio Fund* 181,784 195,197 Fidelity Magellan Fund* 195,564 177,035 PIMCO Total Return Fund 4,497 - Putnam New Opportunities Fund 9,175 - Sequoia Fund* 117,854 - MAS Small Cap Value Portfolio-Adviser Class 2,675 - Fidelity Diversified International Fund 4,418 - Fidelity US Equity Index Pool 2,315 - Participant Loans 13,497 12,715 ---------- ---------- Total investments 1,219,022 1,074,138 ---------- ---------- Receivables: Participants' contributions 843 1,432 Employer's contribution 299 504 Interest Income 29 95 ---------- ---------- Total receivables 1,171 2,031 ---------- ---------- Net assets available for benefits $1,220,193 $1,076,169 ========== ==========
* Investment balance represents 5% or more of the Plan's net assets available for benefits. ** Nonparticipant-directed The accompanying notes are an integral part of these financial statements. F-3 ABC, INC. SAVINGS & INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (In thousands)
For the Year Ended December 31, 2000 ------------------ Additions to net assets attributed to: Investment income(loss): Dividends $ 67,844 Interest 990 Net depreciation in fair value of investments (71,540) ---------- (2,706) ---------- Contributions: Participant 34,055 Employer 12,112 ---------- 46,167 ---------- Total additions 43,461 ---------- Deductions from net assets attributed to: Benefits paid to participants 96,818 Administrative expenses 85 ---------- Total deductions 96,903 ---------- Net decrease (53,442) Transfer in of assets from the Employee Profit Sharing Plan of ABC, Inc. (Note 1) 223,300 Transfer out of assets (Note 1) (25,834) ---------- Net increase including transfers 144,024 Net assets available for benefits: Beginning of year 1,076,169 ---------- End of year $1,220,193 ==========
The accompanying notes are an integral part of these financial statements. F-4 ABC, INC. SAVINGS & INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (Tabular dollars in thousands) 1. Description of the Plan - --------------------------- General The ABC, Inc. Savings & Investment Plan (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) and after-tax contributions pursuant to Section 401(a) 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 and fund prospectus. Administration of the Plan On February 9, 1996, The Walt Disney Company acquired ABC, Inc. (the "Company") (previously called "Capital Cities/ABC, Inc."). The Company appointed the Employee Benefits Committee (the "Committee" or "Plan Administrator") to administer the Plan, interpret its provisions and resolve all issues arising in the administration of the Plan. The assets of the Plan are administered under a trust agreement between the Company and Fidelity Institutional Retirement Services Company ("Fidelity" or the "Trustee"). Pursuant to the trust agreement, Fidelity executes most of the day-to-day activities of administration. Participation Participation in the Plan is available to qualified employees of the Company and those other subsidiaries and divisions of ABC, Inc. which were a part of, or affiliates of the American Broadcasting Companies, Inc. ("ABC") (an indirect wholly-owned subsidiary of ABC, Inc.) prior to January 1, 1989. Individuals who became employees of the corporate and other broadcasting properties of ABC, Inc. subsequent to 1988 also are eligible to participate in the Plan as are employees of certain properties within the Company's Publishing Group not part of ABC, Inc. prior to January 1, 1989. Effective April 1, 1998, certain employees of the corporate and broadcasting operations of the Company hired prior to January 1, 1989 who were previously ineligible for the Plan and participating in the Employee Profit Sharing Plan of ABC, Inc., a defined contribution plan sponsored by the Company, became eligible to participate in the Plan. Transfer of Assets Effective November 1, 2000, the Employee Profit Sharing Plan of ABC, Inc., was merged with and into the Plan, which resulted in the transfer of $223,299,919 of assets into the Plan. During 1999, the Company sold certain Publishing Group properties. In accordance with the terms and conditions of the sales, total net assets amounting to $25,834,244 were transferred to successor trustees in 2000. F-5 ABC, INC. SAVINGS & INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 1. Description of the Plan (continued) - --------------------------------------- Contributions Participants are permitted to authorize contributions in whole percentages, up to 10 percent of their base compensation on a pre-tax or after-tax basis, through payroll deductions. A participant's total contributions and the Company's matching contributions, in any Plan year, cannot exceed the limits provided under Sections 401(k), 401(a) and 415 of the Code. The Company currently contributes a matching amount equal to 50 percent of the first 5 percent of compensation a participant contributes to the Plan. The Company may make matching contributions either in cash, which is invested exclusively in the common stock of The Walt Disney Company, or directly in shares of the common stock of The Walt Disney Company and, at its discretion, the Company may change the level of matching contributions or cease making matching contributions. Participants may not transfer matched company contributions from The Walt Disney Company Common Stock Fund. However, participants are allowed to transfer matched contributions made prior to the merger of ABC, Inc. with The Walt