Excluding the restructuring and impairment charges and gain on the sale of businesses discussed below, net income for the quarter decreased 3% to $479 million, while diluted earnings per share remained flat at $0.23.

For the nine months, pro forma revenues increased 1% to $19.4

billion and segment operating income increased 6% to $3.4 billion.

Excluding restructuring and impairment charges, gain on the sale of

businesses and the cumulative effect of accounting changes, net income

and diluted earnings per share increased 17% to $1.4 billion and 18% to

$0.66, respectively.

In a soft economy, Disney’s overall performance continues to be

solid, said Michael D. Eisner, Chairman and CEO of The Walt Disney

Company. Our studio has added yet another quarter to a year of strong

growth. At our parks, effective expense-management measures have

largely compensated for the weaker attendance that we had anticipated.

We also continue to take steps to build for the future, as evidenced

by our acquisition of Fox Family Worldwide. Once the economy begins to

strengthen, we will be well positioned for accelerating growth.

Fox Family Acquisition

On July 23, 2001, the Company announced that it had entered into an

agreement to purchase Fox Family Worldwide for $3 billion in cash, plus

the assumption of $2.3 billion in debt. Among the businesses being

acquired are the Fox Family Channel, a programming service that currently

reaches approximately 81 million cable and satellite television subscribers

throughout the U.S.; a 76% interest in Fox Kids Europe, which reaches

more than 24 million subscribers across Europe; Fox Kids channels in Latin

America, and the Saban library and entertainment production businesses.

The Fox Family Channel is one of the few fully distributed stand-alone

channels and gives Disney a platform for launching ABC Family and

strengthening its position as the leading provider of family television

programming. The acquisition of the Fox Kids international channels

strengthens Disney’s presence in important markets in Europe and Latin

America and enhances the Company’s potential for growth domestically

and internationally.

The beginning of fiscal 2000, eliminating the one-time impacts of those

events. Additionally, prior-year pro forma operating results for the Studio

Entertainment segment have been restated to reflect the impact of the Film

Accounting change discussed below.

The Company believes that pro forma results provide additional

information useful in analyzing underlying business results. However, pro

forma results are not necessarily indicative of the combined results that

would have occurred had these events actually occurred at the beginning

of fiscal 2000, nor are they necessarily indicative of future results.

On an as-reported basis, results for the quarter and nine months

include restructuring and impairment charges totaling $138 million and

$1.3 billion, respectively. Included in the charges for the nine-month

period is $862 million associated with the closure of GO.com. On a pro

forma basis, restructuring and impairment charges exclude the impact of

the GO.com closure and, as a result, amount to $138 million and $466

million, for the quarter and nine-month periods, respectively.

On an as-reported basis, revenues for the quarter and nine months

were $6.0 billion and $19.5 billion, respectively. Including the restructuring

and impairment charges and gain on the sale of businesses, as-reported net

income attributed to Disney common stock was $392 million (or $0.19 per

share) for the quarter and as-reported net loss attributed to Disney common stock was $94 million (or $0.04 per share) for the nine months including the cumulative effect of the accounting changes ($0.13 per share).

SOURCE: COMPANY PRESS RELEASE