The Walt Disney Company Reports Earnings for Fiscal Year 2009

http://www.businesswire.com/news/home/20091112006146/en

BURBANK, Calif.--(Business Wire)--
The Walt Disney Company (NYSE: DIS) today reported earnings for the fiscal year
and fourth quarter ended October 3, 2009. Diluted earnings per share (EPS) for
the year was $1.76, compared to $2.28 in the prior year. EPS for the current and
prior year include certain items that are discussed below. Excluding these
items, EPS for the year was $1.82, down 20% from $2.28 in the prior year.

EPS for the current year included a non-cash gain in connection with the merger
of Lifetime Entertainment Services (Lifetime) and A&E Television Networks (A&E),
a gain on the sale of our investment in two pay television services in Latin
America, and restructuring and impairment charges, which collectively had a net
adverse impact of $0.06. EPS for the prior year included an accounting gain
related to the acquisition of the Disney Stores North America, a gain on the
sale of movies.com, the favorable resolution of certain income tax matters, a
bad debt charge for a receivable from Lehman Brothers, and an impairment charge,
which collectively had no net impact on EPS.

For the quarter, diluted EPS was $0.47 compared to $0.40 in the prior-year
quarter. EPS for the current quarter included the gain related to the
Lifetime/A&E transaction and restructuring and impairment charges, which
together resulted in a net benefit of $0.01, while EPS for the prior-year
quarter included the Lehman Brothers bad debt charge and an impairment charge,
which together had a net adverse impact of $0.04. Excluding these items, EPS for
the quarter increased 5% to $0.46 compared to $0.44 in the prior-year quarter.

"Although last year was a difficult one due in part to the weak global economy,
I`m pleased with the way our businesses have responded to the downturn," said
President and CEO Robert A. Iger. "We`ve stayed focused on our long-term
strategy, efficiently managed costs, and continued to invest in initiatives to
deliver future growth. We also have adapted our organization to respond to and
take advantage of the changes taking place in our businesses and will continue
to do so as we position Disney to thrive for years to come."

Fiscal 2009 results for the full year and fourth quarter include the benefit
from one additional week of operations compared to the prior-year periods due to
our fiscal period end. The following table summarizes the full year and fourth
quarter results for fiscal 2009 and 2008 (in millions, except per share
amounts):

Year Ended Quarter Ended
Oct. 3, Sept. 27, Oct. 3, Sept. 27,
2009 2008 Change 2009 2008 Change
Revenues $ 36,149 $ 37,843 (4 ) % $ 9,867 $ 9,445 4 %
Segment operating income (1) $ 6,672 $ 8,484 (21 ) % $ 1,853 $ 1,777 4 %
Net income $ 3,307 $ 4,427 (25 ) % $ 895 $ 760 18 %
Diluted EPS (2) $ 1.76 $ 2.28 (23 ) % $ 0.47 $ 0.40 18 %
Cash provided by operations $ 5,064 $ 5,446 (7 ) % $ 1,738 $ 1,245 40 %
Free cash flow (1) $ 3,311 $ 3,868 (14 ) % $ 1,112 $ 616 81 %

1
Aggregate segment operating income and free cash flow are non-GAAP
financial measures. See the discussion of non-GAAP financial measures
below.
2
Results for the year included a non-cash gain in connection with the
merger of Lifetime and A&E and a gain on the sale of our investment in
two pay television services in Latin America, which are reported in
“Other Income” in the consolidated statement of income, and
restructuring and impairment charges. Collectively, these items had a
$0.06 net adverse impact on EPS. Excluding these items, EPS for the
year was $1.82. Results for the prior year included an accounting gain
related to the acquisition of the Disney Stores North America, a gain
on the sale of movies.com and a bad debt charge for a receivable from
Lehman Brothers, all of which were recorded in “Other Income,” the
favorable resolution of certain income tax matters, and an impairment
charge. In aggregate, these items did not have a net impact on
prior-year EPS.