Disney Company into any fund of their choice. Vesting Participants are immediately 100 percent vested with respect to all contributions made by the participant. Effective January 1, 1995, once the participant completes five years of service, matching employer contributions are immediately 100 percent vested. Prior to completion of the fifth year of service, matching employer contributions vest 50 percent at the end of the Plan year for which the contributions are made, and the remaining 50 percent at the end of the subsequent Plan year. Additionally, a participant's account is considered fully vested upon attaining age 65, or death while in active service, or upon termination of service because of permanent and total disability. Forfeitures Nonvested employer contributions are forfeited upon termination and revert to the Company. These amounts are used to reduce future employer contributions. Investments Participants may direct the investment of their contributions in any 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. Such elections must be made in 1 percent increments. All funds are maintained on a unit basis. Unit value is determined daily by dividing the total assets of the fund by the total number of units allocated to participants' accounts. F-6 ABC, INC. SAVINGS & INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 1. Description of the Plan (continued) - --------------------------------------- Investments (continued) Brokerage commissions and stock transfer taxes in connection with the purchase or sale of securities are absorbed within the net asset value of each investment fund on each business day. All other costs and expenses incurred in connection with the administration of the Plan will be charged to the participants' accounts. Benefits, Distributions and Withdrawals A participant's entire vested account balance, adjusted for investment gains or losses, is available for immediate distribution upon termination of employment. Participant account balances under $5,000 are automatically distributed within 60 days following the participant's severance date or as soon as possible, thereafter. All amounts must be distributed when the terminated 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. Under Section 401(a) of the Code, in service withdrawals of the value of after- tax contributions by participants can be made at any time, for any reason. In compliance with the Code, active participants who have reached age 70 and one- half must (unless exempt) take an annual minimum required distribution commencing not later than April 1, of the year following the year they attain age 70 and one-half. 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 off-set. Participants may borrow up to 50 percent of their vested account balance not to exceed $50,000 in any consecutive twelve-month period. A participant may only have one loan outstanding. Loans may have a term of up to five years. The interest rate on loans is currently Chase Manhattan Bank of New York's prime rate 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 vested account at the time of liquidation. F-7 ABC, INC. SAVINGS & INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 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. 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. Net Appreciation/Depreciation in Fair Value of Investments The net appreciation or depreciation in the fair value of investments disclosed in the Statement of Changes in Net Assets Available for Benefits consists of realized gains or losses and unrealized appreciation (depreciation) on investments. Payment of Benefits Benefits are recorded when paid. Reclassifications Certain reclassifications have been made to the prior year amounts to conform to the current year presentation. Recent Accounting Pronouncements Effective January 1, 2001, the Plan is required to adopt SFAS 133, "Accounting for Derivative Instruments and Hedging Activities", as amended. This standard establishes a new model for accounting for derivatives and hedging activities and supersedes and amends a number of existing standards. All derivatives are required to be recognized in the statement of net assets available for benefits as either assets or liabilities and measured at fair value. The new standard will not have a material impact on the Plan's financial statements. F-8 ABC, INC. SAVINGS & INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 3. Investments - --------------- During 2000, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value as follows: The Walt Disney Company Common Stock Fund $ 2,801 Shares of registered investment companies (74,341) -------- $(71,540) ========
4. Nonparticipant-Directed Investments - --------------------------------------- Information about the significant components of the changes in net assets relating to the nonparticipant-directed investment (The Walt Disney Company Common Stock Fund) is as follows:
Year Ended December 31, 2000 ------------ Changes in Net Assets: Contributions $ 23,934 Dividends 3,117 Net appreciation 2,801 Benefits paid to participants (33,103) Administrative expenses (11) Net transfers to participant-directed Investments and other plans (See Note 1) (24,371) -------- $(27,633) ========
