OREANDA-NEWS. The Walt Disney Company today reported earnings for its fourth quarter and fiscal year ended October 3, 2015. Diluted earnings per share (EPS) for the fourth quarter increased 10% to $0.95 from $0.86 in the prior-year quarter. Excluding certain items affecting comparability(1), EPS for the quarter increased 35% to $1.20 from $0.89 in the prior-year quarter. Diluted EPS for the year increased 15% to $4.90 from $4.26 in the prior year. Excluding certain items affecting comparability(1) , EPS for the year increased 19% to $5.15 from $4.32 in the prior year.

“We had a strong quarter, with adjusted EPS up 35%, completing our fifth consecutive year of record performance,” said Robert A. Iger, chairman and chief executive officer of The Walt Disney Company. “In Fiscal 2015 we delivered the highest revenue, net income and adjusted EPS in the Company’s history, reflecting the power of our great brands and franchises, the quality of our creative content, and our relentless innovation to maximize value from emerging technologies.”

The following table summarizes the full year and fourth quarter results for fiscal 2015 and 2014 (in millions, except per share amounts). Fiscal 2015 results for the full year and fourth quarter include the benefit from one additional week of operations compared to the prior-year and prior-year fourth quarter due to our fiscal period end.

DISCUSSION OF FULL YEAR CONSOLIDATED RESULTS

For the year, the increase in diluted EPS was due to growth at all of our operating segments, a decrease in weighted average shares outstanding as a result of our share repurchase program and lower restructuring and impairment charges in the current year, partially offset by an increase in the effective income tax rate and lower investment gains in the current year. The increase in the effective income tax rate was due to the write-off of a deferred income tax asset as a result of the increase in the Company’s ownership of Euro Disney S.C.A. in connection with the Disneyland Paris recapitalization. Operating income growth at Media Networks was driven by higher affiliate fees, increased advertising revenue at ESPN and the ABC Television Network and higher operating income from program sales. These increases were partially offset by an increase in programming and production costs at ESPN and, to a lesser extent, the Disney Channels and the ABC Television Network. At Studio Entertainment, operating income growth was due to a higher revenue share with the Consumer Products segment reflecting the success of Frozen merchandise, an increase in television distribution revenue and higher domestic theatrical results. This growth was partially offset by a decline in home entertainment units sold reflecting the success of Frozen in the prior year. Consumer Products operating income growth was due to higher merchandise licensing revenue reflecting the strength of Frozen, Avengers and Star Wars Classic merchandise. Growth at Parks and Resorts was driven by our domestic operations due to higher average guest spending, attendance and occupancy, partially offset by increased costs driven by inflation and volumes. Results at our international parks and resorts operations reflected lower attendance and occupancy at Hong Kong Disneyland Resort and higher pre-opening expenses at Shanghai Disney Resort. Interactive growth was driven by the ongoing success of the Tsum Tsum mobile game and lower product development and marketing costs, primarily at our mobile businesses, partially offset by lower operating income from Disney Infinity console games.

Cable Networks

Operating income at Cable Networks increased $381 million to $1.7 billion for the quarter due to an increase at ESPN and, to a lesser extent, A&E Television Networks (A & E) and the Disney Channels. The increase at ESPN reflected higher affiliate and advertising revenues, partially offset by an increase in programming costs. Affiliate revenue growth was driven by contractual rate increases and an increase in subscribers. The increase in subscribers was due to a full quarter of the SEC Network, which launched in August 2014, partially offset by a decline in subscribers at certain of our networks. Growth in advertising revenue reflected higher units sold, partially offset by lower ratings. Higher programming costs reflected a full quarter for the SEC Network, additional rights for the US Open Tennis tournament and contractual rate increases for Major League Baseball and NFL rights, partially offset by the absence of rights costs for NASCAR. Higher equity income from A & E was due to lower programming and marketing costs, partially offset by lower advertising and affiliate revenue. The increase at Disney Channels was driven by higher affiliate revenues, partially offset by higher programming costs. Affiliate revenue growth reflected contractual rate increases domestically and subscriber growth internationally. The programming cost increase was driven by higher costs for original programming, including more hours of new series in the current quarter.