SEGMENT RESULTS

The following table summarizes the full year and fourth quarter segment
operating results for fiscal 2009 and 2008 (in millions):

Year Ended Quarter Ended
Oct. 3, Sept. 27, Oct. 3, Sept. 27,
2009 2008 Change 2009 2008 Change
Revenues (1):
Media Networks $ 16,209 $ 15,857 2 % $ 4,725 $ 4,144 14 %
Parks and Resorts 10,667 11,504 (7 ) % 2,844 2,969 (4 ) %
Studio Entertainment 6,136 7,348 (16 ) % 1,495 1,452 3 %
Consumer Products 2,425 2,415 - % 646 735 (12 ) %
Interactive Media 712 719 (1 ) % 157 145 8 %
$ 36,149 $ 37,843 (4 ) % $ 9,867 $ 9,445 4 %
Segment operating income (loss) (1):
Media Networks $ 4,765 $ 4,981 (4 ) % $ 1,485 $ 1,176 26 %
Parks and Resorts 1,418 1,897 (25 ) % 344 412 (17 ) %
Studio Entertainment 175 1,086 (84 ) % (13 ) 98 nm
Consumer Products 609 778 (22 ) % 151 211 (28 ) %
Interactive Media (295 ) (258 ) (14 ) % (114 ) (120 ) 5 %
$ 6,672 $ 8,484 (21 ) % $ 1,853 $ 1,777 4 %

1
Beginning with the first quarter fiscal 2009 financial statements, the
Company reports its Disney Interactive Media Group along with certain
new business initiatives as “Interactive Media” for segment reporting
purposes. Prior-period amounts have been reclassified to conform to
the new presentation.

Media Networks

Media Networks revenues for the year increased 2% to $16.2 billion and segment
operating income decreased 4% to $4.8 billion. The following table provides
further detail of the Media Networks results (in millions):

Year Ended Quarter Ended
Oct. 3, Sept. 27, Oct. 3, Sept. 27,
2009 2008 Change 2009 2008 Change
Revenues:
Cable Networks $ 10,555 $ 10,041 5 % $ 3,336 $ 2,927 14 %
Broadcasting 5,654 5,816 (3 ) % 1,389 1,217 14 %
$ 16,209 $ 15,857 2 % $ 4,725 $ 4,144 14 %

Segment operating income:
Cable Networks $ 4,260 $ 4,139 3 % $ 1,483 $ 1,247 19 %
Broadcasting 505 842 (40 ) % 2 (71 ) nm
$ 4,765 $ 4,981 (4 ) % $ 1,485 $ 1,176 26 %

Cable Networks

Operating income at Cable Networks increased $121 million to $4.3 billion for
the year due to growth at ESPN and at ABC Family, partially offset by the impact
associated with the transition of Jetix to Disney-branded channels. The growth
at ESPN was driven by higher affiliate revenue primarily due to contractual rate
increases and, to a lesser extent, the impact of the additional week of
operations and subscriber growth, partially offset by decreased advertising
revenue and higher programming costs. The decrease in advertising revenues was
due to a decrease in units sold, partially offset by higher rates. Higher
programming costs reflected contractual rate increases for key rights contracts
and the cost of new and renewed rights agreements for college and international
sports programming.

Operating income growth at ABC Family reflected higher advertising and affiliate
revenue. Increased advertising revenue at ABC Family was primarily due to higher
units sold and higher rates while increased affiliate revenue was driven by
higher rates. At the worldwide Disney Channel, increased affiliate revenue due
to subscriber growth and contractual rate increase was largely offset by lower
DVD sales.

For the quarter, operating income at Cable Networks increased 19% to $1.5
billion primarily due to an increase at ESPN and, to a lesser extent, the
worldwide Disney Channels. The growth at ESPN was driven by higher affiliate
revenue, partially offset by higher programming costs. Higher affiliate revenue
reflected increased recognition of previously deferred revenues related to
annual programming commitments, the impact of the additional week of operations
and contractual rate increases. During the quarter, ESPN recognized $128 million
more in net deferred revenues related to programming commitments than in the
prior-year quarter. Programming cost increases at ESPN for the quarter reflected
similar impacts as discussed above for the year. Growth at the worldwide Disney
Channels was driven by higher affiliate revenues due to international subscriber
growth, partially offset by lower DVD sales.

