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Disney Reports Lowered Profits, Higher Theme Park Attendance

Profits are down but theme park attendance is up, as The Walt Disney Company reported earnings for the quarter ended December 31, 2002. Net income in the quarter was $256 million, or 13 cents per share, compared with net income of $438 million, or 21 cents, in the same quarter last year. These figures included an after-tax charge of $83 million, or 4 cents per share, for investments in aircraft leveraged leases with United Airlines. In the prior-year quarter, net income and earnings per share were $438 million and 21 cents per share, including a gain of $216 million (6 cents per share) resulting from the sale of shares in Knight-Ridder, Inc. Network revenues for the quarter increased 9% to $3.2 billion, and segment operating income decreased 7% to $225 million. In studio entertainment, operating income decreased 7% to $138 million, driven by lowered revenue from theatrical motion pictures, which was partially offset by an increase in worldwide home video. Attendance and per capita spending at Disney's domestic theme parks rose during the past year, growing17 percent at Walt Disney World in Orlando, Florida and even higher at the Disneyland Resort in Anaheim, although no specific number was given. Parks and Resorts revenues for the quarter increased 8% to $1.5 billion and segment operating income increased 20% to $225 million. "Our most recent quarter's results, especially the strength of the Disney Parks in the face of continued economic softness, are further evidence of the soundness of our strategic plan," said Michael Eisner, chairman and chief executive officer. "We still have a number of challenges ahead of us, but we remain convinced of the extraordinary potential of our businesses. Assuming a continued gradual improvement in the economic climate, we continue to target earnings per share growth from our operations of 25 - 35 percent this year, and similar growth in 2004."