5. Income Taxes - ---------------- The Company received an Internal Revenue Service determination letter dated March 28, 1996, stating that the Plan, as currently amended, 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. 6. 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 the Trustee as a party-in-interest for which a statutory exemption exists. Fees paid by the Plan to the Trustee amounted to $85,107 for the year ended December 31, 2000. F-9 ABC, INC. SAVINGS & INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 7. 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, ----------------------- 2000 1999 ---------- ---------- Net assets available for benefits per the financial statements $1,220,193 $1,076,169 Amounts allocated to withdrawing participants (1,217) (1,232) ---------- ---------- Net assets available for benefits per Form 5500 $1,218,976 $1,074,937 ========== ==========
The following is a reconciliation of benefits paid to participants according to the financial statements to Form 5500:
For the Year Ended December 31, 2000 ------------------ Benefits paid to participants per the financial statements $96,818 Add: Amounts allocated to withdrawing participants at December 31, 2000 1,217 Less: Amounts allocated to withdrawing participants at December 31, 1999 (1,232) ------- Benefits paid to participants per Form 5500 $96,803 =======
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, 2000 but not yet paid as of that date. 8. Investment in ABC Master Trust - ---------------------------------- Prior to June 1, 2000, the Plan's investments were held in a Master Trust (the "ABC Master Trust") along with the assets of the Employee Profit Sharing Plan of ABC, Inc. Each participating plan had a specific interest in the ABC Master Trust. Assets of the ABC Master Trust were allocated to the participating plans according to the elections of participants within each plan. At December 31, 1999, the Plan's interest in the net assets of the ABC Master Trust was approximately 82.8%. Investment income of the ABC Master Trust for the five months ended May 31, 2000 was allocated based upon each Plan's interest within each of the investment funds held by the ABC Master Trust. On May 31, 2000, the current ABC Master Trust agreement was terminated and the Plan's investments were transferred into the Disney 401(k) Master Trust, along with the assets of the Employee Profit Sharing Plan of ABC, Inc., the Disney Salaried Savings & Investment Plan, the Go.com Savings and Investment Plan, and the Disney Hourly Savings and Investment Plan (see Note 9), which are defined contribution plans sponsored by the Company. F-10 ABC, INC. SAVINGS & INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 8. Investment in ABC Master Trust (continued) - ---------------------------------------------- Investments held by the ABC Master Trust were as follows:
December 31, 1999 ----------------- Investments, at fair value: The Walt Disney Company Common Stock Fund $ 465,112 Shares of registered investment companies 817,276 Participant loans 14,622 ---------- Total $1,297,010 ==========
The investment income of the ABC Master Trust is as follows:
For the five months Ended May 31, 2000 ------------------- Investment Income: Interest and dividends $ 10,918 Net appreciation 179,678 -------- Total $190,596 ========
The net (depreciation)/appreciation (including net realized gains/losses) in the fair value of the investments held by the ABC Master Trust is as follows:
For the five months Ended May 31, 2000 ------------------- Net (Depreciation)/Appreciation: The Walt Disney Company Common Stock Fund $196,097 Shares of registered investment companies (16,419) -------- Total $179,678 ========
9. Investment in Disney 401(k) Master Trust - -------------------------------------------- Effective June 1, 2000, the Plan's investments were transferred into the Disney 401(k) Master Trust, which includes the assets of the Employee Profit Sharing Plan of ABC, Inc., the Disney Salaried Savings & Investment Plan, the Go.com Savings and Investment Plan, and the Disney Hourly Savings and Investment Plan. Each participating plan has a specific interest in the Disney 401(k) Master Trust. Assets of the Disney 401(k) Master Trust are allocated to the participating plans according to the elections of participants within each plan. At December 31, 2000, the Plan's interest in the net assets of the Disney 401(k) Master Trust was approximately 59.2%. Investment income of the Disney 401(k) Master Trust for the seven months ended December 31, 2000 was allocated based upon each Plan's interest within each of the investment funds held by the Disney 401(k) Master Trust. F-11 ABC, INC. SAVINGS & INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) Investments held by the Disney 401(k) Master Trust are as follows:
December 31, 2000 ----------------- Investments, at fair value: The Walt Disney Company Common Stock Fund $ 817,279 The Go.com Stock Fund 791 Shares of registered investment companies 1,210,143 Participant loans 30,915 ---------- Total $2,059,128 ==========
The investment income(loss) of the Disney 401(k) Master Trust is as follows:
For the seven months Ended December 31, 2000 ----------------------- Investment Income(Loss): Interest and dividends $ 97,442 Net depreciation (460,335) --------- Total $(362,893) =========
The net (depreciation)/appreciation (including net realized gains/losses) in the fair value of the investments held by the Disney 401(k) Master Trust is as follows:
For the seven months Ended December 31, 2000 ----------------------- Net (Depreciation)/Appreciation: The Walt Disney Company Common Stock Fund $(361,829) The Go.com Stock Fund (1,160) Shares of registered investment companies (97,346) --------- Total $(460,335) =========
