The Walt Disney Co.
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; in millions, except per share data)
Three Months Ended Six Months Ended
March 31, March 31,
2001 2000 2001 2000
Revenues $ 6,047 $ 6,287 $ 13,469 $ 13,215
Costs and expenses (5,119) (5,479) (11,370) (11,366)
Amortization
of intangible assets (146) (166) (296) (329)
Gain on sale of
businesses -- -- 22 --
Net interest expense
and other (98) (121) (207) (289)
Equity in the income
of investees 66 63 148 115
Restructuring and
impairment charges (134) (36) (328) (61)
Income before income
taxes, minority
interests and the
cumulative effect of
accounting changes 616 548 1,438 1,285
Income taxes (276) (251) (673) (579)
Minority interests (33) (20) (63) (44)
Income before cumulative
effect of accounting
changes 307 277 702 662
Cumulative effect of
accounting changes:
Film accounting -- -- (228) --
Derivative accounting -- -- (50) --
Net income $ 307 $ 277 $ 424 $ 662
Earnings per share before
cumulative effect of
accounting changes:
Diluted $ 0.15 $ 0.13 $ 0.33 $ 0.32
Basic $ 0.15 $ 0.13 $ 0.34 $ 0.32
Earnings per share
including cumulative
effect of accounting
changes (diluted and
basic) (1): $ 0.15 $ 0.13 $ 0.20 $ 0.32
Earnings before
cumulative effect of
accounting changes,
excluding restructuring
and impairment charges $ 391 $ 294 $ 908 $ 695
Earnings per share
before cumulative
effect of accounting
changes, excluding
restructuring and
impairment charges
(diluted and basic) $ 0.19 $ 0.14 $ 0.43 $ 0.33
Average number of common
and common equivalent
shares outstanding:
Diluted 2,105 2,111 2,108 2,100
Basic 2,089 2,077 2,090 2,075
(1) The per share impacts of the film and derivative accounting
changes for the six-month period were ($0.11) and ($0.02),
respectively.
The Walt Disney Co.
AS-REPORTED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; in millions, except per share data)
Three Months Ended Six Months Ended
March 31, March 31,
2001 2000 2001 2000
Revenues $ 6,049 $ 6,307 $ 13,482 $ 13,247
Costs and expenses (5,133) (5,549) (11,416) (11,391)
Amortization of
intangible assets (184) (344) (477) (570)
Gain on sale of
businesses -- -- 22 243
Net interest expense
and other (98) (121) (207) (293)
Equity in the income
of investees 66 63 148 74
Restructuring and
impairment charges (996) (36) (1,190) (61)
Income before income
taxes, minority interests
and the cumulative effect
of accounting changes (296) 320 362 1,249
Income taxes (238) (223) (624) (813)
Minority interests (33) (20) (63) (44)
Income before cumulative
effect of accounting
changes (567) 77 (325) 392
Cumulative effect of
accounting changes:
Film accounting -- -- (228) --
Derivative accounting -- -- (50) --
Net income (loss) $ (567) $ 77 $ (603) $ 392
Earnings (loss)
attributed to:
Disney Common
Stock (1) $ (548) $ 161 $ (486) $ 517
Internet Group Common
Stock (19) (84) (117) (125)
$ (567) $ 77 $ (603) $ 392
Earnings (loss) per share
before cumulative effect
of accounting changes
attributed to:
Disney Common Stock
(basic and
diluted) (1) (2) $ (0.26) $ 0.08 $ (0.10) $ 0.25
Internet Group
Common Stock
(basic and diluted) $ (0.45) $ (1.87) $ (2.72) $ (2.84)
Earnings (loss) per share
including cumulative effect
of accounting changes
attributed to:
Disney Common Stock
(basic and
diluted) (1) (2) (3) $ (0.26) $ 0.08 $ (0.23) $ 0.25
Internet Group Common
Stock (basic and
diluted) $ (0.45) $ (1.87) $ (2.72) $ (2.84)
Earnings attributed to
Disney common stock
before cumulative effect
of accounting changes,
excluding restructuring
and impairment charges $ 366 $ 161 $ 713 $ 533
Earnings per share
attributed to Disney
common stock before
cumulative effect of
accounting changes,
excluding restructuring
and impairment charges (1)
Diluted $ 0.17 $ 0.08 $ 0.34 $ 0.25
Basic $ 0.18 $ 0.08 $ 0.34 $ 0.26
Average number of common
and common equivalent
shares outstanding:
Disney
Diluted 2,098 2,103 2,101 2,092
Basic 2,082 2,069 2,082 2,067
Internet Group
(basic and diluted) 42 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 Nov. 17, 1999,
approximately 72% for the period from Nov. 18, 1999, through
Jan. 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 represent basic earnings per share.
