Walt Disney Company (DIS)

Broadcasting

Operating income at Broadcasting increased $42 million to $180 million for the quarter primarily due to the absence of a bad debt charge in connection with the bankruptcy of a syndication customer in the prior-year quarter and higher revenues from ABC Studios productions driven by increased third party network license fees and international sales of Criminal Minds. These increases were partially offset by decreases at the ABC Television Network and owned television stations. At the ABC Television Network,

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results reflected lower primetime ratings and advertising rates, partially offset by a shift from political news coverage in primetime in the prior-year quarter to entertainment programming in the current quarter. At the owned television stations, results reflected lower advertising revenue due to higher political advertising sales in the prior-year quarter.

Broadcasting

Operating income at Broadcasting decreased $337 million to $505 million for the year primarily due to lower advertising sales at the ABC Television Network and owned television stations, higher programming and production costs and a bad debt charge related to a syndication customer. These decreases were partially offset by increased international and domestic sales of ABC Studios productions, led by Grey’s Anatomy, Desperate Housewives and According to Jim. Decreased advertising revenues at the ABC Television Network reflected lower primetime ratings. The increase in programming and production costs was driven by higher primetime programming costs due to more hours of original scripted programming and higher production cost amortization related to sales of ABC Studios productions.

For the quarter, operating results at Broadcasting increased $73 million to $2 million, driven by increased domestic and international sales of ABC Studios productions, led by Grey’s Anatomy and According to Jim, partially offset by an increase in the related production cost amortization.

At the ABC Television Network, results were comparable to the prior-year quarter as lower pilot costs and the benefit of an additional week of advertising revenues were offset by the impact of lower ratings and advertising rates and higher programming costs for more hours of original scripted programming. Lower pilot costs reflected the timing of pick up decisions, which generally occurred in the third quarter this year compared to the fourth quarter of the prior year due to delays resulting from the Writers Guild of America work stoppage in fiscal 2008.

Broadcasting

Operating income at Broadcasting decreased 34% to $204 million for the quarter primarily due to higher costs for primetime programming and lower advertising sales at the owned television stations and at the ABC Television Network, partially offset by increased international sales of ABC Studios productions, led by Grey’s Anatomy and Criminal Minds. Higher programming costs were driven by increased pilot costs as pick-up decisions this year generally occurred in the current quarter compared to the fourth quarter of the prior year as the Writers Guild of America work stoppage led to delays in pick-up decisions. Lower advertising revenues at the ABC Television Network were primarily due to decreases in news, daytime and primetime. The decrease in primetime was due to lower ratings.

Broadcasting

Operating income at Broadcasting decreased 38% to $162 million for the quarter primarily due to lower advertising sales at the owned television stations and higher programming costs at the ABC Television Network due to an increase in production expenses, partially offset by increased sales of ABC Studios productions in international markets, led by Ugly Betty, Desperate Housewives and Criminal Minds. Higher production expenses reflected more production activity during the current quarter compared to the prior-year quarter which was affected by the Writers’ Guild of America work stoppage.

Broadcasting

Operating income at Broadcasting decreased $205 million to $138 million for the quarter primarily due to lower advertising revenue at the ABC Television Network and at the owned television stations, and a bad debt charge in connection with the bankruptcy of a syndication customer. These decreases were partially offset by lower programming costs at the ABC Television Network due to a lower cost mix of programming including a shift of hours from primetime to news. The decrease in advertising revenues at the ABC Television Network was primarily due to lower primetime ratings.

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Broadcasting

Operating income at Broadcasting decreased $43 million to $655 million for the year primarily due to lower advertising revenue at the owned television stations, partially offset by an improvement at the Internet Group. At the Internet Group, decreased costs for the Disney-branded mobile phone service, which was shut down during the first quarter of the current year, were partially offset by higher costs related to international mobile and on-line operations and our Disney.com website. Results at the ABC Television Network were comparable to the prior year as the impact of lower ratings was offset by higher advertising rates and digital media revenues. In television distribution, higher syndication and international sales revenue was offset by higher production cost amortization.

For the quarter, the operating loss at Broadcasting increased $117 million to a loss of $150 million, driven by a decrease at the ABC Television Network and lower advertising revenues at the owned television stations, partially offset by an improvement at the Internet Group. The decrease at the ABC Television Network reflected lower advertising revenues, higher pilot expenses and increased news production costs related to presidential election coverage. Lower advertising revenues were due to lower ratings and sold inventory partially offset by higher rates. Increased pilot costs reflected a delay of pick-up decisions to the fourth quarter of the current year versus the third quarter when most of the pick-up decisions were made in the prior year. The delay was primarily due to the impact of the Writers Guild of America work stoppage. The improvement at the Internet Group reflected the absence of costs related to the Disney-branded mobile phone service partially offset by higher costs related to international mobile and on-line operations and our Disney.com website.

Broadcasting

Operating income at Broadcasting decreased 11% to $260 million for the quarter primarily due to higher production cost amortization related to programs in syndication and lower advertising sales at the owned television stations, partially offset by lower costs for new scripted programming for the ABC Television Network. These decreased costs were the result of lower expenses for pilots as pick up decisions were delayed in the current year primarily due to the Writers Guild of America work stoppage.

