Disney Enterprises Inc · 10-K · For 9/30/95

Filed On 12/19/95   ·   SEC File 1-04083   ·   Accession Number 898430-95-2664

This Filing's "Filed As Of" Date was Corrected by the SEC on 12/21/98.

Annual Report   ·   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Form 10-K for Fiscal Year End 09/30/95                53    321K 
 2: EX-10.(D)   Restricted Stock Agreement                             5     27K 
 3: EX-10.(E)   Employment Agreement of Ovitz                         20     54K 
 4: EX-10.(M)   Cash Bonus Performance Plan                            9     30K 
 5: EX-10.(S)   Disney Salaried Savings & Investment Plan            149    207K 
 6: EX-21       List of Subsidiaries                                   1      5K 
 7: EX-27       Financial Data Schedule                                2      9K 

10-K   ·   Form 10-K for Fiscal Year End 09/30/95
Document Table of Contents

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UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION  
Washington, D.C. 20549  

FORM 10-K 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  
SECURITIES EXCHANGE ACT OF 1934 

For the Fiscal Year Ended September 30, 1995      Commission File Number 1-4083 

[LOGO OF THE WALT DISNEY COMPANY] 

Incorporated in Delaware                     I.R.S. Employer Identification No. 
500 South Buena Vista Street,                                95-0684440         
Burbank, California 91521                                                       
(818) 560-1000                                                                  

Securities Registered Pursuant to Section 12(b) of the Act:                     

                                                   Name of Each Exchange
Title of Each Class                                     on Which Registered     
-------------------                                    ---------------------    
Common Stock, $.025 par value                          New York Stock Exchange  
                                                    Pacific Stock Exchange
                                                  Swiss Stock Exchange
                                                  Tokyo Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act: None.               

Indicate by check mark whether the registrant (1) has filed all reports     
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of   
1934 during the preceding 12 months, and (2) has been subject to such filing    
requirements for the past 90 days. Yes  X  No                                   
        ---    ---

Indicate by check mark if disclosure of delinquent filers pursuant to Rule  
405 of Regulation S-K is not contained herein, and will not be contained, to    
the best of registrant's knowledge, in definitive proxy or information          
statements incorporated by reference in Part III of this Form 10-K or any       
amendment to this Form 10-K. ____                                               

As of November 30, 1995, the aggregate market value of registrant's common  
stock held by non-affiliates (based on the closing price on such date as        
reported on the New York Stock Exchange-Composite Transactions) was $31.6       
billion. All executive officers and directors of registrant and all persons     
filing a Schedule 13D with the Securities and Exchange Commission in respect    
to registrant's common stock have been deemed, solely for the purpose of the    
foregoing calculation, to be "affiliates" of the registrant.                    

There were 524,843,804 shares of common stock outstanding as of December 15,
1995.                                                                           

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PART I  

ITEM 1. BUSINESS                                                                

The Walt Disney Company, together with its subsidiaries (the "Company"), is 
a diversified international entertainment company with operations in three      
business segments: Filmed Entertainment, Theme Parks and Resorts and Consumer   
Products. Information on revenues, operating income, identifiable assets and    
supplemental revenue data of the Company's business segments appears in the     
Consolidated Statement of Income and in Note 13 of Notes to Consolidated        
Financial Statements included in Item 8 hereof. The Company employs             
approximately 71,000 people.                                                    

In July 1995, the Company and Capital Cities/ABC, Inc. ("Cap Cities")       
entered into a reorganization agreement, pursuant to which the Company expects  
to acquire Cap Cities in a transaction that is expected to be completed in      
1996. Information on the business activities of Cap Cities appears in Note 2    
of Notes to Consolidated Financial Statements included in Item 8 hereof.        

FILMED ENTERTAINMENT  

The Company produces and acquires live-action and animated motion pictures  
for distribution to the theatrical, television and home video markets and       
produces original television programming for the network and first-run          
syndication markets. In addition, the Company provides programming for and      
operates The Disney Channel, a pay television programming service and KCAL-TV,  
a Los Angeles, California television station. The Company also produces music   
recordings and live stage plays.                                                

The success of all the Company's theatrical motion pictures and television  
programming is heavily dependent upon public taste, which is unpredictable and  
subject to change without warning. In addition, filmed entertainment operating  
results fluctuate due to the timing of theatrical and home video releases.      
Release dates are determined by several factors, including timing of vacation   
and holiday periods and competition in the market.                              

THEATRICAL FILMS                                                                
Walt Disney Pictures and Television, a wholly-owned subsidiary of the       
Company, produces and acquires live-action motion pictures that are             
distributed under the banners Walt Disney Pictures, Touchstone Pictures,        
Hollywood Pictures and Caravan Pictures. The Company's Miramax Film Corp.       
subsidiary distributes films under its own banner. In addition, the Company     
distributes films produced or acquired by the independent production companies  
Cinergi Pictures Entertainment, Interscope Communications and Merchant-Ivory    
Productions. The Company also produces animated motion pictures under the       
banner Walt Disney Pictures.                                                    

The Company generally seeks to distribute approximately 20 to 30 feature    
films each year under the Company's various banners, including several live-    
action family feature films, one to two full-length animated films under the    
Walt Disney Pictures banner, and between 15 and 25 teenage and adult films      
under the other motion picture banners. In addition, the Company periodically   
reissues previously released animated films. As of September 30, 1995, the      
Company had released 311 full-length live-action features (primarily color),    
33 full-length animated color features and approximately 536 cartoon shorts.    
The Company also expects that Miramax will independently acquire and produce    
approximately 30 films per year.                                                

The Company distributes and markets its filmed products through its own     
distribution and marketing companies in the United States and certain foreign   
markets.                                                                        

HOME VIDEO                                                                      
The Company directly distributes home video releases from each of its       
banners in the domestic market. In the international market, the Company        
distributes both directly and through foreign distribution companies. In        
addition, the Company acquires and produces original programming for            

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direct-to-video release. As of September 30, 1995, approximately 657 titles,    
including 203 feature films and 193 cartoon shorts and animated features were   
available to the domestic marketplace. Approximately 589 titles, including 293  
feature films and 296 cartoon shorts and animated features were available to    
the international home entertainment market.                                    

NETWORK TELEVISION                                                              
The Company's network television operation develops, produces and           
distributes television programming to network and other broadcasters, under     
the Buena Vista Television, Touchstone Television and Walt Disney Television    
labels. Program development is carried out in collaboration with a number of    
independent writers, producers and creative teams under exclusive development   
arrangements. Since 1991, the Company has focused on the development,           
production and distribution of half-hour comedies for network prime-time        
broadcast, including such series as Home Improvement, Ellen, If Not For You,    
Boy Meets World and Misery Loves Company. The Company seeks to syndicate in     
the domestic market those series that produce enough programs to permit         
syndicated "strip" broadcasting on a five-days-per-week basis.                  

The Company licenses television series developed for United States networks 
in a number of foreign markets, including Germany, Italy, the United Kingdom,   
France, Spain and Canada.                                                       

Walt Disney Television currently distributes two animated cartoon series for
Saturday morning: Aladdin and Timon and Pumbaa. The Company also offers a       
variety of prime-time specials for exhibition on network television.            

The Company believes that its television programs complement the marketing  
and distribution of its theatrical motion pictures, the Walt Disney World       
destination resort, Disneyland and other businesses.                            

PAY TELEVISION AND TELEVISION SYNDICATION                                       
The Company licenses a number of feature films to pay television services,  
including its wholly-owned subsidiary, The Disney Channel.                      

The Company's Buena Vista Television subsidiary licenses the theatrical and 
television film library to the domestic television syndication market. Major    
packages of the Company's feature films and television programming have been    
licensed for broadcast and basic cable continuing over several years.           

The Company currently licenses its feature films for pay television on an   
output basis in several geographic markets, including the United Kingdom and    
Scandinavia, and has an arrangement with Showtime through 1996 for the United   
States. In 1993, the Company entered into an agreement to license to the        
Encore pay television service, over a multi-year period, exclusive domestic     
pay television rights to Miramax films beginning in 1994 and Touchstone         
Pictures and Hollywood Pictures films starting in 1997.                         

The Company also produces first-run animated and live-action syndicated     
programming. The Disney Afternoon is a two-hour block of cartoons airing five   
days per week including Aladdin, Gargoyles, Darkwing Duck, Goof Troop and       
Bonkers. Tale Spin, Duck Tales and Chip'n Dale are also syndicated nationally.  
Live action programming includes: Live with Regis and Kathie Lee and Danny!,    
daily talk shows; Siskel & Ebert, a weekly motion picture review program;       
Disney Presents Bill Nye the Science Guy and Sing Me a Story With Belle,        
weekly educational programs for children; and Land's End, a weekly action       
program. Home Improvement, Blossom and Dinosaurs entered syndication in         
September 1995, joining The Golden Girls and Empty Nest in off-network          
syndication.                                                                    

Certain of the Company's television programs are also syndicated by the     
Company abroad, including The Disney Club, a weekly series that the Company     
produces for foreign markets. The Company's television programs are telecast    
regularly in many countries, including Australia, Brazil,                       

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Canada, China, France, Germany, Italy, Japan, Mexico, Spain and the United      
Kingdom. The Company teamed with Compagnie Luxembourgeoise de Telediffusion S.  
A. to launch Super RTL, a new family-oriented channel in Germany in June 1995.  

THE DISNEY CHANNEL                                                              
The Disney Channel, which has approximately 14.5 million subscribers, is the
Company's nationwide premium television service. New shows developed for        
original use by The Disney Channel include dramatic, adventure, comedy and      
educational series, as well as documentaries and first-run television movies.   
In addition, entertainment specials include shows originating from both the     
Walt Disney World destination resort and Disneyland. The balance of the         
programming consists of products acquired from third parties and products from  
the Company's theatrical film and television programming library. The Disney    
Channel premiered in Taiwan in March 1995, with the launch of The Disney        
Channel (Taiwan), and in Europe in October 1995, with the launch of The Disney  
Channel UK. The Company is scheduled to begin broadcasting The Disney Channel   
in Australia in late 1996 and is exploring the development of The Disney        
Channel in other countries around the world.                                    

KCAL-TV                                                                         
The Company operates KCAL-TV, an independent commercial station on VHF      
channel 9 in the Los Angeles area. Its revenues are derived from the sale of    
advertising time to local, regional and national advertisers.                   

WALT DISNEY THEATRICAL PRODUCTIONS                                              
In 1994, the Company produced a Broadway-style stage musical based on the   
animated feature film Beauty and the Beast. The stage adaptation is currently   
playing in three cities in the United States and overseas, and is scheduled to  
open in additional cities around the world beginning in 1996.                   

HOLLYWOOD RECORDS                                                               
Hollywood Records seeks to develop and market recordings from new talent    
across the spectrum of popular music, as well as soundtracks from the           
Company's live-action motion pictures.                                          

COMPETITIVE POSITION                                                            
The Company's filmed entertainment businesses (including theatrical films,  
product distributed through the network, syndication and pay television and     
home video markets and The Disney Channel) compete with all forms of            
entertainment. The Company also competes to obtain creative talents, story      
properties, advertiser support, broadcast rights and market share, which are    
essential to the success of all of the Company's filmed entertainment           
businesses.                                                                     

A significant number of companies produce and/or distribute theatrical and  
television films, exploit products in the home video market and provide pay     
television programming service. The Company produces and distributes films      
designed for family audiences and believes that it is a significant source of   
such films.                                                                     

THEME PARKS AND RESORTS 

The Company operates the Walt Disney World(R) destination resort in Florida 
and the Disneyland Park(R) and the Disneyland Hotel in California. The Company  
earns royalties on revenues generated by the Tokyo Disneyland theme park.       

All of the theme parks and most of the associated resort facilities are     
operated on a year-round basis. Historically, the theme parks and resorts       
business experiences fluctuations in park attendance and resort occupancy       
resulting from the nature of vacation travel. Peak attendance and resort        
occupancy generally occur during the summer months when school vacations occur  
and during early-winter and spring holiday periods.                             

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WALT DISNEY WORLD DESTINATION RESORT                                            
The Walt Disney World destination resort is located on approximately 29,900 
acres of land owned by the Company 15 miles southwest of Orlando, Florida. The  
resort includes three theme parks (the Magic Kingdom, Epcot and the Disney-MGM  
Studios Theme Park), hotels and villas, an entertainment complex, a shopping    
village, conference centers, campgrounds, golf courses, water parks and other   
recreational facilities designed to attract visitors for an extended stay. The  
Company markets the entire Walt Disney World destination resort through a       
variety of national, international and local advertising and promotional        
activities. A number of attractions in each of the theme parks are sponsored    
by corporate participants through long-term participation agreements.           

MAGIC KINGDOM - The Magic Kingdom, which opened in 1971, consists of seven  
principal areas: Main Street, Liberty Square, Frontierland, Tomorrowland,       
Fantasyland, Adventureland and Mickey's Starland. These areas feature themed    
rides and attractions, restaurants, refreshment stands and merchandise shops.   

EPCOT - Epcot, which opened in 1982, consists of two major themed areas:    
Future World and World Showcase. Future World dramatizes certain historical     
developments and addresses the challenges facing the world today through major  
pavilions devoted to high-tech products of the future ("Innoventions"),         
communication and technological exhibitions ("Spaceship Earth"), and energy,    
transportation, imagination, life and health, the land and seas. World          
Showcase presents a community of nations focusing on the culture, traditions    
and accomplishments of people around the world. World Showcase includes as a    
central showpiece the American Adventure pavilion, which highlights the         
history of the American people. Other nations represented are Canada, Mexico,   
Japan, China, France, the United Kingdom, Germany, Italy, Morocco and Norway.   
Both areas feature themed rides and attractions, restaurants, refreshment       
stands and merchandise shops.                                                   

DISNEY-MGM STUDIOS THEME PARK - The Disney-MGM Studios Theme Park, which    
opened in 1989, consists of a theme park, an animation studio and a production  
facility. The theme park centers around Hollywood as it was during the 1930's   
and 1940's and features Disney animators at work and a backstage tour of the    
production facilities in addition to themed food service and merchandise        
facilities and other attractions. The production facility consists of three     
sound stages, merchandise shops and a back lot area and currently hosts both    
feature film and television productions.                                        

RESORT FACILITIES - As of September 30, 1995, the Company owned and operated
12 resort hotels and a complex of villas and suites at the Walt Disney World    
destination resort, with a total of approximately 14,300 rooms. Disney's        
Boardwalk Resort, a mixed-use resort built around a turn-of-the-century         
Atlantic boardwalk theme, offering approximately 380 hotel rooms and            
additional Disney Vacation Club villas, and The Disney Institute, a resort      
community offering participatory programs and enriching experiences, are        
expected to open in 1996. In addition, Disney's Fort Wilderness camping and     
recreational area offers approximately 1,200 campsites and wilderness homes.    
Several of the resort hotels also contain conference centers and related        
facilities.                                                                     

Recreational activities available at the resort facilities include five     
championship golf courses, an animal sanctuary, tennis, sailing, water skiing,  
swimming, horseback riding and a number of noncompetitive sports and leisure    
time activities. The Company also operates three water parks: Blizzard Beach,   
River Country and Typhoon Lagoon.                                               

The Company has also developed a shopping facility known as the Disney      
Village Marketplace. Pleasure Island, an entertainment center adjacent to       
Disney Village Marketplace, includes restaurants, night clubs and shopping      
facilities. Currently under development are Celebration, a 5,000-acre town;     
Disney Cruise Lines, a cruise vacation line that will include two ships;        
Disney's Animal Kingdom, a themed wild animal adventure park incorporating      
live animals in natural habitats; Disney's Coronado Springs Resort, designed    
to serve the moderately priced hotel/convention market; a sports complex        
featuring amateur sporting events; and a motor speedway which will host         
Indianapolis style racing.                                                      

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The downtown area of Celebration is scheduled to open during 1996, when         
limited residential lot sales are also expected to begin.                       

At the Disney Village Marketplace Hotel Plaza, seven independently operated 
hotels are situated on property leased from the Company. These hotels have a    
capacity of approximately 3,700 rooms. Additionally, two hotels--the Walt       
Disney World Swan and the Walt Disney World Dolphin, with an aggregate          
capacity of approximately 2,300 rooms--are independently operated on property   
leased from the Company near Epcot. Another hotel, the 290-room Shades of       
Green on Walt Disney World Resort, is leased from the Company and operated by   
a non-profit organization as an armed forces recreation center.                 

DISNEY VACATION CLUB                                                            
In 1995, Disney Vacation Development, Inc., a wholly-owned subsidiary of the
Company, completed its 497-unit Disney Vacation Club at the Walt Disney World   
Resort. In addition, 175 units of the Disney Vacation Club in Vero Beach,       
Florida opened in October 1995, and a 102-unit Disney Vacation Club on Hilton   
Head Island, South Carolina, and 377 Disney Vacation Club villas located at     
Disney's Boardwalk Resort are expected to open in 1996. Each facility is        
intended to be sold under a vacation ownership plan and operated partially as   
rental property until the units are completely sold. The Company has also       
acquired property for a planned resort in Newport Beach, California.            

DISNEYLAND                                                                      
The Company owns 330 acres and has under long-term lease an additional 39   
acres of land in Anaheim, California. Disneyland, which opened in 1955,         
consists of eight principal areas: Toontown, Fantasyland, Adventureland,        
Frontierland, Tomorrowland, New Orleans Square, Main Street and Critter         
Country. These areas feature themed rides and attractions, restaurants,         
refreshment stands and merchandise shops. A number of the Disneyland            
attractions are sponsored by corporate participants. The Company markets        
Disneyland through national and local advertising and promotional activities.   
The Company also owns and operates the 1,100-room Disneyland Hotel near         
Disneyland.                                                                     

TOKYO DISNEYLAND                                                                
The Company earns royalties on revenues generated by the Tokyo Disneyland   
theme park, which is owned and operated by Oriental Land Co., Ltd., an          
unrelated Japanese corporation. The park, which opened in 1983, is similar in   
size and concept to Disneyland and is located approximately six miles from      
downtown Tokyo, Japan.                                                          

DISNEY DESIGN AND DEVELOPMENT                                                   
Disney Design and Development, encompassing the Company's two major design  
and development organizations, Walt Disney Imagineering and Disney Development  
Company, provides master planning, real estate development, attraction and      
show design, engineering support, production support, project management and    
other development services for the Company's operations.                        

COMPETITIVE POSITION                                                            
The Company's theme parks and resorts compete with all other forms of       
entertainment, lodging, tourism and recreational activities. The profitability  
of the leisure-time industry is influenced by various factors which are not     
directly controllable, such as economic conditions, amount of available         
leisure time, oil and transportation prices and weather patterns. The Company   
believes its theme parks and resorts benefit substantially from the Company's   
reputation in the entertainment industry for excellent quality and from         
synergy with activities in other business segments of the Company.              

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CONSUMER PRODUCTS 

The Company licenses the name Walt Disney, as well as the Company's         
characters, visual and literary properties and songs and music, to various      
consumer manufacturers, retailers, show promoters and publishers throughout     
the world. The Company also engages in direct retail distribution through The   
Disney Stores and consumer catalogs, and is a publisher of books, magazines     
and comics in the United States and Europe. In addition, the Company produces   
audio products for all markets, as well as film and video products for the      
educational marketplace. Operating results for the consumer products business   
are influenced by seasonal consumer purchasing behavior and by the timing of    
animated theatrical releases.                                                   

CHARACTER MERCHANDISE AND PUBLICATIONS LICENSING                                
The Company's domestic and foreign licensing activities generate royalties  
which are usually based on a fixed percentage of the wholesale or retail        
selling price of the licensee's products. The Company licenses characters       
based upon both traditional and newly created film properties. Character        
merchandise categories which have been licensed include apparel, watches,       
toys, gifts, housewares, stationery, sporting goods and domestic items such as  
sheets and towels. Publication categories which have been licensed include      
continuity-series books, book sets, art and picture books, magazines and        
newspaper comic strips.                                                         

In addition to receiving licensing fees, the Company is actively involved in
the development and approval of licensed merchandise and in the                 
conceptualization, development, writing and illustration of licensed            
publications. The Company continually seeks to create new characters to be      
used in licensed products.                                                      

PUBLISHING                                                                      
The Company has book imprints in the United States offering trade books for 
children (Mouse Works, Disney Press and Hyperion Books for Children) and        
adults (Hyperion Press). In addition, the Company is a joint venture partner    
in Disney Hachette Editions, which produces children's books, and Disney        
Hachette Presse, which produces children's magazines and computer software      
magazines in France. In Italy and France, the Company publishes comic           
magazines for children. The Company also publishes the children's magazine      
Disney Adventures, the general science magazine Discover and the family         
entertainment and informational magazines FamilyFun and FamilyPC.               

