The Walt Disney Company reported financial results for the quarter and nine months ended June 30, 2001. For the quarter, revenues decreased 1% to $6 billion while net income decreased 3% to $479 million. For the nine months, revenues increased 1% to $19.4 billion while net income increased 17% to $1.4 billion. Disney acquired Fox Family Worldwide for $3 billion in cash to strengthen its family programming. The company also announced job cuts of 4,000 positions to reduce costs. Disney's performance was solid overall despite a soft economy, with growth in studio films and cost cuts helping to offset weaker parks attendance.
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walt disney Quarter2001 3rd
1. FOR IMMEDIATE RELEASE
August 2, 2001
THE WALT DISNEY COMPANY REPORTS EARNINGS FOR THE
QUARTER AND NINE MONTHS ENDED JUNE 30, 2001
BURBANK, Calif. – The Walt Disney Company today reported
earnings for the quarter and nine months ended June 30, 2001.
Pro forma revenues and segment operating income for the quarter
decreased 1% and 7% to $6.0 billion and $1.1 billion, respectively, from the
prior-year quarter. Excluding the restructuring and impairment charges
and gain on the sale of businesses discussed below, net income for the
quarter decreased 3% to $479 million, while diluted earnings per share
remained flat at $0.23.
For the nine months, pro forma revenues increased 1% to $19.4
billion and segment operating income increased 6% to $3.4 billion.
Excluding restructuring and impairment charges, gain on the sale of
businesses and the cumulative effect of accounting changes, net income
and diluted earnings per share increased 17% to $1.4 billion and 18% to
$0.66, respectively.
“In a soft economy, Disney’s overall performance continues to be
solid,” said Michael D. Eisner, Chairman and CEO of The Walt Disney
Company. “Our studio has added yet another quarter to a year of strong
growth. At our parks, effective expense-management measures have
largely compensated for the weaker attendance that we had anticipated.”
2. “We also continue to take steps to build for the future, as evidenced
by our acquisition of Fox Family Worldwide. Once the economy begins to
strengthen, we will be well positioned for accelerating growth”.
Fox Family Acquisition
On July 23, 2001, the Company announced that it had entered into an
agreement to purchase Fox Family Worldwide for $3 billion in cash, plus
the assumption of $2.3 billion in debt. Among the businesses being
acquired are the Fox Family Channel, a programming service that currently
reaches approximately 81 million cable and satellite television subscribers
throughout the U.S.; a 76% interest in Fox Kids Europe, which reaches
more than 24 million subscribers across Europe; Fox Kids channels in Latin
America, and the Saban library and entertainment production businesses.
The Fox Family Channel is one of the few fully distributed stand-alone
channels and gives Disney a platform for launching ABC Family and
strengthening its position as the leading provider of family television
programming. The acquisition of the Fox Kids international channels
strengthens Disney’s presence in important markets in Europe and Latin
America and enhances the Company’s potential for growth domestically
and internationally.
Basis of Presentation
The Company acquired Infoseek, created the Internet Group and
disposed of Fairchild Publications in November 1999. In January 2001, the
Company announced the closure of the GO.com portal business and the
conversion of Internet Group common stock into Disney common stock.
To enhance comparability, the Company has presented operating
results on a pro forma basis, which assumes these transactions occurred at
2
3. the beginning of fiscal 2000, eliminating the one-time impacts of those
events. Additionally, prior-year pro forma operating results for the Studio
Entertainment segment have been restated to reflect the impact of the Film
Accounting change discussed below.
The Company believes that pro forma results provide additional
information useful in analyzing underlying business results. However, pro
forma results are not necessarily indicative of the combined results that
would have occurred had these events actually occurred at the beginning
of fiscal 2000, nor are they necessarily indicative of future results.
