The Walt Disney Company (NYSE: DIS) today reported earnings for its
fiscal year and fourth quarter ended September 29, 2012.
Diluted earnings per share (EPS) for the year increased 24% to $3.13 from $2.52 in the prior year. For the quarter, diluted EPS was $0.68 compared to $0.58 in the prior-year quarter. Excluding certain items affecting comparability as detailed below, EPS for the year increased 21% to $3.07 from $2.54 in the prior year and EPS for the quarter increased 15% to $0.68 from $0.59 in the prior-year quarter.
"Fiscal 2012 was a great year creatively, financially and strategically, resulting in record revenue, net income, and earnings per share," said Disney Chairman and CEO Robert A. Iger. "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."
EPS for the current year includes a $184 million non-cash gain recorded in connection with the acquisition of a controlling interest in UTV Software Communication Limited (UTV) and a $79 million recovery of a receivable from Lehman Brothers (Lehman) that was written off in 2008 as a result of the Lehman bankruptcy, partially offset by $100 million of restructuring and impairment charges and a $24 million net charge related to the refinancing of Disneyland Paris borrowings (DLP debt charge). These items benefitted EPS by $0.06. The UTV gain, the Lehman recovery and the DLP debt charge were recorded in "Other income/(expense), net" in the Consolidated Statement of Income. EPS for the prior year included $75 million of gains from the sales of Miramax and BASS and $55 million of restructuring and impairment charges. These items had a negative impact on EPS of $0.02.
EPS for the current quarter includes the Lehman recovery ($79 million), restructuring and impairment charges ($49 million) and the DLP debt charge ($24 million). Collectively, these items had no net impact on EPS. EPS for the prior-year quarter included restructuring and impairment charges of $9 million which had a negative impact on EPS of $0.01.
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
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