The Walt Disney Company reported earnings for the fiscal year and fourth quarter ended Oct. 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 percent from $2.28 in the prior year.

Parks and Resorts revenues for the year decreased 7 percent to $10.7 billion and segment operating income decreased 25 percent to $1.4 billion. For the quarter, revenues decreased 4 percent to $2.8 billion and segment operating income decreased 17 percent to $344 million. Results for the year and quarter reflected decreases at domestic operations and at Disneyland Paris. For the year, lower operating income at domestic operations was driven by decreased guest spending, principally at 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 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.

EPS for the current year included a non-cash gain in connection with the merger of Lifetime Entertainment Services and A&E Television Networks, a gain on the sale of investments 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 percent 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.” For more information, visit www.disneytravelagents.com.

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