On an as-reported basis, results for the quarter and nine months
include restructuring and impairment charges totaling $138 million and
$1.3 billion, respectively. Included in the charges for the nine-month
period is $862 million associated with the closure of GO.com. On a pro
forma basis, restructuring and impairment charges exclude the impact of
the GO.com closure and, as a result, amount to $138 million and $466
million, for the quarter and nine-month periods, respectively. See Table C
for details of these charges. In addition, as-reported results for the prior
year include a $243 million pre-tax gain on the sale of Fairchild
Publications in the first quarter and a $93 million pre-tax gain on the sale of
the Company’s stake in Eurosport in the third quarter.
On an as-reported basis, revenues for the quarter and nine months
were $6.0 billion and $19.5 billion, respectively. Including the restructuring
and impairment charges and gain on the sale of businesses, as-reported net
income attributed to Disney common stock was $392 million (or $0.19 per
share) for the quarter and as-reported net loss attributed to Disney
3
4. common stock was $94 million (or $0.04 per share) for the nine months
including the cumulative effect of the accounting changes ($0.13 per share).
See Table D for a reconciliation of as-reported income (loss) per share
attributed to Disney common stock to pro forma earnings per share.
Unless otherwise noted, the following discussion reflects pro forma
results.
Studio Entertainment
Studio Entertainment revenues for the quarter increased 8% to $1.3
billion, while segment operating income increased to $65 million compared
to a segment operating loss of $1 million in the prior-year quarter.
Studio Entertainment results for the quarter were primarily driven by
growth in worldwide theatrical motion picture distribution and stage
plays.
Improvements in worldwide theatrical motion picture distribution
were primarily due to the releases of Pearl Harbor, Spy Kids and Atlantis.
Growth in stage plays reflected performances of The Lion King in additional
cities.
The Company’s live action and animated titles continued to perform
well on DVD reflecting the overall strength of the DVD market.
Media Networks
Media Networks revenues for the quarter decreased 6% to $2.1 billion
and operating income decreased 29% to $470 million from the prior-year
quarter.
Broadcasting results for the quarter reflected declines at the ABC
television network and the Company’s owned television stations and radio
4
5. operations driven by the soft advertising market, lower ratings and higher
primetime programming costs.
Disney’s share of operating income from cable television activities,
which consists of Disney’s cable networks and cable equity investments,
was $293 million for the quarter.
Excluding the gain from the sale of Eurosport in the prior-year
quarter, cable television results were up 2%, reflecting higher cable
network affiliate revenue and improved results from cable equity
investments, including Lifetime Television, The History Channel and E!
Entertainment Television. These increases were partially offset by the soft
advertising market, higher programming costs and higher costs associated
with the launch of international Disney Channels. Higher affiliate
revenues from the cable networks were driven by strong subscriber
growth, annual contractual rate adjustments and the conversion of the
Disney Channel from a premium to a basic service. Additionally, certain
European Disney Channel operations showed improvements.
Parks & Resorts
Parks & Resorts revenues for the quarter remained flat at $1.9 billion
and segment operating income decreased 1% to $560 million.
Parks & Resorts results reflected increased attendance, guest
spending and occupied room nights at the Disneyland Resort, due to the
addition of Disney’s California Adventure, Downtown Disney and the
Grand Californian Hotel, increased guest spending at Walt Disney World,
continued growth at the Disney Cruise Line, due to the success of the 7-day
cruise package, and cost savings at Walt Disney World. These increases
5
6. were offset by higher costs at the Disneyland Resort and decreased theme
park attendance and lower occupied room nights at Walt Disney World.
The decreased attendance and lower expenses at Walt Disney World
reflected the prior-year impact of the Millennium Celebration, which
concluded in December 2000. Reduced costs at Walt Disney World also
reflected productivity and other cost reduction initiatives.
Consumer Products
Consumer Products revenues for the quarter decreased 3% to $518
million and segment operating income increased 32% to $58 million.
The decline in revenue for the quarter is primarily due to declines in
comparative store sales at Disney Stores North America. Operating income
reflected cost reduction initiatives across all lines of business and favorable
comparable store sales at Disney Stores Europe, partially offset by the
impact of declines in comparative store sales at Disney Stores North
America.