THE DISNEY STORES                                                               
The Company markets Disney-related products directly through its retail     
facilities operated under "The Disney Store" name. These facilities are         
generally located in leading shopping malls and similar retail complexes. The   
stores carry a wide variety of Disney merchandise and promote other businesses  
of the Company. During fiscal 1995, the Company opened 64 new Disney Stores in  
the United States and Canada, 26 in Europe and 15 in the Asia-Pacific area,     
bringing the total number to 429 as of September 30, 1995. The Company expects  
to open additional stores in the future in selected markets throughout the      
country, as well as in Asia-Pacific, European and Latin American countries.     

AUDIO PRODUCTS AND MUSIC PUBLISHING                                             
The Company produces and distributes compact discs, audiocassettes and      
records primarily directed at the children's market in the United States and    
France, consisting primarily of soundtracks for animated films and read-along   
products, and licenses the creation of similar products throughout the rest of  
the world. In addition, the Company commissions new music for its motion        
pictures, television programs and records and exploits the song copyrights      
created for the Company by licensing others to produce and distribute printed   
music, records, audiovisual devices and public performances.                    

Domestic retail sales of compact discs, audiocassettes, records and related 
materials are the largest source of revenues, while direct marketing, which     
utilizes catalogs, coupon packages and television, is a secondary means of      
distribution for the Company.                                                   

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OTHER ACTIVITIES                                                                
The Company produces audiovisual materials for the educational market,      
including videocassettes and film strips. It also licenses the manufacture and  
sale of posters and other teaching aids. The Company markets and distributes,   
through various channels, animation cel art and other animation-related         
artwork.                                                                        

COMPETITIVE POSITION                                                            
The Company competes in its character merchandising and other licensing,    
publishing and retail activities with other licensers, publishers and           
retailers of character, brand and celebrity names. In the record and music      
publishing business the Company competes with several other companies.          
Although public information is limited, the Company believes it is the largest  
worldwide licenser of character-based merchandise and producer/distributor of   
children's audio products.                                                      

OTHER OPERATIONS  

DISNEY INTERACTIVE                                                              
Disney Interactive, organized during 1995, is a fully integrated software   
venture focused on product development and marketing of entertainment and       
educational computer software and video game titles for home and school.        

DISNEY SPORTS ENTERPRISES                                                       
Disney Sports Enterprises provides management and development services for  
the Company's National Hockey League franchise, the Mighty Ducks of Anaheim.    

DISNEYLAND PARIS  

Disneyland Paris is located on a 4,800-acre site at Marne-la-Vallee,        
approximately 20 miles east of Paris, France. The project has been developed    
pursuant to a 1987 master agreement with French governmental authorities by     
Euro Disney S.C.A., a publicly held French company in which the Company holds   
a 39% equity interest and which is managed by a subsidiary of the Company. In   
addition, the Company has licensed various intellectual property rights to      
Euro Disney for use in connection with the project.                             

The Disneyland Paris theme park, which opened in April 1992, draws on a     
number of European traditions in its five themed lands. Six themed hotels,      
with a total of approximately 5,200 rooms, are part of the resort complex,      
together with an entertainment center offering a variety of retail, dining and  
show facilities and a 595-space camping area. The complex is served by direct   
rail transport to Paris and by high-speed TGV train service.                    

In 1994, the Company, Euro Disney, Euro Disney's principal creditors and    
Euro Disney's shareholders approved a financial restructuring that included an  
offering of new shares, to which the Company subscribed 49%, and various other  
contributions and concessions by and from the Company and Euro Disney's         
creditors. In connection with the restructuring, the Company agreed to waive    
its royalties and base management fees through September 30, 1998. (See Note 3  
of Notes to Consolidated Financial Statements and Management's Discussion and   
Analysis on page 12 for further information.)                                   

ITEM 2. PROPERTIES                                                              

The Walt Disney World destination resort, Disneyland Park and other         
California and Florida properties are described in Item 1 under the caption     
Theme Parks and Resorts. Film library properties are described in Item 1 under  
the caption Filmed Entertainment.                                               

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The Company owns approximately 51 acres of land in Burbank, California on   
which are located its studios and executive offices. The studio facilities are  
used for the production of both live-action and animated motion pictures and    
television products. In addition, the Company leases office and warehouse       
space for certain of its studio and corporate activities. The Company's KCAL-   
TV facilities are located in Hollywood, California.                             

It is the Company's practice to obtain United States and foreign legal      
protection for its theatrical and television product and its other original     
works, including the various names and designs of the animated characters and   
the publications and music which have been created in connection with the       
Company's filmed products. The Company owns all rights to the name, likeness    
and portrait of Walt Disney.                                                    

ITEM 3. LEGAL PROCEEDINGS                                                       

The Company, together with, in some instances, certain of its directors and 
officers, is a defendant or co-defendant in various legal actions involving     
copyright, breach of contract and various other claims incident to the conduct  
of its businesses. Management does not expect the Company to suffer any         
material liability by reason of such actions.                                   

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                     

No matters were submitted to a vote of stockholders during the fourth       
quarter of the fiscal year covered by this report.                              

PART II 

ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS   

The Company's common stock is listed on the New York, Pacific, Swiss and    
Tokyo stock exchanges (NYSE symbol DIS). The following sets forth the high and  
low composite sale prices for the fiscal periods indicated.                     

                                                                · Download Table

                                                            Sales Price  
                                                          ---------------
                                                           High     Low  
                                                          ------- -------
                                                                         
 1995                                                                    
1st Quarter.............................................. $46 7/8 $37 3/4
2nd Quarter..............................................  56 1/4  45    
3rd Quarter..............................................  60      52 7/8
4th Quarter..............................................  62 3/4  50 1/2
 1994                                                                    
1st Quarter.............................................. $45 3/8 $37 1/8
2nd Quarter..............................................  48 5/8  40 7/8
3rd Quarter..............................................  45 1/8  39 5/8
4th Quarter..............................................  44 1/4  38 3/4

The Company declared one quarterly dividend of $.075 per share and three    
quarterly dividends of $.09 per share in 1995, and in 1994, declared one        
quarterly dividend of $.0625 per share and three quarterly dividends of $.075.  

As of September 30, 1995, the approximate number of record holders of the   
Company's common stock was 507,960.                                             

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ITEM 6. SELECTED FINANCIAL DATA                                                 

(In millions, except per share data)                                            

                                                                · Download Table

                            1995       1994       1993*      1992       1991    
                          ---------  ---------  ---------  ---------  --------- 
                                                                                
Statement of Income                                                             
 Revenues                 $12,112.1  $10,055.1  $ 8,529.2  $ 7,504.0  $ 6,112.0 
 Operating income           2,445.7    1,965.7    1,724.5    1,435.3    1,094.5 
 Income before cumulative                                                       
  effect of accounting                                                          
  changes                   1,380.1    1,110.4      671.3      816.7      636.6 
 Cumulative effect of                                                           
  accounting changes                               (371.5)                      
 Net income                 1,380.1    1,110.4      299.8      816.7      636.6 
Per Share                                                                       
 Earnings before                                                                
  cumulative effect of                                                          
  accounting changes      $    2.60  $    2.04  $    1.23  $    1.52  $    1.20 
 Cumulative effect of                                                           
  accounting changes                                 (.68)                      
 Earnings                      2.60       2.04        .55       1.52       1.20 
 Cash dividends                 .35        .29        .24        .20        .17 
Balance Sheet                                                                   
 Total assets             $14,605.8  $12,826.3  $11,751.1  $10,861.7  $ 9,428.5 
 Borrowings                 2,984.3    2,936.9    2,385.8    2,222.4    2,213.8 
 Stockholders' equity       6,650.8    5,508.3    5,030.5    4,704.6    3,871.3 
Statement of Cash Flows                                                         
 Cash flow from                                                                 
  operations              $ 3,510.1  $ 2,807.3  $ 2,145.2  $ 1,838.1  $ 1,496.7 
 Investing activities      (2,288.4)  (2,886.7)  (2,659.7)  (1,923.7)  (1,726.3)
 Financing activities        (332.1)     (96.7)     112.7      (35.7)     295.9 

*  See Notes 1, 7, 8, and 12 of Notes to Consolidated Financial Statements for  
description of accounting changes effective October 1, 1992.              

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND         
RESULTS OF OPERATIONS                                                           

RESULTS OF OPERATIONS                                                           

1995 VS. 1994                                                                   
Revenues increased 20% or $2.06 billion to a record $12.11 billion in 1995, 
reflecting growth in Filmed Entertainment, Theme Parks and Resorts and          
Consumer Products revenues of $1.21 billion, $496.2 million, and $352.6         
million, respectively. Revenues of $2.80 billion from foreign operations in     
all business segments increased 19% or $443.6 million in 1995 and represented   
23% of total revenues.                                                          
Operating income rose 24% or $480.0 million to a record $2.45 billion in    
1995, driven by increases in Filmed Entertainment, Theme Parks and Resorts and  
Consumer Products operating income of $218.3 million, $176.7 million and $85.0  
million, respectively. Net income increased 24% to a record $1.38 billion and   
earnings per share increased 27% to a record $2.60 from $1.11 billion and       
$2.04, respectively.                                                            

1994 VS. 1993                                                                   
Revenues increased 18% or $1.53 billion to a record $10.06 billion in 1994, 
driven by growth in Filmed Entertainment and Consumer Products revenues of      
$1.12 billion and $383.1 million, respectively. Revenues of $2.36 billion from  
foreign operations in all business segments increased 30% or $539.1 million in  
1994 and represented 23% of total revenues, an increase of two percentage       
points over 1993.                                                               
Operating income rose 14% or $241.2 million to a record $1.97 billion in    
1994, driven by increases in Filmed Entertainment and Consumer Products         
operating income of $233.9 million and $70.1 million, respectively, partially   
offset by Theme Parks and Resorts results, which declined $62.8 million. Net    
income increased 65% to a record $1.11 billion and earnings per share           
increased 66% to a record $2.04 from $671.3 million and $1.23, respectively,    
before the cumulative effect of accounting changes in 1993. Excluding Euro      
Disney reserves, which negatively impacted 1993 results, net income and         
earnings per share grew 25%.                                                    

FILMED ENTERTAINMENT                                                            

1995 VS. 1994                                                                   
Revenues increased 25% or $1.21 billion to $6.00 billion in 1995, driven by 
growth of $605 million in worldwide home video revenues, $340 million in        
television revenues and $106 million in worldwide theatrical revenues. Home     
video revenues increased primarily due to the domestic and initial              
international release of The Lion King and the worldwide release of Snow White  
and the Seven Dwarfs, compared to the worldwide release of Aladdin, the         
domestic release of The Fox and the Hound and the international release of The  
Jungle Book in the prior year. Television revenues grew primarily due to the    
release of Home Improvement in syndication and increased availability and       
success of titles in pay television. Theatrical revenues increased primarily    
due to the domestic rerelease and expanded international release of The Lion    
King, the domestic release of Pocahontas and the domestic release of the live-  
action titles The Santa Clause, While You Were Sleeping and Pulp Fiction.       
Operating income increased 25% or $218.3 million to $1.07 billion in 1995,  
primarily due to growth in worldwide home video and television. Costs and       
expenses increased 25% or $989.9 million, principally due to higher home video  
marketing and distribution costs reflecting the worldwide release of Snow       
White and the Seven Dwarfs and the domestic release of The Lion King, higher    
distribution costs related to theatrical releases and costs associated with     
the syndication of Home Improvement.                                            

1994 VS. 1993                                                                   
Revenues increased 30% or $1.12 billion to $4.79 billion in 1994, driven by 
growth of $731 million in worldwide home video revenues, $224 million in        
worldwide theatrical revenues and $99 million in television revenues. Domestic  
home video revenues were driven by Aladdin, The Fox and the Hound and           

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The Return of Jafar compared to Beauty and the Beast and Pinocchio in 1993,     
while international home video revenues were driven by The Jungle Book,         
Aladdin and Bambi compared to Beauty and the Beast and Cinderella in the prior  
year. Theatrical revenues increased due to the worldwide release of The Lion    
King, except for Europe, Aladdin in Europe and continued expansion of           
theatrical productions, including full-year operations of Miramax, which was    
acquired in June 1993. Television revenues grew due to increased title          
availabilities worldwide.                                                       
Operating income increased 38% or $233.9 million to $856.1 million in 1994, 
driven by growth in worldwide home video activity and television, partially     
offset by lower worldwide theatrical operating income, reflecting lower         
results per film in 1994. Theatrical results in 1993 were driven by the         
worldwide release of Aladdin except for Europe, and international releases of   
Beauty and the Beast, Sister Act and The Jungle Book, compared to the 1994      
release of The Lion King, the European release of Aladdin, and the              
international release of Cool Runnings. Costs and expenses increased 29% or     
$886.0 million, principally due to higher film cost amortization and increased  
distribution and selling costs, resulting from increased home video and         
theatrical activities.                                                          

THEME PARKS AND RESORTS                                                         

1995 VS. 1994                                                                   
Revenues increased 14% or $496.2 million to $3.96 billion, driven by growth 
of $288 million from higher theme park attendance in Florida and California     
and $127 million from an increase in occupied rooms at Florida resorts. Higher  
theme park attendance reflected increased domestic and international tourist    
visitation. The increase in occupied rooms reflected the openings of Disney's   
Wilderness Lodge and Disney's All-Star Sports Resort in the third quarter of    
1994 and the phased opening of Disney's All-Star Music Resort during 1995.      
Operating income increased 26% or $176.7 million to $860.8 million in 1995, 
driven by higher theme park attendance and increased occupied rooms at Florida  
resorts. Costs and expenses, which consist principally of labor, costs of       
merchandise, food and beverages sold, depreciation, repairs and maintenance,    
entertainment and marketing and sales expenses, increased 11% or $319.5         
million, primarily due to expansion of theme park attractions and Florida       
resorts and increased marketing and sales expenses, partially offset by the     
impact of ongoing cost reduction initiatives.                                   

1994 VS. 1993                                                                   
Revenues of $3.46 billion in 1994 were substantially unchanged from the     
prior year, as growth of $86 million reflecting higher guest spending at        
Florida theme parks and resorts and $47 million from an increase in occupied    
rooms at Florida resorts offset the $114 million impact of lower attendance at  
Florida and California theme parks. Guest spending rose, primarily due to       
expanded product offerings and certain price increases, while the increase in   
occupied rooms reflected the third quarter openings of Disney's Wilderness      
Lodge and Disney's All-Star Sports Resort and expansion at the Disney Vacation  
Club. Lower attendance was driven by reduced international tourism.             
Operating income decreased 8% or $62.8 million to $684.1 million in 1994,   
reflecting the impact of reduced revenues from lower theme park attendance.     
Costs and expenses increased 3% or $85.7 million, primarily due to expansion    
of theme park attractions and resorts in Florida and a charge recorded in the   
fourth quarter to write off certain development costs associated with Disney's  
America, as a result of the Company's decision to seek a new site for the       
theme park.                                                                     

CONSUMER PRODUCTS                                                               

1995 VS. 1994                                                                   
Revenues increased 20% or $352.6 million to $2.15 billion in 1995, driven by
growth of $237 million from the Disney Stores and $67 million from worldwide    
character merchandise licensing. In 1995, 105 new Disney Stores opened,         
bringing the total number of stores to 429. Comparable store sales grew 4% and  
sales at new stores contributed $94 million of sales growth. Worldwide          
merchandise licensing growth was generated by increased demand for traditional  
Disney characters and recent animated film properties, principally The Lion     
King and Pocahontas.                                                            

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Operating income increased 20% or $85.0 million to $510.5 million in 1995,  
primarily due to growth in worldwide character merchandise licensing and the    
Disney Stores. Costs and expenses, which consist principally of costs of goods  
sold, labor and publicity and promotion, increased 19% or $267.6 million,       
primarily due to ongoing expansion and revenue growth of the Disney Stores.     

1994 VS. 1993                                                                   
Revenues increased 27% or $383.1 million to $1.80 billion in 1994, driven by
growth of $166 million from the Disney Stores, $109 million from worldwide      
character merchandise licensing and $87 million from publications, catalogs     
and records and audio entertainment. In 1994, 85 new Disney Stores opened,      
bringing the total number of stores to 324. Comparable store sales grew 7% and  
sales at new stores contributed $70 million of sales growth. Worldwide          
merchandise licensing growth was generated by increased demand for traditional  
Disney characters and new animated film properties, including Aladdin and The   
Lion King.                                                                      
Operating income increased 20% or $70.1 million to $425.5 million in 1994,  
primarily due to the worldwide success of character merchandise licensing and   
expansion of the Disney Stores, partially offset by higher costs and expenses.  
Costs and expenses increased 30% or $313.0 million, primarily reflecting        
expansion and revenue growth of the Disney Stores and higher expenses in        
catalog businesses.                                                             

CORPORATE ACTIVITIES                                                            
GENERAL AND ADMINISTRATIVE EXPENSES                                             

1995 VS. 1994                                                                   
General and administrative expenses increased 13% or $21.4 million to $183.6
million in 1995, reflecting higher corporate general and administrative         
expenses and losses from Disney Sports Enterprises (The Mighty Ducks of         
Anaheim) due to the shortened NHL season.                                       

1994 VS. 1993                                                                   
General and administrative expenses decreased 1% or $2.0 million to $162.2  
million in 1994, reflecting operating income from Disney Sports Enterprises     
and lower losses incurred by Hollywood Records, partially offset by higher      
corporate general and administrative expenses incurred to support growth in     
the Company's operations and performance-related incentive programs.            

INVESTMENT AND INTEREST INCOME AND INTEREST EXPENSE                             

1995 VS. 1994                                                                   
Total investment and interest income decreased 48% or $61.9 million to $68.0
million in 1995. The decrease reflected both lower average investment balances  
and yields.                                                                     
Interest expense increased 49% or $58.4 million to $178.3 million in 1995,  
primarily reflecting the impact of higher borrowings, due in part to calendar   
1994 common stock repurchases and prior-year Euro Disney funding.               

1994 VS. 1993                                                                   
Total investment and interest income decreased 30% or $56.2 million to      
$129.9 million in 1994. The decrease reflected both lower average investment    
balances and yields.                                                            
Interest expense decreased 24% or $37.8 million to $119.9 million in 1994,  
primarily due to the 1993 write-off of unamortized issuance costs related to    
subordinated notes redeemed by the Company and increased capitalized interest,  
resulting from higher capital expenditures in the current year.                 

INVESTMENT IN EURO DISNEY                                                       

1995 VS. 1994                                                                   
The Company's investment in Euro Disney resulted in a loss of $35.1 million 
in 1995, compared to a loss of $110.4 million in 1994. Results for 1995         
include a gain of $55 million from the sale of                                  

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approximately 75 million shares, or 20% of the Company's investment in Euro     
Disney, to Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud in the first         
quarter. The Company currently holds an ownership interest in Euro Disney of    
approximately 39% and has agreed, under certain conditions, to maintain         
ownership of at least 34% of the outstanding common stock of Euro Disney until  
June 1999, at least 25% for the subsequent five years and at least 16.67% for   
an additional term thereafter. The prior-year loss consisted of a $52.8         
million third-quarter charge reflecting the Company's participation in the      
Euro Disney financial restructuring, and the Company's equity share of Euro     
Disney's post-restructuring operating results.                                  