F-12 EX-99.3 4 dex993.txt FINANCIAL STATEMENT FOR THE DISNEY SALARIED Exhibit 99.3 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN REPORT ON FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN INDEX TO FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999
Page ---- Report of Independent Accountants F-2 Financial Statements: Statements of Net Assets Available for Benefits as of December 31, 2000 and 1999 F-3 Statement of Changes in Net Assets Available for Benefits For the year ended December 31, 2000 F-4 Notes to Financial Statements F-5
Other schedules required by the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are either not applicable or have been filed directly with the Department of Labor as part of the Master Trust filing. F-1 REPORT OF INDEPENDENT ACCOUNTANTS --------------------------------- To the Participants and Plan Administrator 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, 2000 and 1999, and the changes in net assets available for benefits for the year ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. 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 auditing standards generally accepted in the United States of America 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 our opinion. June 15, 2001 F-2 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (In thousands)
December 31, ------------------ 2000 1999 -------- -------- Assets Investments in master trust***: At fair value: The Walt Disney Company Common Stock Fund*,** $376,998 $383,635 Shares of registered investment companies: Fidelity Institutional Short-Intermediate Government Portfolio Fund - 36,657 Fidelity Magellan Fund* 152,903 164,824 PIMCO Total Return Fund 16,653 13,418 Fidelity Growth & Income Portfolio Fund* 115,474 121,203 Sequoia Fund 37,118 32,965 Fidelity Diversified International Fund 19,481 15,875 Putnam New Opportunities Fund 36,884 30,646 Fidelity Asset Manager Fund 1,037 - Fidelity US Equity Index Pool 1,843 - Fidelity Retirement Money Market Portfolio Fund 36,739 - MAS Small Cap Value Portfolio-Adviser Class 1,191 - Participant Loans 17,077 16,194 -------- -------- Total investments 813,398 815,417 -------- -------- Receivables: Participants' contributions 5,048 2,584 Employer's contribution 1,235 646 Interest income 110 50 -------- -------- Total receivables 6,393 3,280 -------- -------- Net assets available for benefits $819,791 $818,697 ======== ========
* Investment balance represents 5% or more of the Plan's net assets available for benefits. ** Nonparticipant-directed *** Investments at December 31, 1999 were not included in a master trust. A master trust was established on April 1, 2000 (See Note 8). 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, 2000 ------------------ Additions to net assets attributed to: Investment income(loss): Dividends $ 36,598 Interest 1,340 Net depreciation in fair value of investments (60,206) -------- (22,268) -------- Contributions: Participant 74,675 Employer 17,245 -------- 91,920 -------- Total additions 69,652 -------- Deductions from net assets attributed to: Benefits paid to participants 59,908 Administrative expenses 66 -------- Total deductions 59,974 -------- Net increase 9,678 Transfer of assets to the GO.com Savings and Investment Plan (Note 1) (8,584) -------- Net increase including transfer 1,094 Net assets available for benefits: Beginning of year 818,697 -------- End of year $819,791 ========
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. The assets of the Plan are administered under a trust agreement between the Company and Fidelity Institutional Retirement Services Company ("Fidelity" or the "Trustee"). Pursuant to the trust agreement, Fidelity executes most of the day-to-day activities of administration. 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. The Plan accepts direct cash rollovers from other qualified plans regardless of whether the employee has met the one-year eligibility requirement. However, such funds are not 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. Transfer of Assets During April 2000, $8,584,375 was transferred into the GO.com Savings and Investment Plan (a defined contribution plan sponsored by the Company) related to participants who had been previously transferred to the employ of Go.com. F-5 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 1. Description of the Plan (continued) - --------------------------------------- Contributions Participants are permitted to authorize income deferrals in whole percentages, up to 15 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. 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 the first 4 percent of compensation a participant contributes to the Plan. 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. Vesting Participants are fully vested immediately in all contributions including the Company's matching contributions made to the Plan and all earnings thereon. Investments Participants may direct the investment of their contributions in any 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 (excluding Company matching contributions) among the various investment funds. Such elections must be made in 1 percent increments. 