Over the last nine months, the Company has formed a number of
alliances with companies such as Coca-Cola, Gillette and Kimberly-Clark in
children’s food and personal care, in addition to retailers K-Mart, J.C.
Penney and Wal-Mart Canada in children’s apparel. The Company
believes that these arrangements will position Consumer Products for
future growth.
Internet Group
Internet Group revenues for the quarter decreased 17% to $38
million; however, segment operating loss improved by 47% to $31 million.
Internet Group results for the quarter reflect improved operating
performance at the Disney-branded and ESPN-branded Web sites, the
6
7. impact of cost reduction efforts and the elimination of operating losses at
toysmart.com, due to its closure in June 2000. The improved operating
performance at the Disney-branded sites is primarily due to growth in
international licensing revenues and increased sales at
DisneyVacations.com resulting from an increase in travel bookings to
Disney destinations.
Corporate and Unallocated Shared Expenses
Corporate and unallocated shared expense increased 15% to $94
million for the quarter, reflecting costs associated with several strategic
initiatives designed to improve overall company-wide efficiency and start-
up costs for the Disney Club, which was launched in the first quarter of
2001.
Workforce Reduction
In March 2001, the Company announced that it would eliminate 4,000
full-time jobs through a combination of voluntary and involuntary
reductions. The reduction affected employees in all business units and
geographic regions. In connection with the reduction and related
restructuring initiatives, the Company incurred $95 million in severance
and other costs during the quarter. The Company expects that the
reduction plan will be substantially complete in the fourth quarter and,
over time, will generate in excess of $350 million in annual savings.
Net Interest Expense and Other
Net interest expense and other decreased 35% to $80 million for the
quarter, driven by lower interest rates and gains from sales of certain
investments.
7
8. Equity in the Income of Investees
Income from equity investees increased 6% to $86 million for the
quarter, reflecting improved results from cable equity investments
including Lifetime Television, The History Channel and E! Entertainment
Television, partially offset by start-up losses incurred in connection with
new investments.
Conversion of Internet Group Common Stock
On March 30, 2001, the Company converted all of its outstanding
Internet Group common stock into Disney common stock, resulting in the
issuance of approximately 8.6 million shares of Disney common stock. For
the quarter and nine months ended June 30, 2001, Disney common stock as-
reported earnings reflect approximately 72% of Internet Group losses from
October 1, 2000 through January 28, 2001 (the last date prior to the
announcement of the conversion), and 100% thereafter.
In addition, the Company has ceased operations of the GO.com
portal business, which resulted in restructuring charges in the current nine
months.
Restructuring, Impairment and Workforce Reduction Related Charges
During the quarter and nine months, the Company recorded
restructuring and impairment charges on an as-reported basis, totaling
$138 million and $1.3 billion, respectively. The charges relate to workforce
reduction; the closure of GO.com and approximately 70 Disney Stores; the
closure of the Chicago DisneyQuest facility, including the write-down of its
fixed assets and leasehold improvements and lease termination costs, and
impairment write-downs for certain Internet investments. The second
8
9. quarter $862 million charge for closure of the GO.com portal business
includes a non-cash write-off of intangible assets totaling $820 million and
the Disney Store closure charge consists of lease termination costs; write-
downs of fixed assets, leasehold improvements and inventory, and other
related closure costs. Restructuring and impairment charges on a pro
forma basis exclude the impact of the GO.com closure.
See Table C for details of the restructuring and impairment charges
on both a pro forma and as-reported basis.
Accounting Changes
Effective October 1, 2000, the Company adopted AICPA Statement of
Position No. 00-2, Accounting by Producers or Distributors of Films
(SOP 00-2), and FASB Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities (SFAS 133), and recorded one-time after-
tax charges for the adoption of the standards totaling $228 million (or $0.11
per share) and $50 million (or $0.02 per share), respectively.