1994 VS. 1993                                                                   
The Company's investment in Euro Disney resulted in a loss of $110.4 million
in 1994. The loss consisted of a $52.8 million charge recognized in the third   
quarter as a result of the Company's participation in the Euro Disney           
financial restructuring and the Company's equity share of fourth quarter        
operating results. The prior year loss reflected the Company's equity share of  
Euro Disney's operating results and a $350.0 million charge to fully reserve    
receivables from and a funding commitment to Euro Disney, partially offset by   
royalties and gain amortization related to the investment.                      
During the third quarter of 1994, the Company entered into agreements with  
Euro Disney and lenders participating in the restructuring (the "Lenders"), to  
provide certain debt, equity and lease financing to Euro Disney.                
Under the restructuring agreements, which specified amounts denominated in  
French francs, the Company increased its equity investment in Euro Disney by    
subscribing for 49% of a $1.1 billion rights offering of new shares; provided   
long-term lease financing at a 1% interest rate for approximately $255 million  
of theme park assets; and subscribed for securities reimbursable in shares      
with a face value of approximately $180 million and a 1% coupon. In addition,   
the Company canceled fully-reserved receivables from Euro Disney of             
approximately $210 million, waived royalties and base management fees for a     
period of five years and reduced such amounts for specified periods             
thereafter, and modified the method by which management incentive fees will be  
calculated.                                                                     
Additionally, the Company agreed to arrange for the provision of a 10-year  
unsecured standby credit facility of approximately $210 million, upon request,  
bearing interest at PIBOR. As of September 30, 1995, Euro Disney had not        
requested the Company to establish this facility.                               
As part of the overall restructuring, the Lenders served as underwriters for
51% of the Euro Disney rights offering, forgave certain interest charges for    
the period from April 1, 1994 to September 30, 2003, having a present value of  
approximately $300 million, and deferred all principal payments until three     
years later than originally scheduled.                                          
In connection with the restructuring, Euro Disney Associes S.N.C. ("Disney  
SNC"), an indirect wholly-owned affiliate of the Company, entered into a lease  
arrangement with a noncancelable term of 12 years (the "Lease") related to      
substantially all of the Disneyland Paris theme park assets, and then entered   
into a 12-year sublease agreement (the "Sublease") with Euro Disney. Remaining  
lease rentals at September 30, 1995 of approximately FF 10 billion ($2          
billion) receivable from Euro Disney under the Sublease approximate the         
amounts payable by Disney SNC under the Lease. At the conclusion of the         
Sublease term, Euro Disney will have the option to assume Disney SNC's rights   
and obligations under the Lease. If Euro Disney does not exercise its option,   
Disney SNC may purchase the assets, continue to lease the assets or elect to    
terminate the Lease, in which case Disney SNC would make a termination payment  
to the lessor equal to 75% of the lessor's then outstanding debt related to     
the theme park assets, estimated to be $1.5 billion; Disney SNC could then      
sell or lease the assets on behalf of the lessor to satisfy the remaining       
debt, with any excess proceeds payable to Disney SNC.                           

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LIQUIDITY AND CAPITAL RESOURCES                                                 

The Company generates significant cash from operations and has substantial  
borrowing capacity to meet its operating and discretionary cash requirements.   
Cash provided by operations increased 25% or $702.8 million to $3.51 billion
in 1995, primarily due to increased operating income in each business segment.  
Net borrowings (the Company's borrowings less cash and liquid investments)  
decreased $327 million to $1.4 billion. The decrease was primarily due to       
payments of existing debt and an increase in cash and liquid investments,       
partially offset by the issuance of $400 million of senior participating notes  
in the second quarter and $300 million of senior, unsecured debt obligations    
in the first quarter.                                                           
In 1995, the Company invested $1.89 billion to develop and produce film and 
television properties and $896.5 million to design and develop new theme park   
attractions and resort properties, including Disney's Animal Kingdom, Disney    
Cruise Lines, the Blizzard Beach water park, Disney's BoardWalk and the town    
of Celebration.                                                                 
Pursuant to agreements executed in connection with the 1994 Euro Disney     
financial restructuring, the Company sold approximately 75 million, or 20%, of  
its Euro Disney shares to Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud for   
approximately $145 million in 1995.                                             
The Company repurchased 8.9 million shares of its common stock for          
approximately $349 million in 1995. Under its share repurchase program, the     
Company is authorized to purchase up to an additional 104 million shares. The   
Company evaluates share repurchase decisions on an ongoing basis, taking into   
account borrowing capacity, management's target capital structure, and other    
investment opportunities. The Company also used $180 million to fund dividend   
payments during the year.                                                       
The Company currently maintains significant borrowing capacity to take      
advantage of growth and investment opportunities. The Company focuses on net    
borrowings, which take into account its cash and investment balances, when      
monitoring borrowing capacity. The Company's borrowing capacity includes        
credit facilities which are available for general corporate purposes and to     
support commercial paper issuance.                                              
The Company's financial condition remains strong. The Company believes that 
its cash, other liquid assets, operating cash flows, access to equity capital   
markets and borrowing capacity taken together provide adequate resources to     
fund ongoing operating requirements and future capital expenditures related to  
the expansion of existing businesses and development of new projects.           
Expansion of existing businesses includes continued film and television         
production, design and development of theme park attractions and resort         
properties and expansion of the Disney Stores worldwide. Theme park and resort  
projects currently under development include Disney's Animal Kingdom, the town  
of Celebration, Disney Cruise Lines, the Coronado Springs Resort and Disney's   
BoardWalk. In addition, the Company continually evaluates discretionary         
investments in new projects which complement its existing businesses.           
In July 1995, the Company and Capital Cities/ABC, Inc. ("Cap Cities")       
entered into a reorganization agreement, pursuant to which the Company expects  
to acquire Cap Cities in a transaction that will be accounted for as a          
purchase. (See Note 2 of Notes to Consolidated Financial Statements.) The       
transaction has been approved by the Board of Directors of each company, and    
is subject to regulatory review and approval by each company's stockholders.    
Pursuant to the reorganization agreement, stockholders of Cap Cities will have  
the right to receive a combination of common stock and cash. The relative       
proportions of common stock and cash consideration payable to Cap Cities        
stockholders are dependent upon certain elections to be made by Cap Cities      
stockholders and other conditions as defined in the reorganization agreement.   
The acquisition cost is estimated to be $19 billion as of the date the          
transaction was announced. The transaction is expected to be completed by       
early 1996.                                                                     
In October 1995, the Company established bank facilities totaling $12       
billion to support the issuance of commercial paper. The Company intends to     
initially fund the cash portion of the Cap Cities purchase consideration        
through the issuance of commercial paper and the use of existing cash and       
investments. The Company may subsequently replace the commercial paper with     
longer-term financing. In accordance with this objective, the Company has       
filed a shelf registration statement permitting the issuance from time to time  
of up to $5 billion of debt and preferred equity securities.                    

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Upon consummation of the Cap Cities acquisition, the Company's debt and     
equity capitalization will change significantly from the issuance of new        
borrowings and Company common stock. The Company continues to believe that it   
will have adequate resources to fund ongoing operating requirements and future  
capital expenditures related to the expansion of existing businesses and        
development of new projects.                                                    

RISK MANAGEMENT STRATEGIES                                                      
The Company employs a variety of on- and off-balance-sheet financial        
instruments to manage its business and financial market risks.                  
During 1995 and 1994, the Company raised $400 million and $475 million,     
respectively, from the issuance of senior participating notes. The notes, due   
2000 with a minimum yield of 2.0% and due 2001 with a minimum yield of 4.2%,    
respectively, provide that a portion of the interest paid is contingent upon    
the performance of a portfolio of live-action films released under the          
Company's various film labels. In the future, the Company will continue to      
seek partners that will share the risks and rewards of its live-action film     
business.                                                                       
The Company's foreign currency revenues continue to grow and management     
believes it is prudent to reduce the risk associated with fluctuations in the   
value of the U.S. dollar in the foreign exchange markets. The Company uses      
foreign currency forward and option contracts to reduce the impact of changes   
in the value of its existing foreign currency assets and liabilities,           
commitments and anticipated foreign currency revenues denominated in Japanese   
yen, French francs, German marks, British pounds, and other currencies. The     
primary focus of the Company's foreign exchange risk management program is to   
reduce earnings volatility. By policy, the Company maintains hedge coverages    
between minimum and maximum percentages of its anticipated foreign exchange     
exposures for each of the next five years.                                      
The Company is exposed to interest rate risk related to its investments and 
borrowings. The Company monitors the net interest rate sensitivity of its       
portfolio of investments and borrowings and uses interest rate and cross-       
currency swaps, exchange-traded futures and forward and option contracts to     
manage the net interest exposure and to lower overall borrowing costs. In       
addition, in anticipation of additional borrowings to finance its proposed      
acquisition of Cap Cities, the Company has entered into forward-starting        
interest rate swaps to manage the interest rate risk associated with such       
borrowings. The Company's objective is to manage the impact of interest rate    
changes on earnings and on the market value of its investments and borrowings.  
The Company does not expect interest rate movements to significantly affect     
its liquidity in the foreseeable future. For 1995 and 1994, a 1% increase or    
decrease in interest rates would not have had a material impact on the          
Company's liquidity or operating results.                                       
The Company continually monitors its positions with, and the credit quality 
of, the financial institutions which are counterparties to its off-balance-     
sheet financial instruments, and does not anticipate failure to perform by      
such institutions. The Company enters into off-balance-sheet transactions only  
with financial institution counterparties which have a credit rating of single  
A- or better. The Company's current policy in agreements with financial         
institution counterparties is generally to require collateral in the event      
credit ratings fall below single A-. With respect to certain contracts, the     
Company has the right to offset amounts payable to the counterparties to the    
extent of amounts receivable, further reducing the risk associated with         
counterparty nonperformance.                                                    

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                             

See Index to Financial Statements and Supplemental Data on page 31.         

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND         
FINANCIAL DISCLOSURE                                                            

None.                                                                       

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PART III  

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY                        

DIRECTORS                                                                       
The Board of Directors of the Company is divided into three classes, as     
nearly equal in number as possible. Each class serves three years, with the     
terms of office of the respective classes expiring in successive years. The     
following table sets forth information as to the persons who served as          
directors of the Company during the 1995 fiscal year.                           

                                                                · Download Table

      Name and Year First Became                                               
         A Director of Disney       Age            Business Experience         
      --------------------------    ---            -------------------         
                                                                               
CLASS I DIRECTORS (ELECTED 1994)                                               
Stephen F. Bollenbach               53    Senior Executive Vice President and  
 (1995)                                   Chief Financial Officer of Disney    
                                          since May 1, 1995. Mr. Bollenbach    
                                          served as Chief Executive Officer and
                                          President of Host Marriott           
                                          Corporation from October 1993 until  
                                          he joined Disney. From March 1992    
                                          until October 1993, he served as the 
                                          Chief Financial Officer of Marriott  
                                          Corporation. During the two years    
                                          prior to joining Marriott            
                                          Corporation, Mr. Bollenbach was the  
                                          Chief Financial Officer of The Trump 
                                          Group. He served as Senior Vice      
                                          President and Chief Financial        
                                          Officer, as well as a member of the  
                                          Board of Directors, of Holiday       
                                          Corporation/Promus Companies prior   
                                          thereto. In addition, Mr. Bollenbach 
                                          is a member of the Board of Directors
                                          of America West Airlines, Inc.       

 Michael D. Eisner                   53   Chairman of the Board and Chief      
  (1984)                                  Executive Officer of Disney. Prior to
                                          joining Disney in September 1984,    
                                          Mr. Eisner was President and Chief   
                                          Operating Officer of Paramount       
                                          Pictures Corp., which was then a     
                                          wholly owned subsidiary of           
                                          Gulf+Western Industries, Inc. Prior  
                                          to joining Paramount in 1976, Mr.    
                                          Eisner was Senior Vice President,    
                                          Prime Time Programming, for ABC      
                                          Entertainment, a division of the     
                                          American Broadcasting Company, Inc., 
                                          with responsibility for the          
                                          development and supervision of all   
                                          prime-time series programming,       
                                          limited series movies made for       
                                          television and the acquisition of    
                                          talent.                              

 Stanley P. Gold                     53   For more than the past five years,   
  (1987) (also June 1984-                 Mr. Gold has served as President and 
  September 1984)                         Chief Executive Officer of Shamrock  
                                          Holdings, Inc. which, through its    
                                          subsidiaries, is engaged in real     
                                          estate development and the making of 
                                          investments. Since January 1, 1990,  
                                          Mr. Gold has been President of       
                                          Trefoil Investors, Inc., the general 
                                          partner of Trefoil Capital Investors,
                                          L.P., an investment partnership, as  
                                          well as President of Shamrock Capital
                                          Advisors, Inc., which acts as manager
                                          of the partnership. Mr. Gold is also 
                                          Chairman of the Board of Directors of
                                          L.A. Gear, Inc., a manufacturer and  
                                          distributor of athletic and casual   
                                          footwear.                            

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                                                                · Download Table

     Name and Year First Became                                                
        A Director of Disney       Age            Business Experience          
     --------------------------    ---            -------------------          
                                                                               
Irwin E. Russell                    69   Attorney engaged in private practice  
 (1987)                                  specializing in the entertainment     
                                         industry. From 1989 to 1992 he served 
                                         of counsel to the law firm of Rudin,  
                                         Appel & Rosenfeld. From 1980 through  
                                         September 1986, he was senior partner 
                                         in the law firm of Russell &          
                                         Glickman. From 1971 to 1976, Mr.      
                                         Russell was Executive Vice President, 
                                         Treasurer and Director of The Wolper  
                                         Organization, Inc., a film production 
                                         company. Mr. Russell serves as an ad  
                                         hoc arbitrator for the Federal        
                                         Mediation and Conciliation Service    
                                         and the American Arbitration          
                                         Association.                          

Raymond L. Watson                   68   Chairman of the Executive Committee   
 (1974)                                  of Disney's Board of Directors since  
                                         September 1984 and served as Chairman 
                                         of the Board of Disney from May 1983  
                                         to September 1984. Since September    
                                         1986, Mr. Watson has been Vice        
                                         Chairman of the Board of The Irvine   
                                         Company, a land development company.  
                                         From 1985 to 1986, he was Regents     
                                         Professor in the Graduate School of   
                                         Management at the University of       
                                         California, Irvine. Mr. Watson is also
                                         a member of the Boards of Directors of
                                         Pacific Mutual Life Insurance Company;
                                         Mitchell Energy & Development Co., a  
                                         company engaged in oil and gas        
                                         exploration, production, distribution 
                                         and land development; and Tejon Ranch 
                                         Company.                              

CLASS II DIRECTORS (ELECTED 1995)                                              
Sanford M. Litvack                  59   Senior Executive Vice President and   
 (1995)                                  Chief of Corporate Operations of      
                                         Disney since August 1994. From April  
                                         1991 through November 1991,           
                                         Mr. Litvack served as Senior Vice     
                                         President-General Counsel of Disney.  
                                         From June 1992 through August 1994,   
                                         he served as Executive Vice           
                                         President-Law and Human Resources of  
                                         Disney. Mr. Litvack was previously a  
                                         member of the executive committee and 
                                         chairman of the litigation department 
                                         of the law firm of Dewey Ballantine,  
                                         of which he was a partner from        
                                         January 1987 until April 1991.        

Richard A. Nunis                    63   Chairman of Walt Disney Attractions,  
 (1981)                                  a principal business of Disney        
                                         encompassing Disney's theme parks and 
                                         resorts, and a senior executive of    
                                         Disney or a subsidiary thereof for    
                                         more than the past five years. He is  
                                         also a member of the Boards of        
                                         Directors of Sun Banks, N.A. and      
                                         Florida Progress Corporation, a       
                                         diversified holding company whose     
                                         interests include an electric         
                                         utility. Mr. Nunis is a member of the 
                                         Travel and Tourism Advisory Board of  
                                         the U.S. Department of Commerce and a 
                                         director or trustee of several        
                                         educational, civic and charitable     
                                         organizations, including the          
                                         University of Central Florida.        

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     Name and Year First Became                                                
        A Director of Disney       Age            Business Experience          
     --------------------------    ---            -------------------          
                                                                               
Sidney Poitier                      68   Actor, director, writer and the Chief 
 (1994)                                  Executive Officer of Verdon-Cedric    
                                         Productions, a film production        
                                         company, and a member of the Boards   
                                         of Directors of SpectraVision, Inc.,  
                                         a designer and operator of closed-    
                                         circuit television movie viewing      
                                         systems, and Sarah Lawrence College.  
                                         Mr. Poitier has won many awards,      
                                         including the Academy Award for Best  
                                         Actor and the American Film           
                                         Institute's Lifetime Achievement      
                                         Award. He belongs to numerous civic   
                                         organizations, including the          
                                         Children's Defense Fund, the NAACP    
                                         League Defense and Education Fund and 
                                         the Natural Resources Defense         
                                         Council.                              

Robert A.M. Stern                   56   Practicing architect, teacher and     
 (1992)                                  writer. He is Senior Partner of       
                                         Robert A.M. Stern Architects of New   
                                         York, which he founded, and a Fellow  
                                         of the American Institute of          
                                         Architects. Mr. Stern is also a       
                                         professor at the Graduate School of   
                                         Architecture, Planning and            
                                         Preservation at Columbia University   
                                         in New York, where he is Director of  
                                         the Historic Preservation Program.    
                                         Mr. Stern was the architect of the    
                                         Yacht and Beach Club hotels and the   
                                         Casting Center at the Walt Disney     
                                         World Resort and the Newport Bay Club 
                                         and the Cheyenne Hotel at Disneyland  
                                         Paris. He is also the architect of    
                                         Disney's Boardwalk Hotel at the Walt  
                                         Disney World Resort and the Feature   
                                         Animation Building at Disney's        
                                         headquarters in Burbank, California.  

E. Cardon Walker                    78   Senior executive of Disney for more   
 (1960)                                  than 25 years until 1984, serving as  
                                         President from 1971 to 1977 and       
                                         Chairman of the Board and Chief       
                                         Executive Officer from 1980 to 1983.  
                                         From 1984 through 1989, he provided   
                                         consulting and other services to      
                                         Disney.                               

CLASS III DIRECTORS (ELECTED 1993)                                             
Reveta F. Bowers                    47   Head of School for the Center for     
 (1993)                                  Early Education, an independent       
                                         school for pre-school through sixth   
                                         grade located in Los Angeles, since   
                                         1976, Mrs. Bowers is a member of the  
                                         Board of Directors of several non-    
                                         profit educational organizations,     
                                         including the National Association of 
                                         Independent Schools and Educational   
                                         Records Bureau, Inc. She is also a    
                                         trustee of Harvard-Westlake School, an
                                         independent high school located in Los
                                         Angeles.                              

Roy E. Disney                       65   Vice Chairman of the Board of         
 (June 1984)                             Directors of Disney since 1984, and   
 (1967-March 1984)                       since November 1985 head of Disney's  
                                         animation department. In addition,    
                                         Mr. Disney is Chairman of the Board   
                                         of Shamrock Holdings, Inc. Mr. Disney 
                                         is a nephew of the late Walt Disney.  

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     Name and Year First Became                                                
        A Director of Disney       Age            Business Experience          
     --------------------------    ---            -------------------          
                                                                               
Ignacio E. Lozano, Jr.              68   Chairman and Editor-in Chief of       
 (1981)                                  Lozano Enterprises, which publishes   
                                         La Opinion, the largest Spanish-      
                                         language newspaper in the Los Angeles 
                                         metropolitan area. Mr. Lozano was     
                                         Publisher and Editor of La Opinion    
                                         from 1953 to 1986, except for the     
                                         period from 1976 through 1977 when he 
                                         was the United States Ambassador to   
                                         El Salvador. Mr. Lozano is a member of
                                         the Boards of Directors of Bank       
                                         America Corporation, a bank holding   
                                         company; Bank of America N.T. & S.A.; 
                                         Pacific Enterprises, a holding company
                                         with interests in a natural gas public
                                         utility; Pacific Mutual Life Insurance
                                         Company; and a number of public       
                                         service and charitable organizations. 

George J. Mitchell                  62   Special Counsel to the law firm of    
 (1995)                                  Verner, Liipfert, Bernhard, McPherson 
                                         and Hand in Washington, D.C. Mr.      
                                         Mitchell served as a United States    
                                         Senator for fifteen years commencing  
                                         in 1980, the last six years of which  
                                         he was the Senate Majority Leader.    
                                         Mr. Mitchell is a member of the       
                                         Boards of Directors of UNUM           
                                         Corporation, Federal Express Corp.    
                                         and Xerox Corporation. He also serves 
                                         as a special advisor to the President 
                                         and the Secretary of State on United  
                                         States investment and trade           
                                         opportunities in Ireland.             