(3) The per share impacts of the film and derivative accounting
changes for the six-month period were ($0.11) and ($0.02),
respectively.
THE WALT DISNEY CO. SEGMENT RESULTS
For the Quarter Ended March 31
(Unaudited, in millions)
Pro Forma % As Reported
2001 2000 Change 2001 2000
Revenues: (3)
Media Networks $ 2,211 $ 2,397 (8)% $ 2,211 $ 2,397
Parks & Resorts 1,648 1,571 5 % 1,648 1,571
Studio Entertainment 1,573 1,662 (5)% 1,573 1,662
Consumer Products 568 609 (7)% 568 609
Internet Group 47 48 (2)% 49 68
$ 6,047 $ 6,287 (4)% $ 6,049 $ 6,307
Segment operating income
(loss): (1) (3)
Media Networks $ 489 $ 536 (9)% $ 489 $ 536
Parks & Resorts 331 330 -- 331 330
Studio Entertainment (2) 164 46 257 % 164 9
Consumer Products 90 69 30 % 90 69
Internet Group (37) (72) 49 % (49) (85)
$ 1,037 $ 909 14 % $ 1,025 $ 859
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 $ 1,037 $ 909 $ 1,025 $ 859
Corporate and unallocated
shared expenses (109) (101) (109) (101)
Amortization of intangible
assets (146) (166) (184) (344)
Net interest expense
and other (98) (121) (98) (121)
Equity in the income
of investees 66 63 66 63
Restructuring and
impairment charges (134) (36) (996) (36)
Income before income taxes
and minority interests $ 616 $ 548 $ (296) $ 320
(1) Segment earnings before interest, income taxes, depreciation
and amortization (EBITDA) is a follows:
Pro Forma As Reported
2001 2000 2001 2000
Media Networks $ 527 $ 571 $ 527 $ 571
Parks & Resorts 470 463 470 463
Studio Entertainment 175 59 175 22
Consumer Products 113 94 113 94
Internet Group (30) (69) (41) (76)
$ 1,255 $ 1,118 $ 1,244 $ 1,074
(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
Dec. 31, 1999 $ (73)
March 31, 2000 37
June 30, 2000 --
Sept. 30, 2000 (14)
$ (50)
(3) During the quarter, 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.