FORWARD-LOOKING STATEMENTS
Management believes certain statements in this press release may
constitute “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are made on the
basis of management’s views and assumptions regarding future events and
business performance as of the time the statements are made. Actual
results may differ materially from those expressed or implied. Such
differences may result from actions taken by the Company prior to its fiscal
2001 year end, including further restructuring or strategic initiatives and
9
10. actions relating to the Company’s strategic sourcing initiative, as well as
from developments beyond the Company’s control, including changes in
global economic conditions that may, among other things, affect the
international performance of the Company’s theatrical and home video
releases, television programming and consumer products and, in addition,
uncertainties associated with the Internet. Changes in domestic
competitive and economic conditions may also affect performance of all
significant Company businesses.
Editor’s Note: The Company makes available its quarterly earnings releases, annual
report to shareholders, fact book and SEC filings on its Investor Relations Web site
located at http://www.disney.com/investors
10
11. The Walt Disney Company
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
(unaudited; in millions, except per share data)
Three Months Ended Nine Months Ended
June 30 June 30
2001 2000 2001 2000
Revenues $ 5,975 $ 6,034 $ 19,444 $ 19,249
Costs and expenses (4,947) (4,904) (16,317) (16,270)
Amortization of intangible assets (145) (162) (441) (491)
Gain on sale of businesses – 93 22 93
Net interest expense and other (80) (124) (287) (413)
Equity in the income of investees 86 81 234 196
Restructuring and impairment charges (138) – (466) (61)
Income before income taxes, minority interests and
the cumulative effect of accounting changes 751 1,018 2,189 2,303
Income taxes (339) (446) (1,012) (1,025)
Minority interests (20) (42) (83) (86)
Income before cumulative effect of accounting
changes 392 530 1,094 1,192
Cumulative effect of accounting changes:
Film accounting – – (228) –
Derivative accounting – – (50) –
Net income $ 392 $ 530 $ 816 $ 1,192
Earnings per share before cumulative effect of
accounting changes (basic and diluted) $ 0.19 $ 0.25 $ 0.52 $ 0.57
Earnings per share including cumulative effect of
accounting changes (basic and diluted) (1) $ 0.19 $ 0.25 $ 0.39 $ 0.57
Earnings before cumulative effect of accounting
changes, excluding restructuring and impairment
charges and gain on the sale of businesses $ 479 $ 495 $ 1,393 $ 1,190
Earnings per share before cumulative effect of
accounting changes, excluding restructuring and
impairment charges and gain on the sale of
businesses:
Diluted $ 0.23 $ 0.23 $ 0.66 $ 0.56
Basic $ 0.23 $ 0.24 $ 0.67 $ 0.57
Average number of common and common equivalent
shares outstanding:
Diluted 2,107 2,123 2,108 2,108
Basic 2,091 2,086 2,090 2,078
(1) The per share impacts of the film and derivative accounting changes for the nine-month period were ($0.11)
and ($0.02), respectively.
11
12. The Walt Disney Company
AS-REPORTED CONSOLIDATED STATEMENTS OF INCOME
(unaudited; in millions, except per share data)
Three Months Ended Nine Months Ended
June 30 June 30
2001 2000 2001 2000
Revenues $ 5,975 $ 6,053 $ 19,457 $ 19,300
Costs and expenses (4,947) (4,935) (16,363) (16,326)
Amortization of intangible assets (145) (340) (622) (910)
Gain on sale of businesses - 93 22 336
Net interest expense and other (80) (124) (287) (417)
Equity in the income of investees 86 81 234 155
Restructuring and impairment charges (138) – (1,328) (61)
Income before income taxes, minority interests and the
cumulative effect of accounting changes 751 828 1,113 2,077
Income taxes (339) (425) (963) (1,238)
Minority interests (20) (42) (83) (86)
Income before cumulative effect of accounting changes 392 361 67 753
Cumulative effect of accounting changes:
Film accounting – – (228) –
Derivative accounting – – (50) –
Net income (loss) $ 392 $ 361 $ (211) $ 753
Earnings (loss) attributed to:
Disney Common Stock (1) $ 392 $ 440 $ (94) $ 957