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 $5,000 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 distributed to the participant less 20 percent for federal withholding tax. Participants with account balances of $5,000 or more may elect a distribution at any time following termination, before age 65. All amounts must be distributed when the participant reaches age 65. F-6 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 1. Description of the Plan (continued) - --------------------------------------- Benefits, Distributions and Withdrawals (continued) 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 off-set. 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. 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. 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. Company contributions are recorded in the same period. F-7 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 2. Summary of Significant Accounting Policies (continued) - ---------------------------------------------------------- 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. Net Appreciation/Depreciation in Fair Value of Investments The net appreciation or depreciation in the fair value of investments disclosed in the Statement of Changes in Net Assets Available for Benefits consists of realized gains or losses and unrealized appreciation (depreciation) on investments. Payment of Benefits Benefits are recorded when paid. Recent Accounting Pronouncements Effective January 1, 2001, the Plan is required to adopt SFAS 133, "Accounting for Derivative Instruments and Hedging Activities", as amended. This standard establishes a new model for accounting for derivatives and hedging activities and supersedes and amends a number of existing standards. All derivatives are required to be recognized in the statement of net assets available for benefits as either assets or liabilities and measured at fair value. The new standard will not have a material impact on the Plan's financial statements. 3. Investments - --------------- During 2000, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value as follows: The Walt Disney Company Common Stock Fund $ (1,546) Shares of registered investment companies (58,660) ------ $ (60,206) ======
F-8 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 4. Nonparticipant-Directed Investments - --------------------------------------- Information about the significant components of the changes in net assets relating to the nonparticipant-directed investment (The Walt Disney Company Common Stock Fund) is as follows:
Year Ended December 31, 2000 ------------ Changes in Net Assets: Contributions $ 37,202 Dividends 2,674 Net depreciation (1,546) Benefits paid to participants (28,609) Administrative expenses (13) Net transfers to participant-directed investments (13,239) Transfer of assets to the Go.com Savings and Investment Plan (3,106) -------- $ (6,637) ========
5. Income Taxes - ---------------- The Company has received an Internal Revenue Service determination letter dated June 18, 1996 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. 6. 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 the Trustee as a party-in-interest for which a statutory exemption exists. Fees paid by the Plan to the Trustee amounted to $66,141 for the year ended December 31, 2000. F-9 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 7. 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, ------------------- 2000 1999 -------- -------- Net assets available for benefits per the financial statements $819,791 $818,697 Amounts allocated to withdrawing participants (671) (292) -------- -------- Net assets available for benefits per Form 5500 $819,120 $818,405 ======== ========
The following is a reconciliation of benefits paid to participants according to the financial statements to Form 5500:
Year Ended December 31, 2000 ------------ Benefits paid to participants per the financial statements $59,908 Add: Amounts allocated to withdrawing participants at December 31, 2000 671 Less: Amounts allocated to withdrawing participants at December 31, 1999 (292) ------- Benefits paid to participants per Form 5500 $60,287 =======
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, 2000 but not yet paid as of that date. F-10 DISNEY SALARIED SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 8. Investment in Disney 401(k) Master Trust - -------------------------------------------- Effective April 1, 2000, the trust agreement between the Company and the Trustee was converted to a master trust agreement to include the investments of the Go.com Savings and Investment Plan. Effective June 1, 2000, the master trust agreement, known as the Disney 401(k) Master Trust, accepted the investments of the Employee Profit Sharing Plan of ABC, Inc., the ABC, Inc. Savings & Investment Plan, and the Disney Hourly Savings and Investment Plan, which are defined contribution plans sponsored by the Company. Each participating plan has a specific interest in the Master Trust. Assets of the Master Trust are allocated to the participating plans according to the elections of participants within each plan. At December 31, 2000, the Plan's interest in the net assets of the Master Trust was approximately 39.5%. Investment income of the Master Trust for the nine months ended December 31, 2000 was allocated based upon each Plan's interest within each of the investment funds held by the Master Trust. Investments held by the Master Trust are as follows:
December 31, 2000 ----------------- Investments, at fair value: The Walt Disney Company Common Stock Fund $ 817,279 The Go.com Stock Fund 791 Shares of registered investment companies 1,210,143 Participant loans 30,915 ---------- Total $2,059,128 ==========
