Walt Disney Company (DIS)

Parks and Resorts

Parks and Resorts revenues for the quarter were essentially flat at $2.7 billion and segment operating income decreased 2% to $375 million. Results for the quarter reflected a decrease at Disneyland Paris, partially offset by an increase at our domestic operations.

The decrease at Disneyland Paris was due to decreased attendance and lower hotel occupancy.

Higher operating income at our domestic operations was driven by an increase in attendance, which benefited from the shift of the New Year's holiday from the second quarter in fiscal 2009 to the first quarter in fiscal 2010, and lower costs, partially offset by decreased guest spending. The decrease in costs was driven by the absence of mark-to-market losses on fuel hedge contracts which impacted the prior-year quarter, decreased food, beverage and merchandise sales and savings from cost mitigation activities. These decreases were partially offset by higher pension and postretirement medical expenses and labor and other cost inflation. Decreased guest spending was driven by lower average ticket prices and decreased food and beverage and merchandise spending.

PARKS AND RESORTS

The Company owns and operates the Walt Disney World Resort in Florida, the Disneyland Resort in California, the Disney Vacation Club, the Disney Cruise Line, and Adventures by Disney. The Company manages and has effective ownership interests of 51% and 47%, respectively, in Disneyland Paris and Hong Kong Disneyland Resort. The Company also licenses the operations of the Tokyo Disney Resort in Japan. The Company’s Walt Disney Imagineering unit designs and develops new theme park concepts and attractions as well as resort properties. In November 2009, the Company’s Project Application Report (PAR) for a Disney theme park in the Pudong district of Shanghai received approval from the relevant authorities of the central government of China. The PAR approval will enable the Company and its Shanghai partners to move forward toward a final agreement to build and operate a park and begin preliminary development work.

The businesses in the Parks and Resorts segment generate revenues predominately from the sale of admissions to the theme parks; room nights at the hotels; merchandise, food and beverage sales; sales and rentals of vacation club properties; and cruise vacation packages. Costs consist principally of labor; depreciation; costs of merchandise, food and beverage sold; marketing and sales expense; repairs and maintenance; and entertainment.

Parks and Resorts

Revenues

Parks and Resorts revenues increased 8%, or $878 million, to $11.5 billion due to increases of $439 million at our domestic operations and $439 million at our international operations.

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

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Table of Contents

At our domestic operations, growth in revenues was primarily due to increases at the Walt Disney World Resort and Disney Vacation Club. Revenue growth at Walt Disney World Resort was primarily due to increased guest spending and theme park attendance. Increased guest spending was due to higher average ticket prices, increased food and beverage sales and higher average daily hotel room rates. At Disney Vacation Club, revenue growth reflected higher vacation club ownership sales, including extensions of the term of ownership on existing vacation club properties.

At our international operations, revenue growth resulted from an increase at Disneyland Paris due to the favorable impact of foreign currency translation as a result of the weakening of the U.S. dollar against the Euro and increased guest spending and theme park attendance. Increased guest spending was due to higher average daily hotel room rates and average ticket prices.

Costs and Expenses

Costs and expenses increased 8%, or $691 million, primarily due to increases at Disneyland Paris, Walt Disney World Resort and Disney Vacation Club. The increase at Disneyland Paris was due to the unfavorable impact of foreign currency translation as a result of the weakening of the U.S. dollar against the Euro, labor cost inflation and higher volume-related costs. The increase at the Walt Disney World Resort was due to labor and other cost inflation, new guest offerings and volume-related costs. The increase at Disney Vacation Club was driven by higher per unit cost of sales.

Segment Operating Income

Segment operating income increased 11%, or $187 million, to $1.9 billion, primarily due to increases at Disneyland Paris and the Walt Disney World Resort.

Parks and Resorts

The Company owns and operates the Walt Disney World Resort in Florida and the Disneyland Resort in California. The Walt Disney World Resort includes four theme parks (the Magic Kingdom, Epcot, Disney’s Hollywood Studios, and Disney’s Animal Kingdom), 17 resort hotels, a retail, dining, and entertainment complex, a sports complex, conference centers, campgrounds, golf courses, water parks, and other recreational facilities. The Disneyland Resort includes two theme parks (Disneyland and Disney’s California Adventure), three resort hotels, and a retail, dining and entertainment complex. The Company manages and has an effective 51% ownership interest in Disneyland Paris, which includes two theme parks (Disneyland Park and Walt Disney Studios Park), seven themed hotels, two convention centers, a shopping, dining and entertainment complex, and a 27-hole golf facility. The Company also manages and has a 47% ownership interest in Hong Kong Disneyland Resort, which includes one theme park and two resort hotels. The Company earns royalties on revenues generated by the Tokyo Disneyland Resort, which includes two theme parks and three Disney-branded hotels, and is owned and operated by an unrelated Japanese corporation. The Company also manages and markets vacation club ownership interests through the Disney Vacation Club, operates the Disney Cruise Line out of Port Canaveral, Florida, and Adventures by Disney. The Company’s Walt Disney Imagineering unit designs and develops new theme park concepts and attractions, as well as resort properties.