Gary L. Wilson                      55   Co-Chairman of the Board of Northwest 
 (1985)                                  Airlines Corporation. From July 1985  
                                         through December 1989, he was         
                                         Executive Vice President and Chief    
                                         Financial Officer of Disney. Prior to 
                                         joining Disney, Mr. Wilson was        
                                         Executive Vice President and Chief    
                                         Financial Officer of Marriott         
                                         Corporation, a diversified company    
                                         involved in lodging, food service and 
                                         related businesses.                   

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EXECUTIVE OFFICERS OF THE COMPANY                                               
The executive officers of the Company are elected each year at the          
organizational meeting of the Board of Directors which follows the annual       
meeting of the stockholders and at such other meetings as appropriate. Each of  
the executive officers has been employed by the Company in the position or      
positions indicated in the list and pertinent notes below. Messrs. Eisner,      
Disney and Murphy have been employed by the Company as executive officers for   
more than five years.                                                           

At September 30, 1995, the executive officers were as follows:              

                                                        · Enlarge/Download Table

                                                                                Executive
                                                                                 Officer 
        Name           Age                        Title                           Since  
---------------------  --- ---------------------------------------------------- ---------
                                                                                         
Michael D. Eisner       53 Chairman of the Board, Chief Executive Officer         1984   
                            and President /1/                                            
Roy E. Disney           65 Vice Chairman of the Board                             1984   
Stephen F. Bollenbach   53 Senior Executive Vice President and Chief              1995   
                            Financial Officer                                            
Sanford M. Litvack      59 Senior Executive Vice President and Chief of           1991   
                            Corporate Operations                                         
John F. Cooke           53 Executive Vice President-Corporate Affairs /2/         1995   
Lawrence P. Murphy      43 Executive Vice President and Chief Strategic Officer   1985   
                            and Chairman of Disney Cruise Lines                          
John J. Garand          48 Senior Vice President-Planning and Control /3/         1992   

--------                                                                        
/1/ On October 2, 1995, Mr. Michael Ovitz joined the Company and assumed the    
position of President. Mr. Ovitz co-founded and served as chairman of   
Creative Artists Agency from 1975 until 1995.                           
/2/ Mr. Cooke served as President of The Disney Channel from 1985 until         
assuming his present position in February 1995.                         
/3/ Mr. Garand joined the Company as Vice President-Planning and Control in     
  1992 and was named Senior Vice President-Planning and Control in September
 1995. Mr. Garand was previously Senior Vice President and Chief Financial
Officer for Morse Shoe, Inc. from April 1990 until March 1992. Prior to 
that, Mr. Garand served in various positions at the corporate and       
subsidiary offices of PepsiCo, Inc. from 1981 until March 1990.         

ITEM 11. EXECUTIVE COMPENSATION                                                 

EMPLOYMENT AGREEMENTS                                                           
Mr. Eisner serves the Company pursuant to an employment agreement dated as  
of January 11, 1989, which provides for his employment as Chairman and Chief    
Executive Officer of the Company through September 30, 1998. Mr. Eisner's base  
salary is $750,000 per year through the entire term of the agreement. In        
addition, his agreement provides for a nondiscretionary annual bonus equal to   
2% of the amount (the "Bonus Base") by which the Company's net income for the   
fiscal year exceeds the amount representing a return on stockholder's equity    
of 11% (9% for 1989 and 1990). Mr. Eisner's bonuses for the first two years of  
the agreement were payable in cash; thereafter, bonuses, to the extent earned,  
are payable in cash to the extent the return on stockholders' equity is equal   
to or less than 17.5%, and in restricted stock, as defined in the employment    
agreement, to the extent of any amount over 17.5%. Mr. Eisner's employment      
agreement provided for a single stock option grant (made on January 11, 1989)   
with respect to 8,000,000 shares of Common Stock. Of the options granted, 25%   
were granted at a exercise price $10 above the then-current fair market value   
of the Common Stock, with the remaining 75% granted at a price equal to fair    
market value. In the event of death or disability, Mr. Eisner's employment      
agreement provides for continued payment of base salary for the remaining term  
of the agreement and continued payment of annual bonuses for 24 months. Mr.     
Eisner is entitled to termination payments under certain circumstances and is   
indemnified up to stated limits in respect of potential tax liabilities for     
certain of such payments.                                                       

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION                     
Directors Lozano, Poitier, Russell and Watson comprise the Company's        
Compensation Committee. Messrs. Lozano, Poitier and Russell are nonemployee     
directors. Mr. Watson was Chairman of the Board of Directors of the Company     
from May 1983 to September 1984, but he has not served as a Company employee    
since that time.                                                                

At its September 1995 meeting, the Board of Directors approved the payment  
of $250,000 as special compensation to Mr. Russell for extraordinary services   
rendered over an extended period of time in connection with his position as     
Chairman of the Compensation Committee. These services related to               
circumstances arising after the death of Frank G. Wells, the Company's former   
President and Chief Operating Officer, in April 1994 and concluded with Mr.     
Russell's key role in securing for the Company the services of Michael S.       
Ovitz as President.                                                             

EXECUTIVE COMPENSATION SUMMARY TABLE                                            
The following table sets forth information concerning total compensation    
earned or paid to the Chief Executive Officer and the four most highly          
compensated executive officers of the Company who served in such capacities on  
September 30, 1995 (the "named executive officers") for services rendered to    
the Company during each of the last three fiscal years.                         

                                                        · Enlarge/Download Table

                                      Annual               Long-Term                         
                                   Compensation           Compensation                       
                                ------------------- ------------------------                 
                                                      Number of   Restricted                 
   Name and Principal    Fiscal                     Stock Options   Stock       All Other    
       Positions          Year   Salary  Bonus /3/     Granted    Awards /4/ Compensation /5/
   ------------------    ------ -------- ---------- ------------- ---------- ----------------
                                                                                             
Michael D. Eisner.......  1995  $750,000 $8,024,707      --       5,996,522      $ 6,877     
 Chief Executive Officer  1994   750,000  7,268,807      --       2,638,394        9,730     
  and Chairman of the     1993   750,000        --       --           --           9,667     
  Board                                                                                      
Sanford M. Litvack /1/..  1995  $647,115 $1,600,000      --           --         $ 6,820     
 Senior Executive Vice    1994   500,000  1,600,000    200,000        --           9,731     
 President and Chief of   1993   500,000    375,000      --           --           9,992     
 Corporate Operations                                                                        
John F. Cooke /2/.......  1995  $569,616 $  550,000    335,000        --         $ 6,840     
 Executive Vice           1994   523,751    575,000      --           --           7,859     
  President-Corporate     1993   505,770    500,000      --           --          10,842     
  Affairs                                                                                    
Lawrence P. Murphy......  1995  $475,769 $  550,000    150,000        --         $ 6,828     
 Executive Vice           1994   436,846    800,000      --           --           9,701     
  President and Chief     1993   408,558    375,000      --           --          10,151     
  Strategic Officer                                                                          
Roy E. Disney...........  1995  $350,000 $  550,000    200,000        --         $ 3,820     
 Vice Chairman of the     1994   350,000    500,000      --           --           6,670     
  Board                   1993   350,000    450,000      --           --           5,532     


--------                                                                        
/1/ Mr. Litvack assumed this position in August 1994; prior to that he was      
Executive Vice President- Law and Human Resources.                      
/2/ Mr. Cooke assumed this position in February 1995; prior to that he was      
President of The Disney Channel.                                        
/3/ Mr. Eisner's bonus was calculated pursuant to the bonus formula set forth   
   in his employment agreement (see "Employment Agreements" above). For Fiscal
 1995, Mr. Eisner received a cash bonus of $8,024,707 and 97,445 shares of
 restricted stock (valued at $5,996,522) pursuant to the formula set forth
in his employment agreement (the "Bonus Formula"). For Fiscal 1994, Mr. 
  Eisner received a cash bonus of $7,268,807 and 60,618 shares of restricted
 stock (valued at $2,638,394) pursuant to the Bonus Formula. In accordance
with the S.E.C.'s rules, the cash and restricted stock portions of Mr.  
Eisner's bonus are reported separately in, respectively, the "Bonus" and
   "Restricted Stock" columns above. For Fiscal 1993, the Company did not meet
 the bonus threshold set forth in Mr. Eisner's employment agreement and he
accordingly did not receive a bonus for that fiscal year.               

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/4/ Mr. Eisner received 97,445 shares of restricted stock for part of his Fiscal
    1995 bonus and 60,618 shares of restricted stock for part of his Fiscal 1994
bonus pursuant to the Bonus Formula (see "Employment Agreements" above).
    Pursuant to Mr. Eisner's employment agreement, the restricted stock value is
    based upon the average closing price for the Company's Common Stock between:
   (i) December 1 and December 14, 1995 ($61.538 per share) for the restricted
    stock awarded as part of Mr. Eisner's Fiscal 1995 bonus and (ii) November 28
    and December 9, 1994 ($43.525 per share) for the restricted stock awarded as
 part of Mr. Eisner's Fiscal 1994 bonus. Mr. Eisner is entitled to receive
 dividends on the restricted stock, and all restrictions will lapse on the
 third anniversary following the date of grant, or earlier in the event of
   death or certain corporate transactions that eliminate or materially impair
the market for the Company's Common Stock.                              
/5/ The Company provides the named executive officers with certain group life,  
health, medical and other non-cash benefits generally available to all  
   salaried employees and not included in this column pursuant to the S.E.C.'s
rules. The amounts shown in this column include the following:          

(a) The Disney Salaried Savings and Investment Plan (the "Savings Plan")    
currently permits salaried employees of the Company to elect to make
tax-deferred contributions of a portion of their base compensation. 
Amounts deferred through payroll deductions are contributed by the  
Company on behalf of a participant as tax-deferred contributions    
pursuant to Section 401(k) of the Internal Revenue Code. Under the  
   Savings Plan, the Company currently matches a participant's first 4% of
tax-deferred contributions by an amount equal to 50% of such        
contribution for each year, subject to a maximum of 2% of the       
participant's compensation for that year. Participants may allocate 
their contributions among six investment funds, including a fund    
investing in the Company's Common Stock. All Company matching       
contributions are invested in Common Stock of the Company. During   
 Fiscal 1995, the Company's matching contributions were $3,057 for Mr.
Eisner, $3,000 for Mr. Litvack, $3,020 for Mr. Cooke, $3,008 for Mr.
  Murphy and $0 for Mr. Disney, who did not participate in the Plan. The
Company's matching contributions were $3,014 during Fiscal 1994 and 
$4,497 during Fiscal 1993 for Mr. Cooke.                            
(b) The Company provides certain key employees with personal liability      
   insurance coverage up to $5,000,000. Benefits under the plan supplement
   each employee's personal homeowner's and automobile liability insurance
coverage. During Fiscal 1995, the Company paid $520 in premiums on  
behalf of each of the named executive officers. The Company paid    
premiums of $195 during each of Fiscal 1994 and Fiscal 1993 for Mr. 
Cooke.                                                              
(c) The Supplemental Medical Plan is a fully insured hospital and medical   
expense reimbursement plan covering certain key management employees
and their dependents. The plan provides coverage for 100% of medical
expenses incurred (with certain limited exceptions) up to 20% of the
employee's annual salary in any one year, provided that the expenses
   are not covered by the Company's Major Medical Plan, which is available
to all salaried employees of the Company. The Company pays the full 
   cost of premiums for the Supplemental Medical Plan, as well as premiums
for additional voluntary insurance under the Company's group life   
insurance plan. During Fiscal 1995, premiums of $3,300 were paid on 
behalf of each of the named executive officers. The Company paid    
   premiums of $4,650 during Fiscal 1994 and $6,150 during Fiscal 1993 for
Mr. Cooke.                                                          

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OPTION GRANTS FOR FISCAL 1995 AND POTENTIAL REALIZABLE VALUES                   
The following table sets forth as to each of the named executive officers   
information with respect to option grants during Fiscal 1995 and the potential  
realizable value of such option grants: (i) the number of shares of Common      
Stock underlying options granted during Fiscal 1995, (ii) the percentage that   
such options represent of all options granted to employees during Fiscal 1995,  
(iii) the exercise price, (iv) the expiration date and (v) the potential        
realizable value, assuming a 5% and 10% annual rate of appreciation in the      
Common Stock during the option terms. The table also sets forth a hypothetical  
potential realizable value during a corresponding 10-year term, assuming a 5%   
and 10% annual rate of appreciation, for all stockholders. The 5% and 10%       
assumed rates of growth are for illustrative purposes only. They are not        
intended to predict future stock prices, which will depend on market            
conditions and other factors such as the Company's performance.                 

                                                        · Enlarge/Download Table

                                                                         Potential Realizable Value   
                                                                           at Assumed Annual Rates    
                                                                          Stock Price Appreciation    
                                       Individual Grants                     for Option Term /3/      
                         --------------------------------------------- -------------------------------
                                      % of Total                                                      
                                       Options                                                        
                          Number of   Granted to  Exercise                                            
                           Options   Employees in   Price   Expiration                                
          Name           Granted /2/ Fiscal Year  ($/Share)    Date          5%              10%      
          ----           ----------- ------------ --------- ---------- --------------- ---------------
                                                                                                      
Michael D. Eisner.......     --           --         --         --           --              --       
Sanford M. Litvack......     --           --         --         --           --              --       
John F. Cooke...........   335,000       3.55%     $52.75   2/21/2005  $    11,113,354 $    28,163,421
Lawrence P. Murphy......   150,000       1.59%      55.25   4/24/2005        5,211,964      13,208,141
Roy E. Disney...........   200,000       2.12%      46.56   1/23/2005        5,856,518      14,841,567
All Stockholders /1/           N/A        N/A         N/A         N/A   18,964,874,599  48,060,710,689

--------                                                                        
/1/ The potential realizable gain to stockholders (based on 524,450,134 shares  
outstanding and a fair market value of $57.50 per share on September 29,
1995 and 5% and 10% assumed annual rates over a term of ten years,      
commencing on October 1, 1995), is provided as a comparison to the      
   potential gain realized by the named executive officers at the same assumed
annual rates of stock appreciation.                                     
/2/ Mr. Cooke's options become exercisable in 9% installments on the first and  
second anniversary following the date of grant, 21% installments on the 
third through fifth anniversaries, and a 19% installment on the sixth   
anniversary of grant. Mr. Disney's options become exercisable in five   
installments of 20% on each of the first through fifth anniversaries    
   following the date of grant. Mr. Murphy's options become exercisable in 50%
installments on each of the fourth and fifth anniversaries following the
date of grant.                                                          
/3/ Amounts for the named executive officers shown under the "Potential         
Realizable Value" columns above have been calculated by multiplying the 
exercise price by the annual appreciation rate shown (compounded for the
term of the options), subtracting the exercise price per share and      
multiplying the gain per share by the number of shares covered by the   
options.                                                                

OPTION EXERCISES AND VALUES FOR FISCAL 1995                                     
The following table sets forth as to each of the named executive officers   
information with respect to option exercises during Fiscal 1995 and the status  
of their options on September 30, 1995: (i) the number of shares of Common      
Stock underlying options exercised during Fiscal 1995, (ii) the aggregate       
dollar value realized upon the exercise of such options, (iii) the total        
number of exercisable and unexercisable stock options held on September 30,     
1995 and (iv) the aggregate dollar value of in-the-money exercisable and        
unexercisable options on September 30, 1995.                                    

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                          Number of                                                                 
                           Shares                       Number of            Value of Unexercised   
                          Acquired                 Unexercised Options       In-the-Money Options   
                            Upon                         9/30/95                 9/30/95 /1/        
                         Exercise of Value Upon ------------------------- --------------------------
  Name                     Option     Exercise  Exercisable Unexercisable Exercisable  Unexercisable
  ----                   ----------- ---------- ----------- ------------- ------------ -------------
                                                                                                    
Michael D. Eisner.......     --          --      6,000,000    2,000,000   $238,410,000  $79,470,000 
Sanford M. Litvack......     --          --        345,000      355,000      9,660,785    8,270,715 
John F. Cooke...........   40,000    $1,480,005     --          415,000        --         4,795,010 
Lawrence P. Murphy           --          --        272,000      330,000      9,189,824    5,925,960 
Roy E. Disney...........     --          --        160,000      200,000      5,490,080    2,187,600 

--------                                                                        
/1/ In accordance with the S.E.C.'s rules, values are calculated by subtracting 
the exercise price from the fair market value of the underlying Common  
Stock. For purposes of this table, fair market value is deemed to be    
   $57.50, the average of the high and low Common Stock price reported for the
New York Stock Exchange Composite Transactions on September 29, 1995.   

RETIREMENT PLANS                                                                
The Company maintains a tax-qualified, noncontributory retirement plan for  
salaried employees called the Disney Salaried Retirement Plan (the "Retirement  
Plan"). Certain provisions of the Retirement Plan become effective if there is  
a change in control of the Company (as defined in the Retirement Plan           
document). These provisions prevent any assets of the Retirement Plan from      
reverting to the Company and any transfers of assets or liabilities to or from  
the Retirement Plan, and prevent any amendments to the Retirement Plan. In      
addition, the Company maintains a nonqualified, unfunded plan, the Amended and  
Restated Key Plan (the "Restated Key Plan"), which provides retirement          
benefits for key salaried employees.                                            

The table set forth below illustrates the total combined estimated annual   
benefits payable under the Retirement Plan and the Restated Key Plan to         
eligible salaried employees for years of service assuming normal retirement at  
age 65.                                                                         

                                                                · Download Table

     Average                                                    
   Annual Base                                                  
  Compensation                    Years of Service              
for Highest Five    --------------------------------------------
Consecutive Years      15       20       25       30       35   
-----------------   -------- -------- -------- -------- --------
                                                                
   $  150,000       $ 45,444 $ 60,621 $ 75,906 $ 91,050 $104,925
      300,000         88,757  118,371  148,094  177,675  205,988
      450,000        132,069  176,121  220,281  264,300  307,050
      600,000        175,382  233,871  292,469  350,925  408,113
      750,000        218,694  291,621  364,656  437,550  509,175
    1,000,000        290,882  387,871  484,969  581,925  677,613

The Retirement Plan covers salaried employees who have completed one year of
service. Benefits under the Retirement Plan are based primarily on the          
participant's credited years of service and average base compensation (base     
compensation excludes other compensation such as bonuses) for the highest five  
consecutive years of compensation during the ten-year period prior to           
termination or retirement, whichever is earlier. In addition, a portion of      
each participant's retirement benefit is comprised of a flat dollar amount      
based solely on years and hours of credited service. Benefits are non-          
forfeitable after five years of vesting service, and actuarially reduced        
benefits are available for participants who retire on or after age 55 after     
five years of vesting service. The Restated Key Plan provides retirement        
benefits for key salaried employees in excess of maximum benefit accruals for   
qualified plans permitted under Code procedures. In calendar year 1995, the     
maximum annual benefit accruable under a tax-qualified plan was $120,000. The   
benefits provided under the Restated Key Plan are provided by the Company on a  
noncontributory basis.                                                          

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As of December 1, 1995, the estimated annual payments for services under the
Retirement Plan and the Restated Key Plan would be based upon an average        
compensation of $750,000 for Mr. Eisner, $540,599 for Mr. Litvack, $496,281     
for Mr. Cooke, $417,081 for Mr. Murphy and $350,000 for Mr. Disney. Messrs.     
Eisner, Cooke and Disney each have eleven years, Mr. Litvack has five years     
and Mr. Murphy has ten years of credited service for the plans. The table set   
forth above illustrates estimated benefits payable determined on a straight-    
life annuity basis. There is no offset in benefits under either plan for        
Social Security benefits.                                                       

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT         

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS                                    
The following table sets forth information as to the beneficial ownership of
each person known to the Company to own more than 5% of the outstanding Common  
Stock as of December 1, 1995.                                                   

                                                                · Download Table

                                                         Shares    Percent
  Name and Address                                    Beneficially   of   
  of Beneficial Owner                                    Owned      Class 
  -------------------                                 ------------ -------
                                                                          
Bass Management Trust /1/............................  31,125,578   5.93% 
2700 First City Bank Tower                                                
201 Main Street                                                           
Fort Worth, Texas 76102                                                   

--------                                                                        
/1/ According to a Schedule 13D, amended through January 28, 1992, filed on     
behalf of the Bass Management Trust (the "Trust"), Mr. Perry R. Bass may
   also be deemed a beneficial owner of the shares held by the Trust by virtue
 of his authority as Trustee and a trustor of the Trust, and Nancy L. Bass
may also be deemed a beneficial owner of such shares as a trustor of the
Trust.                                                                  

STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS                             
The following table reflects shares of Common Stock beneficially owned (or  
deemed to be beneficially owned pursuant to the rules of the Securities and     
Exchange Commission) as of December 1, 1995 by each director of the Company,    
each of the executive officers named in the Summary Compensation Table          
included elsewhere herein and the current directors and executive officers of   
the Company as a group.                                                         

                                                                · Download Table

                              Sole    Shared Voting                            
                           Voting and    and/or     Acquirable                 
                           Investment  Investment   Within 60     Percent of   
      Name                 Power /1/    Power /2/    Days /3/  Common Stock /4/
      ----                 ---------- ------------- ---------- ----------------
                                                                               
Reveta F. Bowers..........     --          --           --            --       
John F. Cooke.............     --           1,430       --            *        
Roy E. Disney /5/......... 5,674,600    2,179,444     200,000        1.53      
Michael D. Eisner......... 2,852,640       99,219   6,000,000        1.71      
Stanley P. Gold...........     1,000        1,936       --            *        
Sanford M. Litvack........     --             607     345,000         *        
Ignacio E. Lozano, Jr. ...     5,148          440       --            *        
George J. Mitchell........       500       --           --            *        
Lawrence P. Murphy........    20,272        1,070     272,000         *        
Richard A. Nunis..........    70,122       35,160     420,000         *        
Sidney Poitier............     --          --           --            --       
Irwin E. Russell..........     4,000       --           --            *        
Robert A.M. Stern.........       140       --           --            *        
E. Cardon Walker..........     --         162,943       --            *        
Raymond L. Watson.........     --          17,040       --            *        
Gary L. Wilson............     --          --           --            --       
All current directors and                                                      
 executive officers as a                                                       
 group (19 persons,                                                            
 including the foregoing). 8,781,162    2,700,305   7,256,000        3.57      

--------                                                                        
*  Represents less than 1% of the Company's outstanding Common Stock.           

