Exhibit 99(b)
Presentation dated November 9, 2000
with respect to The Walt Disney Company
by
Michael D. Eisner, Chairman and Chief Executive Officer;
Robert A. Iger, President and Chief Operating Officer;
and
Thomas O. Staggs, Senior Executive Vice President and Chief
Financial Officer.
* * * * *
Good morning and thanks for joining us.
Here with me today in Burbank, to discuss The Walt Disney
Company's fourth quarter and fiscal year end financial results,
are Michael Eisner, Chairman and CEO; Bob Iger, Disney's
President and COO; and Tom Staggs, Disney's Senior Executive Vice
President and Chief Financial Officer.
For your information, this call is being simulcast over the
web at disney.go.com/investors.
For today's call regarding Disney's yearend financial
results, Michael Eisner will lead off with his remarks, followed
by Bob Iger and then Tom Staggs. We will then open up the call
to you for Q&A.
We plan to conclude this call in approximately 1 hour. So,
let's get started.
[Remarks of Michael D. Eisner, Chairman and Chief Executive
Officer]
As many of you are aware, we have just concluded our
conference call on the Disney Internet Group, so before I talk
about the overall Walt Disney Company, let me just say that the
Internet continues to be one of the most exciting areas in which
our company is involved.
None of us were around at the start of the movies or
the television business, so this is our chance to be on the
ground floor of a major entertainment venue as it emerges, which
is a pretty extraordinary thing. And, just as with motion
pictures and television, the implications for our company will be
phenomenal.
So, that said, let me now say good morning to all of you.
Indeed, this is such a good morning that it's worth getting up
early enough to be able to say good morning while it's still
morning for those of you listening in New York.
As many of you have already seen, we capped off FY 2000 with
another strong quarter as the entire fiscal year has posted
earnings growth well in excess of the 15% compound average growth
our company has enjoyed for the past 16 years.
The year ended up better than we had expected, but not
better than what we knew was possible, given our company's wealth
of entertainment assets.
I'm now going to briefly focus on performance in Parks &
Resorts and the Studios, then Bob will summarize Media Networks
and Consumer Products and Tom will fill in the details of our
financial results.
Parks and Resorts came in with record operating results for
the quarter and for the year. This is the sixth record-breaking
year in a row for this business unit, during which time its
earnings have grown at a compound annual rate of 13%. This kind
of performance isn't just significant in itself, but it has that
much greater meaning because Parks and Resorts is so fundamental
to what we do. This business provides an immersive Disney
experience for people to not just visit Disney but to really live
Disney. It is certainly nice to see that consumers continue to
seek this experience out in ever greater numbers.
In FY 2000, Walt Disney World proved to be as popular as
ever. Performance was also enhanced by the tremendous success of
our innovative FASTPASS, which magically eliminates lines and
makes every guest feel like a VIP.
The Disney Cruise Line is achieving strong performance and -
most important -- very strong guest satisfaction, with an
astonishing 97 percent of guests rating it as either Excellent or
Very Good. My own personal belief is that the other three percent
accidentally marked the wrong box. Maybe we should have a
recount.
Perhaps the most gratifying aspect of this years' Parks and
Resorts results was the fact that Disneyland had a strong year,
apparently unhampered by the adjacent construction and the
absence of a major new attraction.
During recent years, some have argued that the days of
bricks-and-mortar entertainment are over as people seek out
virtual entertainment. Fortunately, we ignored these false
prophets and continued to enhance our incredible collection of
theme park assets, while still pursuing the cutting-edge
opportunities represented by various forms of new media.
Consequently, early next year -- as you're all probably
tired of hearing but can expect to continue to hear from me -- we
will be completely transforming the Disneyland Resort with the
addition of a new theme park -- Disney's California Adventure --
a new entertainment district -- Downtown Disney -- a new hotel --
the Grand Californian -- and one very, very large parking garage.
This should alter the very essence of our Anaheim property as it
becomes a multi-day destination for out-of-towners and a place
that invites more frequent repeat visits for locals.
