EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread
Economic Profit Margin

Walt Disney Co., economic profit calculation

USD $ in millions

	12 months ended	Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014	Sep 28, 2013
	Net operating profit after taxes (NOPAT)¹
	Cost of capital²
	Invested capital³

	Economic profit⁴

Based on: 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19), 10-K (filing date: 2013-11-20).

2018 Calculations

¹ NOPAT. See Details »

² Cost of capital. See Details »

³ Invested capital. See Details »

⁴ Economic profit = NOPAT – Cost of capital × Invested capital
= hidden – hidden × hidden = hidden

Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Walt Disney Co.’s economic profit declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level.

Walt Disney Co., NOPAT calculation

USD $ in millions

	12 months ended	Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014	Sep 28, 2013
	Net income attributable to The Walt Disney Company (Disney)
	Deferred income tax expense (benefit)¹
	Increase (decrease) in allowance for doubtful accounts²
	Increase (decrease) in equity equivalents³
	Interest expense
	Interest expense, operating lease liability⁴
	Adjusted interest expense
	Tax benefit of interest expense⁵
	Adjusted interest expense, after taxes⁶
	Interest and investment income
	Investment income, before taxes
	Tax expense (benefit) of investment income⁷
	Investment income, after taxes⁸
	Net income (loss) attributable to noncontrolling interest
	Net operating profit after taxes (NOPAT)

Based on: 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19), 10-K (filing date: 2013-11-20).

2018 Calculations

¹ Elimination of deferred tax expense. See Details »

² Addition of increase (decrease) in allowance for doubtful accounts.

³ Addition of increase (decrease) in equity equivalents to net income attributable to The Walt Disney Company (Disney).

⁴ Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= hidden × hidden = hidden

⁵ Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= hidden × 24.50% = hidden

⁶ Addition of after taxes interest expense to net income attributable to The Walt Disney Company (Disney).

⁷ Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= hidden × 24.50% = hidden

⁸ Elimination of after taxes investment income.

Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Walt Disney Co.’s NOPAT declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.

Walt Disney Co., cash operating taxes calculation

USD $ in millions

	12 months ended	Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014	Sep 28, 2013
	Income tax expense
	Less: Deferred income tax expense (benefit)
	Add: Tax savings from interest expense
	Less: Tax imposed on investment income
	Cash operating taxes

Based on: 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19), 10-K (filing date: 2013-11-20).

Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Walt Disney Co.’s cash operating taxes increased from 2016 to 2017 but then declined significantly from 2017 to 2018.

Walt Disney Co., invested capital calculation (financing approach)

USD $ in millions

		Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014	Sep 28, 2013
	Current portion of borrowings
	Borrowings, excluding current portion
	Operating lease liability¹
	Total reported debt & leases
	Total Disney Shareholder’s equity
	Net deferred tax (assets) liabilities²
	Allowance for doubtful accounts³
	Equity equivalents⁴
	Accumulated other comprehensive (income) loss, net of tax⁵
	Redeemable noncontrolling interests
	Noncontrolling interests
	Adjusted total Disney Shareholder’s equity
	Projects in progress⁶
	Securities classified as available-for-sale⁷
	Invested capital

Based on: 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19), 10-K (filing date: 2013-11-20).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See Details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of equity equivalents to total Disney Shareholder’s equity.

⁵ Removal of accumulated other comprehensive income.

⁶ Subtraction of projects in progress.

⁷ Subtraction of securities classified as available-for-sale.

Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Walt Disney Co.’s invested capital increased from 2016 to 2017 and from 2017 to 2018.

Walt Disney Co., cost of capital calculations


Equity²	÷	=	×		=
Borrowings³	÷	=	×	× (1 – 24.50%)	=
Operating lease liability⁴	÷	=	×	× (1 – 24.50%)	=
Total:

Based on: 10-K (filing date: 2018-11-21).

¹ USD $ in millions

² Equity. See Details »

³ Borrowings. See Details »

⁴ Operating lease liability. See Details »


Equity²	÷	=	×		=
Borrowings³	÷	=	×	× (1 – 35.00%)	=
Operating lease liability⁴	÷	=	×	× (1 – 35.00%)	=
Total:

Based on: 10-K (filing date: 2017-11-22).

¹ USD $ in millions

² Equity. See Details »

³ Borrowings. See Details »

⁴ Operating lease liability. See Details »


Equity²	÷	=	×		=
Borrowings³	÷	=	×	× (1 – 35.00%)	=
Operating lease liability⁴	÷	=	×	× (1 – 35.00%)	=
Total:

Based on: 10-K (filing date: 2016-11-23).

¹ USD $ in millions

² Equity. See Details »

³ Borrowings. See Details »

⁴ Operating lease liability. See Details »


Equity²	÷	=	×		=
Borrowings³	÷	=	×	× (1 – 35.00%)	=
Operating lease liability⁴	÷	=	×	× (1 – 35.00%)	=
Total:

Based on: 10-K (filing date: 2015-11-25).

¹ USD $ in millions

² Equity. See Details »

³ Borrowings. See Details »

⁴ Operating lease liability. See Details »


Equity²	÷	=	×		=
Borrowings³	÷	=	×	× (1 – 35.00%)	=
Operating lease liability⁴	÷	=	×	× (1 – 35.00%)	=
Total:

Based on: 10-K (filing date: 2014-11-19).

¹ USD $ in millions

² Equity. See Details »

³ Borrowings. See Details »

⁴ Operating lease liability. See Details »


Equity²	÷	=	×		=
Borrowings³	÷	=	×	× (1 – 35.00%)	=
Operating lease liability⁴	÷	=	×	× (1 – 35.00%)	=
Total:

Based on: 10-K (filing date: 2013-11-20).

¹ USD $ in millions

² Equity. See Details »

³ Borrowings. See Details »

⁴ Operating lease liability. See Details »

Walt Disney Co., economic spread calculation

		Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014	Sep 28, 2013
	Selected Financial Data (USD $ in millions)
	Economic profit¹
	Invested capital²
	Ratio
	Economic spread³

Based on: 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19), 10-K (filing date: 2013-11-20).

2018 Calculations

¹ Economic profit. See Details »

² Invested capital. See Details »

³ Economic spread = 100 × Economic profit ÷ Invested capital
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Economic spread	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Walt Disney Co.’s economic spread deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.

Walt Disney Co., economic profit margin calculation

		Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014	Sep 28, 2013
	Selected Financial Data (USD $ in millions)
	Economic profit¹
	Revenues
	Ratio
	Economic profit margin²

Based on: 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19), 10-K (filing date: 2013-11-20).

2018 Calculations

¹ Economic profit. See Details »

² Economic profit margin = 100 × Economic profit ÷ Revenues
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company’s profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Walt Disney Co.’s economic profit margin deteriorated from 2016 to 2017 but then improved from 2017 to 2018 not reaching 2016 level.

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Walt Disney Co. (DIS)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Sep 29, 2018

Sep 30, 2017

Oct 1, 2016

Oct 3, 2015

Sep 27, 2014

Sep 28, 2013

Economic Spread

Economic Profit Margin