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The Walt Disney Company Reports Fourth Quarter And Full Year Earnings For Fiscal 2013

Studio Entertainment

Studio Entertainment revenues for the quarter increased 7% to $1.5 billion and segment operating income increased $28 million to $108 million. For the year, revenues increased 3% to $6.0 billion and segment operating income decreased $61 million to $661 million.

Results for the Quarter

The increase in operating income for the quarter was primarily due to improved theatrical results and growth from television/subscription video on demand (TV/SVOD) distribution, partially offset by a decrease in home entertainment and higher film impairments. The increase in theatrical results was primarily due to the strength of Monsters University in the current quarter compared to Brave in the prior-year quarter, partially offset by the performance of The Lone Ranger in the current quarter. The increase in TV/SVOD distribution was driven by the timing of title availabilities and SVOD sales of library titles in the current quarter. Lower home entertainment results reflected decreased unit sales driven by the performance of Iron Man 3 in the current quarter compared to Marvel's The Avengers in the prior-year quarter, partially offset by lower marketing and overhead costs. Higher film impairments were driven by the write-down of The Lone Ranger in the current quarter, partially offset by a development cost write-off in the prior-year quarter.

Results for the Year

For the year, the decrease in operating income was primarily due to a decrease in home entertainment results, partially offset by an increase in SVOD sales of library titles and lower film impairments. Lower home entertainment results were driven by decreased unit sales reflecting the performance of Brave, Iron Man 3, Wreck-It Ralph and Cinderella Diamond Release in the current year compared to Marvel's The Avengers, Cars 2 and The Lion King Diamond Release in the prior year along with lower catalog sales. Lower film impairments were due to the write-down of The Lone Ranger in the current year compared to the write-down of John Carter and higher development cost write-offs in the prior year. Theatrical distribution results were essentially flat year over year as increased revenues were offset by incremental distribution and production cost amortization. A key driver of the revenue and cost increase was the release of two Disney animated features, Wreck-It Ralph and Planes in the current year versus none in the prior year. Other significant titles in release during the year included Iron Man 3, Monsters University and Oz The Great and Powerful compared to Marvel's The Avengers, Brave and The Muppets in the prior year.

Consumer Products

Consumer Products revenues for the quarter increased 14% to $1.0 billion and segment operating income increased 30% to $347 million. For the year, revenues increased 9% to $3.6 billion and segment operating income increased 19% to $1.1 billion.

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