Later next year, our partners at Oriental Land Company will
be unveiling Tokyo DisneySea, which will similarly reshape
the Tokyo Disney Resort. In 2002, a second theme park at
Disneyland Paris -- Disney Studios -- should solidify and expand
on the gains that have been made at that site, which is now the
most popular tourist destination in all of Europe. And next week,
Bob and Tom will formally close the bank financing for Hong Kong
Disneyland. This financing, which is not on Disney's balance
sheet, was nearly three-times oversubscribed. I think this
represents a great vote of confidence for the success of our
second Asian theme park location, which we expect to open in
2005.
For these reasons -- among many others -- we expect growth
at Parks and Resorts to continue to underpin the strength of our
entire company.
As for the Studios, the fourth quarter showed improvement
over the prior year, as we stay committed to the path we have set
for ourselves earlier in the year, namely to control costs,
reduce the overall number of films, and emphasize and expand the
Disney brand.
In this regard, "Remember the Titans"is a recent example of
what we are working to achieve. It was originally developed as a
Touchstone period drama. But, we came to realize that its
underlying messages about values, racial understanding and our
nation's history were a perfect match for the Disney brand, so we
produced it as a Walt Disney Pictures film. This wonderful --
and moderately budgeted -- motion picture will pass $100 million
at the box office this weekend, propelled in part by the strength
of the Disney brand.
There are two overall forces at work in the movie business -
- one is the transition of home video from VHS to DVD and the
other, as always, is the unpredictable nature of the product.
Since the success of individual titles in the film business
is inherently unpredictable, I won't make any predictions,
but I will share my hunches -- namely, that there is strong
potential in our upcoming holiday releases of "102 Dalmatians,"
"Unbreakable" - from the same team that created "The Sixth Sense"
- and "The Emperor's New Groove" - which is our latest work from
feature animation. And, looking further ahead, we have what
should be two of the biggest movies of the summer, "Pearl Harbor"
and our first wide-screen animated action adventure film,
"Atlantis."
As for the home video market, there is no question that it
is morphing into a DVD market. The growth in sales of DVD players
has exceeded the growth of CD players at this stage. At the end
of 1999, there were 9.7 million DVD players in American
households. At the end of this year, there are expected to be
22.3 million units. And, at the end of 2001, it is estimated
there will be more than 36 million units.
This trend is especially important to our company because
more and more people are not just buying DVDs of new movies, but
they are also buying DVDs of movies they already own on VHS.
A survey conducted earlier this year indicated that 14% of people
who own DVD players say they are likely to replace all of their
VHS movies, while 55% said they are likely to replace their
Disney videos. So, it is safe to say that there will be upside
benefit for us from this major shift in home entertainment
technology.
What's more, we have the library and the infrastructure
to maximize this opportunity in the months and years ahead --
an opportunity that could take our Studio Entertainment unit
to new heights of success.
Now, here's Bob Iger to brief you on the rest of our
company.
[Remarks of Robert A. Iger, President and Chief Operating
Officer]
Thank you, Michael.
In fiscal 2000, The Walt Disney Company's media networks
flourished:
The ABC Television Network had its highest revenue-
generating year in history with near record profits and leading
the broadcast industry's Upfront advertising sales period,
capturing 30% of the market.
ESPN extended its reach through significant growth at ESPN2,
ESPN Classic, ESPN Radio, ESPN Magazine and the ESPN Zones.
The Disney Channel hit major growth strides due largely to
its conversion from a premium program service to a basic cable
service, yielding an 18% increase in subscribers. And, the reach
of our International Disney Channels expanded with the launch of
Spanish and Portuguese language Disney Channels in Latin America.
Toon Disney and SoapNet, our newest program services, posted
strong audience performance results and have significant
additional subscriber commitments over the next 36 months.
Our portfolio of advertising sponsored cable assets: ESPN,
Lifetime, A&E, History, and E! Entertainment Television, are not
only coming off record earnings but sold 75-80% of their
commercial inventory in the cable Upfront sales market with
double-digit increases in rates.
