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"Independent" Disney's First Quarter Results

The Walt Disney Company has announced its financial results for its

operations excluding its Internet business, Disney pro forma

diluted earnings per share excluding were $0.25 for the quarter

ended December 31, 1999, a 9% increase over the prior year. Disney revenues

increased 5% to $6.8 billion and operating income increased 8% to $1.1

billion. Excluding the retained interest in, net income increased 7%

to $515 million. Broadcasting results for the quarter were driven up by

gains at the ABC television network and the Company's owned television

stations due to a strong advertising market and the success of WHO WANTS TO

BE A MILLIONAIRE. The quarter was good for cable television spurred by

growth at ESPN, E! Entertainment Television, Lifetime Television and The

History Channel. Revenues for the studio were $1.6 billion, a decrease of

10% compared to the prior-year quarter, and operating income was $23

million, compared to $143 million for the prior-year quarter. Declines in

worldwide home video and domestic theatrical motion picture distribution

were cited as the main contributors to the decline. The successful release

of TOY STORY 2 was more than offset by the less-than-expected performances

of THE INSIDER and BICENTENNIAL MAN. Improvements in international

theatrical motion picture distribution were driven primarily by TARZAN and

TOY STORY 2. Theme Parks and Resorts posted record operating results, with

revenues increasing 9% to $1.6 billion and operating income up 6% to $363

million. Theme Parks and Resorts results benefited from increased guest

spending, growth in occupied room nights, record attendance at Walt Disney

World and improved results at Disney Cruise Line. Increased guest spending

and record attendance at Walt Disney World were driven by the ongoing

Millennium Celebration. Consumer Products revenues for the quarter were

$903 million, down 6% from the prior-year quarter, and operating income was

$207 million, down 29%. Declines occurred in merchandise licensing in the

U.S., Latin America and Europe. There were also softer publishing results

in Europe. These declines were partially offset by improvements at Disney

Interactive, primarily driven by the success of the WHO WANTS TO BE A

MILLIONAIRE video game and the TOY STORY 2 action game. During the quarter,

Disney completed its sale of Fairchild Publications, which it had acquired

in connection with the 1996 acquisition of ABC, Inc. The sale did not have

a material impact on net income, as income taxes on the transaction largely

offset the pre-tax gain. The company recently announced that it has reached

a definitive agreement with EMMIS Communications Corporation for the sale

of LOS ANGELES MAGAZINE. Due to its launch as a new IPO, will report

its results in early February. The release of the quarter results coincide

with Walt Disney Co. Chairman and CEO, Michael Eisner's announcement that

the company has no plans of a merger like the recent deal between America

On-line and Time Warner. "We don't feel the need for anything, but being

independent. We think the Disney brand demands independence," Eisner said

in a teleconference with financial analysts and reporters. "We feel that we

are big enough that we can be independent and can participate in the

marketplace." However, Eisner added that his company was open to alliances

in areas like the Internet, telephony, satellite transmission and other

forms of content distribution.

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Rick DeMott
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