Internet Group Common Stock - (79) (117) (204)
$ 392 $ 361 $ (211) $ 753
Earnings (loss) per share before cumulative effect of
accounting changes attributed to:
Disney Common Stock (basic and diluted) (1) $ 0.19 $ 0.21 $ 0.09 $ 0.46
Internet Group Common Stock (basic and diluted) n/a $ (1.75) $ (2.72) $ (4.58)
Earnings (loss) per share including cumulative effect of
accounting changes attributed to:
Disney Common Stock (1) (2) (3)
Diluted $ 0.19 $ 0.21 $ (0.04) $ 0.46
Basic $ 0.19 $ 0.21 $ (0.05) $ 0.46
Internet Group Common Stock (basic and diluted) n/a $ (1.75) $ (2.72) $ (4.58)
Earnings attributed to Disney common stock before
cumulative effect of accounting changes, excluding
restructuring and impairment charges and gain on the
sale of businesses $ 479 $ 405 $ 1,198 $ 934
Earnings per share attributed to Disney common stock
before cumulative effect of accounting changes, excluding
restructuring and impairment charges and gain on the
sale of businesses (1)
Diluted $ 0.23 $ 0.19 $ 0.57 $ 0.44
Basic $ 0.23 $ 0.19 $ 0.57 $ 0.45
Average number of common and common equivalent
shares outstanding:
Disney
Diluted 2,107 2,115 2,103 2,100
Basic 2,091 2,078 2,085 2,070
Internet Group (basic and diluted) - 45 43 44
(1) Including Disney’s retained interest in the Internet Group. Disney’s as-reported retained interest in the Internet Group reflects 100% of
Internet Group losses through November 17, 1999, approximately 72% for the period from November 18, 1999 through January 28, 2001
(the last date prior to the announcement of the conversion of the Internet Group common stock) and 100% thereafter.
(2) Amounts for the current year nine-month period represent basic earnings per share.
(3) The per share impacts of the film and derivative accounting changes for the nine month period were ($0.11) and ($0.02), respectively.
12
13. THE WALT DISNEY COMPANY SEGMENT RESULTS
For the Quarter Ended June 30
(unaudited, in millions)
Pro Forma % As Reported
2001 2000 Change 2001 2000
Revenues: (3)
Media Networks $ 2,135 $ 2,270 (6)% $ 2,135 $ 2,270
Parks & Resorts 1,942 1,940 n/m 1,942 1,940
Studio Entertainment 1,342 1,246 8% 1,342 1,246
Consumer Products 518 532 (3)% 518 532
Internet Group 38 46 (17)% 38 65
$ 5,975 $ 6,034 (1)% $ 5,975 $ 6,053
Segment operating income (loss): (1) (3)
Media Networks $ 470 $ 662 (29)% $ 470 $ 662
Parks & Resorts 560 565 (1)% 560 565
Studio Entertainment (2) 65 (1) n/m 65 (1)
Consumer Products 58 44 32 % 58 44
Internet Group (31) (58) 47 % (31) (70)
$ 1,122 $ 1,212 (7)% $ 1,122 $ 1,200
The Company evaluates the performance of its operating segments based on segment operating income.
A reconciliation of segment operating income to income before income taxes and minority interests is as
follows:
Pro Forma As Reported
2001 2000 2001 2000
Segment operating income $ 1,122 $ 1,212 $ 1,122 $ 1,200
Corporate and unallocated shared expenses (94) (82) (94) (82)
Amortization of intangible assets (145) (162) (145) (340)
Gain on sale of businesses - 93 - 93
Net interest expense and other (80) (124) (80) (124)
Equity in the income of investees 86 81 86 81
Restructuring and impairment charges (138) - (138) -
Income before income taxes and minority
interests $ 751 $ 1,018 $ 751 $ 828
(1) Segment earnings before interest, income taxes, depreciation and amortization (EBITDA) is as follows:
Pro Forma As Reported
2001 2000 2001 2000
Media Networks $ 509 $ 697 $ 509 $ 697
Parks & Resorts 731 731 731 731
Studio Entertainment 76 11 76 11
Consumer Products 77 75 77 75
Internet Group (26) (55) (26) (62)
$ 1,367 $ 1,459 $ 1,367 $ 1,452
(2) Pro forma segment operating income has been adjusted to reflect the impact of SOP 00-2. The respective
adjustments for the year will (decrease) increase segment operating income as follows:
Quarter ended
December 31, 1999 $ (73)
March 31, 2000 37
June 30, 2000 -
September 30, 2000 (14)
$ (50)
(3) The Company made certain changes to its business segment classifications. The Disney Store Catalog and
the Disney Store Online, which were previously reported in the Internet Group, are now reported in the
Consumer Products segment. Prior-year amounts have been reclassified to reflect the current-year
presentation.