Broadcasting

Operating income at Broadcasting decreased $337 million to $505 million for the
year primarily due to lower advertising sales at the ABC Television Network and
owned television stations, higher programming and production costs and a bad
debt charge related to a syndication customer. These decreases were partially
offset by increased international and domestic sales of ABC Studios productions,
led by Grey`s Anatomy, Desperate Housewives and According to Jim. Decreased
advertising revenues at the ABC Television Network reflected lower primetime
ratings. The increase in programming and production costs was driven by higher
primetime programming costs due to more hours of original scripted programming
and higher production cost amortization related to sales of ABC Studios
productions.

For the quarter, operating results at Broadcasting increased $73 million to $2
million, driven by increased domestic and international sales of ABC Studios
productions, led by Grey`s Anatomy and According to Jim, partially offset by an
increase in the related production cost amortization.

At the ABC Television Network, results were comparable to the prior-year quarter
as lower pilot costs and the benefit of an additional week of advertising
revenues were offset by the impact of lower ratings and advertising rates and
higher programming costs for more hours of original scripted programming. Lower
pilot costs reflected the timing of pick up decisions, which generally occurred
in the third quarter this year compared to the fourth quarter of the prior year
due to delays resulting from the Writers Guild of America work stoppage in
fiscal 2008.

Parks and Resorts

Parks and Resorts revenues for the year decreased 7% to $10.7 billion and
segment operating income decreased 25% to $1.4 billion. For the quarter,
revenues decreased 4% to $2.8 billion and segment operating income decreased 17%
to $344 million. Results for the year and quarter reflected decreases at our
domestic operations and at Disneyland Paris.

For the year, lower operating income at our domestic operations was driven by
decreased guest spending, principally at our domestic parks and resorts, and
lower gains on securitized sales of ownership interests at Disney Vacation Club,
partially offset by lower costs at Walt Disney World Resort. Decreased guest
spending at the domestic parks and resorts was due to lower average ticket
prices, lower average daily hotel room rates and decreased merchandise spending.
Lower costs at Walt Disney World Resort reflected savings from cost mitigation
activities, partially offset by labor and other cost inflation.

The decrease at Disneyland Paris was due to decreased guest spending and lower
hotel occupancy, partially offset by lower costs. Decreased guest spending
reflected lower average ticket prices, decreased merchandise spending and lower
average daily hotel room rates. Lower costs were driven by savings from cost
mitigation activities, partially offset by labor and other cost inflation.

For the quarter, lower operating income at our domestic operations reflected
decreased guest spending and increased costs, partially offset by higher
attendance, which was driven by the benefit of the additional week of
operations, and increased revenue recognition at Disney Vacation Club in
connection with the completion of vacation club properties. Decreased guest
spending was due to lower average ticket prices, decreased merchandise, food and
beverage spending and lower average daily hotel room rates. Higher costs
reflected the additional week of operations in the current quarter and labor and
other cost inflation, partially offset by cost mitigation activities.

Lower operating income at Disneyland Paris reflected decreased guest spending
due to lower average ticket prices and lower average daily hotel room rates,
partially offset by lower costs driven by cost mitigation activities and a
favorable claim settlement.

Studio Entertainment

Studio Entertainment revenues for the year decreased 16% to $6.1 billion and
segment operating income decreased 84% to $175 million. For the quarter,
revenues increased 3% to $1.5 billion and segment operating income decreased
$111 million to a loss of $13 million.

Lower operating income for the year was primarily due to decreases in worldwide
home entertainment, worldwide theatrical distribution and worldwide television
distribution.