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Revenues at the ABC Television Network were comparable to the prior year as the impact of lower ratings was offset by higher advertising rates and digital media revenues.

Broadcasting

Operating income at Broadcasting increased 17% to $223 million for the quarter primarily due to the strong performance of ABC Studios productions in international markets, led by Grey’s Anatomy and Lost. This growth was partially offset by the impact of the Writer’s Guild of America strike which limited the airing of original scripted programming in primetime on the ABC Television Network resulting in lower ratings and advertising revenues. The negative impact of the strike on advertising revenue was partially offset by higher advertising rates and lower programming costs due to the reduction in hours of original scripted programming.

Broadcasting

Operating income at Broadcasting increased $75 million to $322 million for the quarter primarily due to higher primetime advertising revenue at the ABC Television Network, partially offset by higher primetime programming costs. Increased primetime advertising revenues were due to higher advertising rates and sold inventory, partially offset by the impact of lower ratings.

Broadcasting

Operating income at Broadcasting increased $228 million to $703 million for the year primarily due to strong sales of ABC Studios productions as well as fewer hours of sports programming and higher primetime advertising revenue at the ABC Television Network. Sales of ABC Studios productions reflected higher international and DVD sales led by Desperate Housewives, Grey’s Anatomy and Lost. The decrease in sports programming reflected the absence of Monday Night Football, the Super Bowl and three College Bowl games. Increased primetime advertising revenues were due to higher advertising rates and sold inventory, partially offset by the impact of lower ratings. These improvements were partially offset by increased costs of the Disney-branded mobile phone service including costs associated with its shutdown in the fourth quarter.

For the quarter, operating income at Broadcasting decreased $40 million to a loss of $30 million. The decline was primarily due to a decrease in domestic syndication due to the prior-year sales of According to Jim and Scrubs and higher costs at the Internet Group, including costs associated with the shutdown of the Disney-branded mobile phone service.

Broadcasting

Operating income at Broadcasting increased $165 million to $295 million for the quarter primarily due to strong sales of ABC Studios productions, lower programming and production costs, including a decrease in the number of pilot productions, and higher advertising revenue at the ABC Television Network. These increases were partially offset by increased costs associated with the Disney-branded mobile phone service. The growth at ABC Studios reflected higher international, domestic syndication and DVD sales led by Lost, Desperate Housewives and Scrubs. Increased advertising revenues at the ABC Television Network were due to higher advertising rates and higher sold inventory, partially offset by the impact of lower ratings.

Broadcasting

Operating income at Broadcasting increased $52 million to $212 million for the quarter primarily due to fewer hours of sports programming and strong international and domestic syndication sales of ABC Studios productions, led by the returning series Desperate Housewives, Lost, and Grey’s Anatomy, and new series Ugly Betty and Brothers and Sisters. These increases were partially offset by increased costs associated with the Disney-branded mobile phone service.

The Broadcast revenue decline was driven by the absence of the Super Bowl, three less College Bowl games and fewer hours of other sports programming at the ABC Television Network. In primetime, lower ratings were essentially offset by higher sold inventory and higher advertising rates.

Broadcasting

Operating income at Broadcasting increased $63 million to $297 million for the quarter due to the absence of MNF at the ABC Television Network, higher political advertising revenues at the owned television stations, and strong international and DVD sales of Touchstone Television series led by the hit dramas Grey’s Anatomy and Lost. These increases were partially offset by higher programming and production costs, including higher write-offs, and increased costs associated with the Disney branded mobile phone service.

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Broadcasting

Operating income at Broadcasting increased $142 million to $606 million for the year driven by improved primetime performance at the ABC Television Network and increased sales of Touchstone Television series, partially offset by higher costs at the Internet Group and Radio, and the increased number and costs of pilot productions.

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The improved primetime performance at the ABC Television Network was driven by higher advertising rates, strong upfront sales, and continued strength in ratings, partially offset by higher programming expenses. The increase in sales at Touchstone were driven by higher international syndication revenues and DVD unit volumes of the hit dramas Lost, Grey’s Anatomy, and Desperate Housewives, as well as higher license fees for Scrubs, which completed its fifth season on network television. Advertising revenues for the year at Broadcasting also benefited from the Super Bowl, however this revenue increase was essentially offset by related programming expenses.

The cost increase at the Internet Group was primarily due to the launch of Disney branded mobile phone services as well as the costs of other new initiatives. Higher costs at Radio included an impairment charge related to FCC licenses, primarily at ESPN Radio, reflecting an overall market decline in certain radio markets in which we operate.

For the quarter, operating income at Broadcasting decreased $19 million to $29 million as improved performance at the ABC Television Network and higher DVD unit sales of Touchstone Television series were more than offset by the increased costs associated with the roll-out of Disney branded mobile phone services and the FCC license impairment charge. The improved performance at the ABC Television Network was driven by higher advertising rates, increased advertising spots from programming changes, and benefits from replacement programming for Monday Night Football, partially offset by the impact of lower ratings.

Broadcasting

Operating income at Broadcasting decreased $70 million to $183 million for the quarter primarily due to higher programming expenses at the ABC Television Network, the increased number and costs of pilot productions and costs associated with the launch of the Disney branded mobile phone service, partially offset by increased revenue due to higher advertising rates at the ABC Television Network.