13
14. THE WALT DISNEY COMPANY SEGMENT RESULTS
For the Nine Months Ended June 30
(unaudited, in millions)
Pro Forma % As Reported
2001 2000 Change 2001 2000
Revenues: (3)
Media Networks $ 7,252 $ 7,420 $ 7,252 $ 7,420
(2)%
Parks & Resorts 5,312 5,088 5,312 5,088
4%
Studio Entertainment 4,765 4,511 4,765 4,511
6%
Consumer Products 1,978 2,094 1,978 2,108
(6)%
Internet Group 137 136 150 173
1%
$ 19,444 $ 19,249 $ 19,457 $ 19,300
1%
Segment operating income (loss): (1) (3)
Media Networks $ 1,549 $ 1,838 $ 1,549 $ 1,838
(16)%
Parks & Resorts 1,276 1,258 1,276 1,258
1%
Studio Entertainment (2) 381 – 381 36
n/m
Consumer Products 314 303 314 304
4%
Internet Group (109) (190) (142) (230)
43 %
$ 3,411 $ 3,209 $ 3,378 $ 3,206
6%
The Company evaluates the performance of its operating segments based on segment operating income.
A reconciliation of segment operating income to income before income taxes, minority interests, and
cumulative effect of accounting changes is as follows:
Pro Forma As Reported
2001 2000 2001 2000
Segment operating income $ 3,411 $ 3,209 $ 3,378 $ 3,206
Corporate and unallocated shared expenses (284) (230) (284) (232)
Amortization of intangible assets (441) (491) (622) (910)
Gain on sale of businesses 22 93 22 336
Net interest expense and other (287) (413) (287) (417)
Equity in the income of investees 234 196 234 155
Restructuring and impairment charges (466) (61) (1,328) (61)
Income before income taxes, minority interests,
and the cumulative effect of accounting
changes $ 2,189 $ 2,303 $ 1,113 $ 2,077
(1) Segment EBITDA is as follows:
Pro Forma As Reported
2001 2000 2001 2000
Media Networks $ 1,664 $ 1,942 $ 1,664 $ 1,942
Parks & Resorts 1,729 1,696 1,729 1,696
Studio Entertainment 416 40 416 76
Consumer Products 379 386 379 387
Internet Group (91) (183) (121) (209)
$ 4,097 $ 3,881 $ 4,067 $ 3,892
(2) Pro forma segment operating income has been adjusted to reflect the impact of SOP 00-2. The respective
adjustments for the year will (decrease) increase segment operating income as follows:
Quarter ended
December 31, 1999 $ (73)
March 31, 2000 37
June 30, 2000 -
September 30, 2000 (14)
$ (50)
(3) The Company made certain changes to its business segment classifications. The Disney Store Catalog and
the Disney Store Online, which were previously reported in the Internet Group, are now reported in the
Consumer Products segment. Prior-year amounts have been reclassified to reflect the current-year
presentation.