The investment income(loss) of the Master Trust is as follows:
For the nine months Ended December 31, 2000 ----------------------- Investment Income(Loss): Interest and dividends $ 101,848 Net depreciation (482,160) --------- Total $(380,312) =========
The net (depreciation)/appreciation (including net realized gains/losses) in the fair value of the investments held by the Master Trust is as follows:
For the nine months Ended December 31, 2000 ----------------------- Net (Depreciation)/Appreciation: The Walt Disney Company Common Stock Fund $(351,386) The Go.com Stock Fund (1,463) Shares of registered investment companies (129,311) --------- Total $(482,160) =========
F-11 EX-99.4 5 dex994.txt FINANCIAL STATEMENT FOR THE GO.COM Exhibit 99.4 GO.COM SAVINGS AND INVESTMENT PLAN (FORMERLY THE INFOSEEK CORPORATION 401(K) PLAN) REPORT ON FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999 GO.COM SAVINGS AND INVESTMENT PLAN INDEX TO FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999
Page - ---- Report of Independent Accountants F-2 Financial Statements: Statements of Net Assets Available for Benefits as of December 31, 2000 and 1999 F-3 Statement of Changes in Net Assets Available for Benefits For the year ended December 31, 2000 F-4 Notes to Financial Statements F-5
Other schedules required by the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are either not applicable or have been filed directly with the Department of Labor as part of the Master Trust filing. F-1 REPORT OF INDEPENDENT ACCOUNTANTS --------------------------------- To the Participants and Plan Administrator of the GO.com 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 GO.com Savings and Investment Plan (formerly the Infoseek Corporation 401(k) Plan, the "Plan") at December 31, 2000 and 1999, and the changes in net assets available for benefits for the year ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. 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 auditing standards generally accepted in the United States of America 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 our opinion. June 28, 2001 F-2 GO.COM SAVINGS AND INVESTMENT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS (In thousands) December 31, ------------------ 2000 1999 ------- ------- Assets Investments in master trust***: At fair value: The Walt Disney Company Common Stock Fund* $ 2,470 $ - The GO.com Common Stock Fund** 791 559 Shares of registered investment companies: Fidelity Magellan Fund* 5,013 1,446 PIMCO Total Return Fund 283 - Fidelity Growth & Income Portfolio Fund* 6,334 - Sequoia Fund* 1,943 - Fidelity Diversified International Fund* 1,514 - Putnam New Opportunities Fund* 5,647 - Fidelity Asset Manager Fund 24 - Fidelity US Equity Index Pool 74 - Fidelity Retirement Money Market Portfolio Fund 1,136 - MAS Small Cap Value Portfolio-Adviser Class 33 - Federated Maximum Capital Fund* - 1,323 Fidelity Advisor Growth Opportunities Fund* - 1,392 Gabelli Growth Fund* - 1,060 Invesco Select Income Fund - 61 Invesco Technology II Fund* - 3,524 Ivy International Fund A - 792 Lasalle National Income Plus Fund - 645 Massachusetts Investors Trust Fund - 676 MFS Capital Opportunities Fund* - 1,358 MFS Emerging Growth Fund* - 2,280 MFS Total Return Fund - 393 Neuberger and Berman Trust Fund - 685 First Trust Money Market Fund - 63 Participant Loans 341 85 ------- ------- Total investments 25,603 16,342 ------- ------- Receivables: Participants' contributions 545 120 Employer's contribution 174 202 ------- ------- Total receivables 719 322 ------- ------- Net assets available for benefits $26,322 $16,664 ======= ======= * Investment balance represents 5% or more of the Plan's net assets available for benefits. ** Nonparticipant-directed *** Investments at December 31, 1999 were not included in a master trust. A master trust was established on April 1, 2000 (See Note 8). The accompanying notes are an integral part of these financial statements. F-3 GO.COM SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (In thousands) For the Year Ended December 31, 2000 ------------------ Additions to net assets attributed to: Investment income: Dividends $ 2,243 Interest 17 Net depreciation in fair value of investments (6,225) -------- (3,965) -------- Contributions: Participant 7,133 Employer 1,973 -------- 9,106 -------- Total additions 5,141 -------- Deductions from net assets attributed to: Benefits paid to participants 4,066 Administrative expenses 1 -------- Total deductions 4,067 -------- Net increase 1,074 Transfer of assets from the Disney Salaried Savings And Investment Plan (Note 1) 8,584 -------- Net increase including transfer 9,658 -------- Net assets available for benefits: Beginning of year 16,664 -------- End of year $ 26,322 ======== The accompanying notes are an integral part of these financial statements. F-4 GO.COM SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (Tabular dollars in thousands) 1. Description of the Plan - --------------------------- General The Infoseek Corporation implemented the Infoseek Corporation 401(k) Plan on January 1, 1996. The Walt Disney Company (the "Company") acquired the Infoseek Corporation on November 17, 1999, and on April 1, 2000, the Company renamed the Infoseek Corporation 401(k) Plan as the GO.com Savings and Investment Plan (the "Plan"). 