And our broadcasting assets, ABC's 10 owned television
stations and radio stations and radio networks performed beyond
expectations with significant increases in revenue and operating
income as compared to the previous year.
The outlook for fiscal 2001 signals a solid year for our
businesses. Despite some early softness in the advertising
market this quarter relative to last year, we are well-positioned
to respond to market conditions due to our on-going efforts to
manage costs and our strong results in this season's Upfront
markets. With the Olympics and the elections almost history, we
believe that the overall advertising market should strengthen and
expect momentum to be restored after the first of the year.
In terms of ratings performance at the ABC TV Network, on
the whole, we are up relative to last season. However, Who Wants
to be a Millionaire is not delivering the same audience levels
that it did during the January to May period. At the start of
this season, we anticipated that there would be a drop-off in
Millionaire's ratings as viewers sampled new programming and we
protected our business against such shortfalls in audience
delivery. Performance to date is below our plan and as a result,
we have had to adjust our sellable supply of commercial
inventory, in order to meet audience delivery guarantees.
Despite lower ratings versus the January to May period,
Millionaire continues to be an important program for ABC, as it
improves the network's performance levels by 20% among Adults 18-
49 in the time periods in which it runs as compared to the same
time periods last year. Millionaire is a powerful program asset,
reaching 79.0 million viewers weekly, and remains a profitable
program franchise. Thus, we are confident that the Millionaire
format maintains a broad appeal, and are taking steps to create
more excitement around the program by developing special event
episodes throughout the season including:
* The extremely popular Celebrity week of Millionaire;
* Family Millionaire, which will have a parent and child in
the hot seat facing off against Regis Philbin later this month;
* Tournaments featuring both high school and college students;
* Newly-wed couples team Millionaire;
* Rock & Roll Star Millionaire;
* and changes to the prize structure for special contestant
bonuses.
We believe these programming events and the new escalating
bonus prize potential will add drama to the series and lift
Millionaire to true appointment television.
Our new fall schedule includes some bright spots with the
successful debut performance of Geena, starring the Academy Award
winning actress Geena Davis, and Gideon's Crossing, starring the
Emmy winning actor Andre Braugher. Gideon's Crossing outperforms
most of its competition in its Wednesday time period, and we
expect it to develop like a similar quality drama on our air, The
Practice, which took two years to achieve time period leadership.
In terms of returning series, the introduction of Charlie Sheen
to Spin City has added a spark to this program with an increase
in the delivery of Adults 18-49 over last season.
We also hope to repeat the success of the series launch of
Millionaire last January with the mid-season premiere of The Mole
and a number of new comedies. The Mole follows 10 demographically
diverse contestants, who work together as a team to accomplish a
series of outrageous tasks; the more tasks they accomplish, the
more money one of them will win. The one-hour show has a unique
twist that will separate it from other game and reality shows
already on the air by adding the distinct component of "the
Mole," a player whose predetermined purpose is to sabotage the
team's efforts to collect all the money. We believe that this
program will attract viewers by making them active participants
in the drama of trying to figure out the identity of the
saboteur. In addition to this compelling new reality program,
our midseason comedies feature the incredible talents of James L.
Brooks and Joan Cusack, Damon Wayans and Dennis Leary.
Our other broadcasting businesses and cable businesses are
healthy, and contractual commitments are in place to expand the
reach of our cable networks this year. ESPN because of its
leading position in reaching men, is the beneficiary of the
majority of advertising budgets chasing this demographic this
fiscal period. As such, ESPN's strong Upfront performance has
held to date with second quarter option commitments being met by
advertisers. Our television stations currently are pacing ahead
of the prior year in the fiscal first quarter due in part to the
substantial volume of political spending and margins are strong.
Furthermore, we expect to see continued subscriber growth at The
Disney Channel, Toon and SoapNet throughout the year, bolstering
our affiliate revenue.
