News Column

Disney Reports Q4, Full-year Earnings for FY2012

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volume after reopening, and the collection of related business interruption insurance proceeds in the current year. Operating income growth at Disney Cruise Line was due to increased passenger cruise days driven by the Disney Fantasy and the Disney Dream, partially offset by the related operating costs.

Operating income growth at Hong Kong Disneyland Resort was primarily due to guest spending, which was driven by higher average ticket prices and daily hotel room rates, and increased attendance, partially offset by higher costs related to resort expansion. At Disneyland Paris, increased guest spending, driven by higher daily hotel room rates, and higher attendance were more than offset by labor cost inflation and lower hotel occupancy.

For the quarter, operating income growth reflected increases at Disney Cruise Line, Hong Kong Disneyland Resort, our new Aulani resort and hotel in Hawaii, and Disneyland Paris.

Higher operating income at Disney Cruise Line was driven by increased passenger cruise days driven by the Disney Fantasy, partially offset by the related operating costs. The increases at both Hong Kong Disneyland Resort and Disneyland Paris were driven by higher attendance. Improved results at Aulani reflected a full quarter of operations in the current year compared to the prior-year quarter which included pre-opening costs.

Results for the quarter at our domestic parks and resorts were comparable to the prior-year quarter as increased guest spending at Disneyland Resort and Walt Disney World Resort and increased attendance at Disneyland Resort were largely offset by higher operating costs. The guest spending increase reflected higher average ticket prices, daily hotel room rates and food and beverage spending. Higher operating costs were driven by resort expansion and new guest offerings, including investments in supporting systems infrastructure, labor cost inflation, and higher employee benefits costs.

Studio Entertainment

Studio Entertainment revenues for the year decreased 8% to $5.8 billion and segment operating income increased 17% to $722 million. For the quarter, revenues decreased 4% to $1.4 billion and segment operating income decreased 32% to $80 million.

The revenue decline for the year was driven by fewer theatrical releases in the current year and lower home entertainment sales volume. Higher operating income for the year was driven by increases in domestic theatrical and worldwide television distribution, partially offset by higher film cost write-downs.

Domestic theatrical operating income growth reflected the strong performance of Marvel's The Avengers in the current year, partially offset by marketing costs for Frankenweenie, which was released after the fiscal year-end. The revenue decline from fewer theatrical releases was largely offset by a decrease in the related distribution and marketing costs and production cost amortization.

In worldwide television distribution, lower revenues from the domestic markets were largely offset by higher international syndication revenues. The increase in operating income was due to a lower average production cost amortization rate on current-year titles.

For the quarter, lower segment operating income was driven by a decrease in worldwide theatrical results and higher film cost write-downs,

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