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Subject: Re: Disney 2Q13 Earnings Report - Q&A Date: 5/11/2013 1:30 AM
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I have a question about the debt and your perspective on it.

If I read the latest balance sheet correctly, there's $20 billion of total debt, composed of borrowings and other long-term liabilities. Out of curiosity, what would be the effect, in your opinion, of taking advatange of the rising stock price to clear out that debt (and I'm assuming you do add those two numbers since I assume the long-term nomenclature is not a part of the borrowing nomenclature)? I'm not saying to do it, Disney seems to be managing its money fine enough, but if the company floated $20 billion of stock to get that off the balance sheet, would that be a proper exploitation of the stock currency? Of course, I'm not sure what the highest secondary offering in history has been. I doubt Disney would ever contemplate a huge number like that, but I'm just wondering what the hit to the stock would be if that were to happen. Let's say there's a 20% drop...would that be beneficial to the company in buying the stock back? Is it legal for a company to do a stock offering it knows will most likely result in a 20% drop in stock price so that it may buy back stock at cheaper prices? Again, just an academic question, I wouldn't say Disney isn't managing debt the way it should be.

ESPN, as someone on the board mentioned earlier, along with media networks, is very valuable to the company and contributes a lot to the profit base. Whoever is named the head of that division definitely needs to be on her/his game. I think the interesting question about this subject is will the next CEO be as acquisition-centric?

The issue of cash-hoarding is also fascinating. I hope dividends will increase. But I guess we'll have to let the board decide what it thinks is best there (I even wish for a quarterly dividend more than a hike at this point).

Iger and the gift shop does show evidence of his intense focus (I do think you have to be careful about what customers say they want and how it is interpreted).
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