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/1/ Certain of the directors and executive officers included in the table       
disclaim beneficial ownership of some of these shares as follows: Mr.   
 Eisner--53,600 shares held by Mr. Eisner's wife directly and as custodian
for their children, 36,000 shares held in trust for the benefit of their
children and 1,600 shares held in a family trust; Mr. Disney--2,179,444 
  shares (see footnote (5) below); Mr. Gold--1,520 shares held by Mr. Gold's
  wife and children and 416 shares held by Shamrock Holdings, Inc., of which
he is an officer and director; Mr. Lozano--440 shares that he holds as  
 custodian for the benefit of his child; Mr. Nunis--3,547 shares held by a
trust of which Mr. Nunis is trustee for the benefit of his son; and all 
current directors and executive officers as a group--2,276,151 shares.  
/2/ Includes interests in shares held for the benefit of the following          
   individuals and for all current directors and executive officers as a group
  in the Disney Salaried Savings and Investment Plan as of December 1, 1995,
   with respect to which such persons have sole voting power but no investment
rights: Mr. Eisner--8,019 shares; Mr. Litvack--607 shares; Mr. Murphy-- 
1,070 shares; Mr. Cooke--1,430 shares; Mr. Nunis--9,555 shares; and all 
current directors and executive officers as a group--20,877 shares.     
/3/ Reflects the number of shares that could be purchased by exercise of        
   options available as of December 1, 1995 or within 60 days thereafter under
the Company's stock option or stock incentive plans.                    
/4/ Based on the number of shares outstanding at, or acquirable within 60 days  
of, December 1, 1995.                                                   
/5/ The shares listed in the table for Mr. Disney include 2,179,444 shares as to
which Mr. Disney disclaims beneficial ownership, consisting of 1,507,520
shares owned by Mr. Disney's wife; 256,320 shares held in trusts for the
benefit of his four children, of which Mr. Disney is the trustee; 33,332
 shares held in trust for the benefit of one of his children, of which Mr.
Disney is the trustee; and 416 shares owned by a subsidiary of Shamrock 
Holdings, Inc., of which both Mr. Disney and his wife are officers and  
   directors and the shares of which are held by Mr. Disney, his wife, certain
of his children, trusts for the benefit of his children and custodial   
accounts for the benefit of certain of his children and grandchildren.  

Section 16(a) of the Securities Exchange Act of 1934 requires the company's 
executive officers and directors to file initial reports of ownership and       
reports of changes of ownership of the Company's Common Stock with the          
Securities and Exchange Commission. Executive officers and directors are        
required to furnish the Company with copies of all Section 16(a) forms that     
they file. Based upon a review of these filings and written representations     
from certain of the Company's directors and executive officers that no other    
reports were required, the Company notes that Robert A.M. Stern inadvertently   
failed to report the gift of 10 shares on December 17, 1994; Gary L. Wilson     
inadvertently failed to report the sale of 1,072 shares held in a retirement    
account on July 5, 1995; and John F. Cooke, an executive officer of the         
Company, inadvertently filed a late initial report of ownership. Messrs. Stern  
and Wilson subsequently reported each transaction.                              

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                         

During Fiscal 1995, E. Cardon Walker received payments totaling $565,359    
with respect to films in which he had invested between 1963 and 1979 under a    
former investment participation incentive program of the Company, but as to     
which he had not yet recovered the amount of such investment, and $17,066 as    
his net profit participation in prior years' programs.                          

During Fiscal 1995, a subsidiary of the Company retained the firm of Robert 
A.M. Stern Architects, of which Mr. Stern is Senior Partner, for architectural  
services relating to resort and office developments in California and Florida.  
Payments to Mr. Stern's firm for these services aggregated approximately        
$201,363 during Fiscal 1995.                                                    

During Fiscal 1995, a subsidiary of the Company retained Impact Design,     
Inc., of which Barbera Hale Thornhill is principal, to perform interior design  
services for the Disney Vacation Club at Newport Coast development. Ms.         
Thornhill is the wife of Gary L. Wilson. Payments to Impact Design, Inc.        
totaled approximately $121,122 during Fiscal 1995.                              

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PART IV 

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K        

(a) Exhibits and Financial Statements and Schedules                             

(1)Financial Statements and Schedules                                       

See Index to Financial Statements and Supplemental Data at page 31.     

(2)Exhibits                                                                 

3(a) Restated Certificate of Incorporation of the Company, filed as   
    Exhibit 3(a) to the Company's Annual Report on Form 10-K for the
year ended September 30, 1992, is hereby incorporated by    
reference.                                                  
3(b) Bylaws of the Company, as amended, filed as Exhibit 3(b) to the  
     Company's Annual Report on Form 10-K for the year ended September
30, 1994, are hereby incorporated by reference.             
4(a) Rights Agreement, dated as of June 21, 1989, between the Company 
  and Security Pacific National Bank, as Rights Agent (including
    the form of Certificate of Designation of the Series R Preferred
Stock attached as Exhibit A thereto and the form of Rights  
     Certificate attached as Exhibit B thereto), filed as Exhibit 1 to
     the Company's Current Report on Form 8-K, dated June 21, 1989, is
hereby incorporated by reference.                           
4(b) Indenture, dated as of November 30, 1990, between the Company and
     Bankers Trust Company, as Trustee, with respect to certain senior
debt securities of the Company, filed as Exhibit 2 to the   
    Company's Current Report on Form 8-K, dated January 14, 1991, is
hereby incorporated by reference.                           
4(c) Second Amended and Restated Credit Agreement, dated as of April  
  12, 1995, among the Company, Citicorp USA, Inc., as Agent, and
certain financial institutions, filed as Exhibit 10 to the  
Company's Quarterly Report on Form 10-Q for the period ended
March 31, 1995, is hereby incorporated by reference.        
4(d) Other long-term borrowing instruments issued by the Company are  
    omitted pursuant to Item 601(b) (4) (iii) of Regulation S-K. The
   Company undertakes to furnish copies of such instruments to the
Commission upon request.                                    
10(a) (i) Agreement on the Creation and the Operation of Euro           
Disneyland en France, dated March 25, 1987, and (ii) Letter 
   relating thereto of Michael D. Eisner, Chairman of the Company,
dated March 24, 1987, filed as Exhibits 10(b) and 10(a),    
   respectively, to the Company's Current Report on Form 8-K filed
April 24, 1987, are hereby incorporated by reference.       
10(b) Limited Recourse Financing Facility Agreement, dated as of April  
    27, 1988, among the Company, Citibank Channel Island Limited and
   Citicorp International, filed as Exhibit (10a) to the Company's
Current Report on Form 8-K filed April 29, 1988, is hereby  
incorporated by reference.                                  
10(c) (i) Employment Agreement, dated as of January 10, 1989, between   
    the Company and Michael D. Eisner, filed as Exhibit 10(a) to the
Company's Quarterly Report on Form 10-Q for the period ended
    March 31, 1989; (ii) Agreement, dated March 1, 1985, between the
Company and Michael D. Eisner, filed as Exhibit 2 to the    
     Company's Quarterly Report on Form 10-Q for the period ended June
30, 1985; and(iii) description of action by the Compensation
   Committee taken on November 30, 1990, filed as Exhibit 10(c) to
the Company's Annual Report on Form 10-K for the year ended 
September 30, 1990, are hereby incorporated by reference.   
10(d) Restricted Stock Agreement, dated May 5, 1995, between the        
Corporation and Stephen F. Bollenbach is filed herewith.    
10(e) Employment Agreement, dated October 1, 1995, between the Company  
andMichael S. Ovitz is filed herewith.                      

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10(f) (i) Contract, dated December 14, 1979, with E. Cardon Walker, to  
    purchase a 2% interest in certain motion pictures to be produced
by the Company and to acquire an additional 2% profit       
    participation; and (ii) Amendment thereto, dated August 8, 1980,
    filed as Exhibits 1 and 3, respectively, to the Company's Annual
  Report on Form 10-K for the year ended September 30, 1980, are
hereby incorporated by reference.                           
10(g) Form of Indemnification Agreement entered into or to be entered   
into by certain officers and directors of the Company as    
    determined from time to time by the Board of Directors, included
   as Annex C to the Proxy Statement for the Company's 1988 Annual
 Meeting of Stockholders, is hereby incorporated by reference.
10(h) 1995 Stock Option Plan for Non-Employee Directors, filed as       
  Exhibit A to the Company's Proxy Statement, dated December 29,
     1994, with respect to its 1995 Annual Meeting of Stockholders, is
hereby incorporated by reference.                           
10(i) (i) 1990 Stock Incentive Plan and Rules, filed as Exhibits 28(a)  
    and 28(b), respectively, to the Company's Registration Statement
     on Form S-8 (No. 33-39770), dated April 5, 1991, and (ii) Amended
and Restated 1990 Stock Incentive Plan and Rules, filed as  
Appendix B-2 to the Company's Joint Proxy Statement and     
   Prospectus, dated November 13, 1995, are hereby incorporated by
reference.                                                  
10(j) 1995 Stock Incentive Plan and Rules, filed as Appendix B-1 to the 
  Company's Joint Proxy Statement and Prospectus, dated November
13, 1995, is hereby incorporated by reference.              
10(k) (i) 1987 Stock Incentive Plan and Rules, (ii) 1984 Stock          
    Incentive Plan and Rules,(iii) 1981 Incentive Plan and Rules and
   (iv) 1980 Stock Option Plan, all as set forth as Exhibits 1(a),
1(b), 2(a), 2(b), 3(a), 3(b) and 4, respectively, to the    
Prospectus contained in Part I of the Company's Registration
  Statement on Form S-8 (No. 33-26106), dated December 20, 1988,
are hereby incorporated by reference.                       
10(l) Contingent Stock Award Rules under the Company's 1984 Stock       
  Incentive Plan, filed as Exhibit 10(t) to the Company's Annual
  Report on Form 10-K for the year ended September 30, 1986, are
hereby incorporated by reference.                           
10(m) 1996 Cash Bonus Performance Plan is filed herewith.               
10(n) Disney Salaried Retirement Plan, as amended through March 1,      
  1994, filed as Exhibit 10(l) to the Company's Annual Report on
Form 10-K for the year endedSeptember 30, 1994, is hereby   
incorporated by reference.                                  
10(o) The Walt Disney Company and Associated Companies Key Employees    
     Deferred Compensation and Retirement Plan, filed as Exhibit 10(u)
  to the Company's Annual Report on Form 10-K for the year ended
September 30, 1985, is hereby incorporated by reference.    
10(p) Group Term Life Insurance Plan (summary plan description), filed  
    as Exhibit 10(x) to the Company's Annual Report on Form 10-K for
the year ended September 30, 1985, is hereby incorporated by
reference.                                                  
10(q) Group Personal Excess Liability Insurance Plan (summary plan      
description), filed as Exhibit 10(z) to the Company's Annual
 Report on Form 10-K for the year ended September 30, 1986, is
hereby incorporated by reference.                           
10(r) Family Income Assurance Plan (summary plan description), filed as 
 Exhibit 10(aa) to the Annual Report on Form 10-K for the year
  ended September 30, 1986, is hereby incorporated by reference.
10(s) Disney Salaried Savings and Investment Plan, as amended and       
restated, is filed herewith.                                
10(t) Disney Salaried Savings and Investment Plan Trust Agreement,      
dated June 30, 1992, filed as Exhibit 10 to the Company's   
     Quarterly Report on Form 10-Q for the period ended June 30, 1992,
is hereby incorporated by reference.                        
10(u) Master Trust Agreement for Employees Savings and Retirement       
    Plans, as amended and restated through June 1, 1990, between the
   Company and Bankers Trust Company, as Trustee, filed as Exhibit
  28(b) to the Company's Registration Statement on Form S-8 (No.
33-35405), filed June 14, 1990, is hereby incorporated by   
reference.                                                  

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10(v) Amended and Restated Agreement and Plan of Reorganization, dated  
    as of July 31, 1995, between the Company and Capital Cities/ABC,
 Inc., filed as Exhibit 2.1 to the Company's Current Report on
Form 8-K, dated October 6, 1995, is hereby incorporated by  
reference.                                                  
18    Letter from the Company's independent accountants, dated August   
9, 1993, regarding preferability of the change in accounting
    method for project-related pre-opening costs, filed as Exhibit 1
 to the Company's Quarterly Report on Form 10-Q for the period
ended June 30, 1993, is hereby incorporated by reference.   
21    Subsidiaries of The Walt Disney Company is filed herewith.        
23    Consent of Price Waterhouse LLP, the Company's independent        
accountants, is included herein at page 32.                 
27    Financial Data Schedule (filed electronically only).              
28    Financial statements with respect to the Disney Salaried Savings  
   and Investment Plan for the year ended December 31, 1994, filed
as Exhibit 28 to the Annual Report on Form 10-K for the year
   ended September 30, 1994, as amended by Amendment No. 1 on Form
     10-K/A dated June 30, 1995, are hereby incorporated by reference.

(b) Reports on Form 8-K                                                         

(1) The Company filed a Current Report on Form 8-K, dated July 31, 1995,    
with respect to the execution of an Agreement and Plan of           
Reorganization, and certain other related agreements, by the Company
and Capital Cities/ABC, Inc.                                        

(2) The Company filed a Current Report on Form 8-K, dated October 6, 1995,  
  with respect to the execution of an Amended and Restated Agreement and
   Plan of Reorganization between the Company and Capital Cities/ABC, Inc.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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)
Date: December 19, 1995   By:               MICHAEL D. EISNER                   
                         -----------------------------------------------------
                         (Michael D. Eisner, Chairman of the Board and Chief
                        Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this   
report has been signed below by the following persons on behalf of the          
registrant and in the capacities and on the dates indicated.                    

                                                                · Download Table

             Signature                    Title                    Date        
             ---------                    -----                    ----        
                                                                               

Principal Executive Officer                                                    
MICHAEL D. EISNER                Chairman of the Board and                     
-----------------------------    Chief Executive Officer      December 19, 1995
(Michael D. Eisner)                                                            

Principal Financial and                                                        
Accounting Officers                                                            
STEPHEN F. BOLLENBACH            Senior Executive Vice                         
-----------------------------    President and Chief                           
(Stephen F. Bollenbach)          Financial Officer            December 19, 1995

JOHN J. GARAND                   Senior Vice President -                       
-----------------------------    Planning and Control         December 19, 1995
(John J. Garand)                                                               

Directors                                                                      
STEPHEN F. BOLLENBACH            Director                     December 19, 1995
-----------------------------                                                  
(Stephen F. Bollenbach)                                                        
REVETA F. BOWERS                 Director                     December 19, 1995
-----------------------------                                                  
(Reveta F. Bowers)                                                             
ROY E. DISNEY                    Director                     December 19, 1995
-----------------------------                                                  
(Roy E. Disney)                                                                
MICHAEL D. EISNER                Director                     December 19, 1995
-----------------------------                                                  
(Michael D. Eisner)                                                            
STANLEY P. GOLD                  Director                     December 19, 1995
-----------------------------                                                  
(Stanley P. Gold)                                                              
SANFORD M. LITVACK               Director                     December 19, 1995
-----------------------------                                                  
(Sanford M. Litvack)                                                           
IGNACIO E. LOZANO, JR.           Director                     December 19, 1995
-----------------------------                                                  
(Ignacio E. Lozano, Jr.)                                                       
GEORGE J. MITCHELL               Director                     December 19, 1995
-----------------------------                                                  
(George J. Mitchell)                                                           
RICHARD A. NUNIS                 Director                     December 19, 1995
-----------------------------                                                  
(Richard A. Nunis)                                                             
SIDNEY POITIER                   Director                     December 19, 1995
-----------------------------                                                  
(Sidney Poitier)                                                               
IRWIN E. RUSSELL                 Director                     December 19, 1995
-----------------------------                                                  
(Irwin E. Russell)                                                             
ROBERT A.M. STERN                Director                     December 19, 1995
-----------------------------                                                  
(Robert A.M. Stern)                                                            
E. CARDON WALKER                 Director                     December 19, 1995
-----------------------------                                                  
(E. Cardon Walker)                                                             
RAYMOND L. WATSON                Director                     December 19, 1995
-----------------------------                                                  
(Raymond L. Watson)                                                            
GARY L. WILSON                   Director                     December 19, 1995
-----------------------------                                                  
(Gary L. Wilson)                                                               

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THE WALT DISNEY COMPANY AND SUBSIDIARIES  
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA 

                                                                · Download Table

                                                                           Page
                                                                           ----
                                                                               
Report of Independent Accountants and Consent of Independent Accountants..  32 
Consolidated Financial Statements of The Walt Disney Company and               
 Subsidiaries                                                                  
  Consolidated Statement of Income for the Years Ended September 30, 1995,     
   1994 and 1993..........................................................  33 
  Consolidated Balance Sheet as of September 30, 1995 and 1994............  34 
  Consolidated Statement of Cash Flows for the Years Ended September 30,       
   1995, 1994 and 1993....................................................  35 
  Notes to Consolidated Financial Statements..............................  36 
  Quarterly Financial Summary.............................................  52 

Schedules other than those listed above are omitted for the reason that they    
are not applicable or the required information is included in the financial     
statements or related notes.                                                    

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REPORT OF INDEPENDENT ACCOUNTANTS 

To the Board of Directors and Stockholders of The Walt Disney Company           

In our opinion, the consolidated financial statements listed in the         
accompanying index present fairly, in all material respects, the financial      
position of The Walt Disney Company and its subsidiaries (the "Company") at     
September 30, 1995 and 1994, and the results of their operations and their      
cash flows for each of the three years in the period ended September 30, 1995,  
in conformity with generally accepted accounting principles. These financial    
statements are the responsibility of the Company'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 audits 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.                                                        

As discussed in Notes 1, 7, 8, and 12 to the consolidated financial         
statements, the Company adopted the provisions of the Financial Accounting      
Standards Board's Statement of Financial Accounting Standards ("SFAS") No.      
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions,"   
and SFAS No. 109, "Accounting for Income Taxes," and changed its method of      
accounting for pre-opening costs in fiscal 1993.                                

PRICE WATERHOUSE LLP                                                            

Los Angeles, California                                                         
November 27, 1995                                                               

CONSENT OF INDEPENDENT ACCOUNTANTS  

We hereby consent to the incorporation by reference in the prospectuses     
constituting part of the Registration Statements on Form S-8 (Nos. 33-26106,    
33-35405 and 33-39770) and Form S-3 (Nos. 33-49891 and 33-62777) of The Walt    
Disney Company of our report dated November 27, 1995 which appears above.       