During our last conference call in August, I noted that each
one of our business unit's strategies included building and
strengthening the companies' brands. To that end, the Consumer
Products division has developed turnaround plans for its
businesses that begin with this fundamental tactic. While the
lead-time for these plans varies by category; the long-term
outlook for the overall Disney Consumer Products business is
optimistic. I will highlight some of these strategies, which we
expect to begin to yield positive financial results in fiscal
2002.
Turning first to Licensing, which represents 70% of Consumer
Product's operating income, we intend to change our current
business models to allow for greater flexibility to adapt to
market conditions. Rather than relying on our network of
licensees to manage Disney's brand identity and brand
presentation at point of sale, Licensing now plans to become an
active participant in setting our brand identity and presentation
at retail. To this end, we are developing new retail models that
should result in a more collaborative relationship with key
retailers worldwide.
From a creative property perspective, we plan to diversify
our portfolio significantly by aggressively developing new and
library properties from our collection of 124 characters -- thus
developing a stronger Disney image at retail and bolstering the
appeal of our primary characters. Part of this over-arching
strategy will be to grant retail exclusives around secondary
characters such as Little Simba, Bambi or Tinker Bell, to enable
key accounts to be differentiated from each other, thereby
providing an attractive retail incentive of market exclusivity.
Apparel has been our most challenged licensed category over
the last few years. Although our business model remained the
same, the retail landscape experienced considerable change during
this period in terms of consolidation and growth of mass market
retailers. In addition, these retailers rather than relying on
external brands, provide consumers with a wider selection of
private label brands characterized by high quality and a high
price-to-value relationship, putting further pressure on our
ability to capture market share.
In response to these market changes, we plan to extend the
Disney brand into the non-character segment of the children's
apparel market, offering totally new thematic collections.
Furthermore, we will execute a direct to retail licensing model,
in order to tap into this new opportunity. We have had
discussions with the 20 largest retailers in the world about this
strategy and have received an overwhelmingly positive response.
Our strategies in toys are very different from apparel.
Consumer Products has enjoyed an 11 year near exclusive
relationship with Mattel, a world-class company and category
leader in infant and pre-school toys and fashion dolls. Hasbro
has had a similar level of success in building programs around
film properties such as Star Wars, Batman, and Jurassic Park,
becoming leaders in the boy's categories of action figures,
vehicles, games and puzzles. Taking advantage of the strengths
of these two companies, Consumer Products has restructured our
alliances with each company. Going forward, Mattel will focus on
Disney Standard Characters including Mickey, Winnie the Pooh, and
princesses, capitalizing on its leadership position in infant and
pre-school toys and dolls, and Hasbro will focus on film
properties capitalizing on its market position in action figures,
vehicles, games and puzzles. By aligning ourselves with the
strongest players in each category, we believe we significantly
can grow our market share in toys.
In Disney Publishing, which represents 16% of Consumer
Products' operating income, we are the world's largest publisher
of children's books and magazines, selling 345 million copies
annually. This profitable division has become an important
source for content that can be leveraged across the company.
Another growth area for Consumer Products is our Interactive
division, which represents 8% of Consumer Products' operating
income and experienced double-digit growth this year. We've
spent the last two years expanding our title base and
diversifying our product range by category, platform and
geography.
Rounding out Consumer Products, The Disney Store represents
6% of Consumer Products' operating income. The Disney Stores
continue to be important to the Disney brand, as they are the
primary interface between the brand and the consumer and have a
halo effect over our entire consumer products business. This
month, we've launched our first-ever on-air marketing campaign in
support of the stores with creative that focuses on our new
merchandise that ties into our theatrical release 102 Dalmatians.
Our two new store design prototypes, which opened last month,
allow us to make a powerful brand statement in a more efficient
retail environment. We will be measuring the success of these
design concepts, fine tuning where necessary, and rolling out a
significant number of the new format over the next two years.
Store remodels and optimizing the chain size are fundamental to
The Disney Store's renewal strategy, and are consistent with our
requirement of double-digit returns on Disney capital from our
divisions.