The decline in worldwide home entertainment was driven by lower unit sales and
net effective pricing, partially offset by lower production cost amortization
and marketing costs. Decreased unit sales reflect the overall decline in the DVD
market and the strength of Pirates of the Caribbean: At World`s End in the prior
year. Significant other titles included WALL-E and The Chronicles of Narnia:
Prince Caspian in the current year while the prior year included Ratatouille,
Enchanted and National Treasure: Book of Secrets.

Lower results in worldwide theatrical distribution were primarily due to a
weaker performing slate of titles in the current year and higher film cost
write-downs. Successful current year titles included UP and The Proposal while
the prior year included National Treasure: Book of Secrets and WALL-E. The
decrease in worldwide television distribution was driven by fewer significant
titles in the current period.

Lower operating results for the quarter were primarily due to higher film cost
write-downs in domestic theatrical distribution and a decline in music
distribution reflecting the strong performance of the Jonas Brothers and Miley
Cyrus titles in the prior-year quarter.

Consumer Products

Consumer Products revenues for the year were essentially flat at $2.4 billion,
and segment operating income decreased 22% to $609 million. For the quarter,
revenues decreased 12% to $646 million, and segment operating income decreased
28% to $151 million.

Lower operating income for the year and quarter reflected the effect of the
difficult global retail environment across our licensing, retail and publishing
businesses as well as the strength of Hannah Montana and High School Musical
propertiesin the prior year. Our retail operations reflected the adverse impact
of a full year of company-owned operations at the Disney Stores North America in
fiscal 2009 whereas the prior year included five months of company-owned
operations and seven months of licensed operations.

Interactive Media

Interactive Media revenues for the year decreased 1% to $712 million and segment
operating results decreased 14% to a loss of $295 million. For the quarter,
revenues increased 8% to $157 million and segment operating results improved 5%
to a loss of $114 million.

Lower operating results for the year were due to a decrease at Disney
Interactive Studios, partially offset by an increase at Disney Online. Lower
results at Disney Interactive Studios were driven by decreased net effective
pricing and unit sales of self-published video games, decreased licensing
revenue and higher unit cost of sales, which included the cost of bundled
accessories and music royalties for current year titles. Significant
self-published video games in the current year included High School Musical 3
and Sing It while the prior year included High School Musical, Turok and Pure.
Improved results at Disney Online reflected lower marketing costs and higher
Club Penguin subscription revenues.

For the quarter, the improved operating results were primarily due to lower
marketing and product development costs as well as increased Club Penguin
subscription revenue at Disney Online, partially offset by higher cost of sales
at Disney Interactive Studios.

OTHER FINANCIAL INFORMATION

Corporate and Unallocated Shared Expenses

Corporate and unallocated shared expenses decreased from $460 million to $398
million for the year and from $147 million to $130 million for the quarter. For
both the year and quarter, the decrease was driven by savings from cost
mitigation activities and an increase in allocation of costs to the business
segments.

Restructuring and Impairment Charges

During the fourth quarter, the Company recorded charges totaling $166 million
which included impairment charges of $73 million and restructuring costs of $93
million. For the year, the Company recorded charges totaling $492 million which
included impairment charges of $279 million and restructuring costs of $213
million. The most significant of the impairment charges was $142 million related
to radio FCC licenses, of which $34 million was recorded in the fourth quarter.
The restructuring charges included severance and other related costs as a result
of various organizational and cost structure initiatives across our businesses.
Restructuring and impairment charges for the prior year consisted of an
impairment charge of $39 million related to radio FCC licenses which was
recorded in the fourth quarter.