PRICE WATERHOUSE LLP                                                            

Los Angeles, California                                                         
December 19, 1995                                                               

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CONSOLIDATED STATEMENT OF INCOME
(In millions, except per share data)

                                                                · Download Table

Year ended September 30                           1995       1994       1993   
-------------------------------------------------------------------------------
                                                                               
Revenues                                                                       
 Filmed entertainment                           $ 6,001.5  $ 4,793.3  $3,673.4 
 Theme parks and resorts                          3,959.8    3,463.6   3,440.7 
 Consumer products                                2,150.8    1,798.2   1,415.1 
                                                ---------  ---------  -------- 
                                                 12,112.1   10,055.1   8,529.2 
                                                ---------  ---------  -------- 
Costs and Expenses                                                             
 Filmed entertainment                             4,927.1    3,937.2   3,051.2 
 Theme parks and resorts                          3,099.0    2,779.5   2,693.8 
 Consumer products                                1,640.3    1,372.7   1,059.7 
                                                ---------  ---------  -------- 
                                                  9,666.4    8,089.4   6,804.7 
                                                ---------  ---------  -------- 
Operating Income                                                               
 Filmed entertainment                             1,074.4      856.1     622.2 
 Theme parks and resorts                            860.8      684.1     746.9 
 Consumer products                                  510.5      425.5     355.4 
                                                ---------  ---------  -------- 
                                                  2,445.7    1,965.7   1,724.5 
                                                ---------  ---------  -------- 
Corporate Activities                                                           
 General and administrative expenses                183.6      162.2     164.2 
 Interest expense                                   178.3      119.9     157.7 
 Investment and interest income                     (68.0)    (129.9)   (186.1)
                                                ---------  ---------  -------- 
                                                    293.9      152.2     135.8 
                                                ---------  ---------  -------- 
Loss from Investment in Euro Disney                 (35.1)    (110.4)   (514.7)
                                                ---------  ---------  -------- 
Income Before Income Taxes and Cumulative                                      
 Effect of Accounting Changes                     2,116.7    1,703.1   1,074.0 
 Income taxes                                       736.6      592.7     402.7 
                                                ---------  ---------  -------- 
Income Before Cumulative Effect of Accounting                                  
 Changes                                          1,380.1    1,110.4     671.3 
Cumulative Effect of Accounting Changes                                        
 Pre-opening costs                                 --         --        (271.2)
 Postretirement benefits                           --         --        (130.3)
 Income taxes                                      --         --          30.0 
                                                ---------  ---------  -------- 
Net Income                                      $ 1,380.1  $ 1,110.4  $  299.8 
                                                =========  =========  ======== 
Amounts Per Common Share                                                       
Earnings Before Cumulative Effect of Account-                                  
 ing Changes                                    $    2.60  $    2.04  $   1.23 
Cumulative Effect of Accounting Changes                                        
 Pre-opening costs                                 --         --          (.50)
 Postretirement benefits                           --         --          (.24)
 Income taxes                                      --         --           .06 
                                                ---------  ---------  -------- 
Earnings Per Share                              $    2.60  $    2.04  $    .55 
                                                =========  =========  ======== 
Average Number of Common and Common Equivalent                                 
 Shares Outstanding                                 530.4      545.2     544.5 
                                                =========  =========  ======== 
Pro Forma Amounts Assuming the New Accounting                                  
 Method for Pre-opening Costs is Applied                                       
 Retroactively                                                                 
 Net Income                                                           $  571.0 
                                                                      ======== 
 Earnings Per Share                                                   $   1.05 
                                                                      ======== 

See Notes to Consolidated Financial Statements

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CONSOLIDATED BALANCE SHEET
(In millions) 

                                                                · Download Table

September 30                                               1995       1994    
------------------------------------------------------------------------------
                                                                              
Assets                                                                        
 Cash and cash equivalents                               $ 1,076.5  $   186.9 
 Investments                                                 866.3    1,323.2 
 Receivables                                               1,792.8    1,670.5 
 Merchandise inventories                                     824.0      668.3 
 Film and television costs                                 2,099.4    1,596.2 
 Theme parks, resorts and other property, at cost                             
  Attractions, buildings and equipment                     8,339.9    7,450.4 
  Accumulated depreciation                                (3,038.5)  (2,627.1)
                                                         ---------  --------- 
                                                           5,301.4    4,823.3 
  Projects in progress                                       778.4      879.1 
  Land                                                       110.5      112.1 
                                                         ---------  --------- 
                                                           6,190.3    5,814.5 
 Investment in Euro Disney                                   532.9      629.9 
 Other assets                                              1,223.6      936.8 
                                                         ---------  --------- 
                                                         $14,605.8  $12,826.3 
                                                         =========  ========= 
Liabilities and Stockholders' Equity                                          
 Accounts payable and other accrued liabilities          $ 2,842.5  $ 2,474.8 
 Income taxes payable                                        200.2      267.4 
 Borrowings                                                2,984.3    2,936.9 
 Unearned royalty and other advances                         860.7      699.9 
 Deferred income taxes                                     1,067.3      939.0 
 Stockholders' equity                                                         
  Preferred stock, $.10 par value                                             
   Authorized--100.0 million shares                                           
   Issued--none                                                               
  Common stock, $.025 par value                                               
   Authorized--1.2 billion shares                                             
   Issued--575.4 million shares and 567.0 million shares   1,226.3      945.3 
  Retained earnings                                        6,990.4    5,790.3 
  Cumulative translation and other adjustments                37.3       59.1 
                                                         ---------  --------- 
                                                           8,254.0    6,794.7 
  Less treasury stock, at cost--51.0 million shares and                       
   42.9 million shares                                     1,603.2    1,286.4 
                                                         ---------  --------- 
                                                           6,650.8    5,508.3 
                                                         ---------  --------- 
                                                         $14,605.8  $12,826.3 
                                                         =========  ========= 

See Notes to Consolidated Financial Statements

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CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions) 

                                                                · Download Table

Year ended September 30                          1995       1994       1993    
-------------------------------------------------------------------------------
                                                                               
Cash Provided by Operations Before Income                                      
 Taxes                                         $ 4,067.5  $ 3,127.7  $ 2,453.9 
 Income taxes paid                                (557.4)    (320.4)    (308.7)
                                               ---------  ---------  --------- 
                                                 3,510.1    2,807.3    2,145.2 
                                               ---------  ---------  --------- 
Investing Activities                                                           
 Film and television costs                      (1,886.0)  (1,433.9)  (1,264.6)
 Investments in theme parks, resorts and other                                 
  property                                        (896.5)  (1,026.1)    (813.9)
 Euro Disney investment                            144.8     (971.1)    (140.1)
 Purchases of investments                       (1,033.2)    (952.7)  (1,313.5)
 Proceeds from sales of investments              1,460.3    1,494.1      841.0 
 Other                                             (77.8)       3.0       31.4 
                                               ---------  ---------  --------- 
                                                (2,288.4)  (2,886.7)  (2,659.7)
                                               ---------  ---------  --------- 
Financing Activities                                                           
 Borrowings                                        786.1    1,866.4    1,256.0 
 Reduction of borrowings                          (771.9)  (1,315.3)  (1,119.2)
 Repurchases of common stock                      (348.7)    (570.7)     (31.6)
 Dividends                                        (180.0)    (153.2)    (128.6)
 Other                                             182.4       76.1      136.1 
                                               ---------  ---------  --------- 
                                                  (332.1)     (96.7)     112.7 
                                               ---------  ---------  --------- 
Increase (Decrease) in Cash and Cash                                           
 Equivalents                                       889.6     (176.1)    (401.8)
Cash and Cash Equivalents, Beginning of Year       186.9      363.0      764.8 
                                               ---------  ---------  --------- 
Cash and Cash Equivalents, End of Year         $ 1,076.5  $   186.9  $   363.0 
                                               =========  =========  ========= 

The difference between Income Before Income Taxes and Cumulative Effect of     
Accounting Changes as shown on the Consolidated Statement of Income and Cash   
Provided By Operations Before Income Taxes is detailed as follows.             

Income Before Income Taxes and Cumulative                                      
 Effect of Accounting Changes                  $ 2,116.7  $ 1,703.1  $ 1,074.0 
                                               ---------  ---------  --------- 
Cumulative Effect of Accounting Changes           --         --         (514.2)
Charges to Income Not Requiring Cash Outlays                                   
 Depreciation                                      470.2      409.7      364.2 
 Amortization of film and television costs       1,382.8    1,198.6      664.2 
 Euro Disney                                        35.1      110.4      350.0 
 Other                                              98.1      121.1      163.5 
Changes in                                                                     
 Investments in trading securities                   1.2     --         --     
 Receivables                                      (122.3)    (280.2)    (211.0)
 Merchandise inventories                          (155.7)     (59.4)    (146.1)
 Other assets                                     (287.7)     (81.5)     197.0 
 Accounts payable and other accrued                                            
  liabilities                                      368.3      146.7      544.4 
 Unearned royalty and other advances               160.8     (140.8)     (32.1)
                                               ---------  ---------  --------- 
                                                 1,950.8    1,424.6    1,379.9 
                                               ---------  ---------  --------- 
Cash Provided by Operations Before Income                                      
 Taxes                                         $ 4,067.5  $ 3,127.7  $ 2,453.9 
                                               =========  =========  ========= 
Supplemental Cash Flow Information:                                            
 Interest paid                                 $   122.8  $    99.3  $    77.3 
                                               =========  =========  ========= 

See Notes to Consolidated Financial Statements

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  

(Tabular dollars in millions, except per share amounts) 

1 Description of the Business and Summary of Significant Accounting Policies    

The Walt Disney Company, together with its subsidiaries (the "Company"), is 
a diversified international entertainment company with operations or            
investments in the following businesses.                                        

FILMED ENTERTAINMENT                                                            
The Company produces and acquires live-action and animated motion pictures  
for distribution to the theatrical, television and home video markets. The      
Company also produces original television programming for the network and       
first-run syndication markets. The Company distributes its filmed product       
through its own distribution and marketing companies in the United States and   
most foreign markets. The Company provides programming for and operates The     
Disney Channel, a pay television programming service, and a Los Angeles,        
California television station.                                                  

THEME PARKS AND RESORTS                                                         
The Company operates the Walt Disney World(R) destination resort in Florida 
and the Disneyland Park(R) and the Disneyland Hotel in California. The Walt     
Disney World destination resort includes the Magic Kingdom, Epcot and the       
Disney-MGM Studios Theme Park, twelve resort hotels and a complex of villas     
and suites, a nighttime entertainment complex, a shopping village, conference   
centers, campgrounds, golf courses, water parks and other recreational          
facilities. The Company earns royalties on revenues generated by the Tokyo      
Disneyland theme park near Tokyo, Japan, which is owned and operated by an      
unrelated Japanese corporation. The Company's Disney Design and Development     
unit designs and develops new theme park concepts and attractions, as well as   
resort properties. The Company also manages and markets vacation ownership      
interests in the Disney Vacation Club.                                          

CONSUMER PRODUCTS                                                               
The Company licenses the name Walt Disney, as well as the Company's         
characters, visual and literary properties and songs and music, to various      
consumer manufacturers, retailers, show promoters and publishers throughout     
the world. The Company also engages in direct retail distribution through the   
Disney Stores and consumer catalogs, and is a publisher of books, magazines     
and comics in the United States and Europe. In addition, the Company produces   
audio products for all markets, as well as film and video products for the      
educational marketplace.                                                        

INVESTMENT IN EURO DISNEY                                                       
The Company is an equity investor in Euro Disney S.C.A. ("Euro Disney"), the
operator of the Disneyland Paris Resort (see Note 3).                           

SIGNIFICANT ACCOUNTING POLICIES                                                 
Principles of Consolidation                                                     
The consolidated financial statements of the Company include the accounts of
The Walt Disney Company and its subsidiaries after elimination of intercompany  
accounts and transactions. Investments in affiliated companies are accounted    
for using the equity method.                                                    

Accounting Changes                                                              
Effective October 1, 1994, the Company adopted Statement of Financial       
Accounting Standards ("SFAS") 115 Accounting for Certain Investments in Debt    
and Equity Securities (see Note 14), the impact of which was not material.      
Effective October 1, 1992, the Company adopted SFAS 106 Employers' Accounting   
for Postretirement Benefits Other Than Pensions (see Note 8) and SFAS 109       
Accounting for Income Taxes (see Note 7) and changed its method of accounting   
for pre-opening costs (see Note 12). These changes had no cash impact.          
The pro forma amounts presented in the consolidated statement of income     
reflect the effect of retroactive application of expensing pre-opening costs.   

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Revenue Recognition                                                             
Revenues from the theatrical distribution of motion pictures are recognized 
when motion pictures are exhibited. Television licensing revenues are recorded  
when the program material is available for telecasting by the licensee and      
when certain other conditions are met. Revenues from video sales are            
recognized on the date that video units are made widely available for sale by   
retailers.                                                                      
Revenues from participants and sponsors at the theme parks are generally    
recorded over the period of the applicable agreements commencing with the       
opening of the related attraction.                                              

Cash, Cash Equivalents and Investments                                          
Cash and cash equivalents consist of cash on hand and marketable securities 
with original maturities of three months or less.                               
SFAS 115, adopted in 1995, requires that certain investments in debt and    
equity securities be classified into one of three categories. Debt securities   
that the Company has the positive intent and ability to hold to maturity are    
classified as "held-to-maturity" and reported at amortized cost. Debt           
securities not classified as held-to-maturity and marketable equity securities  
are classified as either "trading" or "available-for-sale," and are recorded    
at fair value with unrealized gains and losses included in earnings or          
stockholders' equity, respectively. Prior to 1995, debt securities were         
carried at cost, adjusted for unamortized premium or discount. Marketable       
equity securities were carried at the lower of aggregate cost or market.        
Realized gains and losses were determined on an average cost basis.             

Merchandise Inventories                                                         
Carrying amounts of merchandise, materials and supplies inventories are     
generally determined on a moving average cost basis and are stated at the       
lower of cost or market.                                                        

Film and Television Costs                                                       
Film and television production and participation costs are expensed based on
the ratio of the current period's gross revenues to estimated total gross       
revenues from all sources on an individual production basis. Estimates of       
total gross revenues are reviewed periodically and amortization is adjusted     
accordingly.                                                                    
Television broadcast rights are amortized principally on an accelerated     
basis over the estimated useful lives of the programs.                          

Theme Parks, Resorts and Other Property                                         
Theme parks, resorts and other property are carried at cost. Depreciation is
computed on the straight-line method based upon estimated useful lives ranging  
from three to fifty years.                                                      

Other Assets                                                                    
Rights to the name, likeness and portrait of Walt Disney, goodwill and other
intangible assets are amortized over periods ranging from two to forty years.   

Risk Management Contracts                                                       
In the normal course of business, the Company employs a variety of off-     
balance-sheet financial instruments to manage its exposure to fluctuations in   
interest and foreign currency exchange rates, including interest rate and       
cross-currency swap agreements, forward and option contracts, and interest      
rate exchange-traded futures. The Company designates interest rate and cross-   
currency swaps as hedges of investments and debt, and accrues the differential  
to be paid or received under the agreements as interest rates change over the   
lives of the contracts. Differences paid or received on swap agreements are     
recognized as adjustments to interest income or expense over the life of the    
swaps, thereby adjusting the effective interest rate on the underlying          
investment or obligation. Gains and losses on the termination of swap           
agreements, prior to their original maturity, are deferred and amortized to     
interest income or expense over the original term of the swaps. Gains and       
losses arising from interest rate futures, forwards and option contracts, and   
foreign currency forward and option contracts are recognized in income or       
expense as offsets of gains and losses resulting from the underlying hedged     
transactions.                                                                   

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Cash flows from interest rate and foreign exchange risk management          
activities are classified in the same category as the cash flows from the       
related investment, borrowing or foreign exchange activity.                     
The Company classifies its derivative financial instruments as held or      
issued for purposes other than trading.                                         

Earnings Per Share                                                              
Earnings per share amounts are based upon the weighted average number of    
common and common equivalent shares outstanding during the year. Common         
equivalent shares are excluded from the computation in periods in which they    
have an anti-dilutive effect.                                                   

Reclassifications                                                               
Certain reclassifications have been made in the 1994 and 1993 financial     
statements to conform to the 1995 presentation.                                 

2 Proposed Acquisition                                                          

In July 1995, the Company and Capital Cities/ABC, Inc. ("Cap Cities")       
entered into a reorganization agreement, pursuant to which the Company expects  
to acquire Cap Cities in a transaction that will be accounted for as a          
purchase. The transaction has been approved by the Board of Directors of each   
company, and is subject to regulatory review and approval by each company's     
stockholders. Pursuant to the reorganization agreement, stockholders of Cap     
Cities will have the right to receive one share of common stock and $65 in      
cash, or the equivalent value in common stock or in cash, subject to certain    
limitations, for each of their shares. The acquisition cost is estimated to be  
$19 billion based upon the Company's common stock price as of the date the      
transaction was announced. The transaction is expected to be completed in       
early 1996.                                                                     
Cap Cities, directly or through its subsidiaries, operates the ABC          
Television Network, ten television stations, the ABC Radio Networks and 21      
radio stations, and provides programming for cable television. Through joint    
ventures, Cap Cities is also engaged in international broadcast/cable services  
and television production and distribution. Cap Cities also publishes daily     
and weekly newspapers, shopping guides, various specialized and business        
periodicals and books, provides research services, and distributes information  
from databases.                                                                 
The Company's consolidated results of operations will incorporate Cap Cities
activity commencing upon the acquisition date. The unaudited pro forma          
combined information below presents combined results of operations as if the    
acquisition had occurred October 1, 1994 and balance sheet information as if    
the acquisition had occurred as of September 30, 1995. The unaudited pro forma  
combined information, based upon the historical consolidated financial          
statements of the Company and Cap Cities, assumes an acquisition cost of        
approximately $19 billion, and further assumes that an estimated $16 billion    
excess of acquisition cost over the net tangible book value of Cap Cities'      
assets is allocated to intangible assets with a useful life of 40 years. In     
addition, since the exact amounts of cash and/or shares of common stock         
issuable to Cap Cities stockholders are dependent upon certain elections to be  
made by Cap Cities stockholders and other conditions as defined in the          
reorganization agreement, two alternative scenarios of unaudited pro forma      
combined financial information are presented, which give effect to the range    
of possible amounts of common stock and/or cash to be received by Cap Cities    
stockholders upon consummation of the acquisition. Scenario 1 assumes that all  
Cap Cities stockholders receive one share of common stock and $65 in cash for   
each outstanding share of Cap Cities common stock, reflecting the maximum       
number of shares of common stock which could be issued in connection with the   
acquisition. Scenario 2 assumes that all Cap Cities stockholders receive        
solely cash for each outstanding share of Cap Cities common stock.              

