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Friday, November 9, 2012

Fourth Quarter Results in Short


                                                 Robert A. Iger:  "Fiscal 2012 was a great year creatively, financially and strategically, resulting in record revenue, net income, and earnings per share. The addition of Lucasfilm will further fuel Disney's creative engine across our company to create additional value for our shareholders and we're confident the Company is well positioned to continue our strong performance and growth."


Park and Resorts:
Higher operating income at our domestic parks and resorts was driven by
increased guest spending and attendance, partially offset by higher costs. Increased guest
spending reflected higher average ticket prices, food and beverage spending and daily
hotel room rates. Increased attendance reflected strong growth at Disneyland Resort
which benefitted from the opening of Cars Land at Disney California Adventure. Higher
costs were driven by resort expansion and new guest offerings, including investments in
supporting systems infrastructure, labor cost inflation and higher employee benefits
costs.
The increase at Tokyo Disney Resort reflected the loss of income in the prior year
due to the March 2011 earthquake and tsunami in Japan, which resulted in a temporary
suspension of operations and a reduction in volume after reopening, and the collection of
related business interruption insurance proceeds in the current year. Operating income
growth at Disney Cruise Line was due to increased passenger cruise days driven by the
Disney Fantasy and the Disney Dream, partially offset by the related operating costs.
Operating income growth at Hong Kong Disneyland Resort was primarily due to
guest spending, which was driven by higher average ticket prices and daily hotel room
rates, and increased attendance, partially offset by higher costs related to resort
expansion. At Disneyland Paris, increased guest spending, driven by higher daily hotel
room rates, and higher attendance were more than offset by labor cost inflation and
lower hotel occupancy. 5
For the quarter, operating income growth reflected increases at Disney Cruise
Line, Hong Kong Disneyland Resort, our new Aulani resort and hotel in Hawaii, and
Disneyland Paris.
Higher operating income at Disney Cruise Line was driven by increased
passenger cruise days driven by the Disney Fantasy, , partially offset by the related
operating costs. The increases at both Hong Kong Disneyland Resort and Disneyland
Paris were driven by higher attendance. Improved results at Aulani reflected a full
quarter of operations in the current year compared to the prior-year quarter which
included pre-opening costs.
Results for the quarter at our domestic parks and resorts were comparable to the
prior-year quarter as increased guest spending at Disneyland Resort and Walt Disney
World Resort and increased attendance at Disneyland Resort were largely offset by
higher operating costs. The guest spending increase reflected higher average ticket
prices, daily hotel room rates and food and beverage spending. Higher operating costs
were driven by resort expansion and new guest offerings, including investments in
supporting systems infrastructure, labor cost inflation, and higher employee benefits
costs.
The increase at Tokyo Disney Resort reflected the loss of income in the prior year
due to the March 2011 earthquake and tsunami in Japan, which resulted in a temporary
suspension of operations and a reduction in volume after reopening, and the collection of
related business interruption insurance proceeds in the current year. Operating income
growth at Disney Cruise Line was due to increased passenger cruise days driven by the
Disney Fantasy and the Disney Dream, partially offset by the related operating costs.
Operating income growth at Hong Kong Disneyland Resort was primarily due to
guest spending, which was driven by higher average ticket prices and daily hotel room
rates, and increased attendance, partially offset by higher costs related to resort
expansion. At Disneyland Paris, increased guest spending, driven by higher daily hotel
room rates, and higher attendance were more than offset by labor cost inflation and
lower hotel occupancy.
For the quarter, operating income growth reflected increases at Disney Cruise
Line, Hong Kong Disneyland Resort, our new Aulani resort and hotel in Hawaii, and
Disneyland Paris.
Higher operating income at Disney Cruise Line was driven by increased
passenger cruise days driven by the Disney Fantasy, partially offset by the related
operating costs. The increases at both Hong Kong Disneyland Resort and Disneyland
Paris were driven by higher attendance. Improved results at Aulani reflected a full
quarter of operations in the current year compared to the prior-year quarter which
included pre-opening costs.
Results for the quarter at our domestic parks and resorts were comparable to the
prior-year quarter as increased guest spending at Disneyland Resort and Walt Disney
World Resort and increased attendance at Disneyland Resort were largely offset by
higher operating costs. The guest spending increase reflected higher average ticket
prices, daily hotel room rates and food and beverage spending. Higher operating costs
were driven by resort expansion and new guest offerings, including investments in
supporting systems infrastructure, labor cost inflation, and higher employee benefits
costs.



