heres an article from Moody's Investment Services
The original article is at
http://www.moodys.com/cust/loadHighLight.asp?documentID=1501600000003433&original=1
WALT DISNEY’S A3 on review for downgrade; Theme Park, debt concerns growing
PRESS RELEASE
Approximately $15 billion of debt securities affected
New York, August 05, 2002 -- Moody's Investors Service has placed the A3 long term rating of The Walt Disney Company on review for possible downgrade. The company's P-2 short term rating remains stable. In addition, the A2 ratings for its subsidiaries, Disney Enterprises and ABC, Inc. are being placed on review as well.
The review is prompted by Moody's ongoing concerns about the outlook for the company's theme park operations, uncertainty about viewer and advertiser share momentum at its ABC networks, and the company's high debt burden versus operating and free cash flow for the A3 rating category. Moody's believes that the external environment, which includes waning consumer confidence and ongoing geopolitical uncertainty, will continue to challenge the company's ability to return to credit metrics appropriate for the current rating category.
As a result of weakening market conditions, Disney has been slower to de-lever than originally expected following the Fox Family acquisition, completed earlier in fiscal 2002, despite management's efforts to reduce costs and net debt. In addition, Moody's remains concerned that given ABC's lagging audience share it may experience greater negative volatility should a "double dip" advertising recession take hold.
The review will focus on the following items: First, Disney's ability to improve its balance sheet over the next fiscal year. Second, the company's ability to rebuild audience and advertiser share at its flagship network. Third, developing comfort around the theme park's intermediate term operating and free cash flow contribution. Fourth, assessing future transaction risk.
The Walt Disney Company, headquartered in Burbank, California, is a diversified international media and entertainment company.