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 Effective April 1, 2000, 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") was appointed to administer the Plan, interpret its provisions and resolve all issues arising in the administration of the Plan. Prior to April 1, 2000, the Plan was administered by the Infoseek Corporation. The assets of the Plan are administered under a trust agreement between the Company and Fidelity Institutional Retirement Services Company ("Fidelity" or the "Trustee"). Pursuant to the trust agreement, Fidelity executes most of the day-to-day activities of administration. Effective April 1, 2000, Fidelity assumed the role of Trustee from First Trust Corporation (the "Prior Trustee"). 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 Prior to April 1, 2000, all full-time employees of the former Infoseek Corporation of at least 18 years of age were eligible to participate in the Plan. Participation in the Plan starting April 1, 2000 became available to all domestic employees of Go.com 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 ninety days of employment during which they must also work at least 260 hours. The Plan accepts direct cash rollovers from other qualified plans regardless of whether the employee has met the ninety day eligibility requirement. However, such funds are not available for hardship distributions or loans until after the employee has met the ninety day eligibility requirement and has become a participant of the Plan. F-5 GO.COM SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 1. Description of the Plan (continued) - --------------------------------------- Transfer of Assets During April 2000, $8,584,375 was transferred into the Plan from the Disney Salaried Savings and Investment Plan (a defined contribution plan sponsored by the Company) related to participants who had been previously transferred to the employ of Go.com and its subsidiaries. Contributions Participants are permitted to authorize income deferrals in whole percentages, up to 15 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. Income earned on voluntary contributions is not taxable for Federal income tax purposes until withdrawal. The Company currently contributes a matching amount equal to 50 percent of the first 6 percent of compensation a participant contributes to the Plan. The Company may make matching contributions either in cash, which is invested exclusively in Go.com common stock, or directly in shares of Go.com common stock and, at its discretion, the Company may change the level of matching contributions or cease making matching contributions. Company matching contributions can then be invested in Company common stock or a combination of Go.com and Company common stock. Vesting Participants are fully vested immediately in their own contributions and are fully vested in the Company's matching contributions made to the Plan after they have completed one year of service. Forfeitures Nonvested employer contributions are forfeited upon termination and revert to the Company. These amounts are used to reduce future employer contributions. Prior to April 1, 2000, the employer matching contribution was equal to 50 percent of a participants' pre-tax contributions up to a maximum of $2,000. All such employer contributions were invested in GO.com common stock. Employee contributions were not permitted to be invested in the GO.com company stock. Employer contributions vested over a period of 4 years. Effective April 1, 2000, all participants in the plan became fully vested in all employer contributions made prior to that date. Investments Participants may direct the investment of their contributions in any 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. Such elections must be made in 1 percent increments. F-6 GO.COM SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 1. Description of the Plan (continued) - --------------------------------------- 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 $5,000 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. Prior to April 1, 2000, participants had 90 days to make an election. 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 $5,000 or more may elect a distribution at anytime following termination, 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. 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 off-set. 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. 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. 2. Summary of Significant Accounting Policies - ---------------------------------------------- Basis of Accounting The financial statements of the Plan are prepared using the accrual basis of accounting. F-7 GO.COM SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 2. Summary of Significant Accounting Policies (continued) - ---------------------------------------------------------- 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. 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. Net Appreciation/Depreciation in Fair Value of Investments The net appreciation or depreciation in the fair value of investments disclosed in the Statement of Changes in Net Assets Available for Benefits consists of realized gains or losses and unrealized appreciation (depreciation) on investments. Payment of Benefits Benefits are recorded when paid. Recent Accounting Pronouncements Effective January 1, 2001, the Plan is required to adopt SFAS 133, "Accounting for Derivative Instruments and Hedging Activities", as amended. This standard establishes a new model for accounting for derivatives and hedging activities and supersedes and amends a number of existing standards. All derivatives are required to be recognized in the statement of net assets available for benefits as either assets or liabilities and measured at fair value. The new standard will not have a material impact on the Plan's financial statements. 