Parks and Resorts

Parks and Resorts revenues for the year decreased 7% to $10.7 billion and segment operating income decreased 25% to $1.4 billion. For the quarter, revenues decreased 4% to $2.8 billion and segment operating income decreased 17% to $344 million. Results for the year and quarter reflected decreases at our domestic operations and at Disneyland Paris.

For the year, lower operating income at our domestic operations was driven by decreased guest spending, principally at our domestic parks and resorts, and lower gains on securitized sales of ownership interests at Disney Vacation Club, partially offset by lower costs at Walt Disney World Resort. Decreased guest spending at the domestic parks and resorts was due to lower average ticket prices, lower average daily hotel room rates and decreased merchandise spending. Lower costs at Walt Disney World Resort reflected savings from cost mitigation activities, partially offset by labor and other cost inflation.

The decrease at Disneyland Paris was due to decreased guest spending and lower hotel occupancy, partially offset by lower costs. Decreased guest spending reflected lower average ticket prices, decreased merchandise spending and lower average daily hotel room rates. Lower costs were driven by savings from cost mitigation activities, partially offset by labor and other cost inflation.

For the quarter, lower operating income at our domestic operations reflected decreased guest spending and increased costs, partially offset by higher attendance, which was driven by the benefit of the additional week of operations, and increased revenue recognition at Disney Vacation Club in connection with the completion of vacation club properties. Decreased guest spending was due to lower average ticket prices, decreased merchandise, food and beverage spending and lower average daily hotel room rates. Higher costs reflected the additional week of operations in the current quarter and labor and other cost inflation, partially offset by cost mitigation activities.

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Lower operating income at Disneyland Paris reflected decreased guest spending due to lower average ticket prices and lower average daily hotel room rates, partially offset by lower costs driven by cost mitigation activities and a favorable claim settlement.

Parks and Resorts

Parks and Resorts revenues for the quarter decreased 9% to $2.8 billion and segment operating income decreased 19% to $521 million. Lower operating income was due to decreases at the Walt Disney World

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Resort, Disney Vacation Club, and Disneyland Paris. Operating income comparisons reflected the shift of the Easter holiday from the second quarter in fiscal 2008 to the third quarter in fiscal 2009.

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.

International Operations

Lower operating income at Disneyland Paris reflected decreased guest spending and hotel occupancy. The decrease in guest spending was due to lower average ticket prices as well as decreased food, beverage and merchandise spending.

Parks and Resorts

Revenues

Parks and Resorts revenues decreased 8%, or $425 million, to $5.1 billion due to decreases of $302 million at our domestic operations and $123 million at our international operations. Results were unfavorably impacted by the timing of the Easter holiday season as discussed above.

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:

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS – (continued)

International Operations

At our international operations, decreased revenue resulted from a decline at Disneyland Resort Paris primarily due to the unfavorable impact of foreign currency translation as a result of the strengthening of the U.S. dollar against the Euro, decreased guest spending and lower real estate sales. Decreased guest spending was due to decreased merchandise spending, lower average ticket prices and lower average daily hotel room rates.

Costs and Expenses

Costs and expenses decreased 3%, or $134 million. The decrease in costs and expenses was primarily due to decreases at Disneyland Resort Paris, Walt Disney World Resort and Disneyland Resort, partially offset by an increase at Disney Vacation Club. The decrease at Disneyland Resort Paris was due to the favorable impact of foreign currency translation as a result of the strengthening of the U.S. dollar against the Euro, and lower real estate cost of sales, partially offset by labor cost inflation. At the Walt Disney World Resort and Disneyland Resort, the decrease was driven by cost mitigation activities and lower volume-related costs, partially offset by labor cost inflation. The increase at Disney Vacation Club reflected higher per unit cost of sales.

Segment Operating Income

Segment operating income decreased 34%, or $291 million, to $553 million, primarily due to decreases at the Walt Disney World Resort, Disneyland Resort Paris, Disney Vacation Club and Disneyland Resort.