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The unaudited pro forma combined information is not necessarily indicative  
of the results of operations of the combined company had the acquisition        
occurred October 1, 1994, or financial position had the acquisition occurred    
on September 30, 1995, nor is it necessarily indicative of future results or    
financial position.                                                             

                                                                · Download Table

                           SCENARIO 1      Scenario 2   

 Statement of Income       YEAR ENDED      Year ended   
 Data                    SEPT. 30, 1995  Sept. 30, 1995 
--------------------------------------------------------
                                                        
 Revenues                   $18,908.4       $18,908.4   
 Net income                   1,368.5           987.7   
 Earnings per share (1)          2.00            1.86   

 Balance Sheet Data       SEPT. 30, 1995  Sept. 30, 1995
--------------------------------------------------------
                                                        
 Total assets               $33,538.6       $33,538.6   
 Borrowings                  11,588.4        21,192.1   
 Stockholders' equity        15,478.1         5,874.5   

--------                                                              
(1) Earnings per share excluding amortization of intangible           
assets would be $2.60 and $2.64 under scenarios 1 and 2,        
respectively.                                                   

3 Investment in Euro Disney                                                     

Euro Disney, a publicly traded French company, operates the Disneyland Paris
theme park and resort complex on a 4,800-acre site near Paris, France. The      
Company accounts for its ownership interest in Euro Disney using the equity     
method of accounting.                                                           
In October 1994, the Company sold approximately 75 million Euro Disney      
shares for $145 million to Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud,     
Chairman of United Saudi Commercial Bank, and recognized a gain of $55          
million. The sale reduced the Company's equity ownership in Euro Disney from    
49% at September 30, 1994 to approximately 39%. The quoted market value of the  
Company's Euro Disney shares at September 30, 1995 was approximately $966       
million.                                                                        
During the third quarter of 1994, the Company entered into restructuring    
agreements with Euro Disney and the lenders participating in a financial        
restructuring for Euro Disney (the "Lenders") and recorded a charge of $52.8    
million to reflect its participation in the restructuring. In the fourth        
quarter of 1994, the Company recorded a loss of $57.6 million to reflect its    
equity share of Euro Disney's operating results for that period.                
Under the restructuring agreements, which specified amounts denominated in  
French francs, the Company increased its equity investment in Euro Disney by    
subscribing for 49% of a $1.1 billion rights offering of new shares; provided   
long-term lease financing at a 1% interest rate for approximately $255 million  
of Disneyland Paris theme park assets; and subscribed for securities            
reimbursable in shares with a face value of approximately $180 million and a    
1% coupon. In addition, the Company canceled fully-reserved receivables from    
Euro Disney of approximately $210 million, waived royalties and base            
management fees for a period of five years and reduced such amounts for         
specified periods thereafter, and modified the method by which management       
incentive fees will be calculated.                                              
Additionally, the Company agreed to arrange for the provision of a 10-year  
unsecured standby credit facility of approximately $210 million, upon request,  
bearing interest at PIBOR. As of September 30, 1995, Euro Disney had not        
requested the Company to establish this facility.                               
The Company also agreed, as long as any obligations to the Lenders are      
outstanding, to maintain ownership of at least 34% of the outstanding common    
stock of Euro Disney until June 1999, at least 25% for the subsequent five      
years and at least 16.67% for an additional term thereafter.                    
In connection with the restructuring, Euro Disney Associes S.N.C. ("Disney  
SNC"), an indirect wholly-owned affiliate of the Company, entered into a lease  
arrangement with a noncancelable term of 12 years (the "Lease") related to      
substantially all of the Disneyland Paris theme park assets, and then entered   
into a 12-year sublease agreement (the "Sublease") with Euro Disney. Remaining  
lease                                                                           

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rentals at September 30, 1995 of FF 10 billion ($2 billion) receivable from     
Euro Disney under the Sublease approximate the amounts payable by Disney SNC    
under the Lease. At the conclusion of the Sublease term, Euro Disney will have  
the option to assume Disney SNC's rights and obligations under the Lease. If    
Euro Disney does not exercise its option, Disney SNC may purchase the assets,   
continue to lease the assets or elect to terminate the Lease, in which case     
Disney SNC would make a termination payment to the lessor equal to 75% of the   
lessor's then outstanding debt related to the theme park assets, estimated to   
be $1.5 billion; Disney SNC could then sell or lease the assets on behalf of    
the lessor to satisfy the remaining debt, with any excess proceeds payable to   
Disney SNC.                                                                     
As part of the overall restructuring, the Lenders served as underwriters for
51% of the Euro Disney rights offering, forgave certain interest charges for    
the period from April 1, 1994 to September 30, 2003, having a present value of  
approximately $300 million, and deferred all principal payments until three     
years later than originally scheduled.                                          
In 1993, the Company's loss from its investment in Euro Disney included a   
$350 million charge to fully reserve its outstanding receivables and its        
commitment to help fund Euro Disney for a limited period, to afford Euro        
Disney time to attempt the financial restructuring. Previously deferred base    
management fees for 1993 were permanently waived as part of Euro Disney's       
financial restructuring.                                                        
Euro Disney's consolidated financial statements are prepared in accordance  
with accounting principles generally accepted in France ("French GAAP"). Under  
French GAAP, Euro Disney recognized net income of FF 114 million in 1995, a     
net loss of FF 1.8 billion in 1994, and a net loss of FF 5.3 billion in 1993    
(FF 2.1 billion before the cumulative effect of an accounting change). During   
1993, Euro Disney changed its method of accounting for project-related pre-     
opening costs. Under the new method, such costs are expensed as incurred. The   
cumulative effect of the change in method on prior years was a charge against   
income of FF 3.2 billion. The effect of the change in 1993 was to decrease the  
loss before the cumulative effect of accounting change by FF 338 million.       

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U.S. generally accepted accounting principles ("U.S. GAAP") differ in       
certain significant respects from French GAAP applied by Euro Disney,           
principally as they relate to accounting for leases and the calculation of      
interest expense relating to the debt affected by Euro Disney's financial       
restructuring. In addition, the U.S. GAAP treatment of receivables due from     
Euro Disney and canceled by the Company in connection with Euro Disney's        
financial restructuring in 1994 differed significantly from French GAAP         
applied by Euro Disney. The summarized consolidated financial statements for    
Euro Disney set forth below are stated in U.S. dollars in accordance with U.S.  
GAAP.                                                                           

                                                                · Download Table

 Balance Sheet                                 1995   1994 
-----------------------------------------------------------
                                                           
 Cash and investments                         $  291 $  289
 Receivables                                     207    227
 Fixed assets, net                             3,855  3,791
 Other assets                                    173    137
                                              ------ ------
  Total Assets                                $4,526 $4,444
                                              ====== ======
 Accounts payable and other liabilities       $  642 $  560
 Borrowings                                    3,213  3,051
 Stockholders' equity                            671    833
                                              ------ ------
  Total Liabilities and Stockholders' Equity  $4,526 $4,444
                                              ====== ======

                                                                · Download Table

 Statement of Operations                         1995    1994    1993   
------------------------------------------------------------------------
                                                                        
 Revenues                                        $ 912  $  751  $   873 
 Costs and expenses                                967   1,198    1,114 
 Net interest expense                              161     280      287 
                                                 -----  ------  ------- 
 Loss before income taxes and cumulative effect                         
  of accounting change                            (216)   (727)    (528)
 Income taxes                                      --      --       --  
                                                 -----  ------  ------- 
 Loss before cumulative effect of accounting                            
  change                                          (216)   (727)    (528)
 Cumulative effect of change in accounting for                          
  pre-opening costs                                --      --      (578)
                                                 -----  ------  ------- 
 Net Loss                                        $(216) $ (727) $(1,106)
                                                 =====  ======  ======= 
 Pro forma net loss assuming the change in                              
  accounting method is applied retroactively                    $  (528)
                                                                ======= 

4 Film and Television Costs                                                     

                                                                · Download Table

                                1995     1994  
-----------------------------------------------
                                               
Theatrical Film Costs                          
 Released, less amortization  $  632.0 $  436.7
 In process                      969.8    627.1
                              -------- --------
                               1,601.8  1,063.8
                              -------- --------
Television Costs                               
 Released, less amortization     274.1    281.9
 In process                      119.9    124.7
                              -------- --------
                                 394.0    406.6
                              -------- --------
Television Broadcast Rights      103.6    125.8
                              -------- --------
                              $2,099.4 $1,596.2
                              ======== ========

Based on management's total gross revenue estimates as of September 30,     
1995, approximately 87% of unamortized production costs applicable to released  
theatrical and television productions are expected to be amortized during the   
next three years.                                                               

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5 Borrowings                                                                    

                                                                · Download Table

                                     Effective  Fiscal                    
                                     Interest    Year                     
                                       Rate    Maturity    1995     1994  
--------------------------------------------------------------------------
                                                                          
Senior participating notes (a)          6.3%   2000-2001 $1,056.8 $  722.8
Medium-term notes (b)                   7.3    1996-2093    863.0    948.0
Eurobonds                               8.2      1998       300.0      -- 
Japanese yen bonds (c)                  5.6      1998       285.4    285.4
Securities sold under agreements to                                       
 repurchase (d)                         0.5      1996       180.0     57.5
Commercial paper (e)                    --        --          --     609.1
Other (c)                               8.6    1996-2013    299.1    314.1
                                                         -------- --------
                                        6.6%             $2,984.3 $2,936.9
                                                         ======== ========

--------                                                                        
(a) The average coupon rate is 2.7% on $1.3 billion face value amount of        
notes. Additional interest may be paid based on the performance of      
designated portfolios of films.                                         
(b) The effective interest rate reflects the effect of interest rate swaps      
entered into with respect to certain of these borrowings.               
(c) The effective interest rate reflects the effect of cross-currency swaps     
entered into with respect to certain of these borrowings.               
(d) Securities sold under agreements to repurchase are collateralized by        
certain marketable securities.                                          
(e) The Company has available through 2000 an unsecured revolving line of bank  
credit of up to $1 billion for general corporate purposes, including the
 support of commercial paper borrowings. In addition, in October 1995, the
Company established bank facilities totaling $12 billion to support the 
issuance of commercial paper to fund the cash portion of the Cap Cities 
purchase price (see Note 2). The facilities expire in one to six years. 
Under the revolving line of bank credit and the new bank facilities, the
Company has the option to borrow at various interest rates.             

Borrowings, excluding commercial paper and securities sold under agreements 
to repurchase, have the following scheduled maturities.                         

                                                                · Download Table
            
1996  $128.7
1997   108.0
1998   711.1
1999    33.3
2000   850.3

The Company capitalizes interest on assets constructed for its theme parks, 
resorts and other property, and on theatrical and television productions in     
process. In 1995, 1994 and 1993, respectively, total interest costs incurred    
were $236.4, $171.9 and $183.7 million, of which $58.1, $52.0 and $26.0         
million were capitalized.                                                       

6 Unearned Royalty and Other Advances                                           

                                                                · Download Table

                                    1995   1994 
------------------------------------------------
                                                
Tokyo Disneyland royalty advances  $452.1 $466.6
Other                               408.6  233.3
                                   ------ ------
                                   $860.7 $699.9
                                   ====== ======

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In 1988, the Company monetized a substantial portion of its royalties       
through 2008 from certain Tokyo Disneyland operations. The Company has certain  
ongoing obligations under its contract with the owner and operator of Tokyo     
Disneyland, and accordingly, royalty advances are being amortized through       
2008. The maximum amount the Company may be required to fund under certain      
recourse provisions of the monetization agreement is $145 million. The Company  
does not anticipate funding any significant amount under this agreement.        

7 Income Taxes                                                                  

                                                                · Download Table

                                                    1995      1994     1993   
------------------------------------------------------------------------------
                                                                              
Income Before Income Taxes and Cumulative Effect                              
 of Accounting Changes                                                        
Domestic (including U.S. exports)                 $1,908.3  $1,514.5 $  931.4 
Foreign subsidiaries                                 208.4     188.6    142.6 
                                                  --------  -------- -------- 
                                                  $2,116.7  $1,703.1 $1,074.0 
                                                  ========  ======== ======== 
Income Tax Provision                                                          
Current                                                                       
 Federal                                          $  325.6  $  117.3 $  217.3 
 State                                                67.6      29.9     47.1 
 Foreign subsidiaries                                 78.7      84.1     63.3 
 Other foreign                                       104.6      78.7     65.1 
                                                  --------  -------- -------- 
                                                     576.5     310.0    392.8 
                                                  --------  -------- -------- 
Deferred                                                                      
 Federal                                             170.1     259.6     17.0 
 State                                               (10.0)     23.1     (7.1)
                                                  --------  -------- -------- 
                                                     160.1     282.7      9.9 
                                                  --------  -------- -------- 
                                                  $  736.6  $  592.7 $  402.7 
                                                  ========  ======== ======== 

                                                                · Download Table

Components of Deferred Tax Assets and Liabilities         1995     1994   
--------------------------------------------------------------------------
                                                                          
Deferred tax assets:                                                      
 Accrued liabilities                                    $ (351.0) $(221.3)
 Investment in Euro Disney                                (153.2)  (133.3)
 State income/franchise taxes                              (88.7)   (72.9)
 Pension and other benefit programs                          --     (26.2)
                                                        --------  ------- 
  Total deferred tax assets                               (592.9)  (453.7)
                                                        --------  ------- 
Deferred tax liabilities:                                                 
 Theme parks, resorts and other property                 1,133.0    954.8 
 Licensing revenues                                         91.3     66.1 
 Interest and property taxes                                87.5     73.8 
 Purchase accounting                                        48.3     49.6 
 Leveraged leases                                          198.7    175.1 
 Other--net                                                 51.6     23.5 
                                                        --------  ------- 
  Total deferred tax liabilities                         1,610.4  1,342.9 
                                                        --------  ------- 
Net deferred tax liability before evaluation allowance   1,017.5    889.2 
Valuation allowance                                         49.8     49.8 
                                                        --------  ------- 
Net deferred tax liability                              $1,067.3  $ 939.0 
                                                        ========  ======= 

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                                                                · Download Table

Reconciliation of Effective Income Tax Rate                 1995  1994  1993 
-----------------------------------------------------------------------------
                                                                             
Federal income tax rate                                     35.0% 35.0% 34.8%
State taxes, net of Federal income tax benefit               1.9   2.1   2.2 
Effect of increase in statutory tax rate on deferred taxes   --    --    1.6 
Other                                                       (2.1) (2.3) (1.1)
                                                            ----  ----  ---- 
                                                            34.8% 34.8% 37.5%
                                                            ====  ====  ==== 

As discussed in Note 1, the Company adopted SFAS 109 in 1993, effective     
October 1, 1992. The adoption of SFAS 109 changed the Company's method of       
accounting for income taxes from the deferred method to the asset and           
liability method. SFAS 109 requires recognition of deferred tax assets and      
liabilities for the expected future tax consequences of events that have been   
recognized in the financial statements or tax returns. Under this method,       
deferred tax assets and liabilities are determined based on the difference      
between the financial statement carrying amounts and tax bases of assets and    
liabilities using enacted tax rates in effect in the years in which the         
differences are expected to reverse. Differences between financial reporting    
and tax bases arise most frequently from differences in timing of income and    
expense recognition and as a result of business acquisitions.                   
As a result of adoption, the Company recognized a benefit in 1993 of $30.0  
million, or $.06 per share, representing the cumulative effect of the change    
on results for years prior to October 1, 1992. The cumulative effect            
represented the adjustment of previously recorded deferred tax assets and       
liabilities to reflect the lower prevailing tax rates and the establishment of  
previously unrecorded deferred tax liabilities. The adoption had no effect on   
pre-tax income in 1993.                                                         
In 1995 and 1994, income tax benefits of $90.0 and $12.6 million,           
respectively, were allocated to stockholders' equity. Such benefits were        
attributable to employee stock option transactions.                             

8 Pension and Other Benefit Programs                                            

The Company contributes to various pension plans under union and industry-  
wide agreements. In 1995, 1994 and 1993, the costs recognized under these       
plans were $14.3, $13.1 and $16.1 million, respectively. The Company's share    
of the unfunded liability, if any, related to these multi-employer plans is     
not material.                                                                   
The Company also maintains pension plans covering most of its domestic      
salaried and hourly employees not covered by union or industry-wide pension     
plans and a non-qualified, unfunded retirement plan for key employees. With     
respect to its qualified defined benefit pension plans, the Company's policy    
is to fund, at a minimum, the amount necessary on an actuarial basis to         
provide for benefits in accordance with the requirements of ERISA. Benefits     
are generally based on years of service and/or compensation.                    
The funded status of the plans and the amounts included in the Company's    
consolidated balance sheet are as follows.                                      

                                                                · Download Table

                                                              1995    1994  
----------------------------------------------------------------------------
                                                                            
Plan assets at fair value, primarily publicly traded stocks                 
 and bonds                                                   $631.6  $484.8 
Actuarial present value of projected benefit obligations                    
 Accumulated benefit obligations                                            
  Vested                                                     (498.9) (383.2)
  Non-vested                                                  (18.1)  (20.3)
Provision for future salary increases                         (86.6)  (72.2)
                                                             ------  ------ 
Excess of plan assets over projected benefit obligations       28.0     9.1 
Unrecognized net loss                                          98.2    82.3 
Unrecognized prior service benefit                             (5.2)  (10.6)
Unrecognized net obligation                                     3.4     3.7 
                                                             ------  ------ 
Prepaid pension cost                                         $124.4  $ 84.5 
                                                             ======  ====== 

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Net pension cost in 1995, 1994 and 1993 amounted to $33.1, $36.5 and $32.0  
million, respectively. The weighted average discount rate was 7.5% for 1995     
and 8.5% for 1994 and 1993, and the expected long-term rate of return on plan   
assets was 9.5% for 1995, 1994 and 1993. The assumed rate of increase in        
compensation for the salaried plans was 5.8% for 1995, 6.3% for 1994, and 6.8%  
for 1993. The mortality table used is the 1983 Group Annuity Mortality Table    
for Males and Females.                                                          
The Company sponsors a plan to provide postretirement medical benefits to   
most of its domestic salaried and hourly employees, and contributes to multi-   
employer welfare plans to provide similar benefits to certain employees under   
collective bargaining agreements. Employees hired after January 1, 1994 are     
not eligible for postretirement medical benefits. The Company funds its         
postretirement health benefit liability on a discretionary basis.               
As discussed in Note 1, the Company adopted SFAS 106 in 1993, effective     
October 1, 1992. SFAS 106 requires accrual of postretirement benefit costs to   
actuarially allocate such costs to the years during which employees render      
qualifying service. Previously, such costs were expensed as actual claims were  
paid. SFAS 106 also requires recognition of the unfunded and previously         
unrecognized accumulated postretirement benefit obligation (transition          
obligation) for all participants in the Company-sponsored plan. The Company     
elected to immediately recognize the transition obligation, which resulted in   
a charge against income of $130.3 million, or $.24 per share, after related     
income tax benefit of $71.7 million, which represented the cumulative effect    
of the change in accounting on results prior to October 1, 1992. Under the      
provisions of SFAS 106, postretirement benefit expense in 1993 exceeded the     
amount under the previous accounting method by $17.0 million after-tax, or      
$.03 per share.                                                                 
The funded status of the plan and the amounts included in the Company       
consolidated balance sheet are as follows.                                      

                                                                · Download Table

                                                                1995     1994  
-------------------------------------------------------------------------------
                                                                               
Actuarial present value of accumulated postretirement benefit                  
 obligation                                                                    
 Retirees                                                      $  53.9  $ 46.9 
 Fully eligible active plan participants                          32.4    57.8 
 Other active plan participants                                   75.5    77.7 
                                                               -------  ------ 
                                                                 161.8   182.4 
Plan assets at fair value, primarily publicly traded stocks                    
 and bonds                                                      (107.3)  (78.1)
Unrecognized net gain                                            (14.9)  (23.1)
Unrecognized prior service cost                                  111.5   129.0 
                                                               -------  ------ 
Accrued postretirement benefit cost                            $ 151.1  $210.2 
                                                               =======  ====== 

Net postretirement benefit (gain) cost in 1995, 1994 and 1993 amounted to   
$(42.7), $13.9 and $29.8 million, respectively.                                 
The weighted average discount rate used in determining the accumulated      
postretirement benefit obligation was 7.5% for 1995 and 8.5% for 1994 and       
1993. The expected long-term rate of return on plan assets was 9.5% for 1995,   
1994 and 1993.                                                                  
The annual rate of increase in the per capita cost of covered health care   
benefits was assumed to be 7% in 1995, 1994 and 1993. An increase in the        
assumed health care cost trend rate of 1% for each year would increase the      
postretirement benefit obligation as of September 30, 1995 and 1994 by $34.8    
and $39.2 million, respectively, and the net service and interest cost          
components of net postretirement benefit cost for 1995, 1994 and 1993 by $5.5,  
$7.1 and $8.1 million, respectively.                                            

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9 Stockholders' Equity                                                          

                                                                · Download Table

                                       Common Paid-in  Retained 
(Shares in millions)            Shares Stock  Capital  Earnings 
----------------------------------------------------------------
                                                                
Balance at September 30, 1992   552.2  $13.8  $  606.1 $4,661.9 
 Exercise of stock options, net  12.4    0.3     256.2      --  
 Dividends ($.24 per share)       --     --        --    (128.6)
 Net income                       --     --        --     299.8 
                                -----  -----  -------- -------- 
Balance at September 30, 1993   564.6   14.1     862.3  4,833.1 
 Exercise of stock options, net   2.4    0.1      68.8      --  
 Dividends ($.2875 per share)     --     --        --    (153.2)
 Net income                       --     --        --   1,110.4 
                                -----  -----  -------- -------- 
Balance at September 30, 1994   567.0   14.2     931.1  5,790.3 
 Exercise of stock options, net   8.4    0.2     280.8      --  
 Dividends ($.345 per share)      --     --        --    (180.0)
 Net income                       --     --        --   1,380.1 
                                -----  -----  -------- -------- 
Balance at September 30, 1995   575.4  $14.4  $1,211.9 $6,990.4 
                                =====  =====  ======== ======== 

In June 1989, the Company adopted a stockholders rights plan. The plan      
becomes operative in certain events involving the acquisition of 25% or more    
of the Company's common stock by any person or group in a transaction not       
approved by the Company's Board of Directors. Upon the occurrence of such an    
event, each right, unless redeemed by the Board, entitles its holder to         
purchase for $350 an amount of common stock of the Company, or in certain       
circumstances the acquirer, having a market value of twice the purchase price.  
In connection with the rights plan, 7.2 million shares of preferred stock were  
reserved.                                                                       
At September 30, 1995 and 1994, the Company's cumulative foreign currency   
translation adjustments were $37.3 and $59.1 million, net of deferred taxes of  
$17.6 and $27.5 million, respectively.                                          
Treasury stock activity for the three years ended September 30, 1995 was as 
follows.                                                                        

                                                                · Download Table

                                                    Treasury
(Shares in millions)                         Shares  Stock  
------------------------------------------------------------
                                                            
Balance at September 30, 1992                 27.8  $  664.1
 Common stock repurchased                      0.9      31.6
 Common stock trade-ins on exercised options   0.4      20.0
                                              ----  --------
Balance at September 30, 1993                 29.1     715.7
 Common stock repurchased                     13.8     570.7
                                              ----  --------
Balance at September 30, 1994                 42.9   1,286.4
 Common stock repurchased, net                 8.1     316.8
                                              ----  --------
Balance at September 30, 1995                 51.0  $1,603.2
                                              ====  ========

On November 21, 1994, the authorized share repurchase amount under the      
Company's share repurchase program was increased from 90 million to 180         
million shares. Since the program's inception, a total of 75.5 million shares   
have been repurchased at prevailing market prices.                              