THE WALT DISNEY CO. SEGMENT RESULTS
For the Six Months Ended March 31
(Unaudited, in millions)
Pro Forma % As Reported
2001 2000 Change 2001 2000
Revenues: (3)
Media Networks $ 5,117 $ 5,150 (1)% $ 5,117 $ 5,150
Parks & Resorts 3,370 3,148 7 % 3,370 3,148
Studio Entertainment 3,423 3,265 5 % 3,423 3,265
Consumer Products 1,460 1,562 (7)% 1,460 1,576
Internet Group 99 90 10 % 112 108
$ 13,469 $ 13,215 2 % $ 13,482 $ 13,247
Segment operating income (loss): (1)(3)
Media Networks $ 1,079 $ 1,176 (8)% $ 1,079 $ 1,176
Parks & Resorts 716 693 3 % 716 693
Studio Entertainment (2) 316 1 n/m 316 37
Consumer Products 262 265 (1)% 262 266
Internet Group (84) (138) 39 % (117) (166)
$ 2,289 $ 1,997 15 % $ 2,256 $ 2,006
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 $ 2,289 $ 1,997 $ 2,256 $ 2,006
Corporate and unallocated
shared expenses (190) (148) (190) (150)
Amortization of
intangible assets (296) (329) (477) (570)
Gain on sale of businesses 22 -- 22 243
Net interest expense
and other (207) (289) (207) (293)
Equity in the income
of investees 148 115 148 74
Restructuring and
impairment charges (328) (61) (1,190) (61)
Income before income taxes,
minority interests and
the cumulative effect
of accounting changes $ 1,438 $ 1,285 $ 362 $ 1,249
(1) Segment EBITDA is as follows:
Pro Forma As Reported
2001 2000 2001 2000
Media Networks $ 1,155 $ 1,245 $ 1,155 $ 1,245
Parks & Resorts 998 965 998 965
Studio Entertainment 340 29 340 65
Consumer Products 308 317 308 318
Internet Group (71) (134) (101) (153)
$ 2,730 $ 2,422 $ 2,700 $ 2,440
(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
Dec. 31, 1999 $ (73)
March 31, 2000 37
June 30, 2000 --
Sept. 30, 2000 (14)
$ (50)
(3) During the quarter, 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.
Table A
MEDIA NETWORKS
(Unaudited, in millions)
Quarter Ended March 31
2001 2000 % Change
Revenues:
Broadcasting $ 1,410 $ 1,652 (15)%
Cable Networks 801 745 8 %
$ 2,211 $ 2,397 (8)%
Segment operating income: (1)
Broadcasting $ 170 $ 244 (30)%
Cable Networks 319 292 9 %
$ 489 $ 536 (9)%
Six Months Ended March 31
2001 2000 % Change
Revenues:
Broadcasting $ 3,133 $ 3,367 (7)%
Cable Networks 1,984 1,783 11 %
$ 5,117 $ 5,150 (1)%
Segment operating income: (1)
Broadcasting $ 479 $ 589 (19)%
Cable Networks 600 587 2 %
$ 1,079 $ 1,176 (8)%
(1) Amounts exclude amortization of intangible assets.
Table B
CABLE TELEVISION ACTIVITIES
(Unaudited, in millions)
Quarter Ended March 31
2001 2000 % Change
Operating income:
Cable Networks $ 319 $ 292 9 %
Equity investments:
A&E, Lifetime and E!
Entertainment Television 169 168 1 %
Other 55 33 67 %
543 493 10 %
Partner share of operating income (190) (169) (12)%
Disney share of operating income $ 353 $ 324 9 %
Six Months Ended March 31
2001 2000 % Change
Operating income:
Cable Networks $ 600 $ 587 2 %
Equity investments:
A&E, Lifetime and E!
Entertainment Television 354 318 11 %
Other 114 51 124 %
1,068 956 12 %
Partner share of operating income (391) (318) (23)%
Disney share of operating income $ 677 $ 638 6 %
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.
Table C
RESTRUCTURING AND IMPAIRMENT CHARGES
(Unaudited, in millions)
Pro Forma As Reported
Quarter Ended March 31 2001 2000 2001 2000
GO.com intangible assets
impairment $ -- $ -- $ 820 $ --
GO.com severance, fixed
asset write-offs and
other -- -- 42 --
Themed entertainment
assets (1) 61 -- 61 --
Disney Store closures 51 -- 51 --
Investment impairment 22 36 22 36
$ 134 $ 36 $ 996 $ 36
Pro Forma As Reported
Six Months Ended March 31 2001 2000 2001 2000
GO.com intangible assets
impairment $ -- $ -- $ 820 $ --
GO.com severance, fixed
asset write-offs and
other -- -- 42 --
Themed entertainment
assets (1) 61 -- 61 --
Disney Store closures 51 -- 51 --
Investment impairment 216 61 216 61
$ 328 $ 61 $ 1,190 $ 61
(1) The charge reflects a write-down to the estimated salvage value
of property and equipment due to the inability of the related
operations to recover the asset costs.
-- Posted April 25, 2001
Source: Company Press Release