The shortest lead-time business I discussed is apparel. To
that end, we have begun the process of diversifying our property
portfolio with a company-wide initiative behind Disney
Princesses, and will begin to see results in this fiscal year.
Lead-time in toys is impacted by our new licensee alignment,
which does not go into effect until the release of Monsters, Inc.
in the fall of 2001.
Growing our branded businesses in the U.S. and international
markets is critical, and I believe that we are well poised to
increase the reach of The Walt Disney Company through our
consumer products and media assets, which are powerful growth
drivers for the company.
I'd like to turn the call over to Tom Staggs, who will
review our quarterly and fiscal year results.
[Remarks of Thomas O. Staggs, Senior Executive Vice President and
Chief Financial Officer]
Thank you, Bob.
Since we discussed the results for the Walt Disney Internet
Group on our earlier call, I will concentrate my remarks on
Disney apart from our retained interest in the Internet Group.
For the fourth quarter of fiscal 2000, our revenues
increased 6% to $6 billion. Operating income was $898 million,
up 58% excluding restructuring charges taken in the prior year
quarter, and net income was up 77% to $417 million, which
delivered earnings per share of $0.20.
For the full year our results were equally robust. Revenues
were $25 billion, an increase of 9% over the prior year.
Operating income was $4 billion, which represents a 26% increase,
and net income was $1.9 billion. Fully diluted earnings per share
were $0.92 -- 42% higher than pro-forma results from last year.
Media Networks, led by our broadcasting group, was our
strongest performing division for both the quarter and the year.
Media Networks revenue for the fourth quarter totaled $2.2
billion, bringing revenues for the year to $9.6 billion: a 21%
increase over 1999. Operating income for the quarter totaled
$460 million, which means that for the year, Media Networks
operating profit grew 45% over 1999 to a total of roughly $2.3
billion.
Broadcasting benefited from a 21% year-over-year increase in
advertising revenues, which drove a 95%increase in operating
profit. These results are indicative of the tremendous earnings
power of this businesses. And it should not go unnoticed that in
these business, great earnings equals great cash flow. As a
whole, Media Networks generated over $2.4 billion in EBITDA. I
should also have to commend the broadcasting group management
team, because even as they generated revenues that far exceeded
expectations, they managed costs to within 1% of their original
budget for the year.
Cable Television also contributed significantly to the
year's success even as we continued to invest in new growth
initiatives like SoapNet and our 3 newest international Disney
Channels. Overall, Disney's share of operating income from its
total cable television activities increased by 7% for the quarter
and 25% for the year. As a result, Disney's cable-based
operating profit totaled more than $1.2 billion in our 2000
fiscal year.
The biggest component of our cable TV activities is, of
course, ESPN, which benefited from increased affiliate fees, a
growing subscriber base and a 20% year-over-year increase in
advertising revenue, delivering growth despite the impact of
higher costs of new sports contracts. It is worth noting that
after the first two quarters of this year, we will lap these
rights fee increases, making our year-over-year comparisons
somewhat easier.
At the Disney Channel, subscriber growth and the conversion
to basic cable in key markets were positive contributors for both
the quarter and for the full year. In fact, on Oct. 28th we
celebrated the latest conversion of the Disney Channel to basic,
when Time Warner added 1.2 million basic homes in New York to the
Disney Channel universe.
Bob mentioned the initial softness in the advertising market
so far this year. While we look for a reversal of this trend
later in the year, it is worth noting that Disney generates well
under 50% of its cable revenues from advertising. In fact, just
40% of ESPN's revenue and virtually none of the Disney Channel's
revenue is advertising based. Therefore, we believe that our
cable businesses are both powerful drivers of future growth and
generally more resistant to advertising downturns than many other
cable programming networks.
Still, looking ahead, the ad market coupled with network
ratings will be the biggest variables in Media Networks results
for next year. I would expect that the early softness will likely
impact our earnings for the first quarter of the year. As we
look further down the road, though, we are confident in the
ongoing strength of our Media Networks business for all the
reasons that Bob has mentioned.