14
16. Table B
CABLE TELEVISION ACTIVITIES
(unaudited, in millions)
Quarter Ended June 30
2001 2000 % Change
Operating income:
Cable Networks $ 226 $ 241 (6) %
Equity investments:
A&E, Lifetime and
E! Entertainment Television 206 183 13 %
Other (1) 52 124 (58) %
484 548 (12) %
Partner share of operating income (191) (186) (3) %
Disney share of operating income $ 293 $ 362 (19) %
Nine Months Ended June 30
2001 2000 % Change
Operating income:
Cable Networks $ 826 $ 828 n/m
Equity investments:
A&E, Lifetime and
E! Entertainment Television 560 501 12 %
Other (1) 166 175 (5) %
1,552 1,504 3%
Partner share of operating income (582) (504) (15) %
Disney share of operating income $ 970 $ 1,000 (3) %
Note: Amounts presented in this table represent 100% of the operating income for all of
the Company’s cable businesses. The Disney share of operating income represents the
Company’s ownership interest in cable television operating income. Cable networks are
reported in “Segment operating income” in the statements of income. Equity investments
are accounted for under the equity method and the Company’s proportionate share of the
net income of its cable equity investments is reported in “Equity in the income of
investees” in the statements of income.
(1) Amounts include the gain on the sale of Eurosport in fiscal 2000. Excluding Disney’s
share of the gain, cable television operating income for the quarter and nine months
ended June 30, 2000 was $287 million and $925 million, respectively. Reflecting the
adjustment for Eurosport in the prior year, Disney’s share of operating income from
cable television activities increased 2% and 5% for the quarter and nine months,
respectively.
16
17. Table C
RESTRUCTURING AND IMPAIRMENT CHARGES
(unaudited, in millions)
Pro Forma As Reported
Quarter Ended June 30 2001 2000 2001 2000
Workforce reductions and other $ 95 $ – $ 95 $ –
Chicago DisneyQuest closure (1) 33 – 33 –
Disney Store closures – – – –
Investment impairment 10 – 10 –
$ 138 $ – $ 138 $ –
Pro Forma As Reported
Nine Months Ended June 30 2001 2000 2001 2000
GO.com intangible assets impairment $ – $ – $ 820 $ –
GO.com severance, fixed asset write-
offs and other – – 42 –
Workforce reductions and other 95 – 95 –
Chicago DisneyQuest closure (1) 94 – 94 –
Disney Store closures 51 – 51 –
Investment impairment 226 61 226 61
$ 466 $ 61 $ 1,328 $ 61
(1) The charge for the quarter ended June 30, 2001 reflects lease termination costs for the
closure of the Chicago DisneyQuest facility. The charge for the nine months includes a
write-down to the estimated salvage value of the property and equipment at the facility.
17
18. Table D
The following table provides a reconciliation of as-reported income (loss) per share
attributed to Disney common stock to pro forma earnings per share before the cumulative
effect of accounting changes, excluding restructuring and impairment charges and gains on
the sale of businesses.
Three Months Nine Months
Ended June 30, Ended June 30,
(unaudited) 2001 2000 2001 2000
As-reported income (loss) per share attributed to Disney
common stock $ 0.19 $ 0.21 $ (0.04) $ 0.46
Adjustment to exclude restructuring and impairment charges
attributed to Disney common stock 0.04 — 0.48 —
Adjustment to exclude gain on the sale of businesses — (0.02) — (0.02)
Adjustment to exclude the cumulative effect of accounting
changes — — 0.13 —
As-reported earnings per share before the cumulative effect
of accounting changes, excluding restructuring and
impairment charges and gain on the sale of businesses 0.23 0.19 0.57 0.44
Adjustment to attribute 100% of Internet Group operating
results to Disney common stock (72% included in as-
reported amounts) — (0.04) (0.06) (0.10)
Adjustment to exclude pre-closure GO.com portal
operating results and amortization of intangible assets — 0.09 0.09 0.26
Adjustment to exclude restructuring and impairment
charges attributed to the Internet Group — — 0.06 0.01
Adjustment to include pre-acquisition Infoseek operating
results — (0.01) — (0.04)
Adjustment to reflect the impact of the new Film
Accounting rules — — — (0.01)
Pro forma earnings per share before the cumulative effect
of accounting changes, excluding restructuring and
impairment charges and gain on the sale of businesses $ 0.23 $ 0.23 $ 0.66 $ 0.56
18