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10 Stock Incentive Plans                                                        

Under various plans, the Company may grant stock option and other awards to 
key executive, management and creative personnel. Transactions under the        
various stock option and incentive plans for the periods indicated were as      
follows.                                                                        

                                                                · Download Table

(Shares in millions)              1995    1994    1993  
------------------------------------------------------- 
                                                        
Outstanding at beginning of year  38.8    36.4     44.3 
Awards canceled                   (3.3)   (1.6)    (1.1)
Awards granted                     7.8     6.5      5.6 
Awards exercised                  (8.2)   (2.5)   (12.4)
                                  ----    ----    ----- 
Outstanding at September 30       35.1    38.8     36.4 
                                  ====    ====    ===== 
Exercisable at September 30       14.6    17.5     13.4 
                                  ====    ====    ===== 

Stock option awards are granted at prices equal to at least market price on 
the date of grant. Options outstanding at September 30, 1995 and 1994 ranged    
in price from $5.56 to $57.44 and $3.61 to $47.31 per share, respectively.      
Options exercised ranged in price from $3.61 to $57.44 per share in 1995, from  
$3.23 to $41.00 per share in 1994, and from $3.23 to $33.35 per share in 1993.  
Shares available for future option grants at September 30, 1995 were 14.4       
million.                                                                        

11 Detail of Certain Balance Sheet Accounts                                     

                                                                · Download Table

                                 1995     1994  
------------------------------------------------
                                                
Receivables                                     
 Trade, net of allowances      $1,593.1 $1,328.4
 Other                            199.7    342.1
                               -------- --------
                               $1,792.8 $1,670.5
                               ======== ========
Other Assets                                    
 Intangibles                   $  318.3 $  311.0
 Other                            905.3    625.8
                               -------- --------
                               $1,223.6 $  936.8
                               ======== ========

Accounts Payable and Other                      
Accrued Liabilities                             
 Accounts payable              $2,130.7 $1,771.8
 Payroll and employee benefits    646.7    638.6
 Other                             65.1     64.4
                               -------- --------
                               $2,842.5 $2,474.8
                               ======== ========

12 Pre-Opening Costs                                                            

As discussed in Note 1, during 1993 the Company changed its method of       
accounting for pre-opening costs. In years prior to 1993, project-related pre-  
opening costs were capitalized and amortized on a straight-line basis over      
periods of up to five years. Under the new method, project-related pre-opening  
costs are expensed as incurred. The cumulative effect of the change in method   
on prior years was a charge against income of $271.2 million, or $.50 per       
share, after related income tax benefit of $71.0 million, of which $233.0       
million related to the impact of the accounting change on the Company's         
investment in Euro Disney. The effect of the change was to increase income in   
1993 by $40.2 million after-tax, or $.07 per share.                             

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13 Segments                                                                     

                                                                · Download Table

Business Segments                 1995       1994       1993    
--------------------------------------------------------------- 
                                                                
Capital Expenditures                                            
 Filmed entertainment           $   125.0  $   100.7  $   130.2 
 Theme parks and resorts            635.5      846.4      593.4 
 Consumer products                  115.4       61.1       36.3 
 Corporate                           20.6       17.9       54.0 
                                ---------  ---------  --------- 
                                $   896.5  $ 1,026.1  $   813.9 
                                =========  =========  ========= 

Depreciation Expense                                            
 Filmed entertainment           $    61.6  $    49.1  $    38.5 
 Theme parks and resorts            319.5      289.2      269.2 
 Consumer products                   52.2       38.3       26.2 
 Corporate                           36.9       33.1       30.3 
                                ---------  ---------  --------- 
                                $   470.2  $   409.7  $   364.2 
                                =========  =========  ========= 

Identifiable Assets                                             
 Filmed entertainment           $ 4,834.2  $ 3,791.5  $ 3,417.5 
 Theme parks and resorts          6,073.9    5,706.9    5,216.0 
 Consumer products                  962.0      845.3      707.5 
 Corporate                        2,202.8    1,852.7    2,410.1 
 Investment in Euro Disney          532.9      629.9       --   
                                ---------  ---------  --------- 
                                $14,605.8  $12,826.3  $11,751.1 
                                =========  =========  ========= 

Supplemental Revenue Data                                       
 Filmed entertainment                                           
  Theatrical product            $ 4,452.5  $ 3,734.2  $ 2,764.4 
 Theme parks and resorts                                        
  Admissions                      1,346.0    1,179.6    1,215.6 
 Merchandise, food and beverage   1,423.6    1,238.1    1,232.7 


Geographic Segments                                             
--------------------------------------------------------------- 
                                                                
Domestic Revenues                                               
 United States                  $ 9,311.0  $ 7,697.6  $ 6,710.8 
 United States export               547.8      458.0      399.8 
International Revenues                                          
 Europe                           1,552.1    1,344.8      984.6 
 Rest of world                      701.2      554.7      434.0 
                                ---------  ---------  --------- 
                                $12,112.1  $10,055.1  $ 8,529.2 
                                =========  =========  ========= 
Operating Income                                                
 United States                  $ 1,745.8  $ 1,392.7  $ 1,591.7 
 Europe                             464.1      405.0      121.8 
 Rest of world                      323.2      226.0       82.5 
 Unallocated expenses               (87.4)     (58.0)     (71.5)
                                ---------  ---------  --------- 
                                $ 2,445.7  $ 1,965.7  $ 1,724.5 
                                =========  =========  ========= 
Identifiable Assets                                             
 United States                  $13,437.5  $11,306.1  $11,084.5 
 Europe                           1,060.2    1,237.8      519.7 
 Rest of world                      108.1      282.4      146.9 
                                ---------  ---------  --------- 
                                $14,605.8  $12,826.3  $11,751.1 
                                =========  =========  ========= 

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14 Financial Instruments                                                        

As discussed in Note 1, the Company adopted the method of accounting        
prescribed by SFAS 115 Accounting for Certain Investments in Debt and Equity    
Securities in 1995. As of September 30, 1995, the Company held $95.8 million    
of securities classified as trading and $403.0 and $307.3 million of            
securities and cash equivalents, respectively, classified as available-for-     
sale. In 1995, realized gains and losses on available-for-sale securities,      
determined principally on an average cost basis, unrealized gains and losses    
on available-for-sale securities and the change in the net unrealized gain on   
trading securities were not material.                                           

Financial Risk Management                                                       
The Company is exposed to the impact of interest rate changes. The Company's
objective is to manage the impact of interest rate changes on earnings and      
cash flows and on the market value of its investments and borrowings.           
The Company transacts business in virtually every part of the world and,    
accordingly, is subject to risks associated with changing foreign exchange      
rates. The Company's objective is to reduce earnings and cash flow volatility   
associated with foreign exchange rate changes to allow management to focus its  
attention on its core business issues and challenges. Accordingly, the Company  
enters into various contracts which change in value as foreign exchange rates   
change to protect the value of its existing foreign currency assets and         
liabilities, commitments and anticipated foreign currency revenues. By policy,  
the Company maintains hedge coverage between minimum and maximum percentages    
of its anticipated foreign exchange exposures for each of the next five years.  
The gains and losses on these contracts offset changes in the related           
exposures.                                                                      
It is the Company's policy to enter into foreign currency and interest rate 
transactions only to the extent considered necessary to meet its objectives as  
stated above. The Company does not enter into foreign currency or interest      
rate transactions for speculative purposes.                                     

Interest Rate Risk Management                                                   
The Company uses interest rate swaps and other instruments to manage net    
exposure to interest rate changes related to its portfolio of investments and   
borrowings and to lower its overall borrowing costs. Significant interest rate  
risk management instruments held by the Company at September 30, 1995 and 1994  
are described below.                                                            

Interest Rate Risk Management-Investment Transactions                           
At September 30, 1995 and 1994, the Company had outstanding interest rate   
swaps designated as hedges of investments with notional amounts totaling        
$153.9 and $131.3 million, respectively, which expire in six to seven years,    
and $225.2 and $461.5 million, respectively, of options, futures and forward    
contracts which expire in one to three years.                                   
At September 30, 1994, the Company had outstanding spreadlock contracts with
notional amounts totaling $250.0 million. These contracts matured during 1995,  
and the realized gains and losses are included in investment and interest       
income.                                                                         

Interest Rate Risk Management-Borrowings                                        
At September 30, 1995 and 1994, the Company had outstanding interest rate   
swaps on its borrowings with notional amounts totaling $685.0 and $590.0        
million, respectively, which effectively converted medium-term notes to         
commercial paper or LIBOR-based variable rate instruments, and $395.0 million   
at September 30, 1994, which effectively converted senior participating notes   
to LIBOR-based variable rate instruments. These swap agreements expire in one   
to 14 years. In anticipation of the acquisition of Cap Cities (see Note 2),     
the Company has entered into forward-starting interest rate swaps designated    
as hedges of anticipated borrowings with notional amounts totaling $4.4         
billion. These swaps will become effective in 1996 and will effectively         
convert acquisition-related floating-rate borrowings into fixed-rate            
instruments. These swaps expire in three to ten years.                          

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Interest Rate Risk Management-Summary of Transactions                           
The following table reflects incremental changes in the notional or         
contractual amounts of the Company's interest rate contracts during 1995 and    
1994. Activity representing renewal of existing positions is excluded.          

                                                                · Download Table

                       Balance at                                       Balance at  
                      September 30,           Maturities/              September 30,
                          1994      Additions Expirations Terminations     1995     
------------------------------------------------------------------------------------
                                                                                    
Pay floating swaps      $1,037.4    $  983.9   $  (135.0)  $(1,167.4)    $  718.9   
Pay fixed swaps            213.1     4,606.5         --       (139.6)     4,680.0   
Spreadlock contracts       250.0         --       (250.0)        --           --    
Forward contracts          100.7       294.1      (394.8)        --           --    
Futures contracts          266.4       288.9      (238.6)     (193.2)       123.5   
Option contracts            94.4       238.8      (190.4)      (41.1)       101.7   
                        --------    --------   ---------   ---------     --------   
                        $1,962.0    $6,412.2   $(1,208.8)  $(1,541.3)    $5,624.1   
                        ========    ========   =========   =========     ========   

                       Balance at                                       Balance at  
                      September 30,           Maturities/              September 30,
                          1993      Additions Expirations Terminations     1994     
------------------------------------------------------------------------------------
                                                                                    
Pay floating swaps      $1,431.7    $1,047.4   $  (590.7)  $  (851.0)    $1,037.4   
Pay fixed swaps            717.6       141.8         --       (646.3)       213.1   
Spreadlock contracts        50.0       300.0         --       (100.0)       250.0   
Forward contracts          212.1        96.5         --       (207.9)       100.7   
Futures contracts           18.7       824.3        (5.3)     (571.3)       266.4   
Option contracts            65.8       727.6      (147.6)     (551.4)        94.4   
                        --------    --------   ---------   ---------     --------   
                        $2,495.9    $3,137.6   $  (743.6)  $(2,927.9)    $1,962.0   
                        ========    ========   =========   =========     ========   

The impact of interest rate risk management activities on income in 1995 and
1994 and the amount of deferred gains and losses from interest rate risk        
management transactions at September 30, 1995 and 1994 were not material.       

Foreign Exchange Risk Management                                                
Most foreign exchange hedging contracts are option strategies providing for 
the sale of foreign currencies which hedge probable, but not firmly committed,  
revenues. While these hedging instruments are subject to fluctuations in        
value, such fluctuations are offset by changes in the value of the underlying   
exposures being hedged. The principal currencies hedged are the Japanese yen,   
French franc, German mark, Italian lira, British pound, Canadian dollar, and    
Spanish peseta.                                                                 

Foreign Exchange Risk Management Transactions                                   
The Company uses option contracts to hedge anticipated foreign currency     
revenues and forward contracts to hedge foreign currency assets and foreign     
currency payments the Company is committed to make in connection with the       
construction of two cruise ships (see Note 15). Cross-currency swaps are used   
to hedge foreign currency-denominated borrowings.                               
At September 30, 1995 and 1994, the notional amounts of the Company's       
foreign exchange risk management contracts, net of notional amounts of          
contracts with counterparties against which the Company has a legal right of    
offset, the related exposures hedged and contract maturities are as follows.    

                                                                · Download Table

                                   1995                           1994             
                      ------------------------------ ------------------------------
                      NOTIONAL EXPOSURES FISCAL YEAR Notional Exposures Fiscal Year
                       AMOUNT   HEDGED    MATURITY    Amount   Hedged    Maturity  
-----------------------------------------------------------------------------------
                                                                                   
Option contracts      $5,070.5 $2,869.3   1996-1999  $6,160.8 $2,337.4   1995-1998 
Forward contracts      1,939.7  1,195.6   1996-1999   1,274.8    918.5   1995-1996 
Cross-currency swaps     350.1    350.1   1997-1998     365.2    372.0   1995-1998 
                      -------- --------              -------- --------             
                      $7,360.3 $4,415.0              $7,800.8 $3,627.9             
                      ======== ========              ======== ========             

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Gains and losses on contracts hedging anticipated foreign currency revenues 
and foreign currency commitments are deferred until such revenues are           
recognized or such commitments are met, and offset changes in the value of the  
foreign currency revenues and commitments. At September 30, 1995, the Company   
had net deferred losses of $188.9 million related to foreign currency hedge     
transactions, which will be recognized in income over the next four years.      
Amounts recognizable in any one year are not material and will be offset by     
gains in the value of the related hedged transactions. Deferred gains and       
losses from foreign exchange risk management transactions at September 30,      
1994 were not material. The impact of foreign exchange risk management          
activities on income in 1995 and 1994 was not material.                         

Fair Value of Financial Instruments                                             
At September 30, 1995 and 1994, the Company's financial instruments included
cash, cash equivalents, investments, borrowings and interest rate and foreign   
exchange risk management contracts.                                             
At September 30, 1995, the fair values of cash and cash equivalents,        
commercial paper and securities sold under agreements to repurchase             
approximated carrying values because of the short-term nature of these          
instruments. The estimated fair values of other financial instruments subject   
to fair value disclosures, determined based on broker quotes or quoted market   
prices or rates for the same or similar instruments, and the related carrying   
amounts at September 30, 1995 are as follows.                                   

                                                                · Download Table

                            Carrying     Fair    
                             Amount      Value   
-------------------------------------------------
                                                 
 Investments                $   498.8  $   498.8 
 Borrowings                  (2,984.3)  (3,151.3)
 Risk management contracts      180.7      137.1 
                            ---------  --------- 
                            $(2,304.8) $(2,515.4)
                            =========  ========= 

At September 30, 1994, the estimated fair values of each class of the       
Company's financial instruments either approximated carrying values, or were    
not material.                                                                   

Credit Concentrations                                                           
The Company continually monitors its positions with, and the credit quality 
of, the financial institutions which are counterparties to its financial        
instruments and does not anticipate nonperformance by the counterparties. The   
Company would not realize a material loss as of September 30, 1995 in the       
event of nonperformance by any one counterparty. The Company enters into        
transactions only with financial institution counterparties which have a        
credit rating of A- or better. The Company's current policy in agreements with  
financial institution counterparties is generally to require collateral in the  
event credit ratings fall below A-. In addition, the Company limits the amount  
of credit exposure with any one institution. At September 30, 1995, neither     
the Company nor its counterparties were required to collateralize their         
respective financial instrument obligations.                                    
The Company's trade receivables and investments do not represent significant
concentrations of credit risk at September 30, 1995, due to the wide variety    
of customers and markets into which the Company's products are sold, their      
dispersion across many geographic areas, and the diversification of the         
Company's portfolio among instruments and issuers. (See Note 3 for a            
discussion of the Company's investment in Euro Disney).                         

15 Commitments and Contingencies                                                

The Company, together with, in some instances, certain of its directors and 
officers, is a defendant or co-defendant in various legal actions involving     
copyright, breach of contract and various other claims incident to the conduct  
of its businesses. Management does not expect the Company to suffer any         
material liability by reason of such actions, nor does it expect that such      
actions will have a material effect on the Company's liquidity or operating     
results.                                                                        
During 1995, the Company entered into agreements with a shipyard to build   
two cruise ships for its Disney Cruise Lines. Under the agreements, the         
Company is committed to make payments totaling approximately $700 million       
through 1999.                                                                   

-51-  

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QUARTERLY FINANCIAL SUMMARY 
(In millions, except per share data)
(Unaudited) 

                                                                · Download Table

                    December 31 March 31   June 30  September 30
----------------------------------------------------------------
                                                                
1995                                                            
Revenues             $3,301.7   $2,922.8  $2,764.0   $3,123.6   
Operating income        790.8      606.6     562.3      486.0   
Net income              482.4      315.5     318.2      264.0   
Earnings per share         .91        .60       .60        .50  
1994                                                            
Revenues             $2,727.3   $2,275.8  $2,353.6   $2,698.4   
Operating income        624.4      410.0     492.6      438.7   
Net income              368.6      248.4     267.5      225.9   
Earnings per share         .68        .45       .49        .42  

-52-

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 10-K Filing		Date		First		Last			Other Filings
		1/28/92		26
		6/30/92		29
		9/30/92		28
		10/1/92		10		46
		6/30/93		30
		8/9/93		30
		9/30/93		32		51			10-K, 10-K/A
		1/1/94		46
		3/1/94		29
		4/1/94		14		41
		9/30/94		28		52			10-K/A, 10-K
		10/1/94		37		40
		11/21/94		47
		12/9/94		23
		12/17/94		27
		12/29/94		29
		12/31/94		30					10-Q
		3/31/95		28					10-Q
		4/12/95		28
		5/1/95		17
		5/5/95		28
		6/30/95		30					10-K/A, 10-Q
		7/5/95		27
		7/31/95		30
		9/29/95		24		25
For The Period Ended		9/30/95		1		52
		10/1/95		24		28
		10/2/95		21
		10/6/95		30					8-K
		11/13/95		29
		11/27/95		33
		11/30/95		1					S-3/A
		12/1/95		26		27			8-K
		12/14/95		23
		12/15/95		1
Filed On / Filed As Of		12/19/95		31		33
		9/30/98		8		21
Corrected On		12/21/98
		9/30/3		14		41
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