Other Income (Expense)

Other Income (Expense) was as follows (in millions):

Year Ended Quarter Ended
Oct. 3, Sept. 27, Oct. 3, Sept. 27,
2009 2008 2009 2008
Gain on Lifetime/A&E transaction $ 228 $ -- $ 228 $ --
Gain on sale of investment in two pay television services in Latin America 114 -- -- --
Gain related to the acquisition of the Disney Stores in North America -- 18 -- --
Gain on sale of movies.com -- 14 -- --
Bad debt charge for Lehman Brothers receivable -- (91 ) -- (91 )
Other Income (Expense) $ 342 $ (59 ) $ 228 $ (91 )

Net Interest Expense

Net interest expense was as follows (in millions):

Year Ended Quarter Ended
Oct. 3, Sept. 27, Oct. 3, Sept. 27,
2009 2008 2009 2008
Interest expense $ (588 ) $ (712 ) $ (136 ) $ (149 )
Interest and investment income 122 188 12 36
Net interest expense $ (466 ) $ (524 ) $ (124 ) $ (113 )

The decrease in interest expense for the year and quarter was driven by lower
effective interest rates.

The decrease in interest and investment income for the year and quarter was
driven by lower effective interest rates.

Minority Interests

Minority interest expense was flat at $302 million for the year and increased
$42 million to $179 million for the quarter. The increase in minority interest
expense for the quarter was primarily due to the impact of increased profits at
ESPN. The minority interest is determined on income after royalties, financing
costs and income taxes.

Cash Flow

Cash provided by operations and free cash flow were as follows (in millions):

Year Ended
Oct. 3, Sept. 27,
2009 2008 Change
Cash provided by operations $ 5,064 $ 5,446 $ (382 )
Investments in parks, resorts and other property (1,753 ) (1,578 ) (175 )
Free cash flow (1) $ 3,311 $ 3,868 $ (557 )

1
Free cash flow is not a financial measure defined by GAAP. See the
discussion of non-GAAP financial measures that follows below.

The decrease in free cash flow was driven by lower segment operating results,
higher contributions to our pension plans and an increase in capital
expenditures, partially offset by lower income tax payments and a decreased net
investment in working capital. The increase in capital expenditures reflected
spending on the Disney`s California Adventure expansion and construction
progress payments on two new cruise ships.

Capital Expenditures and Depreciation Expense

Investments in parks, resorts and other property by segment were as follows (in
millions):

Year Ended
Oct. 3, Sept. 27,
2009 2008
Media Networks
Cable Networks $ 151 $ 206
Broadcasting 143 132
Total Media Networks 294 338
Parks and Resorts
Domestic 1,039 793
International 143 140
Total Parks and Resorts 1,182 933
Studio Entertainment 135 126
Consumer Products 46 51
Interactive Media 21 40
Corporate 75 90
Total investments in parks, resorts and other property $ 1,753 $ 1,578

Depreciation expense is as follows (in millions):

Year Ended
Oct. 3, Sept. 27,
2009 2008
Media Networks
Cable Networks $ 108 $ 89
Broadcasting 89 90
Total Media Networks 197 179
Parks and Resorts
Domestic 822 803
International 326 342
Total Parks and Resorts 1,148 1,145
Studio Entertainment 50 41
Consumer Products 29 18
Interactive Media 28 21
Corporate 128 123
Total depreciation expense $ 1,580 $ 1,527

Borrowings

Total borrowings and net borrowings are detailed below (in millions):

Oct. 3, Sept. 27,
2009 2008 Change
Current portion of borrowings $ 1,206 $ 3,529 $ (2,323 )
Long-term borrowings 11,495 11,110 385
Total borrowings 12,701 14,639 (1,938 )
Less: cash and cash equivalents (3,417 ) (3,001 ) (416 )
Net borrowings (1) $ 9,284 $ 11,638 $ (2,354 )

1
Net borrowings is a non-GAAP financial measure. See the discussion of
non-GAAP financial measures that follows.

The total borrowings shown above include $2,868 million and $3,706 million
attributable to Euro Disney and Hong Kong Disneyland as of October 3, 2009 and
September 27, 2008, respectively. Cash and cash equivalents attributable to Euro
Disney and Hong Kong Disneyland totaled $606 million and $693 million as of
October 3, 2009 and September 27, 2008, respectively.

Non-GAAP Financial Measures

This earnings release presents earnings per share excluding certain items, net
borrowings, free cash flow, and aggregate segment operating income, all of which
are important financial measures for the Company but are not financial measures
defined by GAAP.