While in fiscal year 2000 the Media Networks segment showed
just what a powerful growth driver it can be, Studio
Entertainment was experiencing the year of transition that we had
indicated it would.
The Studios ended the year with just under $6 billion in
revenue, off slightly from the prior year, and operating income
of $110 million, down from the $154 million recorded in 1999.
Nonetheless, the segment ended the year on a significantly more
positive note, posting operating income of $87 million versus a
loss of $84 million in Q4 of the prior year.
In the Studios' Home Video business, difficult comparisons
early in the year dampened overall results. Despite the success
of Tarzan and the Gold Collection, these titles faced difficult
comparisons to the prior year's slate, which included Simba's
Pride, A Bug's Life and Mulan. However, in the fourth quarter,
the performance of Little Mermaid II: Return to the Sea, The
Tigger Movie and Buzz Lightyear: Star Command as well as the
solid theatrical performances of films like Scary Movie, Coyote
Ugly and The Kid all contributed to our positive earnings.
For next year, the key drivers of Studio Entertainment
performance will be the new release slate, starting with the key
films that Michael noted in addition to the performance of new
releases on VHS and DVD, including Toy Story 2 and Dinosaur.
While Michael discussed the anticipated creative success of our
2001 slate, progress also has been made on the financial side.
We have taken $500 million out of our annual investment in live
action films over the past 2 years and have significantly brought
down the cost of our animated films going forward. Our film
slate is also more heavily weighted toward films with low to
moderate budgets that Peter Schneider and his team feel have
strong potential commercial appeal. And, as Michael outlined,
in big budget pictures like Pearl Harbor, we are structuring
deals to mitigate our financial risk. The success of Remember
the Titans is an encouraging sign that our strategy here will pay
off. In addition, during the year we will complete the rollout
of the Gold Collection, which we hope will benefit greatly from
the continued growth of DVD.
In Consumer Products for the quarter, revenues were $628
million, down somewhat from the $672 recorded in the fourth
quarter of 1999. Operating income improved from $80 million to
$100 million, largely reflecting the impact of restructuring
charges in the prior year. For the year, Consumer Products
delivered revenues of $2.6 billion, a decline of 6%, while
operating income for 2000 was down 20% to $454 million.
Results for both the quarter and the full year reflect
continued softness in worldwide licensing, which, as we have
said, is a trend that we are taking steps to reverse over time.
Nonetheless, it is unlikely that Consumer Products will be a
growth driver for 2001, with the first quarter being the most
difficult in terms of year over year comparisons. Our Consumer
Products business certainly is still the most successful of its
kind. However, as Bob mentioned, we are single-mindedly focused
on better tapping into the strength of this business and we are
confident that we will be successful in doing so over the longer
term.
Next, in our Parks and Resorts division, strategies to drive
demand through broad marketing-based celebrations spurred record-
breaking growth for both the year and the quarter.
For the quarter, Parks and Resorts generated revenues of
$1.7 billion and operating income of $362 million, both of which
represent a 10% increase over the same period last year. And for
the year, Parks and Resorts revenue grew from $6.1 to $6.8
billion, and operating income increased by 10% to a record $1.6
billion.
Contributing to our increases for both the quarter and the
year were:
* The Millennium Celebration at Epcot, which increased traffic
across our Florida parks, driving record attendance at Walt
Disney World;
* At Disneyland, the success of the Annual Pass Program and
the 45th Anniversary Celebration, which increased attendance most
notably within our local resident segment;
* Increased guest spending on Millennium and Disneyland 45th
Anniversary merchandise;
* And of course, the positive impact of FASTPASS on guest
satisfaction, spending and intent to return cannot be overlooked.
By the end of 2001, we expect to have over 50 FASTPASS locations
installed in all our parks throughout the world.
Also contributing to our results was the impact of over $80
million in productivity improvement and cost reduction
initiatives achieved by our Parks and Resorts division. Remember
that for the quarter, Parks and Resorts delivered these robust
results despite the fact that we have begun to book pre-opening
costs for Disney's California Adventure. These costs will
continue through the 2nd quarter of fiscal 2001, and we expect
that they will have roughly a $55 million impact on Parks and
Resorts operating earnings for fiscal 2001.