Studio Entertainment
Studio Entertainment revenues for the year decreased 8% to $5.8 billion and
segment operating income increased 17% to $722 million.  For the quarter, revenues
decreased 4% to $1.4 billion and segment operating income decreased 32% to $80 million.
The revenue decline for the year was driven by fewer theatrical releases in the
current year and lower home entertainment sales volume. Higher operating income for
the year was driven by increases in domestic theatrical and worldwide television
distribution, partially offset by higher film cost write-downs.
Domestic theatrical operating income growth reflected the strong performance of
Marvel’s The Avengers in the current year, partially offset by marketing costs for
Frankenweenie, which was released after the fiscal year-end. The revenue decline from
fewer theatrical releases was largely offset by a decrease in the related distribution and
marketing costs and production cost amortization.
In worldwide television distribution, lower revenues from the domestic markets
were largely offset by higher international syndication revenues.  The increase in
operating income was due to a lower average production cost amortization rate on
current-year titles.
For the quarter, lower segment operating income was driven by a decrease in
worldwide theatrical results and higher film cost write-downs, partially offset by
improved results in worldwide home entertainment.
Lower worldwide theatrical operating income was driven by the performance of
Brave in the current quarter compared to Cars 2 in the prior-year quarter and the prerelease marketing expense for Frankenweenie in the current quarter. Improved home
entertainment results were driven by the strong performance of Marvel’s The Avengers in
the current quarter.


Consumer Products
Consumer Products revenues for the year increased 7% to $3.3 billion and
segment operating income increased 15% to $937 million.  For the quarter, revenues
increased 8% to $883 million and segment operating income increased 29% to $267
million.
Higher segment operating income for both the year and quarter was primarily due
to increases at Merchandise Licensing and our retail business as well as favorable foreign
currency impacts. At Merchandise Licensing, the increase for the year and quarter was
driven by earned royalty growth reflecting the strong performance of Spider-Man,
Avengers, and Minnie and Mickey merchandise in the current year and an increase in
Japan as a result of the impact of the earthquake and tsunami which occurred in the
second quarter of the prior year. These increases were partially offset by lower sales of
Cars and Toy Story merchandise. Licensing results for the current year also benefitted
from lower revenue share with Studio Entertainment and higher guaranteed shortfall
recognition. The revenue share impact was due to a lower mix of revenues from
properties subject to revenue share in the current year reflecting the strong prior-year
sales of Cars merchandise.
At our retail business, higher operating income for the year and quarter was
driven by new stores in North America and Europe and higher online sales.


Interactive
 Interactive revenues for the year decreased 14% to $845 million and segment
operating results improved $92 million to a loss of $216 million. For the quarter, revenues
decreased 14% to $191 million and segment operating results improved $18 million to a
loss of $76 million.
 Improved segment operating results for the year reflected an increase at our social
games business and higher allocations to other Company businesses, primarily related to
website design and maintenance, partially offset by a decrease at our console game
business.
Social game results reflected lower acquisition accounting impacts and improved
title performance in the current year. Lower console game results were driven by a
decline in sales volume from fewer significant releases which was partially offset by
lower marketing costs, higher minimum guarantee recognition and decreased product
development costs. The reduction in console games product development reflected an
ongoing shift from console game releases to mobile and social game releases.
For the quarter, improved operating results were primarily due to lower
acquisition accounting impacts at our social games business and higher allocations to
other Company businesses related to website design and maintenance, partially offset by
a decrease at our console game business driven by fewer significant titles in release in the
current quarter.


Cable Networks
Operating income at Cable Networks increased $471 million to $5.7 billion for the
year due to growth at ESPN and the worldwide Disney Channels and an increase in
equity income. The increase at ESPN was driven by higher affiliate and advertising
revenue, partially offset by higher programming costs. Higher affiliate revenue was due
to contractual rate increases while the increase in advertising revenue was primarily due
to higher rates. The programming cost increase was driven by contractual rate increases
for college sports, NFL, Major League Baseball, and NBA programming and expanded
rights for the Wimbledon Championships. Growth at the worldwide Disney Channels
was driven by higher affiliate revenue due to contractual rate increases domestically and
subscriber growth internationally. These increases were partially offset by lower Disney
Channel program sales.  Increased equity income was driven by growth at A & E
Television Networks (AETN), which reflected higher advertising and affiliate revenues
partially offset by higher programming costs.
For the quarter, operating income at Cable Networks increased by $118 million to
$1.4 billion due to growth at ESPN, higher equity income at AETN, and improvement at
ABC Family, partially offset by lower operating income at the domestic Disney Channels.
The increase at ESPN reflected higher contractual rates for affiliate fees, decreased
marketing costs, and higher equity income at the ESPN Star Sports joint venture due to
lower programming costs. These increases were partially offset by higher programming
costs driven by contractual rate increases for college football and Major League Baseball
and expanded rights for the Wimbledon Championships. The improvement at ABC
Family was primarily due to lower programming and marketing and sales costs.  At the
domestic Disney Channels, the benefit of higher affiliate revenue due to contractual rate
increases was more than offset by a decrease due to a significant program sale that
occurred in the prior-year quarter.











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