These measures should be reviewed in conjunction with the relevant GAAP
financial measures and are not presented as alternative measures of earnings per
share, borrowings, cash flow or net income as determined in accordance with
GAAP. Earnings per share excluding certain items, net borrowings, free cash
flow, and aggregate segment operating income as we have calculated them may not
be comparable to similarly titled measures reported by other companies.

Earnings per share excluding certain items - The Company uses earnings per share
excluding certain items to evaluate the performance of the Company`s operations
exclusive of certain items that impact the comparability of results from period
to period. In the current year, these items included a non-cash gain in
connection with the merger of Lifetime and A&E, a gain on the sale of our
investment in two pay television services in Latin America and restructuring and
impairment charges. In the prior year, these items included gains related to the
acquisition of the Disney Stores North America and the sale of movies.com, the
favorable resolution of certain income tax matters, a bad debt charge for a
receivable from Lehman Brothers and an impairment charge. The Company believes
that information about earnings per share exclusive of these impacts is useful
to investors, particularly where the impact of the excluded items is significant
in relation to reported earnings, because the measure allows for comparability
between periods of the operating performance of the Company`s business and
allows investors to evaluate the impact of these items separately from the
impact of the operations of the business. The following table reconciles
reported earnings per share to earnings per share excluding certain items:

Year Ended Quarter Ended
Oct. 3, Sept. 27, Oct. 3, Sept. 27,
2009 2008 Change 2009 2008 Change
Diluted EPS as reported $ 1.76 $ 2.28 (23 ) % $ 0.47 $ 0.40 18 %
Exclude:
Restructuring and impairment charges (1) 0.17 0.01 nm 0.06 0.01 nm
Other (income)/expense (2) (0.11 ) 0.02 nm (0.07 ) 0.03 nm
Favorable resolution of certain income tax matters - (0.03 ) nm - - nm
Diluted EPS excluding certain items $ 1.82 $ 2.28 (20 ) % $ 0.46 $ 0.44 5 %

1
The amount in the prior year and prior-year quarter consists of an
impairment charge for radio FCC licenses which was previously reported
in Media Networks operating income in the fiscal 2008 financial
statements. For the fiscal 2009 financial statements, this amount has
been reclassified to “Restructuring and Impairment Charges” in the
consolidated statement of income to conform to the fiscal 2009
presentation.
2
Other (income)/expense for the current year consists of a non-cash
gain in connection with the merger of Lifetime and A&E ($228 million
pre-tax) in the fourth quarter and a gain on the sale of our
investment in two pay television services in Latin America ($114
million pre-tax) in the first quarter. Other (income)/expense for the
prior year consists of an accounting gain related to the acquisition
of the Disney Stores North America ($18 million pre-tax) and a gain on
the sale of movies.com ($14 million pre-tax) in the third quarter and
a bad debt charge for a receivable from Lehman Brothers ($91 million
pre-tax) in the fourth quarter.

Net borrowings - The Company believes that information about net borrowings
provides investors with a useful perspective on our financial condition. Net
borrowings reflect the subtraction of cash and cash equivalents from total
borrowings. Since we earn interest income on our cash balances that offsets a
portion of the interest expense we pay on our borrowings, net borrowings can be
used as a measure to gauge net interest expense. In addition, a portion of our
cash and cash equivalents is available to repay outstanding indebtedness when
the indebtedness matures or when other circumstances arise. However, we may not
immediately apply cash and cash equivalents to the reduction of debt, nor do we
expect that we would use all of our available cash and cash equivalents to repay
debt in the ordinary course of business.

Free cash flow - The Company uses free cash flow (cash provided by operations
less investments in parks, resorts and other property), among other measures, to
evaluate the ability of its operations to generate cash that is available for
purposes other than capital expenditures. Management believes that information
about free cash flow provides investors with an important perspective on the
cash available to service debt, make strategic acquisitions and investments and
pay dividends or repurchase shares.

