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The Walt Disney Company Risk Finance and Risk Management Strategy

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The Walt Disney Company Risk Finance and Risk Management Strategy Tim East Director, Risk Management Organization of The Walt Disney Company The Walt Disney Company ... – PowerPoint PPT presentation

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Title: The Walt Disney Company Risk Finance and Risk Management Strategy


1
The Walt Disney Company Risk Finance and Risk
Management Strategy
  • Tim East
  • Director, Risk Management

2
Organization of The Walt Disney Company
The Walt Disney Company
Corporate
Media Networks Distribution of Content
Theme Parks and Resorts 11 Theme Parks
and Resorts
Consumer Products Licencing and Retail
Interactive Media Interactive Media and Internet
Studio Entertainment Creation of Content
3
Media Networks
3
4
Parks Resorts
4
5
Consumer Products
6
Studio Entertainment
6
7
Interactive Media
7
8
Organization of The Walt Disney Company
The Walt Disney Company
Corporate
Media Networks 2010 Revenue 17.2B USD
Theme Parks and Resorts 2010 Revenue 10.7 B
USD
Consumer Products 2010 Revenue 2.7 B USD
Interactive Media 2010 Revenue .76 B USD
Studio Entertainment 2010 Revenue 6.7 B USD
9
Growth in Revenue by Year
10
Highlights
  • Revenue up 5
  • Net income attributable to Disney up 20
  • Toy Story 3 No. 1 animated movie of all time
  • Acquisition of Marvel Entertainment
  • Investing significantly in expanding and
    enhancing the theme parks
  • Began Shanghai project

11
How Disney Manages Risk
  • Risks are identified, defined and quantified
  • Risk management strategies are developed and
    implemented
  • Leadership with the business units
  • Partnership with external resources and providers
  • Corporate Risk Management reports through
    Corporate Treasury
  • Corporate Risk Management is focused on pure
    risks
  • Financial/operational risks managed by Treasury,
    Finance and the Business Units
  • Business Unit risk management specialists report
    to the leaders of the business unit

12
Risk Identification and Quantification
  • Risk identification in our business is a constant
    process and repetitive loop
  • Various techniques and methods are used depending
    on the exposure
  • Risk mapping
  • Dynamic analysis and simulation
  • Risk modeling
  • Whether a risk is insurable is a second-question
  • Three key risk areas

13
Risk Identification and Quantification
  • Property and Business Interruption

14
Risk Identification and Quantification
  • Work Injury or Illness

15
Risk Identification and Quantification
  • Motion Picture and Television Production

16
Risk Tolerance and Appetite
  • Risk tolerance considers reputational, financial
    and operational impacts
  • Processes used depend on the nature of the risk
  • Strong balance sheet and cash flow increases our
    financial tolerance
  • Managing and mitigating a risk is the first
    strategy
  • If a pure risk can be economically transferred we
    use commercial insurance

17
Risk Financing
  • Risk retention and self-insurance
  • Captive insurance
  • Alameda Insurance Company
  • Buena Vista Insurance Company
  • Captives are used strategically
  • Internally To help business units understand
    risk
  • Externally To improve placement and reduce the
    cost-of-risk
  • Alternative Risk Transfer
  • CAT bonds
  • Various weather derivatives and methods

18
Selling Risk
  • We develop long-term partnerships with insurers
  • Partners must know and understand our business
  • What sells our risk
  • Our people
  • Our processes
  • Our infrastructure

19
The Future of Risk Management
  • Technology
  • Global risk takers
  • Continued need for
  • Long-term Vision
  • Trusting Relationships
  • Creative Problem-solving
  • Communicating Effectively
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