Parks and Resorts

Parks and Resorts revenues for the quarter decreased 12% to $2.4 billion and segment operating income decreased 50% to $171 million. Lower operating income was due to decreases at the Walt Disney World Resort, Disney Vacation Club, Disneyland Resort and Disneyland Resort Paris. Operating income comparisons were unfavorably impacted by the shift of the Easter holiday from the second quarter in fiscal 2008 to the third quarter in fiscal 2009.

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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.

International Operations

At Disneyland Resort Paris, lower operating income was primarily due to decreased guest spending and attendance. The decrease in guest spending reflected lower average ticket prices, lower average daily hotel room rates and decreased merchandise spending.

Parks and Resorts

The Company owns and operates the Walt Disney World Resort in Florida and the Disneyland Resort in California. The Walt Disney World Resort includes four theme parks (the Magic Kingdom, Epcot, Disney’s Hollywood Studios, and Disney’s Animal Kingdom), seventeen resort hotels, a retail, dining, and entertainment complex, a sports complex, conference centers, campgrounds, golf courses, water parks, and other recreational facilities. The Disneyland Resort includes two theme parks (Disneyland and Disney’s California Adventure), three resort hotels, and a retail, dining and entertainment district. The Company manages and has an effective 51% ownership interest in Disneyland Resort Paris, which includes the Disneyland Park, the Walt Disney Studios Park, seven themed hotels, two convention centers, a shopping, dining and entertainment complex, and a 27-hole golf facility. The Company also manages and has a 43% ownership interest in Hong Kong Disneyland, which includes one theme park and two resort hotels. The Company earns royalties on revenues generated by the Tokyo Disneyland Resort, which includes two theme parks and three Disney-branded hotels, near Tokyo, Japan, and is owned and operated by an unrelated Japanese corporation. The Company also manages and markets vacation club ownership interests through the Disney Vacation Club and operates the Disney Cruise Line out of Port Canaveral, Florida. The Company’s Walt Disney Imagineering unit designs and develops new theme park concepts and attractions, as well as resort properties. Also included in Parks and Resorts is Adventures by Disney, which provides personalized travel experiences to guests at destinations world-wide, and the ESPN Zone, which operates eight sports-themed dining and entertainment facilities around the United States.

Parks and Resorts

Parks and Resorts revenues for the quarter decreased 4% to $2.7 billion and segment operating income decreased 24% to $382 million. Lower operating income was due to decreases at the domestic operations and at Disneyland Resort Paris.

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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.

International Operations

At Disneyland Resort Paris, lower operating income reflected a decrease in real estate sales, labor cost inflation and higher marketing and sales costs, partially offset by increased attendance.

Parks and Resorts

The Company owns and operates the Walt Disney World Resort in Florida and the Disneyland Resort in California. The Walt Disney World Resort includes four theme parks (the Magic Kingdom, Epcot, Disney’s Hollywood Studios, and Disney’s Animal Kingdom), seventeen resort hotels, a retail, dining, and entertainment complex, a sports complex, conference centers, campgrounds, golf courses, water parks, and other recreational facilities. The Disneyland Resort includes two theme parks (Disneyland and Disney’s California Adventure), three resort hotels, and a retail, dining and entertainment district. The Company manages and has an effective 51% ownership interest in Disneyland Resort Paris, which includes the Disneyland Park, the Walt Disney Studios Park, seven themed hotels, two convention centers, a shopping, dining and entertainment complex, and a 27-hole golf facility. The Company also manages and has a 43% ownership interest in Hong Kong Disneyland, which includes one theme park and two resort hotels. The Company earns royalties on revenues generated by the Tokyo Disneyland Resort, which includes two theme parks and three Disney-branded hotels, near Tokyo, Japan, and is owned and operated by an unrelated Japanese corporation. The Company also manages and markets vacation club ownership interests through the Disney Vacation Club and operates the Disney Cruise Line out of Port Canaveral, Florida. The Company’s Walt Disney Imagineering unit designs and develops new theme park concepts and attractions, as well as resort properties. Also included in Parks and Resorts is Adventures by Disney, which provides personalized travel experiences to guests at destinations world-wide, and the ESPN Zone, which operates eight sports-themed dining and entertainment facilities around the United States.