Aggregate segment operating income - The Company evaluates the performance of
its operating segments based on segment operating income, and management uses
aggregate segment operating income as a measure of the performance of operating
businesses separate from non-operating factors. The Company believes that
information about aggregate segment operating income assists investors by
allowing them to evaluate changes in the operating results of the Company`s
portfolio of businesses separate from non-operational factors that affect net
income, thus providing separate insight into both operations and the other
factors that affect reported results.

A reconciliation of segment operating income to net income is as follows (in
millions):

Year Ended Quarter Ended
Oct. 3, Sept. 27, Oct. 3, Sept. 27,
2009 2008 2009 2008
Segment operating income $ 6,672 $ 8,484 $ 1,853 $ 1,777
Corporate and unallocated shared expenses (398 ) (460 ) (130 ) (147 )
Restructuring and impairment charges (492 ) (39 ) (166 ) (39 )
Other income (expense) 342 (59 ) 228 (91 )
Net interest expense (466 ) (524 ) (124 ) (113 )
Income before income taxes and minority interests 5,658 7,402 1,661 1,387
Income taxes (2,049 ) (2,673 ) (587 ) (490 )
Minority interests (302 ) (302 ) (179 ) (137 )
Net income $ 3,307 $ 4,427 $ 895 $ 760

CONFERENCE CALL INFORMATION

In conjunction with this release, The Walt Disney Company will host a conference
call today, November 12, 2009, at 4:30 PM EST/1:30 PM PST via a live Webcast. To
access the Webcast go to www.disney.com/investors. The discussion will be
available via replay through November 26, 2009 at 7:00 PM EST/4:00 PM PST.

FORWARD-LOOKING STATEMENTS

Management believes certain statements in this earnings 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. Management does not
undertake any obligation to update these statements.

Actual results may differ materially from those expressed or implied. Such
differences may result from actions taken by the Company, including
restructuring or strategic initiatives (including capital investments or asset
acquisitions or dispositions), as well as from developments beyond the Company`s
control, including:

* changes in domestic and global economic conditions, competitive conditions and
consumer preferences;
* adverse weather conditions or natural disasters;
* health concerns;
* international, political, or military developments; and
* technological developments.

Such developments may affect travel and leisure businesses generally and may,
among other things, affect:

* the performance of the Company`s theatrical and home entertainment releases;
* the advertising market for broadcast and cable television programming;
* expenses of providing medical and pension benefits;
* demand for our products; and
* performance of some or all company businesses either directly or through their
impact on those who distribute our products.

Additional factors are set forth in the Company`s Annual Report on Form 10-K for
the year ended September 27, 2008 under Item 1A, "Risk Factors," and subsequent
reports.

The Walt Disney Company

CONSOLIDATED STATEMENTS OF INCOME

(unaudited; in millions, except per share data)

Year Ended Quarter Ended
Oct. 3, Sept. 27, Oct. 3, Sept. 27,
2009 2008 2009 2008

Revenues $ 36,149 $ 37,843 $ 9,867 $ 9,445

Costs and expenses (30,452 ) (30,400 ) (8,272 ) (7,954 )

Restructuring and impairment charges (492 ) (39 ) (166 ) (39 )

Other income (expense) 342 (59 ) 228 (91 )

Net interest expense (466 ) (524 ) (124 ) (113 )

Equity in the income of investees 577 581 128 139

Income before income taxes and minority interests 5,658 7,402 1,661 1,387

Income taxes (2,049 ) (2,673 ) (587 ) (490 )

Minority interests (302 ) (302 ) (179 ) (137 )
Net income $ 3,307 $ 4,427 $ 895 $ 760

Earnings per share:
Diluted $ 1.76 $ 2.28 $ 0.47 $ 0.40

Basic $ 1.78 $ 2.34 $ 0.48 $ 0.41

Weighted average number of common and common equivalent shares outstanding:
Diluted 1,875 1,948 1,885 1,903

