The Walt Disney Company today reported earnings for the fiscal year and fourth quarter ended October 2, 2010. Diluted earnings per share (EPS) for the year increased 15% to $2.03 from $1.76 in the prior year. For the quarter, diluted EPS was $0.43 compared to $0.47 in the prior-year quarter. The decrease for the quarter reflected a $0.09 adverse impact from a shift in the timing of recognition of previously deferred revenues between the third and fourth quarters at ESPN. Additionally, fiscal 2010 results for the full year and for the quarter include one fewer week of operations compared to fiscal 2009 due to our fiscal period end.

"The 2010 fiscal year was a financial and strategic success for The Walt Disney Company with performance driven by great content like Toy Story 3 and the way we benefited from that content across our many businesses. Our fourth quarter earnings grew solidly after factoring out a programming writeoff at one of our equity networks, the timing of ESPN revenue recognition and the effect of one fewer week of operations this year than last," said Disney president and CEO Robert A. Iger. "With the acquisition of Marvel, our brand and franchise portfolio is stronger than ever and were confident our global growth strategy positions the company well to thrive in the coming years."

EPS for the current year included restructuring and impairment charges ($270 million), gains on the sales of investments in two television services in Europe ($75 million), a gain on the sale of the Power Rangers property ($43 million), and an accounting gain related to the acquisition of The Disney Store Japan ($22 million), which collectively had a net adverse impact of $0.04. EPS for the prior year included restructuring and impairment charges ($492 million), a non-cash gain in connection with the merger of Lifetime Entertainment Services (Lifetime) and A&E Television Networks (A&E) ($228 million), and a gain on the sale of investments in two pay television services in Latin America ($114 million), which collectively had a net adverse impact of $0.06. The gains mentioned above are recorded in ―Other Income‖ in the Consolidated Statements of Income. Excluding these items, EPS for the year increased 14% to $2.07 from $1.82 in the prior year.

The current quarter included restructuring and impairment charges ($58 million), which adversely impacted EPS by $0.02. The prior-year quarter included the gain related to the A&E/Lifetime transaction and restructuring and impairment charges ($166 million), which collectively benefited EPS by $0.01. Excluding these items, EPS for the quarter was $0.45 compared to $0.46 in the prior-year quarter.

The Company recorded $270 million of restructuring and impairment charges in the current year related to organizational and cost structure initiatives primarily at our Studio Entertainment and Media Networks segments. Restructuring charges of $138 million, of which $55 million were recorded in the current quarter, were primarily for severance and other related costs. Impairment charges of $132 million, of which $3 million were recorded in the current quarter, consisted of writeoffs of capitalized costs primarily related to abandoned film projects, the closure of a studio production facility and the closure of five ESPN Zone locations.

In the prior year, the Company recorded charges totaling $492 million which included impairment charges of $279 million (of which $142 million related to radio FCC licenses) and restructuring costs of $213 million. During the prior-year quarter, the Company recorded charges totaling $166 million which included impairment charges of $73 million (of which $34 million related to radio FCC licenses) and restructuring costs of $93 million.

The decrease in interest expense for the year was primarily due to lower effective interest rates and lower average debt balances, partially offset by expense related to the early redemption of a film financing borrowing. For the quarter, the decrease in interest expense reflected lower average debt balances.

The decrease in interest and investment income for the year was primarily due to a gain on the sale of an investment in the prior-year third quarter, lower effective interest rates and lower average cash balances.