In recent years we have been a net investor in our Parks and
Resorts business, so it is important to note that after tax free
cash flow from this segment totaled more than $450 million this
past fiscal year even as we invested significant capital in
projects like Disney's California Adventure in Anaheim and the
Animal Kingdom Lodge in Florida. So we are well on our way to
generating the $1 billion plus in annual free cash flow that we
are expecting from this segment in 2002 and beyond.
For 2001, the key to Parks and Resorts results will be the
opening of Disney's California Adventure. At the Disneyland
Resort, we expect nearly 6 million guests to visit Disney's
California Adventure during the park's first eight months of
operations, which will begin February 8.. As I mentioned, the pre-
opening expenses for Disney's California Adventure will be
incurred and expensed throughout the year. At Walt Disney World,
the Millennium Celebration draws to an end in January. Growth
drivers for the next year in our Orlando resort will include new
hotels like Animal Kingdom Lodge and new attractions, like
Aladdin's Magic Carpet Ride in late spring.
Given the strength of our results, Disney's overall cash
flow increased significantly on a year-over-year basis. As a
result, Disney's net debt decreased by more than $2 billion from
Q4 1999 to Q4 2000 and Net Interest expense declined by 13%. As
we have mentioned in the past, we believe that the strength of
our cash flow and financial position will be an increasingly
important asset going forward. During the quarter, we purchased
1 million Disney shares for approximately $40 million bringing
our total repurchase for the year to 4.9 million shares at a cost
of $155 million. As I mentioned earlier this morning, we also
purchased slightly over 900,000 shares of the Walt Disney
Internet Group at a cost of roughly $11 million. And lastly, let
me restate that we remain on track to deliver the $500 million in
annual savings by 2001 that we targeted at the beginning of the
year.
I have tried to outline some of the key variables that will
most influence our results over the coming year. While we are
not going to project actual earnings for our next fiscal year
today, I hope our discussion of 2001 gives you a sense of our
continued confidence in the outlook for Disney. For the first
fiscal quarter of 2001 we believe that the factors we have
outlined will likely result in our posting earnings that are
roughly on par with last year's $0.25 per share. As we continue
to follow the strategies we have outlined on this call, and as we
roll out quality new products, content and services throughout
the year, we expect that our earnings outlook will be very
positive.
A year ago, we identified our 2000 fiscal year as one in
which we would lay the foundation for the company's next phase of
growth. And, while our earnings for the year have been
unquestionably strong, we've remained focused on positioning
ourselves for the future. While successfully leveraging the
unprecedented strength of the ad market and ratings improvements
at the ABC Network, we continued to lay the groundwork for long
term growth in our cable television assets through the continued
development of the ESPN brand and the launch of SoapNet
domestically and the expansion of the Disney Channel's reach both
domestically and internationally. We have planned and begun
executing turnaround strategies for both Studio Entertainment and
Consumer Products. As we generated another year of record
performance in Parks & Resorts, we also continued to manage the
development of four additional parks at various locations around
the world. Finally, we have substantially augmented our
attention to returns on capital and generation of free cash flow
across our various lines of business, which will help insure that
our growth initiatives are consistent with our overall objective
of delivering ever-greater value for our shareholders.
[Remarks of Winifred Webb, Senior Vice President of Investor
Relations]
Thanks again for joining us today. Let me remind you that
certain statements in today's press release and on this
conference call may constitute forward-looking statements under
Federal securities laws. These statements are subject to a
number of risks and uncertainties and actual results may differ
materially from those expressed or implied in light of future
decisions by the company and by market, economic, competitive and
technological developments beyond the company's control. For
more information on factors that may affect future performance,
you may wish to review our periodic financial reports, which are
available at our disney.com investor relations websites.
This concludes Disney's year-end conference call.
* * * * *
