Walt Disney Company (DIS)

Domestic Operations

Lower operating income at the Walt Disney World Resort was primarily due to decreased guest spending and lower corporate alliance income recognition, partially offset by lower costs. Decreased guest spending was driven by lower average daily hotel room rates and lower average ticket prices, which included the impact of promotional programs such as our Buy 4, Get 3 Free program. Lower costs reflected savings from cost mitigation activities and lower volume, partially offset by labor and other cost inflation. Lower operating income at Disney Vacation Club was primarily due to higher per unit cost of sales.

Domestic Operations

Lower operating income at the Walt Disney World Resort and Disneyland Resort was primarily due to decreased guest spending, partially offset by lower costs. Decreased guest spending at the Walt Disney World Resort was due to lower average daily hotel room rates, lower average ticket prices and decreased merchandise spending. At Disneyland Resort, decreased guest spending was primarily due to lower average ticket prices and decreased merchandise spending. Lower costs reflected savings from cost mitigation activities and lower cost of merchandise, food and beverages sold, partially offset by labor and other cost inflation. Lower operating income at Disney Vacation Club reflected unfavorable impacts associated with securitized ownership interests, higher per unit cost of sales, decreased sales of term extensions on certain existing properties and lower rentals of vacation club units.

Domestic Operations

At our domestic operations, decreased revenue was primarily due to decreased guest spending at both Walt Disney World Resort and Disneyland Resort and a decrease at Disney Vacation Club. Decreased guest spending at Walt Disney World Resort reflected lower average daily hotel room rates, lower average ticket prices and decreased merchandise spending and lower guest spending at Disneyland Resort was driven by lower average ticket prices and decreased merchandise spending. Lower revenues at Disney Vacation Club reflected unfavorable impacts associated with securitized ownership interests, decreased sales of term extensions on certain existing properties and lower rentals of vacation club units.

25

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – (continued)

The following table presents attendance, per capita theme park guest spending and hotel statistics for our domestic properties:

Domestic Operations

At our domestic operations, decreased revenue was primarily due to decreased guest spending, lower attendance and lower occupancy at the Walt Disney World Resort and Disneyland Resort. Decreased guest spending at the Walt Disney World Resort was due to lower average daily hotel room rates, decreased merchandise spending and lower average ticket prices. At Disneyland Resort, decreased guest spending was due to lower average ticket prices.

The following table presents attendance, per capita theme park guest spending and hotel statistics for our domestic properties:

29

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – (continued)

Domestic Operations

Lower operating income at the domestic operations reflected a decline in attendance and occupied room nights at Walt Disney World Resort and Disneyland Resort, mark to market adjustments on fuel hedge contracts and labor and other cost inflation, partially offset by cost mitigation activities.

Domestic Operations

For the year, operating income growth at Walt Disney World Resort was primarily due to increased guest spending and theme park attendance, partially offset by higher operating costs. Increased guest spending was due to higher average ticket prices, increased food and beverage spending and higher average daily hotel room rates. Higher operating costs were due to labor cost inflation, new guest offerings and volume-related costs.

For the quarter, decreased results in the domestic operations reflected higher costs, which included labor and other cost inflation at Walt Disney World Resort and higher fuel and drydock maintenance costs at Disney Cruise Line, partially offset by higher guest spending at Walt Disney World Resort.