Basic 1,856 1,890 1,859 1,871

The Walt Disney Company

CONSOLIDATED BALANCE SHEETS

(unaudited; in millions, except per share data)

Oct. 3, Sept. 27,
2009 2008
ASSETS
Current assets
Cash and cash equivalents $ 3,417 $ 3,001
Receivables 4,854 5,373
Inventories 1,271 1,124
Television costs 631 541
Deferred income taxes 1,140 1,024
Other current assets 576 603
Total current assets 11,889 11,666
Film and television costs 5,125 5,394
Investments 2,554 2,249
Parks, resorts and other property, at cost
Attractions, buildings and equipment 32,475 31,493
Accumulated depreciation (17,395 ) (16,310 )
15,080 15,183
Projects in progress 1,350 1,169
Land 1,167 1,180
17,597 17,532
Intangible assets, net 2,247 2,428
Goodwill 21,683 21,465
Other assets 2,022 1,763
$ 63,117 $ 62,497

LIABILITIES AND SHAREHOLDERS` EQUITY
Current liabilities
Accounts payable and other accrued liabilities $ 5,616 $ 5,980
Current portion of borrowings 1,206 3,529
Unearned royalties and other advances 2,112 2,082
Total current liabilities 8,934 11,591
Borrowings 11,495 11,110
Deferred income taxes 1,819 2,350
Other long-term liabilities 5,444 3,779
Minority interests 1,691 1,344
Commitments and contingencies
Shareholders` equity
Preferred stock, $.01 par value
Authorized - 100 million shares, Issued - none - -
Common stock, $.01 par value
Authorized - 3.6 billion shares, Issued - 2.6 billion shares 27,038 26,546
Retained earnings 31,033 28,413
Accumulated other comprehensive loss (1,644 ) (81 )
56,427 54,878
Treasury stock, at cost, 781.7 million shares at Oct. 3, 2009 and 777.1 million shares at September 27, 2008 (22,693 ) (22,555 )
33,734 32,323
$ 63,117 $ 62,497

The Walt Disney Company

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited; in millions)

Year Ended
Oct. 3, Sept. 27,
2009 2008
OPERATING ACTIVITIES
Net income $ 3,307 $ 4,427
Depreciation and amortization 1,631 1,582
Gain on sale of equity investment (342 ) (14 )
Deferred income taxes 323 (128 )
Equity in the income of investees (577 ) (581 )
Cash distributions received from equity investees 505 476
Minority interests 302 302
Net change in film and television costs (43 ) (301 )
Equity-based compensation 457 402
Impairment charges 279 39
Other (247 ) (209 )
Changes in operating assets and liabilities:
Receivables 468 (594 )
Inventories (117 ) (329 )
Other assets (565 ) (64 )
Accounts payable and other accrued liabilities (325 ) 488
Income taxes 8 (50 )
Cash provided by operations 5,064 5,446

INVESTING ACTIVITIES
Investments in parks, resorts and other property (1,753 ) (1,578 )
Sales of investments 46 70
Proceeds from sale of equity investment 185 14
Acquisitions (517 ) (660 )
Other (57 ) (8 )
Cash used in investing activities (2,096 ) (2,162 )

FINANCING ACTIVITIES
Commercial paper repayments, net (1,985 ) (701 )
Borrowings 1,750 1,706
Repayments of borrowings (1,617 ) (477 )
Dividends (648 ) (664 )
Repurchases of common stock (138 ) (4,453 )
Exercise of stock options and other 86 636
Cash used in financing activities (2,552 ) (3,953 )

Increase/(Decrease) in cash and cash equivalents 416 (669 )
Cash and cash equivalents, beginning of year 3,001 3,670
Cash and cash equivalents, end of year $ 3,417 $ 3,001

The Walt Disney Company
Zenia Mucha
Corporate Communications
(818) 560-5300
or
Jonathan Friedland
Corporate Communications
(818) 560-8306
or
Lowell Singer
Investor Relations
(818) 560-6601

Copyright Business Wire 2009