Parks and Resorts

The Company owns
and operates the Walt Disney World Resort in Florida and the Disneyland Resort in California. The Walt Disney World Resort includes four theme parks (the Magic Kingdom, Epcot, Disney’s Hollywood Studios, and Disney’s Animal Kingdom),
seventeen resort hotels, a retail, dining, and entertainment complex, a sports complex, conference centers, campgrounds, golf courses, water parks, and other recreational facilities. The Disneyland Resort includes two theme parks (Disneyland and
Disney’s California Adventure), three resort hotels, and a retail, dining and entertainment district. The Company manages and has an effective 51% ownership interest in Disneyland Resort Paris, which includes the Disneyland Park, the Walt
Disney Studios Park, seven themed hotels, two convention centers, a shopping, dining and entertainment complex, and a 27-hole golf facility. The Company also manages and has a 43% ownership interest in Hong Kong Disneyland, which includes one theme
park and two resort hotels. The Company earns royalties on revenues generated by the Tokyo Disneyland Resort, which includes two theme parks and three Disney-branded hotels, near Tokyo, Japan, and is owned and operated by an unrelated Japanese
corporation. The Company also manages and markets vacation club ownership interests through the Disney Vacation Club and operates the Disney Cruise Line out of Port Canaveral, Florida. The Company’s Walt Disney Imagineering unit designs and
develops new theme park concepts and attractions, as well as resort properties. Also included in Parks and Resorts is Adventures by Disney, which provides personalized travel experiences to guests at destinations world-wide, and the ESPN Zone, which
operates eight sports-themed dining and entertainment facilities around the United States.

Parks and Resorts

Parks and Resorts revenues for the year increased 8% to $11.5 billion and segment operating income increased 11% to $1.9 billion. For the quarter, revenues increased 7% to $3.0 billion and segment operating income decreased 4% to $412 million. Operating income growth for the year was driven by increases at Disneyland Resort Paris and Walt Disney World Resort. For the quarter, lower operating income was driven by a decrease in domestic operations, partially offset by an increase at Disneyland Resort Paris.

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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.

International Operations

Operating income growth at Disneyland Resort Paris for the year was primarily due to increased guest spending, higher theme park attendance and the favorable impact of currency translation, partially offset by higher operating costs. Increased guest spending was due to higher average daily hotel room rates and higher average ticket prices. Higher operating costs were driven by labor cost inflation and volume-related expenses.

For the quarter, operating income growth at Disneyland Resort Paris reflected higher guest spending and the favorable impact of currency translation, partially offset by lower attendance and occupied room nights and labor cost inflation.

Parks and Resorts

Parks and Resorts revenues for the quarter increased 5% to $3.0 billion and segment operating income increased 3% to $641 million. Revenue growth was primarily due to an increase at Disneyland Resort Paris driven by favorable currency translation and higher guest spending and attendance.

Operating income growth was driven by increases at Walt Disney World Resort and Disneyland Resort Paris, partially offset by a decrease at Disneyland Resort. Operating results at the theme parks reflected decreased attendance due to the timing of the Easter holiday, which fell in the third quarter in fiscal 2007 and in the second quarter in fiscal 2008.

Domestic Resorts

Operating results at both Walt Disney World Resort and Disneyland Resort reflected decreased attendance due to the shift of the Easter holiday. This was more than offset by higher corporate alliance income and increased guest spending at Walt Disney World Resort driven by higher average ticket prices.

International Resorts

Operating income growth at Disneyland Resort Paris was primarily due to higher guest spending, increased attendance and the favorable impact of currency translation, partially offset by higher operating costs. Increased guest spending was due to higher average ticket prices. Higher operating costs were driven by labor cost inflation and increased marketing, partially offset by a favorable claim settlement.

Parks and Resorts

Revenues

Parks and Resorts revenues increased 11%, or $562 million, to $5.5 billion due to increases of $315 million at our domestic resorts and $247 million at our international resorts. Results at our theme parks were favorably impacted by the timing of the Easter holiday season as discussed above.

Domestic Parks and Resorts

At our domestic parks and resorts, revenue growth was due to increases at the Walt Disney World Resort and Disney Vacation Club. Revenue growth at the Walt Disney World Resort was due to increased guest spending and theme park attendance. Increased guest spending was due to higher average ticket prices, higher average daily hotel room rates and increased food and beverage spending. At Disney Vacation Club, revenue growth was driven by vacation club ownership sales, including extensions of the term of ownership on certain existing vacation home properties and higher rentals of vacation club units.

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

International Parks and Resorts

At our international parks and resorts, revenue growth was driven by an increase at Disneyland Resort Paris due to the favorable impact of foreign currency translation as a result of the weakening of the U.S. dollar against the Euro, and increased theme park attendance and guest spending. Increased guest spending was primarily due to higher average daily hotel room rates.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- (continued)

Costs and Expenses

Costs and expenses increased 9%, or $377 million. The increase in costs and expenses was primarily due to increases at Disneyland Resort Paris and the Walt Disney World Resort. The increase at Disneyland Resort Paris was primarily due to the unfavorable impact of foreign currency translation as a result of the weakening of the U.S. dollar against the Euro and higher volume-related costs. The increase at the Walt Disney World Resort was due to labor cost inflation, volume-related costs and new guest offerings.