3. Investments - --------------- During 2000, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value as follows: Common stock $(2,620) Shares of registered investment companies (3,605) ----- $(6,225) ===== F-8 GO.COM SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 4. Nonparticipant-Directed Investments - --------------------------------------- Information about the significant components of the changes in net assets relating to the nonparticipant-directed investment (the GO.com Common Stock Fund) is as follows: Year ended December 31, 2000 --------------- Changes in Net Assets Contributions $ 1,867 Dividends 116 Net depreciation (1,563) Benefits paid to participants (86) Net transfers to participant-directed investments (102) -------- $ 232 ======== 5. Income Taxes - ---------------- The Company has received an Internal Revenue Service determination letter dated January 18, 1997 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. The Plan has subsequently been amended and the Company believes that the Plan still qualifies under Section 401(a) of the Code. Since the Plan, as amended, was designed to be 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. 6. 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 the Trustee as a party-in-interest for which a statutory exemption exists. Fees paid by the Plan to the Trustee and the Prior Trustee amounted to $1,060 for the year ended December 31, 2000. F-9 GO.COM SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 7. 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, ---------------------- 2000 1999 --------- --------- Net assets available for benefits per the financial statements $ 26,322 $ 16,664 Amounts allocated to withdrawing participants (53) (9) --------- --------- Net assets available for benefits per Form 5500 $ 26,269 $ 16,655 ========= ========= The following is a reconciliation of benefits paid to participants according to the financial statements to Form 5500: Year Ended December 31, 2000 ------------ Benefits paid to participants per the financial statements $ 4,066 Add: Amounts allocated to withdrawing participants at December 31, 2000 53 Less: Amounts allocated to withdrawing participants at December 31, 1999 (9) ------- Benefits paid to participants per Form 5500 $ 4,110 ======= 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, 2000 but not yet paid as of that date. 8. Disney 401(k) Master Trust - ------------------------------ Effective April 1, 2000, the Plan's investments were transferred into the Disney 401(k) Master Trust, which includes the assets of the Employee Profit Sharing Plan of ABC, Inc., the Disney Salaried Savings & Investment Plan, the ABC, Inc. Savings and Investment Plan, and the Disney Hourly Savings and Investment Plan, all of which are defined contribution plans sponsored by the Company. Each participating plan has a specific interest in the Disney 401(k) Master Trust. Assets of the Disney 401(k) Master Trust are allocated to the participating plans according to the elections of participants within each plan. At December 31, 2000, the Plan's interest in the net assets of the Disney 401(k) Master Trust was approximately 1.2%. Investment income of the Disney 401(k) Master Trust for the nine months ended December 31, 2000 was allocated based upon each Plan's interest within each of the investment funds held by the Disney 401(k) Master Trust. F-10 GO.COM SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS (continued) 8. Disney 401(k) Master Trust (continued) - ------------------------------------------ Investments held by the Master Trust are as follows: December 31, 2000 ------------------- Investments, at fair value: The Walt Disney Company Common Stock Fund $ 817,279 The Go.com Stock Fund 791 Shares of registered investment companies 1,210,143 Participant loans 30,915 ------------- Total $2,059,128 ============= The investment income(loss) of the Master Trust is as follows: For the nine months Ended December 31, 2000 ----------------------- Investment Income(Loss): Interest and dividends $ 101,848 Net depreciation (482,160) ------------ Total $(380,312) ============ The net (depreciation)/appreciation (including net realized gains/losses) in the fair value of the investments held by the Master Trust is as follows: For the nine months Ended December 31, 2000 ----------------------- Net (Depreciation)/Appreciation: The Walt Disney Company Common stock Fund $(351,386) The Go.com Stock Fund (1,463) Shares of registered investment companies (129,311) ------------ Total $(482,160) ============ 9. Subsequent Events - --------------------- On March 20, 2001, investments in the Go.com Common Stock Fund were converted into shares of The Walt Disney Company Common Stock Fund. On April 6, 2001, the Committee approved the termination of all participant and employer contributions to the Plan effective July 1, 2001. Participants will be eligible to participate in the Disney Salaried Savings and Investment Plan as of July 1, 2001. F-11 -----END PRIVACY-ENHANCED MESSAGE-----