Broadcasting

Operating income at Broadcasting was essentially flat at $164 million for the quarter. Growth in advertising and affiliate revenue was offset by higher programming costs, lower operating income from program sales, an equity loss from Hulu and higher marketing costs for the fall season launch. The increase in advertising revenue reflected higher units sold, including the benefit of the extra week of operations, and higher rates. Affiliate revenue growth was due to contractual rate increases and new contractual provisions. Higher programming costs reflected the impact of an additional week of operations. Lower operating income from program sales was driven by an increase in cost amortization and lower sales. Program sales reflected decreases for My Wife and Kids and America’s Funniest Home 4 Videos, partially offset by the sale of How to Get Away with Murder in the current quarter. The equity loss from Hulu was due to higher content and marketing costs.

Parks and Resorts

Parks and Resorts revenues for the quarter increased 10% to $4.4 billion, and segment operating income increased 7% to $738 million. Operating income growth for the quarter was due to an increase at our domestic operations, partially offset by a decrease at our international operations. Growth at our domestic operations was driven by increased guest spending and attendance at our theme parks, partially offset by higher costs. Guest spending growth was primarily due to higher average hotel room rates and ticket prices for sailings at our cruise line as well as theme park admissions and increased merchandise, food and beverage spending. Cost increases were driven by labor and other cost inflation, spending on information technology maintenance and infrastructure and higher pension and postretirement medical costs. The decrease at our international operations was primarily due to lower attendance and occupied room nights at Hong Kong Disneyland Resort, higher operating costs at Disneyland Paris and higher preopening expenses at Shanghai Disney Resort. These decreases were partially offset by increased guest spending and volumes at Disneyland Paris. Guest spending growth at Disneyland Paris was due to increased food, beverage and merchandise spending as well as higher average hotel room rates and ticket prices. Increased volumes at Disneyland Paris were due to higher attendance and occupied room nights.

Studio Entertainment

Studio Entertainment revenues for the quarter were relatively flat at $1.8 billion, and segment operating income increased $276 million to $530 million. Operating income growth was due to increased TV/SVOD distribution results, lower film cost impairments, improved theatrical results and a higher revenue share with the Consumer Products segment. These increases were partially offset by lower home entertainment results. The increase in TV/SVOD distribution was driven by a lower average production cost amortization rate, the timing of title availabilities in international pay and domestic free television markets as well as SVOD revenue growth internationally. Lower production cost amortization reflected a higher sales mix of catalog titles in the current quarter. Operating income growth in theatrical distribution was driven by the performance of Inside Out and Ant-Man in the current quarter compared to Guardians of the Galaxy, Maleficent and no Pixar title in the prior-year quarter. Theatrical distribution revenues were lower in the current quarter as the prior-year quarter also included Planes: Fire and Rescue and The Hundred-Foot Journey whereas the current year included no Disney feature animation or DreamWorks titles in release. Increased revenue share was due to the performance of Frozen merchandise in the current quarter. The decrease in home entertainment was due to lower net effective pricing and unit sales reflecting the prior-year quarter performance of Frozen internationally and Marvel’s Captain America: The Winter Soldier worldwide, partially offset by Marvel’s Avengers: Age of Ultron and Cinderella in the current quarter. These decreases were partially offset by lower per unit costs as well as decreased marketing spending in the current quarter.

Consumer Products

Consumer Products revenues for the quarter increased 11% to $1.2 billion, and segment operating income increased 10% to $416 million. Higher operating income was driven by earned licensing revenue growth, partially offset by an unfavorable impact from foreign currency translation due to the strengthening of the U.S. dollar against major currencies as well as higher marketing costs. Earned licensing revenue growth was driven by the performance of Star Wars Classic, Avengers and Frozen merchandise.

Interactive

Interactive revenues for the quarter decreased by $15 million to $347 million, and segment operating income increased $13 million to $31 million. The increase in operating income was primarily due to higher sales of Disney Infinity and lower costs at our mobile businesses, partially offset by lower revenues at our mobile businesses. Higher sales of Disney Infinity were due to the timing of the release of Disney Infinity 3.0, which was launched on August 30, 2015, compared to Disney Infinity 2.0, which was launched on September 23, 2014.