Segment Operating Income

Segment operating income increased 28%, or $185 million, to $844 million, primarily due to increases at the Walt Disney World Resort, Disneyland Resort Paris and Disney Vacation Club.

Parks and Resorts

Parks and Resorts revenues for the quarter increased 11% to $2.7 billion and segment operating income increased 33% to $339 million. Operating income growth was due to improved results in our domestic businesses and at Disneyland Resort Paris, both of which were favorably impacted by the shift of the Easter holiday from the third quarter in fiscal 2007 to the second quarter in fiscal 2008.

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Domestic Resorts

Operating income growth at the domestic businesses was primarily due to increased guest spending and theme park attendance at the Walt Disney World Resort and higher revenues at Disney Vacation Club, partially offset by higher operating costs at the Walt Disney World Resort. Increased guest spending was due to higher average daily hotel room rates, higher average ticket prices and increased food and beverage spending. Higher attendance was primarily driven by the benefit of the shift of the Easter holiday. The increase in operating costs was driven by labor cost inflation, new guest offerings and volume-related expenses. The benefit from higher revenues at Disney Vacation Club reflected extensions of the term of ownership on certain existing vacation home properties and higher rentals of vacation club units.

International Resorts

Operating income growth at Disneyland Resort Paris was primarily due to increased attendance and higher guest spending, partially offset by higher operating costs. Increased guest spending was driven by higher average daily hotel room rates. Higher operating costs were driven by volume-related expenses and labor cost inflation.

Parks and Resorts

Parks and Resorts revenues for the quarter increased 11% to $2.8 billion and segment operating income increased 25% to $505 million. Operating income growth was driven by increases at Walt Disney World and Disneyland Resort Paris, and improved performance at Hong Kong Disneyland Resort.

Domestic Resorts

Operating income growth at Walt Disney World was primarily due to increased guest spending, attendance, vacation club ownership sales and hotel occupancy, partially offset by higher operating costs. Increased guest spending was due to higher average ticket prices and increased food, beverage and merchandise spending. Higher operating costs were driven by volume-related costs, labor cost inflation and new guest offerings.

International Resorts

Operating income growth at Disneyland Resort Paris was primarily due to increased attendance, guest spending, hotel occupancy and real estate sales. Increased guest spending was driven by higher average daily room rates and increased food and beverage spending. At Hong Kong Disneyland Resort, improved performance reflected increased attendance.

Parks and Resorts

Revenues

Parks and Resorts revenues increased 11%, or $283 million, to $2.8 billion due to increases of $141 million at our domestic resorts and $142 million at our international resorts.

Domestic Parks and Resorts

At our domestic parks and resorts, revenue growth was primarily due to an increase at Walt Disney World driven by increased guest spending, theme park attendance, vacation club ownership sales and hotel occupancy. Increased guest spending was due to higher average ticket prices and increased food, beverage and merchandise spending.

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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:

Per room guest spending consists of the average daily hotel room rate as well as guest spending on food, beverage and merchandise at the hotels.

International Parks and Resorts

At our international parks and resorts, revenue growth was primarily due to an increase at Disneyland Resort Paris and, to a lesser extent, Hong Kong Disneyland Resort. Revenue growth at Disneyland Resort Paris was due to the favorable impact of foreign currency translation, as a result of the weakening of the U.S. dollar against the Euro, and higher theme park attendance, guest spending, real estate sales and hotel occupancy. Increased guest spending was primarily due to higher average daily room rates and increased food and beverage spending. At Hong Kong Disneyland Resort, revenue growth was primarily due to higher theme park attendance.

Costs and Expenses

Costs and expenses, which consist principally of labor, depreciation, costs of merchandise, food and beverage sold, marketing and sales expense, repairs and maintenance and entertainment, increased 9%, or $183 million. The increase in costs and expenses was due primarily to increases at Disneyland Resort Paris and Walt Disney World. The increase at Disneyland Resort Paris was primarily due to the unfavorable impact of foreign currency translation, as a result of the weakening of the U.S. dollar against the Euro, and higher real estate cost of sales. The increase at Walt Disney World was driven by volume-related expenses, labor cost inflation and new guest offerings.

Segment Operating Income

Segment operating income increased 25%, or $100 million, to $505 million reflecting increases at Walt Disney World and Disneyland Resort Paris and improved performance at Hong Kong Disneyland Resort.